2–10–04 Tuesday Vol. 69 No. 27 Feb. 10, 2004

Pages 6139–6524

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1 II Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004

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2 III

Contents Federal Register Vol. 69, No. 27

Tuesday, February 10, 2004

Agriculture Department Commerce Department See Commodity Credit Corporation See Foreign-Trade Zones Board See Cooperative State Research, Education, and Extension See International Trade Administration Service See National Institute of Standards and Technology See Forest Service See National Oceanic and Atmospheric Administration See Rural Utilities Service See Technology Administration NOTICES Committees; establishment, renewal, termination, etc.: Commodity Credit Corporation National Agricultural Research, Extension, Education, PROPOSED RULES and Economics Advisory Board, 6244 Loan and purchase programs: Warehouses for interest commodity storage; approval Antitrust Division standards, 6201 NOTICES Competitive impact statements and proposed consent Commodity Futures Trading Commission judgments: RULES First Data Corp. and Concord EFS, Inc., 6325–6339 Commodity Exchange Act: Army Department Customer funds investment, 6140–6146 NOTICES Cooperative State Research, Education, and Extension Agency information collection activities; proposals, Service submissions, and approvals, 6271–6272 NOTICES Patent licenses; non-exclusive, exclusive, or partially Reports and guidance documents; availability, etc.: exclusive: Agricultural research and extension formula funds; State Camouflage pattern for sheet material, 6272 Senior Executive Service: work plans; guidelines, 6244–6248 Performance Review Board; membership, 6272–6273 Corporation for National and Community Service Centers for Disease Control and Prevention RULES NOTICES Grants: Grants and cooperative agreements; availability, etc.: Innovative and Special Demonstration Programs and Human immunodeficiency virus (HIV)— National Service Fellowships; application Africa and Caribbean; blood transfusion services; rapid procedures, selection criteria, etc.; electronic strengthening, 6296 availability, 6181 PROPOSED RULES Coast Guard Foster Grandparent Progam; amendments, 6227–6228 RULES Retired Senior Volunteer Program; amendments, 6228–6229 Outer Continental Shelf activities: Senior Companion Program; amendments, 6225–6227 Gulf of Mexico; safety zone, 6146–6147 NOTICES Ports and waterways safety: Agency information collection activities; proposals, Chesapeake Bay, VA— submissions, and approvals, 6270–6271 Hampton Roads, Elizabeth River, VA; security zone, 6158–6160 Customs and Border Protection Bureau Eagle Island, Cape Fear River, NC; security zone, 6148– NOTICES 6150 Trade name recordation applications: Schuylkill River, PA; Limerick Generating Station; DISPALCA, 6319 security zone, 6152–6154 St. Croix, VI; HOVESNA refinery facility; security zone, Defense Department 6150–6152 See Army Department Susquehanna River, PA— NOTICES Peach Bottom Atomic Power Station; security zone, Agency information collection activities; proposals, 6154–6156 submissions, and approvals, 6271 Three Mile Island Generating Station; security zone, Meetings: 6156–6158 Threat Reduction Advisory Committee, 6271 PROPOSED RULES Ports and waterways safety: Education Department Coast Guard Station Fire Island, NY; safety zone, 6221– NOTICES 6223 Agency information collection activities; proposals, Lake Washington, Seattle, WA; safety zone, 6219–6221 submissions, and approvals, 6273 NOTICES Agency information collection activities; proposals, Employment and Training Administration submissions, and approvals, 6317–6318 NOTICES Meetings: Adjustment assistance: Chemical Transportation Advisory Committee, 6318–6319 Cascada de Mexico, Inc., 6339

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Cascade West Sportswear, Inc., 6339 Federal Communications Commission Solon Manufacturing Co., 6339 RULES Weyerhaeuser Co., 6340 Common carrier services: Unemployment compensation for ex-servicemembers: Federal-State Joint Board on Universal Service— Renumeration schedules, 6340 Schools and libraries; universal service support mechanism, 6181–6192 Radio stations; table of assignments: Employment Standards Administration Kansas, 6193 NOTICES Texas, 6194 Agency information collection activities; proposals, Utah and Idaho, 6192 submissions, and approvals, 6340–6341 Virginia, 6194–6195 Virgin Islands, 6193–6194 West Virginia, 6192–6193 Energy Department PROPOSED RULES See Federal Energy Regulatory Commission Common carrier services: NOTICES Federal-State Joint Board on Universal Service— Meetings: Schools and libraries; universal service support Environmental Management Site-Specific Advisory mechanism, 6229–6238 Board— Digital television stations; table of assignments: Fernald Site, OH, 6273–6274 Kansas, 6238–6239 New Mexico, 6238 Radio stations; table of assignments: Environmental Protection Agency Alabama, 6239–6240 RULES New Mexico, 6239 Air quality implementation plans; approval and NOTICES promulgation; various States: Committees; establishment, renewal, termination, etc.: West Virginia, 6160–6164 Federal-State Joint Conference on Advanced PROPOSED RULES Telecommunications Services, 6290–6291 Air quality implementation plans; approval and promulgation; various States: Federal Emergency Management Agency West Virginia, 6223–6224 RULES NOTICES Flood elevation determinations: Air pollution control: North Carolina, 6172–6179 Federal operating permit approvals— Various States, 6165–6172, 6179–6180 Clearwater Forest Industries et al., 6282–6283 PROPOSED RULES Grants and cooperative agreements; availability, etc.: Flood elevation determinations: National Brownfields Assessment, Revolving Loan Fund, North Carolina, 6224–6225 and Cleanup Grants, 6283–6284 NOTICES Wetland Program Development Grants; guidelines, 6284– Disaster and emergency areas: 6289 California, 6319 Water pollution control: Federal Energy Regulatory Commission National Pollutant Discharge Elimination System— NOTICES Delaware; program revision, 6289–6290 Electric rate and corporate regulation filings, 6279–6281 Meetings: Federal Aviation Administration Compensation for generating units; technical conference, RULES 6281–6282 Air carrier certification and operations: Applications, hearings, determinations, etc.: Airports serving scheduled air carrier operations in ANR Pipeline Co., et al., 6274 aircraft with 10-30 seats; certification requirements, Dominion Transmission, Inc., 6274 6379–6436 Eastern Shore Natural Gas Co., 6275 Gas Transmission Northwest Corp., 6275 Airworthiness directives: Gulfstream Natural Gas System, L.L.C., 6275 Bombardier, 6139–6140 Northern Natural Gas Co., 6276 PROPOSED RULES Northwest Pipeline Corp., 6276 Air carrier certification and operations: Panhandle Eastern Pipe Line Co., L.L.C., 6276–6277 National air tour safety standards; meeting, 6218–6219 Sound Energy Solutions, 6277–6278 Airmen certification: Southern California Edison Co., 6274 Flight simulation device; initial and continuing Southern LNG Inc., 6278–6279 qualification and use requirements, 6216–6218 Southwest Gas Storage Co., 6279 Airworthiness directives: Texas Gas Transmission, L.L.C., 6279 Eurocopter Deutschland GmbH, 6214–6216 NOTICES Federal Reserve System Exemption petitions; summary and disposition, 6365–6366 NOTICES Grants and cooperative agreements; availability, etc.: Banks and bank holding companies: Passenger Facility Charge Program— Formations, acquisitions, and mergers, 6291–6292 Airport ground access projects; funding eligibility Federal Open Market Committee: policy, 6366–6371 Domestic policy directives, 6292

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Reports and guidance documents; availability, etc.: NOTICES Payments system risk; policy statements— Law enforcement in Indian country: Foreign banking organizations; daylight overdraft Law enforcement services policies; BIA arrangements capacity; modifications, 6292–6296 with other parties, 6321–6322

Fish and Wildlife Service Indian Health Service PROPOSED RULES NOTICES Endangered and threatened species: Grants and cooperative agreements; availability, etc.: Findings on petitions, etc.— Health Professions Educational Loans Repayment Desert cymopterus, 6240–6243 Program, 6310–6312 NOTICES Endangered and threatened species permit applications, Interior Department 6320–6321 See Fish and Wildlife Service Food and Drug Administration See Indian Affairs Bureau NOTICES See Land Management Bureau Memorandums of understanding: Virginia Polytechnic Institute and State University and Internal Revenue Service FDA; sabbaticals, postdoctoral fellowships, student NOTICES internships; collaboration, 6296–6307 Agency information collection activities; proposals, Reports and guidance documents; availability, etc.: submissions, and approvals, 6374–6376 Medical products and health conditions; information improvement, 6308–6309 International Trade Administration Over-the-counter drug monograph system— NOTICES Time and extent applications, 6309–6310 Antidumping: Brake rotors from— Foreign-Trade Zones Board China, 6253 NOTICES Cut-to-length carbon steel plate from— Applications, hearings, determinations, etc.: Ukraine, 6253-6254 California, 6252 Oil country tubular goods from— Georgia Mexico, 6254–6255 Inflation Systems, Inc.; automotive airbag inflator Pasta from— manufacturing facilities, 6252 Italy, 6255–6258 Washington Petroleum wax candles from— Inflation Systems, Inc.; automotive airbag inflator and China, 6258–6259 propellant manufacturing plant, 6252 Stainless steel sheet and strip in coils from— Germany, 6262–6264 Forest Service Mexico, 6259–6262 NOTICES Agency information collection activities; proposals, submissions, and approvals, 6248–6249 International Trade Commission Environmental statements; notice of intent: NOTICES Beaverhead-Deerlodge National Forest, MT, 6249–6250 Meetings; Sunshine Act, 6325 Meetings: National Tree-Marking Paint Committee, 6250 Justice Department Southwest Oregon Province Advisory Committee, 6250– See Antitrust Division 6251 Labor Department Health and Human Services Department See Employment and Training Administration See Centers for Disease Control and Prevention See Employment Standards Administration See Food and Drug Administration See Indian Health Service Land Management Bureau See National Institutes of Health NOTICES Homeland Security Department Meetings: Resource Advisory Committees— See Coast Guard Eugene District, 6322 See Customs and Border Protection Bureau Public land orders: See Federal Emergency Management Agency Alaska, 6322–6323 Housing and Urban Development Department Realty actions; sales, leases, etc.: NOTICES California, 6323–6324 Agency information collection activities; proposals, Nevada, 6324 submissions, and approvals, 6320 Oregon, 6324–6325 Indian Affairs Bureau National Highway Traffic Safety Administration PROPOSED RULES NOTICES Trust management reform: Motor vehicle safety standards: Residential and business leases on trust and restricted Nonconforming vehicles— land, 6499–6524 Importation eligibility; determinations, 6371–6372

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National Institute of Standards and Technology Boston Stock Exchange, Inc., 6348–6351 NOTICES Chicago Board Options Exchange, Inc., 6352–6353 Information processing standards, Federal: Chicago Stock Exchange, Inc., 6353–6354 Security categorization of Federal information and New York Stock Exchange, Inc., 6354–6356 information systems, 6264–6266 Pacific Exchange, Inc., 6356–6357 Voluntary product standards: Philadelphia Stock Exchange, Inc., 6357–6364 American Petroleum Institute; standards development, Applications, hearings, determinations, etc.: 6266–6268 FTTW Funds, Inc., et al., 6343–6344 National Institutes of Health State Department NOTICES Inventions, Government-owned; availability for licensing, NOTICES 6312–6313 Agency information collection activities; proposals, Meetings: submissions, and approvals, 6364 National Institute of Allergy and Infectious Diseases, Art objects; importation for exhibition: 6314 Nicholas and Alexandra: At Home with the Last Tsar and National Institute of Diabetes and Digestive and Kidney his Family, 6364 Diseases, 6313–6314 Meetings: Scientific Review Center, 6314–6317 Overseas Security Advisory Council, 6364–6365

National Oceanic and Atmospheric Administration Surface Transportation Board RULES NOTICES Fishery conservation and management: Railroad services abandonment: Alaska; fisheries of Exclusive Economic Zone— Hennepin County Regional Railroad Authority, 6372– American Fisheries Act; implementation; expiration 6373 date removed, 6198–6199 Pennsylvania Lines LLC and Norfolk Southern Railway Sablefish, 6199–6200 Co., 6373 NOTICES Meetings: Pacific Fishery Management Council, 6268 Technology Administration Western Pacific Fishery Management Council, 6268–6269 NOTICES Senior Executive Service: Nuclear Regulatory Commission Performance Review Board; membership, 6269–6270 RULES Radioactive material; packaging and transportation: Thrift Supervision Office International Atomic Energy Agency transportation safety PROPOSED RULES standards (TS-R-1) and other transportation safety Assessments and fees, 6201–6214 amendments; compatibility Correction, 6139 NOTICES Transportation Department Meetings; Sunshine Act, 6341–6342 See Federal Aviation Administration See National Highway Traffic Safety Administration Personnel Management Office See Research and Special Programs Administration NOTICES See Surface Transportation Board Agency information collection activities; proposals, NOTICES submissions, and approvals, 6342 Reports and guidance documents; availability, etc.: Greening the Government Through Federal Fleet and Research and Special Programs Administration Transportation Efficiency; alternative fuel vehicle RULES report, 6365 Hazardous materials: Transportation— Treasury Department Security requirements, 6195–6198 See Internal Revenue Service See Thrift Supervision Office Rural Utilities Service NOTICES NOTICES Agency information collection activities; proposals, Grants and cooperative agreements; availability, etc.: submissions, and approvals, 6373–6374 Household water well systems financing, 6251 Securities and Exchange Commission Veterans Affairs Department PROPOSED RULES PROPOSED RULES Securities: Adjudication; pensions, compensation, dependency, etc.: Mutual funds and other securities; point of sales Testimony certified or under oath; withdrawn, 6223 disclosure and transaction confirmation NOTICES requirements, 6437–6498 Agency information collection activities; proposals, NOTICES submissions, and approvals, 6376–6377 Agency information collection activities; proposals, Meetings: submissions, and approvals, 6342–6343 Vocational Rehabilitation and Employment Task Force, Self-regulatory organizations; proposed rule changes: 6377 American Stock Exchange LLC, 6345–6348

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Separate Parts In This Issue

Part II Reader Aids Transportation Department, Federal Aviation Consult the Reader Aids section at the end of this issue for Administration, 6379–6436 phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws. Part III To subscribe to the Federal Register Table of Contents Securities and Exchange Commission, 6437–6498 LISTSERV electronic mailing list, go to http:// listserv.access.gpo.gov and select Online mailing list Part IV archives, FEDREGTOC-L, Join or leave the list (or change Interior Department, Indian Affairs Bureau, 6499–6524 settings); then follow the instructions.

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CFR PARTS AFFECTED IN THIS ISSUE

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

7 CFR 171...... 6195 176...... 6195 Proposed Rules: 177...... 6195 1423...... 6201 50 CFR 10 CFR 679 (2 documents) ...... 6198, 71...... 6139 6199 12 CFR Proposed Rules: Proposed Rules: 17...... 6240 502...... 6201 14 CFR 39...... 6139 121...... 6380 139...... 6380 Proposed Rules: 39...... 6214 60...... 6216 61...... 6218 91...... 6218 119...... 6218 121 (2 documents) ...... 6216, 6218 135...... 6218 136...... 6218 17 CFR 1...... 6140 Proposed Rules: 239...... 6438 240...... 6438 274...... 6438 25 CFR Proposed Rules: 162...... 6500 33 CFR 147...... 6146 165 (6 documents) ...... 6148, 6150, 6152, 6154, 6156, 6158 Proposed Rules: 165 (2 documents) ...... 6219, 6221 38 CFR Proposed Rules: 3...... 6223 40 CFR 52...... 6160 Proposed Rules: 52...... 6223 44 CFR 65 (3 documents) ...6165, 6166, 6170 67 (2 documents) ....6172, 6179 Proposed Rules: 67...... 6224 45 CFR 2531...... 6181 2533...... 6181 Proposed Rules: 2551...... 6225 2552...... 6227 2553...... 6228 47 CFR 54...... 6181 73 (6 documents) ...6192, 6193, 6194 Proposed Rules: 54...... 6229 73 (4 documents) ....6238, 6239 49 CFR 107...... 6195

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Rules and Regulations Federal Register Vol. 69, No. 27

Tuesday, February 10, 2004

This section of the FEDERAL REGISTER Dated at Rockville, Maryland, this 4th day 1601 Lind Avenue, SW., Renton, contains regulatory documents having general of February, 2004. Washington; or at the FAA, New York applicability and legal effect, most of which For the Nuclear Regulatory Commission. Aircraft Certification Office, 1600 are keyed to and codified in the Code of Michael T. Lesar, Stewart Avenue, Westbury, New York; Federal Regulations, which is published under or at the Office of the Federal Register, 50 titles pursuant to 44 U.S.C. 1510. Federal Register Liaison Officer. [FR Doc. 04–2774 Filed 2–9–04; 8:45 am] 800 North Capitol Street, NW., suite The Code of Federal Regulations is sold by BILLING CODE 7590–01–P 700, Washington, DC. the Superintendent of Documents. Prices of FOR FURTHER INFORMATION CONTACT: Jon new books are listed in the first FEDERAL Hjelm, Aerospace Engineer, Airframe REGISTER issue of each week. DEPARTMENT OF TRANSPORTATION and Propulsion Branch, ANE–171, FAA, New York Aircraft Certification Office, Federal Aviation Administration 1600 Stewart Avenue, Westbury, New NUCLEAR REGULATORY York 11581; telephone (516) 228–7300; COMMISSION 14 CFR Part 39 fax (516) 794–5531. SUPPLEMENTARY INFORMATION: A 10 CFR Part 71 [Docket No. 2003–NM–154–AD; Amendment 39–13458; AD 2004–03–14] proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to RIN 3150–AG71 RIN 2120–AA64 include an airworthiness directive (AD) Compatibility With IAEA that is applicable to certain Bombardier Airworthiness Directives; Bombardier ¥ ¥ ¥ Transportation Safety Standards and Model DHC–8–102, 103, 106, 201, Model DHC–8–102, –103, –106, –201, ¥202, ¥301, ¥311, and ¥315 series Other Transportation Safety –202, –301, –311, and –315 Series Amendments; Correction airplanes was published in the Federal Airplanes Register on November 28, 2003 (68 FR AGENCY: Nuclear Regulatory AGENCY: Federal Aviation 66765). That action proposed to require Commission. Administration, DOT. repetitive inspections for discrepancies ACTION: of certain rear spar fittings between the Final rule: correction. ACTION: Final rule. flex shaft of the flap secondary drive SUMMARY: This document corrects a SUMMARY: This amendment adopts a and the wing-to-fuselage structure, and final rule appearing in the Federal new airworthiness directive (AD), corrective action if necessary. That Register on January 26, 2004 (69 FR applicable to certain Bombardier Model action also provides for an optional 3698) amending the regulations DHC–8–102, –103, –106, –201, –202, modification of the flex shaft governing the packaging and –301, –311, and –315 series airplanes, installation, which would terminate the transportation of radioactive materials. that requires repetitive inspections for repetitive inspections. This action is necessary to precisely discrepancies of certain rear spar fittings Comments identify provisions that will expire four between the flex shaft of the flap years after the final rule becomes secondary drive and the wing-to- Interested persons have been afforded effective and the date on which that will fuselage structure, and corrective action an opportunity to participate in the occur. if necessary. This action also provides making of this amendment. No EFFECTIVE DATE: The final rule is for an optional modification of the flex comments were submitted in response effective on October 1, 2004. Sections shaft installation, which terminates the to the proposal or the FAA’s 71.19(a) and 71.20 expire on October 1, repetitive inspections. This action is determination of the cost to the public. 2008. necessary to find and fix damage and Conclusion FOR FURTHER INFORMATION CONTACT: prevent subsequent failure of the rear The FAA has determined that air spar fittings, which could result in loss Naiem S. Tanious, Office of Nuclear safety and the public interest require the of the wing. This action is intended to Material Safety and Safeguards, U.S. adoption of the rule as proposed. Nuclear Regulatory Commission, address the identified unsafe condition. Washington, DC 20555–0001, telephone DATES: Effective March 16, 2004. Cost Impact (301) 415–6103, e-mail [email protected]. The incorporation by reference of a The FAA estimates that 218 airplanes ■ 1. On page 3698, the effective date is certain publication listed in the of U.S. registry will be affected by this corrected to read as follows: EFFECTIVE regulations is approved by the Director AD. DATE: The final rule is effective on of the Federal Register as of March 16, It will take about 16 work hours per October 1, 2004. Sections 71.19(a) and 2004. rear spar fitting (two fittings per 71.20 expire on October 1, 2008. ADDRESSES: The service information airplane) to accomplish the inspection, 2. In § 71.19 paragraph (a)(3) is referenced in this AD may be obtained at an average labor rate of $65 per work corrected to read as follows: from Bombardier, Inc., Bombardier hour. Based on these figures, the cost Regional Aircraft Division, 123 Garratt impact of the inspection required by § 71.19 Previously approved package. Boulevard, Downsview, Ontario M3K this AD on U.S. operators is estimated (a) * * * 1Y5, Canada. This information may be to be $453,440, or $2,080 per airplane, (3) Paragraph (a) of this section examined at the Federal Aviation per inspection cycle. expires October 1, 2008. Administration (FAA), Transport The cost impact figure discussed * * * * * Airplane Directorate, Rules Docket, above is based on assumptions that no

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operator has yet accomplished any of Authority: 49 U.S.C. 106(g), 40113, 44701. this AD in accordance with Bombardier the requirements of this AD action, and Service Bulletin 8–27–83, dated October 19, § 39.13 [Amended] that no operator would accomplish 2001, is considered acceptable for those actions in the future if this AD ■ 2. Section 39.13 is amended by adding compliance with the applicable actions specified in this AD. were not adopted. The cost impact the following new airworthiness figures discussed in AD rulemaking directive: Alternative Methods of Compliance actions represent only the time 2004–03–14 Bombardier, Inc. (Formerly de (d) In accordance with 14 CFR 39.19, the necessary to perform the specific actions Havilland, Inc.): Amendment 39–13458. Manager, New York Aircraft Certification actually required by the AD. These Docket 2003–NM–154–AD. Office, FAA, is authorized to approve figures typically do not include Applicability: Model DHC–8–102, ¥103, alternative methods of compliance for this incidental costs, such as the time ¥106, ¥201, ¥202, ¥301, ¥311, and ¥315 AD. required to gain access and close up, series airplanes; certificated in any category; Incorporation by Reference planning time, or time necessitated by as listed in Bombardier Service Bulletin 8– 27–83, Revision ‘‘A’’, dated February 8, 2002. (e) The actions shall be done in accordance other administrative actions. Compliance: Required as indicated, unless with Bombardier Service Bulletin 8–27–83, The optional terminating accomplished previously. Revision ‘‘A’’, dated February 8, 2002. This modification, if done, will take about 16 To find and fix damage and prevent incorporation by reference was approved by work hours, at an average labor rate of subsequent failure of the rear spar fittings the Director of the Federal Register in $65 per work hour. Required parts will between the flex shaft of the flap secondary accordance with 5 U.S.C. 552(a) and 1 CFR cost about $365 per airplane. Based on drive and the wing-to-fuselage structure, part 51. Copies may be obtained from these figures, we estimate the cost of the which could result in loss of the wing, Bombardier, Inc., Bombardier Regional accomplish the following: Aircraft Division, 123 Garratt Boulevard, optional terminating modification to be Downsview, Ontario M3K 1Y5, Canada. $1,405 per airplane. Repetitive Inspections/Corrective Action Copies may be inspected at the FAA, Regulatory Impact (a) For airplanes with rear spar fittings Transport Airplane Directorate, 1601 Lind having part number (P/N) 85320053, Avenue, SW., Renton, Washington; or at the The regulations adopted herein will 85322060, or 85334180: Within 12 months FAA, New York Aircraft Certification Office, not have a substantial direct effect on after the effective date of this AD; do a 1600 Stewart Avenue, Westbury, New York; the States, on the relationship between detailed inspection for discrepancies or at the Office of the Federal Register, 800 the national Government and the States, (chafing, wear damage, cracking) of the rear North Capitol Street, NW., suite 700, or on the distribution of power and spar fittings located between the flex shaft of Washington, DC. responsibilities among the various the flap secondary drive and the wing-to- Note 2: The subject of this AD is addressed fuselage structure. Do the inspection as levels of government. Therefore, it is in Canadian airworthiness directive CF– defined in Parts III.A., III.B., and III.D. of the 2001–42, dated November 23, 2001. determined that this final rule does not Accomplishment Instructions of Bombardier have federalism implications under Service Bulletin 8–27–83, Revision ‘‘A’’, Effective Date Executive Order 13132. dated February 8, 2002; except where the (f) This amendment becomes effective on service bulletin specifies to report inspection For the reasons discussed above, I March 16, 2004. certify that this action (1) is not a findings, this AD does not require such ‘‘significant regulatory action’’ under reporting. Do the inspection per the service Issued in Renton, Washington, on January Executive Order 12866; (2) is not a bulletin, and repeat the inspection thereafter 29, 2004. at the applicable time specified in Part I.D. Kalene C. Yanamura, ‘‘significant rule’’ under DOT ‘‘Compliance’’ of the service bulletin. Any Regulatory Policies and Procedures (44 Acting Manager, Transport Airplane applicable corrective action (high frequency Directorate, Aircraft Certification Service. FR 11034, February 26, 1979); and (3) eddy current inspection for cracking, will not have a significant economic blending out wear damage, replacement of [FR Doc. 04–2583 Filed 2–9–04; 8:45 am] impact, positive or negative, on a rear spar fittings) must be done at the BILLING CODE 4910–13–U substantial number of small entities applicable time specified in Part I.D. under the criteria of the Regulatory ‘‘Compliance’’ of the service bulletin. Flexibility Act. A final evaluation has Note 1: For the purposes of this AD, a COMMODITY FUTURES TRADING been prepared for this action and it is detailed inspection is defined as: ‘‘An COMMISSION contained in the Rules Docket. A copy intensive visual examination of a specific of it may be obtained from the Rules structural area, system, installation, or 17 CFR Part 1 assembly to detect damage, failure, or Docket at the location provided under irregularity. Available lighting is normally RIN 3038–AC01 the caption ADDRESSES. supplemented with a direct source of good Investment of Customer Funds List of Subjects in 14 CFR Part 39 lighting at intensity deemed appropriate by the inspector. Inspection aids such as mirror, AGENCY: Commodity Futures Trading Air transportation, Aircraft, Aviation magnifying lenses, etc., may be used. Surface safety, Incorporation by reference, cleaning and elaborate access procedures Commission. Safety. may be required.’’ ACTION: Final rule. Adoption of the Amendment Optional Terminating Modification SUMMARY: The Commodity Futures Trading Commission (‘‘Commission’’) is ■ Accordingly, pursuant to the authority (b) Modification of the flex shaft of the flap secondary drive per Part III.C. of the amending its regulations to allow delegated to me by the Administrator, Accomplishment Instructions of Bombardier futures commission merchants the Federal Aviation Administration Service Bulletin 8–27–83, Revision ‘‘A’’, (‘‘FCMs’’) and derivatives clearing amends part 39 of the Federal Aviation dated February 8, 2002, terminates the organizations (‘‘DCOs’’) to engage in Regulations (14 CFR part 39) as follows: repetitive inspections required by paragraph repurchase agreements (‘‘repos’’) with (a) of this AD. PART 39—AIRWORTHINESS securities deposited by customers, DIRECTIVES Actions Done per Previous Issue of Service subject to certain conditions, and to Bulletins modify the portfolio time-to-maturity ■ 1. The authority citation for part 39 (c) Accomplishment of the inspections or requirements for securities deposited in continues to read as follows: the modification before the effective date of connection with certain collateral

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management programs of DCOs, (‘‘customer collateral’’), subject to customer agreements without a pursuant to certain conditions. certain terms and conditions. When the corresponding regulatory benefit. EFFECTIVE DATE: March 11, 2004. Commission adopted the amendments Freddie Mac expressed the contrary FOR FURTHER INFORMATION CONTACT: John to Rule 1.25 in December 2000, it view that the written disclosure and C. Lawton, Deputy Director and Chief included provisions governing repos customer consent requirements of Letter Counsel, or Phyllis P. Dietz, Special and reverse repos involving investments 84–24 are appropriate, and should be Counsel, Division of Clearing and purchased with customer funds retained. It pointed out that, in posting Intermediary Oversight, Commodity (‘‘permitted investments’’), subject to margin to its clearing firms, Freddie Futures Trading Commission, Three terms and conditions that differ in a Mac may transfer securities, which may Lafayette Centre, 1155 21st Street, NW, number of ways from those in Letter 84– include mortgage-related securities that Washington, DC 20581. Telephone (202) 24.5 The Commission did not, however, are not fungible. In certain cases, it may 418–5450. specifically address Letter 84–24 at that be necessary to have the same security returned in order to achieve the SUPPLEMENTARY INFORMATION: time. The Commission proposed to amend company’s asset/liability management I. Background Rule 1.25(a)(2) to permit FCMs and goals or for other risk management Commission Rule 1.25 (17 CFR 1.25) DCOs to engage in repos of customer- purposes. Freddie Mac stated that, at a sets forth the types of instruments in deposited securities subject to certain minimum, customers and FCMs should which FCMs and DCOs are permitted to terms and conditions. The proposed be permitted to provide contractually invest customer segregated funds. Rule amendments did not include a for disclosure and notice. 1.25 was substantially amended in requirement that the FCM provide The Commission has determined to December 2000 to expand the list of written disclosure of the mechanics of amend Rule 1.25(a)(2) as proposed, permitted investments.1 In connection the repo transaction and obtain prior without a requirement for written with that expansion, the Commission written authorization from the disclosure and customer consent. The added several provisions intended to customer. In contrast, Letter 84–24 does Commission believes that in light of the minimize the credit, liquidity, and include such a requirement. The stringent safeguards discussed below, it volatility risks associated with the Commission requested public comment is appropriate to provide FCMs and additional investments. on whether it is appropriate to permit DCOs this additional flexibility in On June 30, 2003, the Commission repos of customer collateral without performing collateral management. The published for public comment proposed prior written consent, and, if so, Commission wishes to emphasize, amendments to some of those whether the limitations set forth in the however, that the absence of disclosure provisions and further requested proposal are appropriate. The and consent requirements does not comment on several other provisions of Commission further requested comment preclude any customer of an FCM from the rule.2 The Commission received on whether one-way notice disclosure to requiring on its own initiative, by comment letters from the Futures the customer should be required, or written agreement (e.g., the customer Industry Association (‘‘FIA’’), National whether an ‘‘opt-out’’ mechanism agreement), that the FCM obtain the Futures Association (‘‘NFA’’), Chicago should be provided. customer’s prior consent in order to engage in repo transactions with Mercantile Exchange (‘‘CME’’), Federal The Commission received three securities deposited by the customer. As Home Loan Mortgage Corporation comments on the disclosure issue. The in other instances where disclosure and (‘‘Freddie Mac’’), and Lehman Brothers. FIA pointed out that the securities used customer authorization are not In light of the comments received, the in the repos would have to be highly expressly required by regulation, a Commission has determined to adopt liquid and any loss incurred as a result customer and its FCM are always free to amendments to Rule 1.25 substantially of a counterparty default would be negotiate terms and conditions of as proposed and to further clarify borne by the FCM. The FIA therefore 3 disclosure and consent, and to enter certain provisions of the rule. concluded that the Commission should into a binding agreement accordingly.7 not require an FCM to provide one-way II. Discussion of the Final Rules With respect to the criteria for disclosure or obtain a customer’s engaging in repos with customer A. Repurchase Agreements Involving written consent prior to engaging in a collateral under proposed paragraphs Collateral Deposited by Customers repo transaction with the customer’s (a)(2)(ii)(A)–(D), the FIA expressed the securities. It further stated its view that CFTC Staff Letter 84–24 (‘‘Letter 84– view that those requirements, in 4 all customers are presumed to be aware 24’’) permits FCMs to enter into repos combination with the requirements of of the rules and regulations governing with collateral deposited by customers paragraph (d), ‘‘will be more than their accounts.6 sufficient to safeguard both the 1 See 65 FR 77993 (Dec. 13, 2000) (publishing The NFA observed that because the customer-owned securities specifically final rules); 65 FR 82270 (Dec. 28, 2000) (making Commission’s proposed amendments technical corrections and accelerating effective date as well as the customer segregated of final rules from February 12, 2001 to December exclude specifically identifiable account generally.’’ Similarly, the NFA 28, 2000). property from repo transactions, it is not observed that the safeguards included in 2 See 68 FR 38654 (June 30, 2003). In a separate necessary to provide an opt-out the proposal provide ‘‘ample release, the Commission will address comments mechanism whereby a customer could received on aspects of Rule 1.25 that were not protection’’ for customer-deposited related to textual amendments proposed in the June instruct an FCM not to subject collateral securities. 30, 2003 Federal Register release. to a repo. The NFA expressed its belief 3 The Commission is also making technical that an opt-out provision would be 7 The Commission believes that a customer’s revisions in that the final rules consistently use the costly and burdensome for FCMs that ability to negotiate arrangements for disclosure and term ‘‘derivatives clearing organization,’’ rather would have to revise their existing consent adequately addresses Freddie Mac’s than the terms ‘‘clearing organization’’ or concerns. It notes, however, that it is not making ‘‘registered clearing organization,’’ as had appeared any determination as to whether the instruments in the text of the proposed rules. 5 See Rule 1.25(a)(2) and Rule 1.25(d). identified in the Freddie Mac letter would satisfy 4 CFTC Staff Letter No. 84–24, [1984–1986 6 Lehman Brothers stated in its comment letter the standards set forth under paragraph Transfer Binder] Comm. Fut. L. Rep. (CCH) ¶ 22,449 that it fully supports the views set forth in the FIA’s (a)(2)(ii)(A)–(D) (discussed below), thereby making (Dec. 5, 1984). comment letter. them suitable for repurchase.

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Proposed paragraph (a)(2)(ii)(A) securities and the customer segregated costs that might be incurred in replacing would provide that, to be eligible for account. The Commission believes that the securities. It noted, however, that repurchase, securities would have to these safeguards, currently applicable to replacing the securities may be the meet the marketability requirements of repos for permitted investments, are preferable course of action. Rule 1.25(b)(1).8 Application of this appropriate to apply to customer- Freddie Mac, in pointing out that it standard is intended to ensure that, if a deposited securities as well. The posts margin in the form of securities repo counterparty should default, the Commission, therefore, has determined that are not fungible, explained that in FCM or DCO could use the cash to adopt paragraph (a)(2)(ii)(C) as certain cases, it may be necessary to proceeds from the repo to buy the proposed. have the same security returned in order securities elsewhere. Both the NFA and Proposed paragraph (a)(2)(ii)(D) to achieve the company’s asset/liability FIA supported the marketability would provide that, in the unlikely management goals or for other risk requirement. The Commission has event of a default by a counterparty to management purposes. Based on this determined to adopt paragraph a repo, the FCM or DCO ‘‘must take concern, Freddie Mac requested that the (a)(2)(ii)(A) as proposed. steps to ensure’’ that the default does Commission make more explicit, and Proposed paragraph (a)(2)(ii)(B) not result in ‘‘any cost or expense’’ to specifically state, that an FCM is would provide that securities subject to the customer. The Commission responsible for losses arising from a repos must not be ‘‘specifically requested comment on how an FCM customer’s inability to maintain the risk identifiable property’’ as defined in Rule might fulfill its obligations to its profile of a portfolio or otherwise 190.01(kk) (17 CFR 190.01(kk)). Such customer in the event a repo replicate necessary positions (e.g., property is generally not eligible for counterparty fails to perform. In this ‘‘breakage’’), transactional costs, and repurchase. The NFA expressed the regard, the Commission asked similar consequential losses resulting opinion that the exclusion of commenters to consider whether it is from the repo transaction. specifically identifiable property sufficient for the FCM to give the The Commission has determined that eliminates the need to require the FCM customer the cash equivalent of the in the unlikely event of a counterparty to replace the securities in the event of securities, plus any transaction costs default involving customer-deposited a counterparty default. The NFA further that might be incurred in replacing the securities, the FCM or DCO must make stated its belief that, in the event of a securities, or whether the FCM should the customer economically whole and default, it would be acceptable for an be required to replace the securities. must do so in a timely manner. The FCM to make the customer whole by The Commission recognized the FCM or DCO will not be required to giving the customer the cash equivalent possibility that cash compensation replace the securities; rather, it may of the securities plus any transaction might be insufficient if a customer exercise its discretion in determining costs that might be incurred in replacing needed the particular securities to the means for making the customer the securities. This topic is discussed in maintain the risk profile of its portfolio. whole in light of the relevant facts and connection with paragraph (a)(2)(ii)(D), The FIA observed that, among other circumstances. Making the customer below. The Commission has determined things, because the customer-owned ‘‘whole’’ includes, but is not limited to to adopt paragraph (a)(2)(ii)(B) as securities used for repos must be highly replacing the securities that were the proposed. liquid, an FCM should have little subject of the repo, paying the customer Proposed paragraph (a)(2)(ii)(C) difficulty using the cash proceeds of the the cash equivalent of the securities, would provide that the terms and repo held in the customer segregated reimbursing the customer for any conditions of a repo involving customer- account to buy the same securities commissions or other transactional costs deposited securities must be in elsewhere. The FIA stated its belief that incurred by the customer in replacing accordance with the requirements of if a counterparty fails to perform, an the securities, compensating the 9 FCM should make every reasonable Rule 1.25(d). As noted above, the FIA customer for any adverse tax effort to replace the customer-owned commented that application of the consequences accruing to the securities that are the subject of the requirements of paragraph (d), customer,10 or covering any other losses repo. The FIA added that ‘‘[o]f course, combined with the additional that arise from the counterparty’s failure any loss incurred as a result of such requirements of proposed paragraph to return the securities deposited by the difficulty would be borne by the FCM.’’ (a)(2)(ii), will more than sufficiently customer. In response to the Commission’s safeguard both the customer-owned Accordingly, the proposed language specific request for comments on of 1.25(a)(2)(ii)(D), which would have 8 whether there are tax implications that Under Rule 1.25(b)(1), except for interests in obligated the FCM or DCO ‘‘to take steps money market mutual funds, investments must be should be considered in connection to ensure’’ that the default by a repo ‘‘readily marketable’’ as defined in 17 CFR with the proposal, the FIA stated its 240.15c3–1 (the net capital rule of the Securities counterparty does not result in ‘‘any understanding that the failure of a and Exchange Commission). Paragraph (c)(11)(i) of cost or expense to the customer,’’ has counterparty to return the customer- that rule provides that ‘‘[t]he term ready market been revised to read ‘‘[u]pon the default shall include a recognized established securities owned securities could, in certain by a counterparty to a repurchase market in which there exists independent bona fide circumstances, have tax implications. offers to buy and sell so that a price reasonably Given the remoteness of counterparty related to the last sales price or current bona fide 10 While the FIA has suggested that the competitive bid and offer quotations can be default, the FIA said it does not believe Commission need not consider possible tax determined for a particular security almost the Commission should consider consequences in its deliberations, the Commission instantaneously and where payment will be potential tax implications in adopting wishes to make clear that adverse tax consequences received in settlement of a sale at such price within final rules. The Commission received no for customers as a result of a repo counterparty a relatively short time conforming to trade custom.’’ default are the type of cost or expense that must be 9 Rule 1.25(d) specifies criteria for repos and other comments on tax implications. covered by the FCM. The Commission agrees that reverse repos involving permitted investments. As noted above, the NFA stated its it is not necessary to engage in an analysis of Those criteria address, among other things, view that in the event of a counterparty specific factual situations that may give rise to identification of securities, permissible default, it would be acceptable for an adverse tax consequences, but it is necessary to counterparties, applicability of concentration limits, point out that the Commission contemplates that duration of the agreement, substitution and transfer FCM to make the customer whole by adverse tax consequences are the type of cost or of securities, documentation and confirmation giving the customer the cash equivalent expense for which the customer must be requirements, and bookkeeping requirements. of the securities plus any transaction compensated.

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agreement, the futures commission B. Time-to-Maturity Requirements for the modified treatment should be merchant or derivatives clearing Certain Collateral extended to apply to initial margin organization shall act promptly to Rule 1.25(b)(5) establishes a time-to- generally. If the latter, the Commission ensure that the default does not result maturity requirement for the portfolio of requested comment on whether in any direct or indirect cost or expense permitted investments. In order to alternative safeguards should be to the customer.’’ This modified encourage development of innovative developed. The Commission also language is intended to clarify: (1) The collateral management programs, and requested comment on whether the FCM or DCO has an unconditional thereby facilitate the efficient use of proposed haircut is appropriate. responsibility to make the customer capital, the Commission proposed to The Commission received two whole; (2) the FCM or DCO must act amend Rule 1.25(b)(5) to permit certain comment letters on the proposed amendments to Rule 1.25(b)(5). With promptly; and (3) making the customer instruments to be treated as if they had respect to the permitted categories of whole includes compensation for a wide a time-to-maturity of one day, if certain terms and conditions were satisfied.12 margin (proposed paragraph range of costs and expenses, both direct (b)(5)(ii)(C)), the CME requested and indirect, as discussed above. The Commission proposed the following criteria for such treatment: clarification that the proposed language In its proposal, the Commission first, under proposed paragraph would not restrict it from applying requested comment on whether the (b)(5)(ii)(A), the instrument must be assets in the IEF 3 program to reserve terms and conditions applicable to deposited with a DCO solely on an and/or core performance bond DCOs engaging in repos should differ in overnight basis, pursuant to the terms requirements. The CME stated that it any way from those applicable to FCMs. and conditions of a collateral performs its own conservative risk The Commission received no comments management program. Second, under management and stress testing functions on this topic. The Commission has proposed paragraph (b)(5)(ii)(B), the on a daily basis, establishing a prudent determined to apply the same rules to instrument must be one that the FCM and flexible program that benefits both FCMs and DCOs engaging in repo owns or has the unqualified right to market participants. It asserted that by transactions with customer-deposited pledge, is free of any lien, and is expanding the list of permitted margin securities because the same economic deposited by the FCM into a segregated categories, industry participants and risks apply to both situations. account at a DCO.13 Third, under DCOs would realize greater benefits. The CME stated its belief that it is The Commission also requested proposed paragraph (b)(5)(ii)(C), the instrument must be used only for the important to have the flexibility to comment on whether customer expand the IEF 3 program to satisfy collateral that is subject to repo should purpose of meeting concentration margin or other similar charges that are other classes of performance bond be treated for concentration purposes in addition to the basic margin requirements. like permitted investments under requirement established by the DCO. Similarly, the FIA expressed the view paragraph (b)(4)(ii) (repurchase Fourth, under proposed paragraph that certain of the proposed terms and agreements) or continue to be treated (b)(5)(ii)(D), the DCO must price the conditions would unnecessarily restrict under paragraph (b)(4)(v) (treatment of instrument each day based on the the scope of the relief. In particular, the customer-owned securities). Only the current mark-to-market value. Fifth, FIA stated its belief that the benefits of FIA touched on this. In footnote 3 of its under proposed paragraph (b)(5)(ii)(E), the amendment should not be limited to letter, the FIA recommends that the the DCO must haircut the instrument by those circumstances in which the concentration limit requirements in at least two percent. securities are used only for the purpose paragraph (b)(4)(i) (permitted The Commission requested comment of meeting concentration margin or investments) apply to all transactions. on the appropriateness of the proposed other similar charges. Referring to the The Commission notes that under terms and conditions. In particular, the IEF 3 program, the FIA noted that current paragraph (b)(4)(v), there is no Commission requested comment on although it is limited to the deposit of concentration requirement for customer- whether the relief should be limited to concentration margin, ‘‘we see no deposited securities because changes in instruments deposited to meet reason why, if a clearing organization desired, a comparable program could the value of such securities accrue to the concentration and similar margin not be designed for initial margin customer, not the FCM.11 The final rules requirements, as proposed, or whether deposits generally.’’ in no way limit or alter the fact that With respect to the proposed changes in the value of such securities 12 The proposed amendments to Rule 1.25(b)(5) were intended to address the CME’s Interest minimum haircut of two percent accrue to the customer and not the FCM. Earning Facility 3 program (‘‘IEF 3’’), and any (proposed paragraph (b)(5)(ii)(E)), the As discussed above, however, if an FCM similar programs, whereby FCMs could deposit CME expressed the view that the rule engaged in a repo with a customer- certain collateral on an overnight basis to meet should allow either a DCO or a qualified deposited security and the counterparty concentration margin requirements. Absent amendment of the rule, the deposit of such custodian to perform the pricing and defaulted, the FCM would bear the cost. collateral could cause the FCM’s portfolio to exceed haircutting functions. It indicated that it Thus, the FCM would incur price risk. the time-to-maturity limits of Rule 1.25(b)(5). plans to use third party custodians to Accordingly, consistent with the FIA 13 Instruments given to an FCM by a customer for price and haircut securities that qualify comment, the concentration deposit in a segregated account currently are not subject to the time-to-maturity provisions of Rule for the one-day time-to-maturity benefit, requirements of direct investments 1.25, and this remains the case under the final but would like the ability to perform apply. rules. Instruments purchased by an FCM with these functions if it obtains the customer funds and held in a segregated account necessary expertise. The CME did not In light of the Commission’s adoption currently are subject to those provisions. This of amendments to Rule 1.25(a)(2), as generally will remain the case under the final rules. object to the two percent minimum discussed above, Rule 1.25, as amended, The final rules provide relief with regard to haircut. supersedes Letter 84–24. instruments that are held by an FCM in its non- The FIA opposed the minimum segregated inventory and that are deposited on an haircut, expressing the view that the overnight basis into a segregated account at a DCO. 11 See 65 FR at 78002 (Dec. 13, 2000) (discussion So long as an FCM has an unqualified right to DCO core principles support the accompanying the Commission’s adoption of the pledge the instruments, it may include instruments authority of DCOs to exercise discretion concentration requirements). obtained through reverse repos, or otherwise. in managing risks in setting haircuts on

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deposited securities. The FIA requested give relief from the time-to-maturity those listed in section 4d(a)(2) of the that the Commission defer to the DCO’s requirement of paragraph (b)(5)(i) that Act, to enhance the yield available to judgment in establishing such haircuts, would otherwise apply. The FCMs, DCOs, and their customers until the Commission has reason to Commission believes that in light of this without compromising the safety of believe that the DCO is not complying relief, the two percent haircut is a customer funds. These final rules with a core principle. prudent substitute safeguard. The should enable FCMs and DCOs to The Commission has carefully Commission understands that two remain competitive globally and considered the views expressed by the percent is the standard haircut generally domestically, while maintaining CME and FIA. The Commission has used in the repo market. safeguards against systemic risk. In light determined to adopt the amendments to Finally, the FIA concluded its of the foregoing, the Commission has Rule 1.25(b)(5), as proposed, with two comments on (b)(5) with a request for determined that the adoption of the exceptions. First, the Commission has the Commission to confirm that, to the final rules regarding the expansion of decided not to adopt proposed extent the concentration limits in Rule permitted instruments for the paragraph (b)(5)(ii)(C), which would 1.25 apply to deposits of securities with investment of customer funds will be have limited the one-day time-to- DCOs under 1.25(b)(2), the applicable consistent with the ‘‘public interest,’’ as maturity treatment to instruments limits will be the limits for direct that term is used in section 4(c) of the deposited to meet concentration margin investments. The Commission hereby Act. When that provision was enacted, or similar charges. The Commission confirms this. the Conference Report accompanying believes that the other provisions of the III. Section 4(c) Findings the Futures Trading Practices Act of rule constitute prudent safeguards and 1992 18 stated that the ‘‘public interest’’ that it is appropriate to give DCOs the The final rules allowing FCMs and in this context would ‘‘include the DCOs to engage in repos with securities flexibility to apply the rule to other national public interests noted in the deposited by customers are promulgated classes of performance bond. Act, the prevention of fraud and the under section 4d(a)(2) of the Commodity Second, in the final rules, the preservation of the financial integrity of Exchange Act (‘‘Act’’),16 which governs Commission has added language to the markets, as well as the promotion of investment of customer funds, and proposed paragraph (b)(5)(ii)(A) to make responsible economic or financial Section 4(c) of the Act,17 which grants clear that the DCO’s collateral innovation and fair competition.’’ 19 management program must have the Commission broad exemptive become effective in accordance with the authority. Section 4d(a)(2) provides that IV. Related Matters 14 customer funds may be invested in notice procedures of Rule 39.4. The A. Regulatory Flexibility Act notice procedures, which apply obligations of the United States, in generally to DCO rules,15 provide the general obligations of any State or of any The Regulatory Flexibility Act Commission with a mechanism for political subdivision thereof, and in (‘‘RFA’’)20 requires federal agencies, in maintaining an appropriate level of obligations fully guaranteed as to promulgating rules, to consider the oversight to ensure that the relief principal and interest by the United impact of those rules on small granted in paragraph (b)(5) is applied States. It further provides that such businesses. The rule amendments consistent with core principles and the investments must be made in adopted herein will affect FCMs and Commission’s regulations. The accordance with such rules and DCOs. The Commission has previously Commission notes that rather than regulations and subject to such established certain definitions of ‘‘small adopt prescriptive rules for collateral conditions as the Commission may entities’’ to be used by the Commission management programs that incorporate prescribe. in evaluating the impact of its rules on the one-day time-to-maturity treatment, Section 4(c) of the Act provides that, small entities in accordance with the the Commission has taken a more in order to promote responsible RFA.21 The Commission has previously flexible approach in permitting DCOs to economic or financial innovation and determined that registered FCMs 22 and exercise discretion in developing such fair competition, the Commission, by DCOs 23 are not small entities for the programs. rule, regulation or order, may exempt purpose of the RFA. Pursuant to 5 With regard to the CME’s comment on any class of agreements, contracts or U.S.C. 605(b), the Chairman, on behalf performance of the pricing and transactions, including any person or of the Commission, certifies that the haircutting function, the Commission class of persons offering, entering into, final rules will not have a significant confirms that a DCO could outsource rendering advice or rendering other economic impact on a substantial the daily execution of these functions to services with respect to, the agreement, number of small entities. a third party custodian. Under the rule, contract, or transaction, from the B. Paperwork Reduction Act however, the DCO would remain contract market designation requirement ultimately responsible for compliance. of section 4(a) of the Act, or any other The Paperwork Reduction Act of 1995 With regard to the FIA’s comment on provision of the Act other than section (‘‘PRA’’) 24 imposes certain the haircut, the Commission has 2(a)(1)(C)(ii) or (D), if the Commission requirements on federal agencies decided to impose a minimum two determines that the exemption would be percent haircut, as proposed. The effect consistent with the public interest. For 18 Pub. L. No. 102–546, 106 Stat. 3590 (1992). of new paragraph (b)(5)(ii) will be to the reasons stated below, the 19 H.R. Conf. Rep. No. 102–978 (1992). The Conference Report also states that the reference in Commission believes that issuing the Section 4(c) to the ‘‘purposes of the Act’’ is 14 Rule 39.4(a) provides that DCOs may request exemptive relief as set forth in these intended to ‘‘underscore [the Conferees’] Commission approval for rules and rule expectation that the Commission will assess the amendments under Rule 40.5, and Rule 39.4(b) final rules is consistent with the public impact of a proposed exemption on the provides that DCOs may self-certify new or interest. maintenance of the integrity and soundness of amended rules under Rule 40.6. The Commission is expanding the markets and market participants.’’ Id. 15 The Commission broadly defines the term range of instruments in which FCMs 20 5 U.S.C. 601 et seq. ‘‘rule’’ to include, among other things, rules, may invest customer funds beyond 21 regulations, interpretations, and stated policies, in 47 FR 18618 (Apr. 30, 1982). whatever form adopted, and any amendment or 22 Id. at 18619. addition thereto, made or issued by a DCO. See 16 7 U.S.C. 6d(a)(2). 23 66 FR 45604, 45609 (Aug. 29, 2001). Rule 40.1. 17 7 U.S.C. 6(c). 24 44 U.S.C. 3507.

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(including the Commission) in 3. Financial integrity of futures (2)(i) In addition, a futures connection with their conducting or markets and price discovery. The final commission merchant or derivatives sponsoring any collection of rules will not affect the financial clearing organization may buy and sell information as defined by the PRA. The integrity of futures markets and price the permitted investments listed in final rule amendments that have been discovery. paragraphs (a)(1)(i) through (viii) of this adopted do not require a new collection 4. Sound risk management practices. section pursuant to agreements for of information on the part of any entities The final rules impose sound risk resale or repurchase of the instruments, subject to these rules. management practices for FCMs and in accordance with the provisions of C. Cost-Benefit Analysis DCOs that elect to invest customer paragraph (d) of this section. funds under the rules. The rules (ii) A futures commission merchant or Section 15(a) of the Act requires that regarding repos with customer- a derivatives clearing organization may the Commission, before promulgating a deposited securities make clear that sell securities deposited by customers as regulation under the Act or issuing an FCMs and DCOs, not customers, will margin pursuant to agreements to order, consider the costs and benefits of bear the costs of any default by a repo repurchase subject to the following: its action. By its terms, section 15(a) counterparty. DCOs acting pursuant to (A) Securities subject to such does not require the Commission to the one-day time-to-maturity relief must repurchase agreements must meet the quantify the costs and benefits of a new satisfy the requirements set forth in the marketability requirement of paragraph rule or determine whether the benefits final rules, which include a requirement (b)(1) of this section. of the rule outweigh its costs. Rather, that the governing collateral (B) Securities subject to such section 15(a) simply requires the management program must have been repurchase agreements must not be Commission to ‘‘consider the costs and filed with the Commission. ‘‘specifically identifiable property’’ as benefits’’ of its action. defined in § 190.01(kk) of this chapter. Section 15(a) further specifies that 5. Other public considerations. The (C) The terms and conditions of such costs and benefits shall be evaluated in final rules are expected to enhance the light of the following considerations: (1) ability of FCMs and DCOs to earn an agreement to repurchase must be in Protection of market participants and revenue from the investment of accordance with the provisions of the public; (2) efficiency, customer funds, while protecting the paragraph (d) of this section. competitiveness, and financial integrity safety of such funds and preserving the (D) Upon the default by a of futures markets; (3) price discovery; rights of customers. FCMs and DCOs are counterparty to a repurchase agreement, (4) sound risk management practices; not obligated to enter into repos with the futures commission merchant or and (5) other public interest customer-deposited collateral under derivatives clearing organization shall considerations. Accordingly, the Rule 1.25(a)(2), and, similarly, DCOs are act promptly to ensure that the default Commission could, in its discretion, not obligated to implement collateral does not result in any direct or indirect give greater weight to any one of the five management programs applying the cost or expense to the customer. considerations and could, in its relief granted in Rule 1.25(b)(5). (b) * * * discretion, determine that, Therefore, any costs to FCMs and DCOs (5) Time-to-maturity. (i) Except for notwithstanding its costs, a particular in connection with the implementation investments in money market mutual rule was necessary or appropriate to of these rules are voluntarily incurred. funds, the dollar-weighted average of protect the public interest or to With respect to customer costs, the rules the time-to-maturity of the portfolio, as effectuate any of the provisions or to clarify that, in the case of a default by that average is computed pursuant to accomplish any of the purposes of the a repo counterparty, the customer must § 270.2a-7 of this title, may not exceed Act. be made whole, promptly. The 24 months. The Commission has evaluated the requirements that must be satisfied in (ii) For purposes of determining the costs and benefits of the final rules in order for collateral to be used for a repo time-to-maturity of the portfolio, an light of the specific considerations (including ready marketability) will instrument that is set forth in identified in section 15(a) of the Act, as make prompt replacement of the paragraphs (a)(1)(i) through (vii) of this follows: securities or payment of replacement section may be treated as having a one- 1. Protection of market participants costs readily feasible solutions. day time-to-maturity if the following terms and conditions are satisfied: and the public. The final rules facilitate List of Subjects in 17 CFR Part 1 greater capital efficiency on the part of (A) The instrument is deposited solely FCMs and DCOs, while protecting Brokers, Commodity futures, on an overnight basis with a derivatives customers by establishing prudent Consumer protection, Reporting and clearing organization pursuant to the standards for repos with customer- recordkeeping requirements. terms and conditions of a collateral deposited collateral and requirements ■ Accordingly, the Commission amends management program that has become for adjustment to time-to-maturity part 1 as follows: effective in accordance with § 39.4 of calculations for certain collateral this chapter; management programs. PART 1—GENERAL REGULATIONS (B) The instrument is one that the 2. Efficiency and competition. The UNDER THE COMMODITY EXCHANGE futures commission merchant owns or final rules provide FCMs and DCOs ACT has an unqualified right to pledge, is not with greater flexibility in using repos to subject to any lien, and is deposited by ■ maximize returns on direct investment 1. The authority citation for Part 1 the futures commission merchant into a of customer funds. They also facilitate continues to read as follows: segregated account at a derivatives the implementation of collateral Authority: 7 U.S.C. clearing organization; management programs, which can also ■ 2. Section 1.25 is amended by revising (C) The derivatives clearing serve to maximize capital efficiency. paragraphs (a)(2) and (b)(5) to read as organization prices the instrument each The rules should enable FCMs and follows: day based on the current mark-to-market DCOs to remain competitive globally value; and and domestically, while maintaining § 1.25 Investment of customer funds. (D) The derivatives clearing safeguards against systemic risk. (a) * * * organization reduces the assigned value

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of the instrument each day by a haircut 501 Magazine Street, New Orleans, LA construction would result in a of at least 2 percent. 70130, telephone (504) 589–6271. catastrophic event. * * * * * SUPPLEMENTARY INFORMATION: The Coast Guard has evaluated BP’s information and concerns against Eighth Issued in Washington, DC on February 4, Regulatory History Coast Guard District criteria developed 2004, by the Commission. On September 26, 2003, we published to determine if an Outer Continental Jean A. Webb, Shelf facility qualifies for a safety zone. Secretary of the Commission. a notice of proposed rulemaking (NPRM) entitled ‘‘Safety Zone for Outer We concluded that the risk of allision to [FR Doc. 04–2752 Filed 2–9–04; 8:45 am] Continental Shelf Facility in the Gulf of the facility and the potential for loss of BILLING CODE 6351–01–P Mexico for Green Canyon 645’’ in the life and damage to the environment Federal Register (68 FR 55557). We resulting from such an accident during received no comments on the proposed and following the construction of DEPARTMENT OF HOMELAND rule. No public hearing was requested, Holstein warrants the establishment of SECURITY and none was held. this safety zone. The regulation will significantly reduce the threat of Coast Guard Background and Purpose allisions, oil spills and natural gas The Coast Guard is establishing a releases and increase the safety of life, 33 CFR Part 147 safety zone around a petroleum and gas property, and the environment in the production facility in the Gulf of Gulf of Mexico. This regulation is issued [CGD08–03–028] Mexico: Holstein, Green Canyon Block pursuant to 14 U.S.C. 85 and 43 U.S.C. RIN 1625–AA76 645 (GC 645), located at position 1333 as set out in the authority citation 27°19′17″ N, 90°32′08″ W. The safety for 33 CFR part 147. Safety Zone for Outer Continental zone will be in effect while the facility Discussion of Comments and Changes Shelf Facility in the Gulf of Mexico for is being constructed and after the Green Canyon 645 construction is completed. We received no comments on the This safety zone is in the deepwater proposed rule. Therefore, we have not AGENCY: Coast Guard, DHS. area of the Gulf of Mexico. For the made any change in the final rule. ACTION: Final rule. purposes of this regulation it is Regulatory Evaluation considered to be in waters of 304.8 SUMMARY: The Coast Guard is This rule is not a ‘‘significant meters (1,000 feet) or greater depth establishing a safety zone around a regulatory action’’ under section 3(f) of extending to the limits of the Exclusive petroleum and gas production facility in Executive Order 12866 and does not Economic Zone (EEZ) contiguous to the Green Canyon 645 of the Outer require an assessment of potential costs territorial sea of the United States and Continental Shelf in the Gulf of Mexico and benefits under section 6(a)(3) of that extending to a distance up to 200 while the facility is being constructed Order. The Office of Management and nautical miles from the baseline from and after the construction is completed. Budget has not reviewed it under that which the breadth of the sea is The construction site and facility need Order. It is not significant under the measured. Navigation in the area of the to be protected from vessels operating regulatory policies and procedures of safety zone consists of large commercial outside the normal shipping channels the Department of Homeland Security shipping vessels, fishing vessels, cruise and fairways, and placing a safety zone (DHS). ships, tugs with tows and the occasional around this area will significantly We expect the economic impact of recreational vessel. The deepwater area reduce the threat of allisions, oil spills this rule to be so minimal that a full of the Gulf of Mexico also includes an and releases of natural gas. This rule regulatory evaluation under the extensive system of fairways. The prohibits all vessels from entering or regulatory policies and procedures of fairways nearest the safety zone include remaining in the specified area around DHS is unnecessary. the East-West Gulf of Mexico Safety the facility’s location except for the The impacts on routine navigation are Fairway and Louisiana Offshore Oil Port following: an attending vessel; a vessel expected to be minimal because the (LOOP) Shipping Safety Fairway. under 100 feet in length overall not safety zone will not overlap any of the Significant amounts of vessel traffic engaged in towing; or a vessel safety fairways within the Gulf of occur in or near the various fairways in authorized by the Eighth Coast Guard Mexico. the deepwater area. District Commander. BP Exploration & Production Inc., Small Entities DATES: This final rule is effective March hereafter referred to as ‘‘BP’’ requested Under the Regulatory Flexibility Act 11, 2004. that the Coast Guard establish a safety (5 U.S.C. 601–612), we have considered ADDRESSES: Comments and material zone in the Gulf of Mexico around the whether this rule would have a received from the public, as well as Holstein construction site and for the significant economic impact on a documents indicated in this preamble as zone to remain in effect after substantial number of small entities. being available in the docket, are part of construction is completed. The term ‘‘small entities’’ comprises docket (CGD08–03–028) and are The request for the safety zone was small businesses, not-for-profit available for inspection or copying at made due to the high level of shipping organizations that are independently Commander, Eighth Coast Guard activity around the site of the facility owned and operated and are not District (m), Hale Boggs Federal Bldg., and the safety concerns for construction dominant in their fields, and 501 Magazine Street, New Orleans, LA, personnel, the personnel on board the governmental jurisdictions with between 8 a.m. and 3:30 p.m., Monday facility after it is completed, and the populations of less than 50,000. through Friday, except Federal holidays. environment. BP indicated that the The Coast Guard certifies under 5 FOR FURTHER INFORMATION CONTACT: location, production level, and U.S.C. 605(b) that this rule will not have Lieutenant (LT) Kevin Lynn, Project personnel levels on board the facility a significant economic impact on a Manager for Eighth Coast Guard District make it highly likely that any allision substantial number of small entities. Commander, Hale Boggs Federal Bldg., with the facility during and after Since the construction site for the

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Holstein is located far offshore, few Federal agencies to assess the effects of Environment privately owned fishing vessels and their discretionary regulatory actions. In recreational boats/yachts operate in the particular, the Act addresses actions We have analyzed this rule under area. This rule will not impact an that may result in the expenditure by a Commandant Instruction M16475.1D, attending vessel or vessels less than 100 State, local, or tribal government, in the which guides the Coast Guard in feet in length overall not engaged in aggregate, or by the private sector of complying with the National towing. Alternate routes are available $100,000,000 or more in any one year. Environmental Policy Act of 1969 for all other vessels impacted by this Though this rule will not result in such (NEPA) (42 U.S.C. 4321–4370f), and rule. Use of an alternate route may cause expenditure, we discuss the effects of have concluded that there are no factors a vessel to incur a delay of four to ten this rule elsewhere in this preamble. in this case that would limit the use of minutes in arriving at their destinations categorical exclusion under section Taking of Private Property depending on how fast the vessel is 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under traveling. Therefore, the Coast Guard This rule will not effect a taking of figure 2–1 paragraph (34)(g), of the expects the impact of this regulation on private property or otherwise have instruction, from further environmental small entities to be minimal. taking implications under Executive documentation because this rule is not If you think that your business, Order 12630, Governmental Actions and expected to result in any significant organization, or governmental Interference with Constitutionally environmental impact as described in jurisdiction qualifies as a small entity Protected Property Rights. and that this rule would have a NEPA. significant economic impact on it, Civil Justice Reform A final ‘‘Environmental Analysis please submit a comment (see Check List’’ and a final ‘‘Categorical This rule meets applicable standards ADDRESSES) explaining why you think it Exclusion Determination’’ are available in sections 3(a) and 3(b)(2) of Executive qualifies and to what degree this rule in the docket where indicated under Order 12988, Civil Justice Reform, to would economically affect it. ADDRESSES. minimize litigation, eliminate Assistance for Small Entities ambiguity, and reduce burden. List of Subjects in 33 CFR Part 147 Under section 213(a) of the Small Protection of Children Continental shelf, Marine safety, Business Regulatory Enforcement Navigation (water). Fairness Act of 1996 (Public Law 104– We have analyzed this rule under 121), we offered to assist small entities Executive Order 13045, Protection of ■ For the reasons discussed in the in understanding this rule so that they Children from Environmental Health preamble, the Coast Guard amends 33 can better evaluate its effects on them Risks and Safety Risks. This rule is not CFR part 147 as follows: and participate in the rulemaking. an economically significant rule and Small businesses may send comments does not create an environmental risk to PART 147—SAFETY ZONES on the actions of Federal employees health or risk to safety that may ■ who enforce, or otherwise determine disproportionately affect children. 1. The authority citation for part 147 compliance with Federal regulations to continues to read as follows: Indian Tribal Governments the Small Business and Agriculture Authority: 14 U.S.C. 85; 43 U.S.C. 1333; Regulatory Enforcement Ombudsman This rule does not have tribal Department of Homeland Security Delegation No. 0170.1. and the Regional Small Business implications under Executive Order Regulatory Fairness Boards. The 13175, Consultation and Coordination ■ 2. Add § 147.831 to read as follows: Ombudsman evaluates these actions with Indian Tribal Governments, annually and rates each agency’s because it does not have a substantial § 147.831 Holstein Truss Spar safety zone. responsiveness to small business. If you direct effect on one or more Indian (a) Description. Holstein, Green wish to comment on actions by tribes, on the relationship between the Canyon 645 (GC 645), located at employees of the Coast Guard, call 1– Federal government and Indian tribes, position 27°19′17″N, 90°32′08″W. The 888–REG–FAIR (1–888–734–3247). or on the distribution of power and area within 500 meters (1640.4 feet) responsibilities between the Federal Collection of Information from each point on the structure’s outer government and Indian tribes. This rule calls for no new collection edge is a safety zone. These coordinates of information under the Paperwork Energy Effects are based upon North American Datum Reduction Act of 1995 (44 U.S.C. 3501– 1983. We have analyzed this rule under 3520). (b) Regulation. No vessel may enter or Executive Order 13211, Actions remain in this safety zone except the Federalism Concerning Regulations That following: A rule has implications for federalism Significantly Affect Energy Supply, under Executive Order 13132, Distribution, or Use. We have (1) An attending vessel; Federalism, if it has a substantial direct determined that it is not a ‘‘significant (2) A vessel under 100 feet in length effect on State or local governments and energy action’’ under that Order because overall not engaged in towing; or would either preempt State law or it is not a ‘‘significant regulatory action’’ (3) A vessel authorized by the impose a substantial direct cost of under Executive Order 12866 and is not Commander, Eighth Coast Guard compliance on them. We have analyzed likely to have a significant adverse effect District. this rule under that Order and have on the supply, distribution, or use of determined that it does not have energy. The Administrator of the Office Dated: January 23, 2004. implications for federalism. of Information and Regulatory Affairs R.F. Duncan, has not designated it as a significant Rear Admiral, U.S. Coast Guard, Commander, Unfunded Mandates Reform Act energy action. Therefore, it does not Eighth Coast Guard District. The Unfunded Mandates Reform Act require a Statement of Energy Effects [FR Doc. 04–2730 Filed 2–9–04; 8:45 am] of 1995 (2 U.S.C. 1531–1538) requires under Executive Order 13211. BILLING CODE 4910–15–P

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DEPARTMENT OF HOMELAND potentially at risk to acts of terrorism, require an assessment of potential costs SECURITY sabotage and other criminal acts. and benefits under section 6(a)(3) of that Munitions and explosives laden vessels Order. The Office of Management and Coast Guard also pose a unique threat to the safety Budget has not reviewed it under that and security of the NCSPA Wilmington, Order. It is not ‘‘significant’’ under the 33 CFR Part 165 vessel crews, and others in the maritime regulatory policies and procedures of community and the surrounding the Department of Homeland Security [CGD05–03–207] community should the vessels be (DHS). RIN 1625–AA00 subject to acts of terrorism or sabotage, Although this regulation restricts or other criminal acts. The ability to access to the security zone, the effect of Security Zone; Cape Fear River, Eagle control waterside access to vessels laden this regulation will not be significant Island, North Carolina State Port with munitions and explosives, as well because: (i) The COTP or his or her Authority Terminal, Wilmington, NC as those used to transport military representative may authorize access to equipment and personnel, moored at the the security zone; (ii) the security zone AGENCY: Coast Guard, DHS. NCSPA Wilmington is critical to will be enforced for limited duration; ACTION: Temporary final rule. national defense and security, as well as and (iii) the Coast Guard will make to the safety and security of the NCSPA notifications via maritime advisories so SUMMARY: The Coast Guard is Wilmington, vessel crews, and others in mariners can adjust their plans establishing a temporary security zone the maritime community and the accordingly. at the North Carolina State Port surrounding community. Therefore, the Authority (NCSPA), Wilmington to Coast Guard is establishing this security Small Entities include the Cape Fear River and Eagle zone to safeguard human life, vessels Under the Regulatory Flexibility Act Island. Entry into or movement within and facilities from sabotage, terrorist (5 U.S.C. 601–612), we have considered the security zone will be prohibited acts or other criminal acts. whether this rule would have a without authorization from the COTP. Discussion of Rule significant economic impact on a This action is necessary to safeguard the substantial number of small entities. The security zone is necessary to vessels and the facility from sabotage, The term ‘‘small entities’’ comprises provide security for, and prevent acts of subversive acts, or other threats. small businesses, not-for-profit terrorism against, vessels loading or DATES: This rule is in effect from organizations that are independently offloading and the NCSPA Wilmington January 15, 2004, to June 13, 2004. owned and operated and are not facility during a military operation. It ADDRESSES: Documents indicated in this dominant in their fields, and will include an area from 800 yards preamble as being available in the governmental jurisdictions with south of the Cape Fear River Bridge docket are part of docket CGD05–03– populations of less than 50,000. encompassing the southern end of Eagle 207 and are available for inspection or Island, the Cape Fear River, and the The Coast Guard certifies under 5 copying at the Marine Safety Office 721 grounds of the State Port Authority U.S.C. 605(b) that this rule will not have Medical Center Drive Wilmington, Terminal south to South Wilmington a significant economic impact on a North Carolina 28401 between 7:30 a.m. Terminal. The security zone will substantial number of small entities. and 3 p.m., Monday through Friday, prevent access to unauthorized persons This rule will affect the following except Federal holidays. who may attempt to enter the secure entities, some of which may be small FOR FURTHER INFORMATION CONTACT: area via the Cape Fear River, the North entities: the owners or operators of LCDR Chuck Roskam, Chief, Port Carolina State Port Authority terminal, vessels intending to transit or anchor in Operations (910) 772–2200 or toll free or use Eagle Island as vantage point for a portion of the Cape Fear River that is (877) 229–0770. surveillance of the secure area. The within the security zone. SUPPLEMENTARY INFORMATION: security zone will protect vessels This security zone will not have a significant economic impact on a Regulatory Information moored at the facility, their crews, others in the maritime community and substantial number of small entities for We did not publish a notice of the surrounding communities from the following reasons. Although the proposed rulemaking (NPRM) for this subversive or terrorist attack that could security zone will apply to the entire rule. The Coast Guard is promulgating cause serious negative impact to vessels, width of the river, traffic will be this security zone regulation to protect the port, or the environment, and result allowed to pass through the zone with NCSPA Wilmington and the in numerous casualties. the permission of the COTP or his or her surrounding vicinity from threats to No person or vessel may enter or designated representative. Before the national security. Accordingly, based on remain in the security zone at any time effective period, we will issue maritime the military function exception set forth without the permission of the Captain of advisories widely available to users of in the Administrative Procedure Act, 5 the Port, Wilmington. Each person or the river. U.S.C. 553(a)(1), notice and comment vessel operating within the security Assistance for Small Entities rule-making and advance publication zone will obey any direction or order of are not required for this regulation. the Captain of the Port. The Captain of Under section 213(a) of the Small Business Regulatory Enforcement Background and Purpose the Port may take possession and control of any vessel in a security zone Fairness Act of 1996 (Public Law 104– Vessels frequenting the North and/or remove any person, vessel, 121), we offer to assist small entities in Carolina State Port Authority (NCSPA) article or thing from this security zone. understanding the rule so that they can Wilmington facility serve as a vital link better evaluate its effects on them and in the transportation of military Regulatory Evaluation participate in the rulemaking process. If munitions, explosives, equipment, and This rule is not a ‘‘significant the rule will affect your small business, personnel in support of Department of regulatory action’’ under section 3(f) of organization, or governmental Defense missions at home and abroad. Executive Order 12866, Regulatory jurisdiction and you have questions This vital transportation link is Planning and Review, and does not concerning its provisions or options for

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compliance, please contact the address an economically significant rule and PART 165—REGULATED NAVIGATION listed under ADDRESSES. does not create an environmental risk to AREAS AND LIMITED ACCESS AREAS Small businesses may send comments health or risk to safety that may ■ 1. The authority citation for part 165 on the actions of Federal employees disproportionately affect children. who enforce, or otherwise determine continues to read as follows: compliance with, Federal regulations to Indian Tribal Governments Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. the Small Business and Agriculture Chapter 701; 50 U.S.C 191, 195; 33 CFR 1.05– This rule does not have tribal 1(g), 6.04–1, 6.04–6, and 160.5; Pub. L 107– Regulatory Enforcement Ombudsman implications under Executive Order and the Regional Small Business 295, 116 Stat. 2064; Department of Homeland 13175, Consultation and Coordination Security Delegation No. 0170.1. Regulatory Fairness Boards. The with Indian Tribal Governments, Ombudsman evaluates these actions ■ 2. Add § 165.T05–207 to read as because it does not have a substantial annually and rates each agency’s follow: responsiveness to small business. If you direct effect on one or more Indian § 165.T05–207 Security Zone: Cape Fear wish to comment on actions by tribes, on the relationship between the Federal government and Indian tribes, River, Eagle Island and North Carolina State employees of the Coast Guard, call 1– Port Authority Terminal, Wilmington, NC. 888–REG–FAIR (1–888–734–3247). or on the distribution of power and responsibilities between the Federal (a) Location. The following area is a Collection of Information government and Indian tribes. security zone: The grounds of the North Carolina State Port Authority, This rule calls for no new collection Energy Effects Wilmington Terminal and the southern of information under the Paperwork portion of Eagle Island; and an area Reduction Act of 1995 (44 U.S.C. 3501– We have analyzed this rule under encompassed from South Wilmington 3520). Executive Order 13211, Actions Terminal at 34°10′38.394″ N, Federalism Concerning Regulations That 077°57′16.248″ W (Point 1); across Cape Significantly Affect Energy Supply, A rule has implications for federalism Fear River to Southern most entrance of Distribution, or Use. We have Brunswick River on the West Bank at under Executive Order 13132, determined that it is not a ‘‘significant ° ′ ″ ° ′ ″ Federalism, if it has a substantial direct 34 10 38.052 N, 077 57 43.143 W energy action’’ under that order because effect on State or local governments and (Point 2); extending along the West bank it is not a ‘‘significant regulatory action’’ would either preempt State law or of the Brunswick River for under Executive Order 12866 and is not impose a substantial direct cost of approximately 750 yards to likely to have a significant adverse effect 34°10′57.062″ N, 077°58′01.342″ W compliance on them. We have analyzed (Point 3); proceeding North across the this rule under that Order and have on the supply, distribution, or use of Brunswick River to the east bank at determined that it does not have energy. The Administrator of the Office 34°11′04.846″ N, 077°58′02.861″ W implications for federalism. of Information and Regulatory Affairs has not designated it as a significant (Point 4) and continuing north on the Unfunded Mandates Reform Act energy action. Therefore, it does not east bank for approximately 5000 yards ° ′ ″ require a Statement of Energy Effects along Eagle Island to 34 13 17.815 N, The Unfunded Mandates Reform Act ° ′ ″ under Executive Order 13211. 077 58 30.671 W (Point 5); proceeding of 1995 (2 U.S.C. 1531–1538) requires ° ′ ″ ° ′ ″ Federal agencies to assess the effects of East to 34 13 19.488 N, 077 58 24.414 Environment their discretionary regulatory actions. In W (Point 6); and then approximately 1700 yards to 34°13′27.169″ N, particular, the Act addresses actions We have analyzed this rule under ° ′ ″ that may result in the expenditure by a 077 57 51.753 W (Point 7); proceeding Commandant Instruction M16475.lD, East to 34°13′21.226″ N, 077°57′19.264″ State, local, or tribal government, in the which guides the Coast Guard in aggregate, or by the private sector of W (Point 8); then across Cape Fear River complying with the National to the Northeast corner of the Colonial $100,000,000 or more in any one year. Environmental Policy Act of 1969 ° ′ ″ Though this rule will not result in such Terminal Pier at 34 13 18.724 N, (NEPA) (42 U.S.C. 4321–4370f), and 077°57′07.401″ W (Point 9), 800 yards expenditure, we do discuss the effects of have concluded that there are no factors this rule elsewhere in this preamble. South of Cape Fear Memorial Bridge; in this case that would limit the use of proceeding South along shoreline (east Taking of Private Property a categorical exclusion under section bank) of Cape Fear River for This rule will not affect a taking of 2.B.2 of the Instruction. Therefore, this approximately 500 yards; proceeding private property or otherwise have rule is categorically excluded, under east inland to Wilmington State Port ° ′ ″ taking implications under Executive figure 2–1, paragraph (34)(g), of the property line at 34 13 03.196 N, ° ′ ″ Order 12630, Governmental Actions and Instruction, from further environmental 077 56 52.211 W (Point 10); extending Interference with Constitutionally documentation. A final ‘‘Environmental South along Wilmington State Port ° ′ ″ Protected Property Rights. Analysis Check List’’ and a final property line to 34 12 43.409 N, ‘‘Categorical Exclusion Determination’’ 077°56′50.815″ W (Point 11); proceeding Civil Justice Reform are available in the docket where to the North entrance of Wilmington This rule meets applicable standards indicated under ADDRESSES. State Port at 34°12′28.854″ N, in sections 3(a) and 3(b)(2) of Executive 077°57′01.017″ W (Point 12); proceeding List of Subjects in 33 CFR Part 165 Order 12988, Civil Justice Reform, to South along Wilmington State Port minimize litigation, eliminate property line to 34°12′20.819″ N, Harbors, Marine safety, Navigation ° ′ ″ ambiguity, and reduce burden. (water), Reporting and recordkeeping 077 57 08.871 W (Point 13); continuing South along the Wilmington State Port Protection of Children requirements, Security measures, ° ′ ″ Waterways. property line to 34 12 08.164 N, We have analyzed this rule under 077°57′08.530″ W (Point 14); continuing Executive Order 13045, Protection of ■ For the reasons discussed in the along State Port property to Children from Environmental Health preamble, the Coast Guard amends 33 34°11′44.426″ N, 077°56′55.003″ W Risks and Safety Risks. This rule is not CFR part 165 as follows: (Point 15); proceeding South to the main

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gate of the Wilmington State Port at SUMMARY: The Coast Guard is re- 15, 2003, respectively. We did not 34°11′29.578″ N, 077°56′55.240″ W establishing a temporary security zone receive any comments on these (Point 16); proceeding South in the vicinity of the HOVENSA refinery regulations. approximately 750 yards to the facility on St. Croix, U.S. Virgin Islands. The Captain of the Port San Juan has Southeast property corner of the Apex This security zone extends 3 miles determined that due to the continued facility at 34°11′10.936″ N, seaward from the HOVENSA facility security risks, the nature of the 077°57′04.798″ W (Point 17); proceeding waterfront area along the south coast of HOVENSA facility, recent increases in West to East bank of Cape Fear River at the island of St. Croix, U.S. Virgin the Homeland Security Advisory 34°11′11.092″ N, 077°57′17.146″ W Islands. All vessels must receive System level and maritime security (Point 18); proceeding South along East permission from the U.S. Coast Guard level, this rule is needed to ensure the bank of Cape Fear River to the point of Captain of the Port San Juan to entering safety and security of this facility. The origins at 34°10′38.394″ N, this temporary security zone. This Coast Guard intends to publish a notice 077°57′16.248″ W (Point 1). security zone is needed for national of proposed rulemaking to propose (b) Captain of the Port. Captain of the security reasons to protect the public making this temporary rule a final rule. Port means the Commanding Officer of and the HOVENSA facility from Request for Comments the Marine Safety Office Wilmington, potential subversive acts. Although the Coast Guard has good NC, or any Coast Guard commissioned, DATES: This rule is effective from 11:59 cause to implement this regulation warrant, or petty officer who has been p.m. on December 24, 2003, through without a notice of proposed authorized to act on her behalf. 11:59 p.m. on April 15, 2004. Comments (c) Regulations. (1) All persons are rulemaking, we want to afford the and related material must reach the public the opportunity to participate in required to comply with the general Coast Guard on or before April 12, 2004. regulations governing security zones in this rulemaking by submitting ADDRESSES: 33 CFR 165.33. Comments and material comments and related material (2) Persons or vessels with a need to received from the public, as well as regarding the size and boundaries of enter or get passage within the security documents indicated in this preamble as these security zones in order to zone, must first request authorization being available in the docket, will minimize unnecessary burdens. If you from the Captain of the Port. The become part of the docket [COTP San submit a comment, please include your Captain of the Port’s representative Juan 03–176] and will be available for name and address, identify the docket enforcing the zone can be contacted on inspection or copying at Marine Safety number for this rulemaking (COTP San VHF marine band radio, channel 16. Office San Juan between 7 a.m. and 3:30 Juan 03–176), indicate the specific The Captain of the Port can be contacted p.m. Monday through Friday, except section of this document to which each at (910) 772–2200 or toll free (877) 229– Federal holidays. Marine Safety Office comment applies, and give the reason 0770. San Juan, is located in the RODVAL for each comment. Please submit all (3) The operator of any vessel within Bldg, San Martin St. 90 Ste 400, comments and related material in an this security zone must: Guaynabo, PR 00968. Marine Safety unbound format, no larger than 81⁄2 by (i) Stop the vessel immediately upon Office San Juan maintains the public 11 inches, suitable for copying to the being directed to do so by the Captain docket for this rulemaking. address indicated in ADDRESSES. If you of the Port or his or her designated FOR FURTHER INFORMATION CONTACT: LT would like to know they reached us, representative. Fred Meadows, Marine Safety Office please enclose a stamped, self-addressed (ii) Proceed as directed by the Captain San Juan, Puerto Rico at (787) 706–2440. postcard or envelope. We will consider of the Port or his or her designated SUPPLEMENTARY INFORMATION: all comments and material received representative. during the comment period. We may (d) Effective period. This section is Regulatory Information change this temporary final rule in view effective from January 15, 2004, to June We did not publish a notice of of them. 13, 2004. proposed rulemaking (NPRM) for this Background and Purpose Dated: January 15, 2004. regulation. Under 5 U.S.C. 553(b)(B), the Based on the September 11, 2001, Jane M. Hartley, Coast Guard finds that good cause exists for not publishing a NPRM. Publishing terrorist attacks and recent increases in Captain, U.S. Coast Guard, Captain of the maritime security levels, there is an Port, Wilmington, North Carolina. a NPRM and delaying the rule’s increased risk that subversive activity [FR Doc. 04–2735 Filed 2–9–04; 8:45 am] effective date would be contrary to the public interest since immediate action is could be launched by vessels or persons BILLING CODE 4910–15–P needed to protect the public, ports and in close proximity to the HOVENSA waterways of the United States. refinery on St. Croix, USVI against tank DEPARTMENT OF HOMELAND For the same reasons, under 5 U.S.C. vessels and the waterfront facility. SECURITY 553(d)(3), the Coast Guard finds that Given the highly volatile nature of the good cause exists for making this rule substances stored at the HOVENSA Coast Guard effective less than 30 days after facility, this security zone is necessary publication in the Federal Register. to decrease the risk that subversive 33 CFR Part 165 Similar regulations were established activity could be launched against the on December 19, 2001, and published in HOVENSA facility. The Captain of the [COTP San Juan 03–176] the Federal Register (67 FR 2332, Port San Juan is reducing this risk by RIN 1625–AA00 January 17, 2002); and again on prohibiting all vessels without a September 13, 2002 (67 FR 57952, scheduled arrival from coming within 3 Security Zone; St. Croix, United States September 13, 2002), on March 18, 2003 miles of the HOVENSA facility unless Virgin Islands (67 FR 22296, April 28, 2003); and on specifically permitted by the Captain of AGENCY: Coast Guard, DHS. June 30, 2003 (67 FR 41081, July 10, the Port San Juan, his designated 2003). However, these regulations have representative, or the HOVENSA ACTION: Temporary final rule; request for expired—on June 15, 2002; December Facility Port Captain. The Captain of the comments. 15, 2002; June 15, 2003; and December Port San Juan can be reached through

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the Coast Guard Greater Antilles Section please submit a comment (see Executive Order 12630, Governmental Command Center via VHF Marine Band ADDRESSES) explaining why you think it Actions and Interference with Radio, Channel 16 (156.8 Mhz) or by qualifies and how and to what degree Constitutionally Protected Property calling (787) 289–2040, 24 hours a day, this rule would economically affect it. Rights. 7 days a week. The HOVENSA Facility Civil Justice Reform Port Captain can be reached on VHF Assistance for Small Entities Marine Band Radio channel 11 (156.6 Under section 213(a) of the Small This proposed rule meets applicable Mhz) or by calling (340) 692–3488, 24 Business Regulatory Enforcement standards in sections 3(a) and 3(b)(2) of hours a day, 7 days a week. Fairness Act of 1996 (Pub. L. 104–121), Executive Order 12988, Civil Justice The temporary security zone around we offer to assist small entities in Reform, to minimize litigation, the HOVENSA facility is outlined by the understanding this rule so that they can eliminate ambiguity, and reduce following coordinates: 64°45′09″ West, better evaluate its effects on them and burden. 17°41′32″ North, 64°43′36″ West, participate in the rulemaking process. If Protection of Children 17°38′30″ North, 64°43′36″ West, the rule will affect your small business, 17°38′30″ North and 64°43′06″ West, organization, or government jurisdiction We have analyzed this proposed rule 17°38′42″ North. and you have questions concerning its under Executive Order 13045, Protection of Children from Regulatory Evaluation provisions or options for compliance, please contact the person listed under Environmental Health Risks and Safety This rule is not a significant FOR FURTHER INFORMATION CONTACT for Risks. This rule is not an economically regulatory action under section 3(f) of assistance in understanding this rule. significant rule and would not create an Executive Order 12866, Regulatory Small businesses may send comments environmental risk to health or risk to Planning and Review, and does not on the actions of Federal employees safety that might disproportionately require an assessment of potential costs who enforce, or otherwise determine affect children. and benefits under section 6(a)(3) of that compliance with, Federal regulations to Indian Tribal Governments Order. The Office of Management and the Small Business and Agriculture Budget has not reviewed it under that Regulatory Enforcement Ombudsman This proposed rule does not have order. It is not significant under the and the Regional Small each agency’s tribal implications under Executive regulatory policies and procedures of responsiveness to small business. If you Order 13175, Consultation and the Department of Homeland Security wish to comment on actions by Coordination with Indian Tribal (DHS) because this zone covers an area employees of the Coast Guard, call 1– Governments, because it would not have that is not typically used by commercial 888–REG–FAIR (1–888–734–3247). a substantial direct effect on one or vessel traffic, including fishermen, and more Indian tribes, on the relationship vessels may be allowed to enter the zone Collection of Information between the Federal Government and on a case by case basis with the This proposed rule would call for no Indian tribes, or on the distribution of permission of the Captain of the Port new collection of information under the power and responsibilities between the San Juan or the HOVENSA Port Captain. Paperwork Reduction Act of 1995 (44 Federal Government and Indian tribes. We invite your comments on how this Small Entities U.S.C. 3501–3520). proposed rule might impact tribal Under the Regulatory Flexibility Act Federalism governments, even if that impact may (5 U.S.C. 601–612), the Coast Guard A rule has implications for federalism not constitute a ‘‘tribal implication’’ considered whether this rule would under Executive Order 13132, under the Order. have a significant economic effect upon Federalism, if it has a substantial direct Energy Effects a substantial number of small entities. effect on State or local governments and ‘‘Small entities’’ include small would either preempt State law or We have analyzed this proposed rule businesses, not-for-profit organizations impose a substantial direct cost of under Executive Order 13211, Actions that are independently owned and compliance on them. We have analyzed Concerning Regulations That operated and are not dominant in their this proposed rule under that Order and Significantly Affect Energy Supply, fields, and governmental jurisdictions have determined that it does not have Distribution, or Use. We have with populations of less than 50,000. implications for federalism. determined that it is not a ‘‘significant This rule may affect the following energy action’’ under that order because entities, some of which may be small Unfunded Mandates Reform Act it is not a ‘‘significant regulatory action’’ entities: owners of small charter fishing The Unfunded Mandates Reform Act under Executive Order 12866 and is not or diving operations that operate near of 1995 (2 U.S.C. 1531–1538) requires likely to have a significant adverse effect the HOVENSA facility. The Coast Guard Federal agencies to assess the effects of on the supply, distribution, or use of certifies under 5 U.S.C. 605(b) that this their discretionary regulatory actions. In energy. The Administrator of the Office rule will not have a significant particular, the Act addresses actions of Information and Regulatory Affairs economic impact on a substantial that may result in the expenditure by a has not designated it as a significant number of small entities because this State, local, or tribal government, in the energy action. Therefore, it does not zone covers an area that is not typically aggregate, or by the private sector of require a Statement of Energy Effects used by commercial fishermen and $100,000,000 or more in any one year. under Executive Order 13211. vessels may be allowed to enter the zone Though this proposed rule would not Environment on a case by case basis with the result in such an expenditure, we do permission of the Captain of the Port discuss the effects of this rule elsewhere We have analyzed this proposed rule San Juan or the HOVENSA Port Captain. in this preamble. under Commandant Instruction If you think that your business, M16475.lD, which guides the Coast organization, or governmental Taking of Private Property Guard in complying with the National jurisdiction qualifies as a small entity This proposed rule would not effect a Environmental Policy Act of 1969 and that this rule would have a taking of private property or otherwise (NEPA) (42 U.S.C. 4321–4370f), and significant economic impact on it, have taking implications under have concluded that there are no factors

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in this case that would limit the use of Center via VHF Marine Band Radio, SUPPLEMENTARY INFORMATION: a categorical exclusion under section Channel 16 (156.8 Mhz) or by calling Regulatory Information 2.B.2 of the Instruction. Therefore, this (787) 289–2040, 24 hours a day, 7 days rule is categorically excluded, under a week. The HOVENSA Facility Port We did not publish a notice of figure 2–1, paragraph (34)(g), of the Captain can be reached on VHF Marine proposed rulemaking (NPRM) for this Instruction, from further environmental Band Radio channel 11 (156.6 Mhz) or rule. Under 5 U.S.C. 553(b)(B) and documentation. A draft ‘‘Environmental by calling (340) 692–3488, 24 hours a (d)(3), the Coast Guard finds that good Analysis Check List’’ and a draft day, 7 days a week. cause exists for not publishing a NPRM ‘‘Categorical Exclusion Determination’’ (c) Effective period. This section is and for making this rule effective less (CED) are available in the docket where effective from 11:59 p.m. on December than 30 days after publication in the indicated under ADDRESSES. Comments 24, 2003, through 11:59 p.m. on April Federal Register. Based upon the on this section will be considered before 15, 2004. warnings from national security and we make the final decision on whether Dated: December 24, 2003. intelligence personnel, this rule is the rule should be categorically W.J. Uberti, urgently required to protect the plant from subversive activity, sabotage or excluded from further environmental Captain, U.S. Coast Guard, Captain of the review. Port, San Juan. possible terrorist attacks initiated from the waters surrounding the plants. List of Subjects in 33 CFR Part 165 [FR Doc. 04–2749 Filed 2–9–04; 8:45 am] Delaying the effective date of the rule Harbors, Marine safety, Navigation BILLING CODE 4910–15–P would be contrary to the public interest, (water), Reporting and recordkeeping since immediate action is needed to requirements, Security measures, DEPARTMENT OF HOMELAND continue to protect the persons at the Waterways. SECURITY facilities, the public and surrounding ■ For the reasons discussed in the communities from the release of nuclear preamble, the Coast Guard amends 33 Coast Guard radiation. This security zone should CFR part 165 as follows: have minimal impact on vessel transits 33 CFR Part 165 because the security zone does not block PART 165—REGULATED NAVIGATION the channel. AREAS AND LIMITED ACCESS AREAS [COTP Philadelphia 03–004] On September 16, 2003, we published a notice of proposed rulemaking (68 FR ■ 1. The authority citation for part 165 RIN 1625–AA00 53928) to create a permanent security continues to read as follows: Security Zone; Limerick Generating zone in the same area this temporary Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. Station, Schuylkill River, Montgomery final rule covers. It is taking longer to Chapter 701; 50 U.S.C. 191, 195; 33 CFR County, PA resolve issues related to the final rule 1.05–1(g), 6.04–1, 6.04–6, and 160.5; Pub. L. than originally expected at the time the 107–295, 116 Stat. 2064; Department of AGENCY: Coast Guard, DHS. Homeland Security Delegation No. 0170.1. first temporary final rule was issued (68 ACTION: Temporary final rule; change in FR 33386, June 4, 2003). Our extension ■ 2. A new section 165.T07–176 is added effective period. of the effective period of the temporary to read as follows: SUMMARY: The Coast Guard is security zone is intended to provide the § 165.T07–176 Security Zone; HOVENSA continuing the effective period of the Coast Guard with enough time to Refinery, St. Croix, U.S. Virgin Islands. temporary security zone on the waters complete the rulemaking for a permanent zone without an interruption (a) Location. The following area is a adjacent to the Limerick Generating in the protection provided at the site by security zone: All waters from surface to Station. This will protect the safety and the temporary security zone. bottom, 3 miles seaward of the security of the generating station from HOVENSA facility waterfront outlined subversive activity, sabotage, or terrorist Background and Purpose by the following coordinates: attacks initiated from surrounding waters. This action will close water Due to the continued warnings from national security and intelligence Latitude Longitude areas around the station. officials that future terrorist attacks are DATES: Effective January 16, 2004, ° ′ ″ ° ′ ″ possible, such as those launched against 64 45 09 West ...... 17 41 32 North. § 165.T05–090, originally added at 68 64°43′36″ West ...... 17°38′30″ North. New York and Washington, DC, on FR 33386, June 4, 2003, effective from 64°43′36″ West ...... 17°38′30″ North. September 11, 2001, heightened security 64°43′06″ West ...... 17°38′42″ North. 5 p.m. e.d.t. on May 13, 2003, to 5 p.m. measures are necessary for the area e.s.t. on January 24, 2004, is reinstated surrounding the Limerick Generating (b) Regulations. Under § 165.33, with and is effective through 11:59 p.m. Station. This rule will provide the the exception of vessels with scheduled (e.s.t.) on February 29, 2004. Captain of the Port Philadelphia with arrivals to the HOVENSA Facility, no ADDRESSES: Documents as indicated in enforcement options to deal with vessel may enter the regulated area this preamble are available as part of potential threats to the security of the unless specifically authorized by the docket COTP Philadelphia 03–004 for generating station. As noted, the Coast Captain of the Port San Juan or a Coast inspection or copying at Coast Guard Guard has proposed to establish a Guard commissioned, warrant, or petty Marine Safety Office Philadelphia, One permanent security zone that would officer designated by him, or the Washington Avenue, Philadelphia, control waterside access to the station. HOVENSA Facility Port Captain. The Pennsylvania, 19147, between 8 a.m. Captain of the Port will notify the public and 4 p.m., Monday through Friday, Discussion of Rule of any changes in the status of this zone except Federal holidays. This temporary rule will extend the by Marine Safety Radio Broadcast on FOR FURTHER INFORMATION CONTACT: effective period of the security zone VHF Marine Band Radio, Channel 16 Lieutenant Junior Grade Kevin Sligh or from 5 p.m. (EST) on January 24, 2004 (156.8 Mhz). The Captain of the Port Ensign Doreen Moore, Coast Guard to 11:59 p.m. (EST) on February 29, San Juan can be reached through the Marine Safety Office/Group 2004. No person or vessel may enter or Greater Antilles Section Command Philadelphia, at (215) 271–4889. remain in the prescribed security zone

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at any time without the permission of Assistance for Small Entities minimize litigation, eliminate the Captain of the Port, Philadelphia, Under section 213(a) of the Small ambiguity, and reduce burden. Pennsylvania or designated Business Regulatory Enforcement Protection of Children representative. Federal, state, and local Fairness Act of 1996 (Pub. L. 104–121), agencies may assist the Coast Guard in we want to assist small entities in We have analyzed this rule under the enforcement of this rule. understanding the rule so that they Executive Order 13045, Protection of Regulatory Evaluation could better evaluate its effects on them Children from Environmental Health and participate in the rulemaking Risks and Security Risks. This rule is This rule is not a ‘‘significant process. not an economically significant rule and regulatory action’’ under section 3(f) of Small businesses may send comments does not create an environmental risk to Executive Order 12866, Regulatory on the actions of Federal employees health or risk to security that may Planning and Review, and does not who enforce, or otherwise determine disproportionately affect children. require an assessment of potential costs compliance with, Federal regulations to Indian Tribal Governments and benefits under section 6(a)(3) of that the Small Business and Agriculture Order. The Office of Management and Regulatory Enforcement Ombudsman This rule does not have tribal Budget has not reviewed it under that and the Regional Small Business implications under Executive Order Order. It is not ‘‘significant’’ under the Regulatory Fairness Boards. The 13175, Consultation and Coordination regulatory policies and procedures of Ombudsman evaluates these actions with Indian Tribal Governments, the Department of Homeland Security annually and rates each agency’s because it does not have a substantial (DHS). responsiveness to small business. If you direct effect on one or more Indian The primary impact of this rule will wish to comment on actions by tribes, on the relationship between the be on vessels wishing to transit the employees of the Coast Guard, call 1– Federal Government and Indian tribes, affected waterway. Although this rule 888–REG–FAIR (1–888–734–3247). or on the distribution of power and restricts traffic from freely transiting Collection of Information responsibilities between the Federal portions of the Schuylkill River, that Government and Indian tribes. restriction affects only a limited area This rule calls for no new collection and will be well publicized to allow of information under the Paperwork Energy Effects mariners to make alternative plans. Reduction Act of 1995 (44 U.S.C. 3501– 3520). We have analyzed this rule under Small Entities Executive Order 13211, Actions Federalism Concerning Regulations That Under the Regulatory Flexibility Act A rule has implications for federalism Significantly Affect Energy Supply, (5 U.S.C. 601–612), we have considered under Executive Order 13132, Distribution, or Use. We have whether this rule would have a Federalism, if it has a substantial direct determined that it is not a ‘‘significant significant economic impact on a effect on State or local governments and energy action’’ under that order because substantial number of small entities. would either preempt State law or it is not a ‘‘significant regulatory action’’ The term ‘‘small entities’’ comprises impose a substantial direct cost of under Executive Order 12866 and is not small businesses, not-for-profit compliance on them. We have analyzed likely to have a significant adverse effect organizations that are independently this rule under that Order and have on the supply, distribution, or use of owned and operated and are not determined that it does not have energy. It has not been designated by the dominant in their fields, and implications for federalism. Administrator of the Office of governmental jurisdictions with Information and Regulatory Affairs as a Unfunded Mandates Reform Act populations of less than 50,000. significant energy action. Therefore, it The Coast Guard certifies under 5 The Unfunded Mandates Reform Act does not require a Statement of Energy U.S.C. 605(b) that this rule will not have of 1995 (2 U.S.C. 1531–1538) requires Effects under Executive Order 13211. Federal agencies to assess the effects of a significant economic impact on a Environment substantial number of small entities. their discretionary regulatory actions. In particular, the Act addresses actions We have analyzed this rule under This rule may affect the following that may result in the expenditure by a entities, some of which may be small Commandant Instruction M16475.1D, State, local, or tribal government, in the which guides the Coast Guard in entities: owners or operators of fishing aggregate, or by the private sector of vessels and recreational vessels wishing complying with the National $100,000,000 or more in any one year. Environmental Policy Act of 1969 to transit the portions of the Schuylkill Though this rule will not result in such River. (NEPA) (42 U.S.C. 4321–4370f), and expenditure, we do discuss the effects of have concluded that there are no factors The rule will not have a significant this rule elsewhere in this preamble. impact on a substantial number of small in this case that would limit the use of entities for the following reasons: the Taking of Private Property a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this restrictions affect only a limited area This rule will not affect a taking of rule is categorically excluded, under and traffic will be allowed to transit private property or otherwise have figure 2–1, paragraph (34)(g), of through the zone with permission of the taking implications under Executive Coast Guard or designated Order 12630, Governmental Actions and Commandant Instruction M16475.lD, representative. The opportunity to Interference with Constitutionally from further environmental engage in recreational and charter Protected Property Rights. documentation. fishing outside the geographical limits A final ‘‘Environmental Analysis of the security zone will not be Civil Justice Reform Checklist’’ and a final ‘‘Categorical disrupted. Therefore, this regulation This rule meets applicable standards Exclusion Determination’’ will be should have a negligible impact on in sections 3(a) and 3(b)(2) of Executive available in the docket where indicated recreational and charter fishing activity. Order 12988, Civil Justice Reform, to under ADDRESSES.

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List of Subjects in 33 CFR Part 165 of the Port to act as a designated rule. Under 5 U.S.C. 553(b)(B) and Harbors, Marine safety, Navigation representative on his behalf. (d)(3), the Coast Guard finds that good (water), Reporting and recordkeeping (d) Effective period. This section is cause exists for not publishing a NPRM requirements, Security measures, effective from 5 p.m. (EDT) on May 13, and for making this rule effective less Waterways. 2003, through 11:59 p.m. (EST) on than 30 days after publication in the February 29, 2004. Federal Register. Based upon the ■ For the reasons discussed in the Dated: January 16, 2004. warnings from national security and preamble, the Coast Guard amends 33 intelligence personnel, this rule is Jonathan D. Sarubbi, CFR part 165 as follows: urgently required to protect the plant Captain, U.S. Coast Guard, Captain of the from subversive activity, sabotage or PART 165—REGULATED NAVIGATION Port Philadelphia. possible terrorist attacks initiated from AREAS AND LIMITED ACCESS AREAS [FR Doc. 04–2745 Filed 2–9–04; 8:45 am] the waters surrounding the plants. ■ 1. The authority citation for part 165 BILLING CODE 4910–15–P Delaying the effective date of the rule continues to read as follows: would be contrary to the public interest, since immediate action is needed to Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. DEPARTMENT OF HOMELAND continue to protect the persons at the Chapter 701; 50 U.S.C. 191, 195; 33 CFR SECURITY 1.05–1(g), 6.04–1, 6.04–6, and 160.5; Pub. L. facilities, the public and surrounding 107–295, 116 Stat. 2064; Department of Coast Guard communities from the release of nuclear Homeland Security Delegation No. 0170.1. radiation. This security zone should ■ 2. Temporary § 165.T05–090 is 33 CFR Part 165 have minimal impact on vessel transits reinstated and revised to read as follows: due to the fact that the security zone [COTP Philadelphia 03–006] does not block the channel. § 165.T05–090 Security Zone; Limerick On September 15, 2003, we published RIN 1625–AA00 Generating Station, Schuylkill River, a notice of proposed rulemaking (68 FR Montgomery County, Pennsylvania. Security Zone; Peach Bottom Atomic 53932) to create a permanent security (a) Location. The following area is a Power Station, Susquehanna River, zone in the same area this temporary security zone: the waters of the York County, PA final rule covers. It is taking longer to Schuylkill River in the vicinity of the resolve issues related to the final rule Limerick Generation Station bounded AGENCY: Coast Guard, DHS. than originally expected at the time the by a line drawn from a point located at ACTION: Temporary final rule; change in first temporary final rule was issued (68 40°13′21.34″ N, 075°35′27.49″ W to effective period. FR 33388, June 4, 2003). Our extension 40°13′18.92″ N, 075°35′29.83″ W, thence of the effective period of the temporary to 40°13′11.36″ N, 075°35′27.57″ W, SUMMARY: The Coast Guard is security zone is intended to provide the thence to 40°13′12.97″ N, 075°35′22.74″ continuing the effective period of the Coast Guard with enough time to W. All coordinates reference Datum: temporary security zone on the waters complete the rulemaking for a NAD 1983. adjacent to the Peach Bottom Atomic permanent zone without an interruption (b) Regulations. (1) All persons are Power Station. This will protect the in the protection provided at the site by required to comply with the general safety and security of the plants from the temporary security zone. regulations governing security zones in subversive activity, sabotage, or terrorist § 165.33 of this part. attacks initiated from surrounding Background and Purpose (2) No person or vessel may enter or waters. This action will close water Due to the continued warnings from navigate within this security zone areas around the power station. national security and intelligence unless authorized to do so by the Coast DATES: Effective January 16, 2004, officials that future terrorist attacks are Guard or designated representative. Any § 165.T05–092, originally added at 68 possible, such as those launched against person or vessel authorized to enter the FR 33388, June 4, 2003, effective from New York and Washington DC on security zone must operate in strict 5 p.m. e.d.t. on May 13, 2003, to 5 p.m. September 11, 2001, heightened security conformance with any directions given e.s.t. on January 24, 2004, is reinstated measures are necessary for the area by the Coast Guard or designated and is effective through 11:59 p.m. surrounding the Peach Bottom Atomic representative and leave the security (e.s.t.) on February 29, 2004. Power Station. This rule will provide zone immediately if the Coast Guard or the Captain of the Port Philadelphia ADDRESSES: Documents as indicated in designated representative so orders. this preamble are available as part of with enforcement options to deal with (3) The Coast Guard or designated docket COTP Philadelphia 03–006 for potential threats to the security of the representative enforcing this section can inspection or copying at Coast Guard plants. As noted, the Coast Guard has be contacted on VHF Marine Band Marine Safety Office Philadelphia, One proposed to establish a permanent Radio, channels 13 and 16. The Captain Washington Avenue, Philadelphia, security zone that would control of the Port can be contacted at (215) Pennsylvania, 19147, between 8 a.m. waterside access to the power station. 271–4807. This will allow the Coast Guard time and 4 p.m., Monday through Friday, (4) The Captain of the Port will notify to publish a notice of proposed except Federal holidays. the public of any changes in the status rulemaking (NPRM) and a final rule in of this security zone by Marine Safety FOR FURTHER INFORMATION CONTACT: the Federal Register without an Radio Broadcast on VHF–FM marine Lieutenant Junior Grade Kevin Sligh or interruption in the protection provided band radio, channel 22 (157.1 MHZ). Ensign Doreen Moore, Coast Guard by the security zone. (c) Definitions. For the purposes of Marine Safety Office/Group this temporary section, Captain of the Philadelphia, at (215) 271–4889. Discussion of Rule Port means the Commanding Officer of SUPPLEMENTARY INFORMATION: This temporary final rule will extend the Coast Guard Marine Safety Office/ the effective period of the security zone Group Philadelphia or any Coast Guard Regulatory Information from 5 p.m. (EST) January 24, 2004, to commissioned, warrant, or petty officer We did not publish a notice of 11:59 p.m. (EST) on February 29, 2004. who has been authorized by the Captain proposed rulemaking (NPRM) for this No person or vessel may enter or remain

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in the prescribed security zone at any Assistance for Small Entities minimize litigation, eliminate time without the permission of the Under section 213(a) of the Small ambiguity, and reduce burden. Captain of the Port, Philadelphia, Business Regulatory Enforcement Protection of Children Pennsylvania or designated Fairness Act of 1996 (Pub. L. 104–121), representative. Federal, state, and local we want to assist small entities in We have analyzed this rule under agencies may assist the Coast Guard in understanding the rule so that they Executive Order 13045, Protection of the enforcement of this rule. could better evaluate its effects on them Children from Environmental Health Regulatory Evaluation and participate in the rulemaking Risks and Security Risks. This rule is process. not an economically significant rule and This rule is not a ‘‘significant Small businesses may send comments does not create an environmental risk to regulatory action’’ under section 3(f) of on the actions of Federal employees health or risk to security that may Executive Order 12866, Regulatory who enforce, or otherwise determine disproportionately affect children. Planning and Review, and does not compliance with, Federal regulations to Indian Tribal Governments require an assessment of potential costs the Small Business and Agriculture and benefits under section 6(a)(3) of that Regulatory Enforcement Ombudsman This rule does not have tribal Order. The Office of Management and and the Regional Small Business Budget has not reviewed it under that implications under Executive Order Regulatory Fairness Boards. The 13175, Consultation and Coordination Order. It is not ‘‘significant’’ under the Ombudsman evaluates these actions regulatory policies and procedures of with Indian Tribal Governments, annually and rates each agency’s because it does not have a substantial the Department of Homeland Security responsiveness to small business. If you (DHS). direct effect on one or more Indian wish to comment on actions by tribes, on the relationship between the The primary impact of this rule will employees of the Coast Guard, call 1– Federal Government and Indian tribes, be on vessels wishing to transit the 888–REG–FAIR (1–888–734–3247). or on the distribution of power and affected waterway. Although this rule responsibilities between the Federal restricts traffic from freely transiting Collection of Information Government and Indian tribes. portions of the Susquehanna River, that This rule calls for no new collection restriction affects only a limited area of information under the Paperwork Energy Effects and will be well publicized to allow Reduction Act of 1995 (44 U.S.C. 3501– mariners to make alternative plans. 3520). We have analyzed this rule under Executive Order 13211, Actions Small Entities Federalism Concerning Regulations That Under the Regulatory Flexibility Act A rule has implications for federalism Significantly Affect Energy Supply, (5 U.S.C. 601–612), we have considered under Executive Order 13132, Distribution, or Use. We have whether this rule would have a Federalism, if it has a substantial direct determined that it is not a ‘‘significant significant economic impact on a effect on State or local governments and energy action’’ under that order because substantial number of small entities. would either preempt State law or it is not a ‘‘significant regulatory action’’ The term ‘‘small entities’’ comprises impose a substantial direct cost of under Executive Order 12866 and is not small businesses, not-for-profit compliance on them. We have analyzed likely to have a significant adverse effect organizations that are independently this rule under that Order and have on the supply, distribution, or use of owned and operated and are not determined that it does not have energy. It has not been designated by the dominant in their fields, and implications for federalism. Administrator of the Office of Information and Regulatory Affairs as a governmental jurisdictions with Unfunded Mandates Reform Act populations of less than 50,000. significant energy action. Therefore, it The Coast Guard certifies under 5 The Unfunded Mandates Reform Act does not require a Statement of Energy U.S.C. 605(b) that this rule will not have of 1995 (2 U.S.C. 1531–1538) requires Effects under Executive Order 13211. Federal agencies to assess the effects of a significant economic impact on a Environment substantial number of small entities. their discretionary regulatory actions. In particular, the Act addresses actions We have analyzed this rule under This rule may affect the following that may result in the expenditure by a entities, some of which may be small Commandant Instruction M16475.1D, State, local, or tribal government, in the which guides the Coast Guard in entities: owners or operators of fishing aggregate, or by the private sector of vessels and recreational vessels wishing complying with the National $100,000,000 or more in any one year. Environmental Policy Act of 1969 to transit the portions of the Though this rule will not result in such Susquehanna River. (NEPA) (42 U.S.C. 4321–4370f), and expenditure, we do discuss the effects of have concluded that there are no factors The rule will not have a significant this rule elsewhere in this preamble. impact on a substantial number of small in this case that would limit the use of entities for the following reasons: The Taking of Private Property a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this restrictions affect only a limited area This rule will not affect a taking of rule is categorically excluded, under and traffic will be allowed to transit private property or otherwise have figure 2–1, paragraph (34)(g), of through the zone with permission of the taking implications under Executive Coast Guard or designated Order 12630, Governmental Actions and Commandant Instruction M16475.lD, representative. The opportunity to Interference with Constitutionally from further environmental engage in recreational and charter Protected Property Rights. documentation. fishing outside the geographical limits A final ‘‘Environmental Analysis of the security zone will not be Civil Justice Reform Checklist’’ and a final ‘‘Categorical disrupted. Therefore, this regulation This rule meets applicable standards Exclusion Determination’’ will be should have a negligible impact on in sections 3(a) and 3(b)(2) of Executive available in the docket where indicated recreational and charter fishing activity. Order 12988, Civil Justice Reform, to under ADDRESSES.

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List of Subjects in 33 CFR Part 165 who has been authorized by the Captain rule. Under 5 U.S.C. 553(b)(B) and Harbors, Marine safety, Navigation of the Port to act as a designated (d)(3), the Coast Guard finds that good (water), Reporting and recordkeeping representative on his behalf. cause exists for not publishing a NPRM (d) Effective period. This section is requirements, Security measures, and for making this rule effective less effective from 5 p.m. (EDT) on May 13, Waterways. than 30 days after publication in the 2003, through 11:59 p.m. EST on Federal Register. Based upon the ■ For the reasons discussed in the February 29, 2004. warnings from national security and preamble, the Coast Guard amends 33 Dated: January 16, 2004. intelligence personnel, this rule is CFR part 165 as follows: Jonathan D. Sarubbi, urgently required to protect the plant Captain, U.S. Coast Guard, Captain of the from subversive activity, sabotage or PART 165—REGULATED NAVIGATION possible terrorist attacks initiated from AREAS AND LIMITED ACCESS AREAS Port Philadelphia. [FR Doc. 04–2744 Filed 2–9–04; 8:45 am] the waters surrounding the plants. ■ 1. The authority citation for part 165 BILLING CODE 4910–15–P Delaying the effective date of the rule continues to read as follows: would be contrary to the public interest, Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. since immediate action is needed to Chapter 701; 50 U.S.C. 191, 195; 33 CFR DEPARTMENT OF HOMELAND continue to protect the persons at the 1.05–1(g), 6.04–1, 6.04–6, and 160.5; Pub. L. SECURITY facilities, the public and surrounding 107–295, 116 Stat. 2064; Department of communities from the release of nuclear Homeland Security Delegation No. 0170.1. Coast Guard radiation. This security zone should have minimal impact on vessel transits ■ 2. Temporary § 165.T05–092 is 33 CFR Part 165 because the security zone does not block reinstated and revised to read as follows: [COTP Philadelphia 03–007] the channel. § 165.T05–093 Security Zone; Peach On September 16, 2003, we published Bottom Atomic Power Station, RIN 1625–AA00 a notice of proposed rulemaking (68 FR Susquehanna River, York County, 54177) to create a permanent security Pennsylvania. Security Zone; Three Mile Island Generating Station, Susquehanna zone in the same area this temporary (a) Location. The following area is a River, Dauphin County, PA final rule covers. It is taking longer to security zone: The waters of the resolve issues related to the final rule Susquehanna River in the vicinity of the AGENCY: Coast Guard, DHS. than originally expected at the time the Peach Bottom Atomic Power Station ACTION: Temporary final rule; change in first temporary final rule was issued (68 bounded by a line drawn from a point effective period. FR 33399, June 4, 2003). Our extension located at 39°45′36.36″ N, 076°16′08.93″ of the effective period of the temporary W to 39°45′38.72″ N, 076°15′57.00″ W, SUMMARY: The Coast Guard is security zone is intended to provide the thence to 39°45′28.95″ N, 076°15′49.74″ continuing the effective period of the Coast Guard with enough time to W, thence to 39°45′28.20″ N, temporary security zone on the waters complete the rulemaking for a 076°16′02.24″ W. All coordinates adjacent to the Three Mile Island permanent zone without an interruption reference Datum: NAD 1983. Generating Station. This will protect the in the protection provided at the site by (b) Regulations. (1) All persons are safety and security of the plants from the temporary security zone. required to comply with the general subversive activity, sabotage, or terrorist Background and Purpose regulations governing security zones in attacks initiated from surrounding § 165.33 of this part. waters. This action will close water Due to the continued warnings from (2) No person or vessel may enter or areas around the generating station. national security and intelligence navigate within this security zone DATES: Effective January 16, 2004, officials that future terrorist attacks are unless authorized to do so by the Coast § 165.T05–093, originally added at 68 possible, such as those launched against Guard or designated representative. Any FR 33399, June 4, 2003, effective from New York and Washington, DC, on person or vessel authorized to enter the 5 p.m. e.d.t. on May 13, 2003, to 5 p.m. September 11, 2001, heightened security security zone must operate in strict e.s.t. on January 24, 2004, is reinstated measures are necessary for the area conformance with any directions given and is effective through 11:59 p.m. surrounding the Three Mile Island by the Coast Guard or designated (e.s.t.) on February 29, 2004. Generating Station. This rule will representative and leave the security ADDRESSES: Documents as indicated in provide the Captain of the Port zone immediately if the Coast Guard or this preamble are available as part of Philadelphia with enforcement options designated representative so orders. docket COTP Philadelphia 03–007 for to deal with potential threats to the (3) The Coast Guard or designated inspection or copying at Coast Guard security of the plants. As noted, the representative enforcing this section can Marine Safety Office Philadelphia, One Coast Guard has proposed to implement be contacted on VHF Marine Band Washington Avenue, Philadelphia, a permanent security zone surrounding Radio, channels 16. The Captain of the Pennsylvania, 19147, between 8 a.m. the plants. Port can be contacted at (215) 271–4940. and 4 p.m., Monday through Friday, Discussion of Rule (4) The Captain of the Port will notify except Federal holidays. the public of any changes in the status FOR FURTHER INFORMATION CONTACT: This temporary rule will extend the of this security zone by Marine Safety Lieutenant Junior Grade Kevin Sligh or effective period of the security zone Radio Broadcast on VHF–FM marine Ensign Doreen Moore, Coast Guard from 5 p.m. (e.s.t.) on January 24, 2004, band radio, channel 16. Marine Safety Office/Group to 11:59 p.m. (e.s.t.) on February 29, (c) Definitions. For the purposes of Philadelphia, at (215) 271–4889. 2004. No person or vessel may enter or this section, Captain of the Port means SUPPLEMENTARY INFORMATION: remain in the prescribed security zone the Commanding Officer of the Coast at any time without the permission of Guard Marine Safety Office/Group Regulatory Information the Captain of the Port, Philadelphia, Philadelphia or any Coast Guard We did not publish a notice of Pennsylvania or designated commissioned, warrant, or petty officer proposed rulemaking (NPRM) for this representative. Federal, State, and local

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agencies may assist the Coast Guard in could better evaluate its effects on them Risks and Security Risks. This rule is the enforcement of this rule. and participate in the rulemaking not an economically significant rule and process. does not create an environmental risk to Regulatory Evaluation Small businesses may send comments health or risk to security that may This rule is not a ‘‘significant on the actions of Federal employees disproportionately affect children. regulatory action’’ under section 3(f) of who enforce, or otherwise determine Indian Tribal Governments Executive Order 12866, Regulatory compliance with, Federal regulations to Planning and Review, and does not the Small Business and Agriculture This rule does not have tribal require an assessment of potential costs Regulatory Enforcement Ombudsman implications under Executive Order and benefits under section 6(a)(3) of that and the Regional Small Business 13175, Consultation and Coordination Order. The Office of Management and Regulatory Fairness Boards. The with Indian Tribal Governments, Budget has not reviewed it under that Ombudsman evaluates these actions because it does not have a substantial Order. It is not ‘‘significant’’ under the annually and rates each agency’s direct effect on one or more Indian regulatory policies and procedures of responsiveness to small business. If you tribes, on the relationship between the the Department of Homeland Security wish to comment on actions by Federal Government and Indian tribes, (DHS). employees of the Coast Guard, call 1– or on the distribution of power and The primary impact of this rule will 888–REG–FAIR (1–888–734–3247). responsibilities between the Federal be on vessels wishing to transit the Government and Indian tribes. affected waterway. Although this rule Collection of Information restricts traffic from freely transiting This rule calls for no new collection Energy Effects portions of the Susquehanna River, that of information under the Paperwork We have analyzed this rule under restriction affects only a limited area Reduction Act of 1995 (44 U.S.C. 3501– Executive Order 13211, Actions and will be well publicized to allow 3520). Concerning Regulations That mariners to make alternative plans. Significantly Affect Energy Supply, Federalism Small Entities Distribution, or Use. We have A rule has implications for federalism determined that it is not a ‘‘significant Under the Regulatory Flexibility Act under Executive Order 13132, energy action’’ under that order because (5 U.S.C. 601–612), we have considered Federalism, if it has a substantial direct it is not a ‘‘significant regulatory action’’ whether this rule would have a effect on State or local governments and under Executive Order 12866 and is not significant economic impact on a would either preempt State law or likely to have a significant adverse effect substantial number of small entities. impose a substantial direct cost of on the supply, distribution, or use of The term ‘‘small entities’’ comprises compliance on them. We have analyzed energy. It has not been designated by the small businesses, not-for-profit this rule under that Order and have Administrator of the Office of organizations that are independently determined that it does not have Information and Regulatory Affairs as a owned and operated and are not implications for federalism. significant energy action. Therefore, it dominant in their fields, and Unfunded Mandates Reform Act does not require a Statement of Energy governmental jurisdictions with Effects under Executive Order 13211. populations of less than 50,000. The Unfunded Mandates Reform Act The Coast Guard certifies under 5 of 1995 (2 U.S.C. 1531–1538) requires Environment U.S.C. 605(b) that this rule will not have Federal agencies to assess the effects of We have analyzed this rule under a significant economic impact on a their discretionary regulatory actions. In Commandant Instruction M16475.1D, substantial number of small entities. particular, the Act addresses actions which guides the Coast Guard in This rule may affect the following that may result in the expenditure by a complying with the National entities, some of which may be small State, local, or tribal government, in the Environmental Policy Act of 1969 entities: owners or operators of fishing aggregate, or by the private sector of (NEPA) (42 U.S.C. 4321–4370f), and vessels and recreational vessels wishing $100,000,000 or more in any one year. have concluded that there are no factors to transit the portions of the Though this rule will not result in such in this case that would limit the use of Susquehanna River. expenditure, we do discuss the effects of a categorical exclusion under section The rule will not have a significant this rule elsewhere in this preamble. 2.B.2 of the Instruction. Therefore, this impact on a substantial number of small Taking of Private Property rule is categorically excluded, under entities for the following reasons: the figure 2–1, paragraph (34)(g), of restrictions affect only a limited area This rule will not affect a taking of Commandant Instruction M16475.lD, and traffic will be allowed to transit private property or otherwise have from further environmental through the zone with permission of the taking implications under Executive documentation. Coast Guard or designated Order 12630, Governmental Actions and A final ‘‘Environmental Analysis representative. The opportunity to Interference with Constitutionally Checklist’’ and a final ‘‘Categorical engage in recreational and charter Protected Property Rights. Exclusion Determination’’ will be fishing outside the geographical limits available in the docket where indicated of the security zone will not be Civil Justice Reform under ADDRESSES. disrupted. Therefore, this regulation This rule meets applicable standards should have a negligible impact on in sections 3(a) and 3(b)(2) of Executive List of Subjects in 33 CFR Part 165 Order 12988, Civil Justice Reform, to recreational and charter fishing activity. Harbors, Marine safety, Navigation minimize litigation, eliminate (water), Reporting and recordkeeping Assistance for Small Entities ambiguity, and reduce burden. Under section 213(a) of the Small requirements, Security measures, Business Regulatory Enforcement Protection of Children Waterways. Fairness Act of 1996 (Pub. L. 104–121), We have analyzed this rule under ■ For the reasons discussed in the we want to assist small entities in Executive Order 13045, Protection of preamble, the Coast Guard amends 33 understanding the rule so that they Children from Environmental Health CFR part 165 as follows:

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PART 165—REGULATED NAVIGATION Dated: January 16, 2004. Federal and local agencies to allow the AREAS AND LIMITED ACCESS AREAS Jonathan D. Sarubbi, P/V MAASDAM to conduct regular Captain, U.S. Coast Guard, Captain of the passenger cruises from Norfolk. As a ■ 1. The authority citation for part 165 Port Philadelphia. result, the Coast Guard received the continues to read as follows: [FR Doc. 04–2743 Filed 2–9–04; 8:45 am] final schedule for the MAASDAM in Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. BILLING CODE 4910–15–P January 2004. Coast Guard policy Chapter 701; 50 U.S.C. 191, 195; 33 CFR dictates that the Captain of the Port will 1.05–1(g), 6.04–1, 6.04–6, and 160.5; Pub. L. provide for the security of high-capacity 107–295, 116 Stat. 2064; Department of DEPARTMENT OF HOMELAND passenger vessels, and this security zone Homeland Security Delegation No. 0170.1. SECURITY is necessary for that purpose. Publishing an NPRM, which would ■ 2. Section 165.T05–093 is reinstated Coast Guard incorporate a comment period before a and revised to read as follows:. final rule was issued, would be contrary § 165.T05–093 Security Zone; Three Mile 33 CFR Part 165 to the public interest since immediate Island Generating Station, Susquehanna action is needed to protect this vessel [CGD05–04–011] River, York County, Pennsylvania. from potential security threats. For similar reasons, under 5 U.S.C. (a) Location. The following area is a RIN 1625–AA00 553(d)(3), the Coast Guard finds that security zone: The waters of the Security Zone; Chesapeake Bay, good cause exists for making this rule Susquehanna River in the vicinity of the Hampton Roads, Elizabeth River, VA effective less than 30 days after Three Mile Island Generating Station publication in the Federal Register. bounded by a line drawn from a point AGENCY: Coast Guard, DHS. ° ′ ″ ° ′ ″ located at 40 09 14.74 N, 076 43 40.77 ACTION: Temporary final rule. Background and Purpose ° ′ ″ ° ′ ″ W to 40 09 14.74 N, 076 43 42.22 W, Following terrorist attacks on the ° ′ ″ ° ′ ″ thence to 40 09 16.67 N, 076 43 42.22 SUMMARY: The Coast Guard is United States in September 2001, there ° ′ ″ W, thence to 40 09 16.67 N, establishing a temporary security zone is a heightened awareness that vessels ° ′ ″ 076 43 40.77 W. All coordinates encompassing all waters surrounding or persons could launch subversive reference Datum: NAD 1983. P/V MAASDAM, to ensure the security activity against passenger ships. These (b) Regulations. (1) All persons are of the vessel during inbound and regulations are necessary to protect the required to comply with the general outbound transits in the Port of vessel, its passengers, and its crew from regulations governing security zones in Hampton Roads, and while the vessel is these potential threats. The Coast Guard § 165.33 of this part. berthed at Nauticus International is establishing a temporary security Terminal. The security zone will extend (2) No person or vessel may enter or zone to ensure the vessel’s safe inbound in a 500-yard radius around P/V and outbound transits, and to protect navigate within this security zone MAASDAM and require that all vessels unless authorized to do so by the Coast the vessel while moored at Nauticus transiting within 500 yards of P/V International Terminal. Guard or designated representative. Any MAASDAM operate only at the person or vessel authorized to enter the minimum speed necessary to maintain Discussion of Rule security zone must operate in strict course. No vessels are allowed within The Coast Guard is establishing conformance with any directions given 100 yards of P/V MAASDAM without temporary security zones to ensure safe by the Coast Guard or designated authorization by the Captain of the Port, transits and port calls for the P/V representative and leave the security Hampton Roads, or his designated MAASDAM. The security zones will be zone immediately if the Coast Guard or representative. activated while the P/V MAASDAM designated representative so orders. DATES: This rule is effective from transits in the Port of Hampton Roads, (3) The Coast Guard or designated January 20, 2004, to April 24, 2004. and while it is berthed at Nauticus representative enforcing this section can International Terminal. This rule is ADDRESSES: Documents indicated in this be contacted on VHF Marine Band effective from January 20, 2004, to April preamble as being available in the Radio, channels 13 and 16. The Captain 24, 2004. The security zone will extend docket are part of docket CGD05–04– of the Port can be contacted at (215) in a 500-yard radius around P/V 011 and are available for inspection or 271–4807. MAASDAM. All vessels within 500 copying at USCG Marine Safety Office yards must operate only at the (4) The Captain of the Port will notify Hampton Roads, 200 Granby Street, minimum speed necessary to maintain the public of any changes in the status Suite 700, Norfolk, Virginia, 23510, course. No vessels are allowed within of this security zone by Marine Safety between 9:30 a.m. and 2 p.m., Monday 100 yards of P/V MAASDAM without Radio Broadcast on VHF–FM marine through Friday, except Federal holidays. band radio, channel 22 (157.1 MHZ). authorization by the Captain of the Port, FOR FURTHER INFORMATION CONTACT: LT Hampton Roads, or his designated (c) Definitions. For the purposes of Mike Dolan, project officer, USCG representative. This rule will provide this section, Captain of the Port means Marine Safety Office Hampton Roads, at for increased security of the vessel and the Commanding Officer of the Coast (757) 668–5590. other vessels transiting in the area, and Guard Marine Safety Office/Group SUPPLEMENTARY INFORMATION: will allow the uninterrupted flow of Philadelphia or any Coast Guard commerce in the Port of Hampton commissioned, warrant, or petty officer Regulatory Information Roads. Public notifications will be made who has been authorized by the Captain We did not publish a notice of prior to the transit via marine of the Port to act as a designated proposed rulemaking (NPRM) for this information broadcasts. representative on his behalf. regulation. Under 5 U.S.C. 553(b)(B), the (d) Effective period. This section is Coast Guard finds that good cause exists Regulatory Evaluation effective from 5 p.m. (EDT) on May 13, for not publishing an NPRM. The This rule is not a ‘‘significant 2003, through 11:59 p.m. (EST) on Holland America cruise line only regulatory action’’ under section 3(f) of February 29, 2004. recently finalized arrangements with Executive Order 12866, Regulatory

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Planning and Review, and does not Regulatory Fairness Boards. The 13175, Consultation and Coordination require an assessment of potential costs Ombudsman evaluates these actions with Indian Tribal Governments, and benefits under section 6(a)(3) of that annually and rates each agency’s because it does not have a substantial Order. The Office of Management and responsiveness to small business. If you direct effect on one or more Indian Budget has not reviewed it under that wish to comment on actions by tribes, on the relationship between the Order. It is not ‘‘significant’’ under the employees of the Coast Guard, call 1– Federal Government and Indian tribes, regulatory policies and procedures of 888–REG–FAIR (1–888–734–3247). or on the distribution of power and the Department of Homeland Security responsibilities between the Federal (DHS). Collection of Information Government and Indian tribes. Although this rule restricts access to This rule calls for no new collection Energy Effects the regulated area, the effect of this rule of information under the Paperwork will not be significant because: (i) The Reduction Act of 1995 (44 U.S.C. 3501– We have analyzed this rule under COTP may authorize access to the 3520). Executive Order 13211, Actions security zone; (ii) the security zones will Concerning Regulations That Federalism be in effect for a limited duration; and Significantly Affect Energy Supply, (iii) the Coast Guard will make A rule has implications for federalism Distribution, or Use. We have notifications via maritime advisories so under Executive Order 13132, determined that it is not a ‘‘significant mariners can adjust their plans Federalism, if it has a substantial direct energy action’’ under that Order because accordingly. effect on State or local governments and it is not a ‘‘significant regulatory action’’ would either preempt State law or under Executive Order 12866 and is not Small Entities impose a substantial direct cost of likely to have a significant adverse effect Under the Regulatory Flexibility Act compliance on them. We have analyzed on the supply, distribution, or use of (5 U.S.C. 601–612), we have considered this rule under that Order and have energy. It has not been designated by the whether this rule would have a determined that it does not have Administrator of the Office of significant economic impact on a implications for federalism. Information and Regulatory Affairs as a substantial number of small entities. significant energy action. Therefore, it The term ‘‘small entities’’ include small Unfunded Mandates Reform Act does not require a Statement of Energy businesses, not-for-profit organizations The Unfunded Mandates Reform Act Effects under Executive Order 13211. that are independently owned and of 1995 (2 U.S.C. 1531–1538) requires Environment operated and are not dominant in their Federal agencies to assess the effects of fields, and governmental jurisdictions their discretionary regulatory actions. In We have analyzed this rule under with populations of less than 50,000. particular, the Act addresses actions Commandant Instruction M16475.1D, The Coast Guard certifies under 5 that may result in the expenditure by a which guides the Coast Guard in U.S.C. 605(b) that this rule will not have State, local, or tribal government, in the complying with the National a significant economic impact on a aggregate, or by the private sector of Environmental Policy Act of 1969 substantial number of small entities. $100,000,000 or more in any one year. (NEPA) (42 U.S.C. 4321–4370f), and This rule will affect the following Though this rule will not result in such have concluded that there are no factors entities, some of which may be small an expenditure, we do discuss the in this case that would limit the use of entities: The owners and operators of effects of this rule elsewhere in this a categorical exclusion under section vessels intending to transit or anchor preamble. 2.B.2 of the Instruction. Therefore, this within a 500-yard radius of P/V rule is categorically excluded, under MAASDAM as she transits the Port of Taking of Private Property figure 2–1, paragraph (34)(g), of the Hampton Roads, and while she is This rule will not affect a taking of Instruction, from further environmental berthed at the Nauticus International private property or otherwise have documentation because it creates Terminal. taking implications under Executive temporary security zones. A final ‘‘Environmental Analysis Check List’’ Assistance for Small Entities Order 12630, Governmental Actions and Interference with Constitutionally and a final ‘‘Categorical Exclusion Under section 213(a) of the Small Protected Property Rights. Determination’’ are available in the Business Regulatory Enforcement docket where indicated under Fairness Act of 1996 (Pub. L. 104–121), Civil Justice Reform ADDRESSES. we offer to assist small entities in This rule meets applicable standards List of Subjects in 33 CFR Part 165 understanding the rule so that they in sections 3(a) and 3(b)(2) of Executive could better evaluate its effects on them Order 12988, Civil Justice Reform, to Harbors, Marine safety, Navigation and participate in the rulemaking minimize litigation, eliminate (water), Reporting and recordkeeping process. If the rule will affect your small ambiguity, and reduce burden. requirements, Security measures, business, organization, or government Waterways. jurisdiction and you have questions Protection of Children ■ For the reasons discussed in the concerning its provisions or options for We have analyzed this rule under preamble, the Coast Guard amends 33 compliance, please contact the person Executive Order 13045, Protection of CFR part 165, subpart F, as follows: listed under FOR FURTHER INFORMATION Children from Environmental Health PART 165—REGULATED NAVIGATION CONTACT for assistance in understanding Risks and Safety Risks. This rule is not AREAS AND LIMITED ACCESS AREAS this rule. an economically significant rule and Small businesses may send comments does not create an environmental risk to ■ 1. The authority citation for part 165 on the actions of Federal employees health or risk to safety that may continues to read as follows: who enforce, or otherwise determine disproportionately affect children. Authority: 33 U.S.C 1226, 1231; 46 U.S.C. compliance with, Federal regulations to Indian Tribal Governments Chapter 701: 50 U.S.C 191, 195; 33 CFR 1.05– the Small Business and Agriculture 1(g), 6.04–1, 6.04–6, and 160.5; Pub. L. 107– Regulatory Enforcement Ombudsman This rule does not have tribal 295, 116 Stat. 2064; Department of Homeland and the Regional Small Business implications under Executive Order Security Delegation No. 0170.1.

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■ 2. Add temporary § 165.T05–011, to ENVIRONMENTAL PROTECTION action are available for public read as follows: AGENCY inspection during normal business hours at the Air Protection Division, § 165.T05–011 Security Zone: Chesapeake 40 CFR Part 52 U.S. Environmental Protection Agency, Bay, Hampton Roads and Elizabeth River, Region III, 1650 Arch Street, [WV063–6032a; FRL–7612–9] Virginia. Philadelphia, Pennsylvania 19103; and (a) Location. The following area is a Approval and Promulgation of Air the West Virginia Department of security zone: All waters within a 500- Quality Implementation Plans; West Environmental Protection, Division of yard radius around the P/V MAASDAM, Virginia; MOBILE6-Based Motor Air Quality, 7012 MacCorkle Avenue, while the vessel transits through the Vehicle Emission Budgets for SE., Charleston, West Virginia 25304– Captain of the Port Hampton Roads Greenbrier County and the Charleston, 2943. zone, and while berthed at Nauticus Huntington, and Parkersburg 1-Hour FOR FURTHER INFORMATION CONTACT: International Terminal. Ozone Maintenance Areas Larry Budney, (215) 814–2184, or by e- mail at [email protected]. (b) Definitions: The designated AGENCY: Environmental Protection representative of the Captain of the Port Agency (EPA). SUPPLEMENTARY INFORMATION: is any U.S. Coast Guard commissioned, ACTION: Direct final rule. I. Background warrant or petty officer who has been On August 4, 1995 (60 FR 39911), authorized by the Captain of the Port, SUMMARY: EPA is taking direct final September 6, 1994 (59 FR 45985), action to approve State Implementation Hampton Roads, Virginia to act on his December 21, 1994 (59 FR 65719) and Plan (SIP) revisions submitted by the behalf. September 6, 1994 (59 FR 45978), State of West Virginia. The revisions (c) Contact information. The Captain respectively, EPA redesignated amend the 1-hour ozone maintenance of the Port, Hampton Roads and the Greenbrier County and the Charleston, plans for Greenbrier County and the Command Duty Officer at the Marine Huntington and Parkersburg areas of Charleston, Huntington and Parkersburg West Virginia to attainment for the 1- Safety Office Hampton Roads, Norfolk, areas. These revisions amend the hour ozone NAAQS. For each of those Virginia, can be contacted at telephone maintenance plans’ base year and 2005 areas, the redesignations included Number (757) 668–5555 or (757) 484– highway mobile volatile organic approvals of 1-hour ozone maintenance 8192. The Coast Guard vessels enforcing compound (VOC) and nitrogen oxide plans, which identify on-road MVEBs the security zone can be contacted on (NO ) emission inventories and the X for VOCs and NO , which are ozone VHF–FM channels 13 and 16. 2005 motor vehicle emissions budgets X precursors. The MVEBs contained in (MVEBs) to reflect the use of MOBILE6. (d) Regulation: (1) Under § 165.33, those maintenance plans were based These revisions also reallocate a portion vessels are prohibited from entering upon MOBILE5, which was the latest of each plans’ safety margins which within 100 yards of the P/V EPA on-road motor vehicle emission results in an increase in the MVEBs. The MAASDAM, unless authorized by the factor model available at the time. revised plans continue to demonstrate Captain of the Port, Hampton Roads, The MOBILE model is an EPA maintenance of the 1-hour national Virginia, or his designated emission factor model for estimating ambient air quality standard (NAAQS) representatives. Vessels within 500 pollutant emissions from on-road motor for ozone. EPA is approving these SIP yards of the P/V MAASDAM must vehicles. The MOBILE model calculates revisions to the West Virginia operate only at the minimum speed emissions of VOCs and NO from maintenance plans in accordance with X necessary to maintain course. passenger cars, motorcycles, buses, and the requirements of the Clean Air Act. (2) The operator of any vessel in any light-duty and heavy-duty trucks. The DATES: This rule is effective on April 12, part of this security zone must: model accounts for the emission 2004, without further notice, unless impacts of factors such as changes in (i) Stop the vessel immediately upon being EPA receives adverse written comment vehicle emission standards, changes in directed to do so by any commissioned, by March 11, 2004. If EPA receives such vehicle populations and activity, and warrant or petty officer on board a vessel comments, it will publish a timely various local conditions such as displaying a U.S. Coast Guard Ensign. withdrawal of the direct final rule in the temperature, humidity, fuel quality, and (ii) Proceed as directed by any Federal Register and inform the public air quality programs. The MOBILE commissioned, warrant or petty officer on that the rule will not take effect. model is used to calculate current and board a vessel displaying a U.S. Coast Guard ADDRESSES: Comments may be future inventories of motor vehicle Ensign. submitted either by mail or emissions at the national and local (iii) Operate at minimum speed within a electronically. Written comments level. These inventories are used to 500-yard radius of P/V MAASDAM. should be mailed to Larry Budney, make decisions about air pollution (e) Effective period: This section is Energy, Radiation and Indoor policies and programs at the local, State effective from January 20, 2004, to April Environment Branch, Mailcode 3AP23, and national level. MOBILE-based 24, 2004. U.S. Environmental Protection Agency, inventories are also used in Region III, 1650 Arch Street, demonstrating how the Clean Air Act’s Dated: January 16, 2004. Philadelphia, Pennsylvania 19103. (the Act’s) requirements for SIPs and Robert R. O’Brien, Jr., Electronic comments should be sent transportation conformity are met. Captain, U.S. Coast Guard, Captain of the either to [email protected] or to The MOBILE model was first Port, Hampton Roads. http://www.regulations.gov, which is an developed in 1978. It has been updated [FR Doc. 04–2742 Filed 2–9–04; 8:45 am] alternative method for submitting several times to reflect changes in the BILLING CODE 4910–15–U electronic comments to EPA. To submit vehicle fleet and fuels, to incorporate comments, please follow the detailed EPA’s growing understanding of vehicle instructions described in Part III of the emissions, and to address new emission SUPPLEMENTARY INFORMATION section. regulations and modeling needs. EPA Copies of the documents relevant to this released MOBILE6, the latest version of

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the MOBILE model, on January 29, 2002 means that transportation activities will (safety margins) between the total base (67 FR 4254). Although some minor not produce new air quality violations, year and total projected 2005 emissions updates were made in 1996 with the worsen existing violations, or delay for each area which produces an release of MOBILE5b, MOBILE6 is the timely attainment of the NAAQS. increase in the MVEBs. The base year is 1990 for the Charleston and Parkersburg first major revision to MOBILE since II. Summary of West Virginia’s SIP MOBILE5a was released in 1993. Revision and EPA’s Review areas, and 1993 for Greenbrier County Beginning in January of 2004, all and the Huntington area. By increasing conformity determinations for new A. MOBILE6-Based Highway Motor the MVEBs, the West Virginia transportation improvement programs Vehicle Emission Inventories Department of Environmental Protection and long range transportation plans will On October 15, 2003, the State of (WVDEP) is ensuring that conformity be required to use MOBILE6 to West Virginia submitted to EPA a formal can be demonstrated in each area. The demonstrate conformity. revision to its State Implementation October 15, 2003 submittal, while For the year 2005, the maintenance Plan (SIP). The SIP revision contains increasing the MVEBs still ensures plans identified and established MVEBs recalculations of the MVEBs to reflect maintenance of the NAAQS for ozone in for VOC and NOX for each area, to the use of the MOBILE6 emission factor each area. which each respective area’s model for Greenbrier County and the Tables 1–4 and the discussion that transportation improvement program Charleston, Huntington and Parkersburg follows describe how the new and long range transportation plan must maintenance areas. The revisions also MOBILE6-based MVEBs were conform. Conformity to MVEBs in a SIP reallocate a portion of the differences determined for each maintenance area.

TABLE 1.—GREENBRIER COUNTY REALLOCATION OF EMISSIONS AND DETERMINATION OF MOBILE6-BASED MVEBS [Tons/day]

Emissions prior to reallocation Safety margin 2005 emissions Allocated safety 1993 base year 2005 projection margin 2005 MVEB

Highway MOBILE6 Emissions: VOC ...... 4.22 1.96 1.50 3.46 NOX ...... 5.07 3.80 1.05 4.85

1993 base year 2005 projection base minus 2005 2005 total

Total (Point, Area and Mobile) Emissions: VOC ...... 8.59 6.92 1.67 8.42 NOX ...... 6.67 5.50 1.17 6.56

TABLE 2.—CHARLESTON AREA REALLOCATION OF EMISSIONS AND DETERMINATION OF MOBILE6-BASED MVEBS [Tons/day]

Emissions prior to reallocation Safety margin 2005 emissions Allocated safety 1990 base year 2005 projection margin 2005 MVEB

Highway MOBILE6 Emissions: VOC ...... 38.2 14.4 30.1 44.5 NOX ...... 35.8 24.5 29.6 54.1

1990 base year 2005 projection Base minus 2005 2005 total

Total (Point, Area and Mobile) Emissions: VOC ...... 114.8 81.3 33.5 111.4 NOX ...... 441.9 409.0 32.9 438.6

TABLE 3.—HUNTINGTON AREA REALLOCATION OF EMISSIONS AND DETERMINATION OF MOBILE6-BASED MVEBS [Tons/day]

Emissions prior to reallocation Safety margin 2005 emissions Allocated safety 1993 base year 2005 projection margin 2005 MVEB

Highway MOBILE6 Emissions: VOC ...... 13.0 6.5 6.9 13.4 NOX ...... 13.0 10.2 3.7 13.9

1993 base year 2005 projection Base minus 2005 2005 total

Total (Point, Area and Mobile) Emissions: VOC ...... 42.5 34.9 7.6 41.8

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TABLE 3.—HUNTINGTON AREA REALLOCATION OF EMISSIONS AND DETERMINATION OF MOBILE6-BASED MVEBS— Continued [Tons/day]

Emissions prior to reallocation Safety margin 2005 emissions Allocated safety 1993 base year 2005 projection margin 2005 MVEB

NOX ...... 42.2 38.1 4.1 41.8

TABLE 4.—PARKERSBURG AREA REALLOCATION OF EMISSIONS AND DETERMINATION OF MOBILE6-BASED MVEBS [Tons/day]

Emissions prior to reallocation Safety margin 2005 emissions Allocated safety 1990 base year 2005 projection margin 2005 MVEB

Highway MOBILE6 Emissions: VOC ...... 10.0 4.0 9.5 13.4 NOX ...... 8.7 6.3 3.6 9.9

1990 base year 2005 projection Base minus 2005 2005 total

Total (Point, Area and Mobile) Emissions: VOC ...... 55.1 44.6 10.5 54.1 NOX ...... 28.6 24.6 4.1 28.2

All emissions presented in the tables mathematical rounding of the VOC and III. Final Action are recalculated based upon MOBILE6. safety margin numbers). EPA is approving West Virginia’s The 2005 MVEB VOC AND NO X In the same Parkersburg example October 15, 2003 SIP revision submittal emissions (upper portion of last (again refer to Table 4), the remaining which amends the 1-hour ozone column) serve as the new MVEBs for 1.0 tpd of the VOC safety margin has maintenance plans for the Greenbrier transportation conformity planning. been reserved as a residual safety County and the Charleston, Huntington As indicated in Tables 1–4 (see margin in the total (point, area and and Parkersburg areas. These revisions explanation that follows), ninety mobile source) maintenance VOC amend the maintenance plans’ base year percent of the difference between the budget. The 1.0 tpd residual VOC safety and 2005 highway mobile VOC and total base year emissions and the total margin is subtracted from the 1990 total NOX emission inventories and the 2005 projected 2005 emissions has been allowable base year emissions (55.1 tpd) MVEBs to reflect the use of MOBILE6. allocated to the respective on-road to yield 54.1 as the new total VOC These revisions also reallocate a portion MVEBs. The remaining ten percent has maintenance budget for the Parkersburg of each plans’ safety margins which been reserved as residual safety margins area. results in an increase in the MVEBs. in the total maintenance budgets to For all of the West Virginia 1-hour EPA is approving these SIP revisions to ensure continued maintenance of the 1- ozone maintenance areas addressed the maintenance plans for Greenbrier hour ozone NAAQS. herein, the WVDEP recalculated the County and the Charleston, Huntington To explain how the safety margins are 2005 MVEBs using the latest available and Parkersburg areas because the determined and allocated, the VOC planning assumption data. However, the October 15, 2003 submittal continues to emissions for the Parkersburg area (in most up-to-date West Virginia vehicle demonstrate maintenance of the 1-hour Table 4) may be used as an example. registration data do not differentiate ozone NAAQS. EPA is publishing this The total 1990 base year VOC emissions between passenger cars and light duty rule without prior proposal because the are 55.1 tons/day (tpd), which is the trucks, rendering those data inadequate Agency views this as a noncontroversial maximum amount of VOC emissions for use in estimating emissions. amendment and anticipates no adverse consistent with maintenance of the 1- Therefore, the WVDEP used the latest comment, since no significant adverse hour ozone NAAQS. Since the total available West Virginia Highway comments were received on the SIP projected 2005 emissions are 44.6 tpd, Performance Monitoring System revision at the State level. However, in there is a 10.5 tpd VOC safety margin (HPMS) data on vehicle miles traveled the ‘‘Proposed Rules’’ section of today’s (i.e., the ozone NAAQS would continue (VMT) by vehicle type and roadway Federal Register, EPA is publishing a to be maintained if total VOC emissions class obtained from the West Virginia separate document that will serve as the increased as much as 10.5 tpd above the Department of Transportation. The proposal to approve the SIP revision if projected 2005 emissions of 44.6 tpd.) WVDEP used the HPMS data to adjust adverse comments are filed. This rule Ninety percent of the 10.5 tpd safety the national MOBILE6 default VMT data will be effective on April 12, 2004 margin (i.e., 9.5 tpd) has been allocated to generate a more accurate VMT mix by without further notice unless EPA to the 2005 projected highway VOC vehicle type and roadway class. That receives adverse comment by March 11, emissions (4.0 tpd) yielding a MVEB of adjusted VMT mix was used in 2004. 13.4 tpd of VOC for year 2005. (Note conjunction with MOBILE6 in If EPA receives adverse comment, regarding the 13.4 number: 13.4, as calculating the base year and projected EPA will publish a timely withdrawal in opposed to 13.5, results from 2005 VOC and NOX emissions. the Federal Register informing the

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public that the rule will not take effect. www.regulations.gov, then select that it does not contain CBI. Information EPA will address all public comments ‘‘Environmental Protection Agency’’ at not marked as CBI will be included in in a subsequent final rule based on the the top of the page and use the ‘‘go’’ the public file and available for public proposed rule. EPA will not institute a button. The list of current EPA actions inspection without prior notice. If you second comment period on this action. available for comment will be listed. have any questions about CBI or the Any parties interested in commenting Please follow the online instructions for procedures for claiming CBI, please must do so at this time. Please note that submitting comments. The system is an consult the person identified in the FOR if EPA receives adverse comment on an ‘‘anonymous access’’ system, which FURTHER INFORMATION CONTACT section. amendment, paragraph, or section of means EPA will not know your identity, this rule and if that provision may be e-mail address, or other contact Considerations When Preparing severed from the remainder of the rule, information unless you provide it in the Comments to EPA EPA may adopt as final those provisions body of your comment. You may find the following of the rule that are not the subject of an iii. Disk or CD ROM. You may submit suggestions helpful for preparing your adverse comment. comments on a disk or CD ROM that comments: You may submit comments either you mail to the mailing address 1. Explain your views as clearly as electronically or by mail. To ensure identified in the ADDRESSES section of possible. proper receipt by EPA, identify the this document. These electronic 2. Describe any assumptions that you appropriate rulemaking identification submissions will be accepted in used. number WV063–6032 in the subject line WordPerfect, Word or ASCII file format. 3. Provide any technical information on the first page of your comment. Avoid the use of special characters and and/or data you used that support your Please ensure that your comments are any form of encryption. views. submitted within the specified comment 2. By Mail. Written comments should 4. If you estimate potential burden or period. Comments received after the be addressed to the EPA Regional office costs, explain how you arrived at your close of the comment period will be listed in the ADDRESSES section of this estimate. marked ‘‘late.’’ EPA is not required to document. For public commenters, it is 5. Provide specific examples to consider these late comments. important to note that EPA’s policy is illustrate your concerns. 1. Electronically. If you submit an that public comments, whether 6. Offer alternatives. electronic comment as prescribed submitted electronically or on paper, 7. Make sure to submit your below, EPA recommends that you will be made available for public comments by the comment period include your name, mailing address, viewing at the EPA Regional Office, as deadline identified. and an e-mail address or other contact EPA receives them and without change, 8. To ensure proper receipt by EPA, information in the body of your unless the comment contains identify the appropriate regional file/ comment. Also include this contact copyrighted material, confidential rulemaking identification number in the information on the outside of any disk business information (CBI), or other subject line on the first page of your or CD ROM you submit, and in any information whose disclosure is response. It would also be helpful if you cover letter accompanying the disk or restricted by statute. When EPA provided the name, date, and Federal CD ROM. This ensures that you can be identifies a comment containing Register citation related to your identified as the submitter of the copyrighted material, EPA will provide comments. comment and allows EPA to contact you a reference to that material in the in case EPA cannot read your comment version of the comment that is placed in IV. Statutory and Executive Order due to technical difficulties or needs the official public rulemaking file. The Reviews further information on the substance of entire printed comment, including the A. General Requirements your comment. EPA’s policy is that EPA copyrighted material, will be available will not edit your comment, and any at the Regional Office for public Under Executive Order 12866 (58 FR identifying or contact information inspection. 51735, October 4, 1993), this action is provided in the body of a comment will Submittal of CBI Comments—Do not not a ‘‘significant regulatory action’’ and be included as part of the comment that submit information that you consider to therefore is not subject to review by the is placed in the official public docket. be CBI electronically to EPA. You may Office of Management and Budget. For If EPA cannot read your comment due claim information that you submit to this reason, this action is also not to technical difficulties and cannot EPA as CBI by marking any part or all subject to Executive Order 13211, contact you for clarification, EPA may of that information as CBI (if you submit ‘‘Actions Concerning Regulations That not be able to consider your comment. CBI on disk or CD ROM, mark the Significantly Affect Energy Supply, i. E-mail. Comments may be sent by outside of the disk or CD ROM as CBI Distribution, or Use’’ (66 FR 28355, May electronic mail (e-mail) to and then identify electronically within 22, 2001). This action merely approves [email protected] attention the disk or CD ROM the specific state law as meeting Federal WV063–6032. EPA’s e-mail system is information that is CBI). Information so requirements and imposes no additional not an ‘‘anonymous access’’ system. If marked will not be disclosed except in requirements beyond those imposed by you send an e-mail comment directly accordance with procedures set forth in state law. Accordingly, the without going through Regulations.gov, 40 CFR part 2. Administrator certifies that this rule EPA’s e-mail system automatically In addition to one complete version of will not have a significant economic captures your e-mail address. E-mail the comment that includes any impact on a substantial number of small addresses that are automatically information claimed as CBI, a copy of entities under the Regulatory Flexibility captured by EPA’s e-mail system are the comment that does not contain the Act (5 U.S.C. 601 et seq.). Because this included as part of the comment that is information claimed as CBI must be rule approves pre-existing requirements placed in the official public docket. submitted for inclusion in the official under state law and does not impose ii. Regulations.gov. Your use of public regional rulemaking file. If you any additional enforceable duty beyond Regulations.gov is an alternative method submit the copy that does not contain that required by state law, it does not of submitting electronic comments to CBI on disk or CD ROM, mark the contain any unfunded mandate or EPA. Go directly to http:// outside of the disk or CD ROM clearly significantly or uniquely affect small

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governments, as described in the required information to the U.S. Senate, margins to those 2005 motor vehicle Unfunded Mandates Reform Act of 1995 the U.S. House of Representatives, and emission budgets. These revisions were (Public Law 104–4). This rule also does the Comptroller General of the United submitted by the State of West Virginia not have tribal implications because it States prior to publication of the rule in Department of Environmental Protection will not have a substantial direct effect the Federal Register. This rule is not a to EPA on October 15, 2003. on one or more Indian tribes, on the ‘‘major rule’’ as defined by 5 U.S.C. (i) Incorporation by reference. relationship between the Federal 804(2). Government and Indian tribes, or on the (A) Letter of October 15, 2003 from distribution of power and C. Petitions for Judicial Review the Secretary of the West Virginia responsibilities between the Federal Under section 307(b)(1) of the Clean Department of Environmental Protection Government and Indian tribes, as Air Act, petitions for judicial review of transmitting revisions to West Virginia’s specified by Executive Order 13175 (65 this action must be filed in the United ozone maintenance plans for the FR 67249, November 9, 2000). This States Court of Appeals for the Greenbrier County and the Charleston, action also does not have Federalism appropriate circuit by April 12, 2004. Huntington and Parkersburg areas. implications because it does not have Filing a petition for reconsideration by (B) Document entitled ‘‘Final substantial direct effects on the States, the Administrator of this final rule does on the relationship between the national not affect the finality of this rule for the Revisions to the 1–Hour Ozone government and the States, or on the purposes of judicial review nor does it Maintenance Plans for the Charleston, distribution of power and extend the time within which a petition WV (Kanawha and Putnam Counties); responsibilities among the various for judicial review may be filed, and Huntingdon, WV (Cabell & Wayne levels of government, as specified in shall not postpone the effectiveness of Counties); Parkersburg, WV (Wood Executive Order 13132 (64 FR 43255, such rule or action. This action County); and Greenbrier County WV August 10, 1999). This action merely approving West Virginia’s revisions to Maintenance Areas.’’ This document approves a state rule implementing a the base-year and 2005 MVEBs of its 1- establishes revised motor vehicle Federal standard, and does not alter the hour ozone maintenance plans for the emissions budgets for the following 1- relationship or the distribution of power Greenbrier County and the Charleston, hour ozone maintenance plans, effective and responsibilities established in the Huntington and Parkersburg areas to September 26, 2003: Clean Air Act. This rule also is not reflect the use of MOBILE6 may not be (1) Revisions to the Charleston, West subject to Executive Order 13045 challenged later in proceedings to Virginia (Kanawha and Putnam ‘‘Protection of Children from enforce its requirements. (See section Counties) ozone maintenance plan, Environmental Health Risks and Safety 307(b)(2).) Risks’’ (62 FR 19885, April 23, 1997), establishing revised motor vehicle because it is not economically List of Subjects in 40 CFR Part 52 emissions budgets of 44.5 tons/day of significant. In reviewing SIP Environmental protection, Air VOC and 54.1 tons/day of NOX. submissions, EPA’s role is to approve pollution control, Nitrogen dioxide, (2) Revisions to the Huntington, West state choices, provided that they meet Ozone, Incorporation by reference, Virginia (Cabell and Wayne Counties) the criteria of the Clean Air Act. In this Reporting and recordkeeping ozone maintenance plan, establishing context, in the absence of a prior requirements, Volatile organic revised motor vehicle emissions budgets existing requirement for the State to use compounds. of 13.4 tons/day of VOC and 13.9 tons/ voluntary consensus standards (VCS), Dated: January 14, 2004. day of NOX. EPA has no authority to disapprove a James W. Newsom, SIP submission for failure to use VCS. (3) Revisions to the Parkersburg, West It would thus be inconsistent with Acting Regional Administrator, Region III. Virginia (Wood County) ozone applicable law for EPA, when it reviews ■ 40 CFR part 52 is amended as follows: maintenance plan, establishing revised a SIP submission, to use VCS in place motor vehicle emissions budgets of 13.4 of a SIP submission that otherwise PART 52—[AMENDED] tons/day of VOC and 9.9 tons/day of satisfies the provisions of the Clean Air ■ 1. The authority citation for part 52 NOX. Act. Thus, the requirements of section continues to read as follows: (4) Revisions to the Greenbrier 12(d) of the National Technology Authority: 42 U.S.C. 7401 et seq. County, West Virginia ozone Transfer and Advancement Act of 1995 maintenance plan, establishing revised (15 U.S.C. 272 note) do not apply. This Subpart XX—West Virginia motor vehicle emissions budgets of 3.46 rule does not impose an information tons/day of VOC and 4.85 tons/day of collection burden under the provisions ■ 2. Section 52.2520 is amended by NOX. of the Paperwork Reduction Act of 1995 adding paragraph (c)(57) to read as (44 U.S.C. 3501 et seq.). follows: (ii) Additional Material.—Remainder of the State submittal pertaining to the B. Submission to Congress and the § 52.2520 Identification of plan. revisions listed in paragraph (c)(57)(i) of Comptroller General * * * * * this section. The Congressional Review Act, 5 (c) * * * [FR Doc. 04–2707 Filed 2–9–04; 8:45 am] U.S.C. 801 et seq., as added by the Small (57) Revisions to the West Virginia 1- Business Regulatory Enforcement hour ozone maintenance plans for BILLING CODE 6560–50–P Fairness Act of 1996, generally provides Greenbrier County and the Charleston, that before a rule may take effect, the Huntington and Parkersburg areas to agency promulgating the rule must amend the base year and 2005 mobile submit a rule report, which includes a emissions inventories and the 2005 copy of the rule, to each House of the motor vehicle emission budgets to Congress and to the Comptroller General reflect the use of MOBILE6, and to of the United States. EPA will submit a reallocate a portion of projected report containing this rule and other MOBILE6-based emission safety

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DEPARTMENT OF HOMELAND The modified BFEs are not listed for Regulatory Flexibility Act SECURITY each community in this notice. However, this rule includes the address The Mitigation Division Director of Federal Emergency Management of the Chief Executive Officer of the the Emergency Preparedness and Agency community where the modified base Response Directorate certifies that this flood elevation determinations are rule is exempt from the requirements of 44 CFR Part 65 available for inspection. the Regulatory Flexibility Act because The modifications are made pursuant modified BFEs are required by the Flood Changes in Flood Elevation to section 206 of the Flood Disaster Disaster Protection Act of 1973, 42 Determinations Protection Act of 1973, 42 U.S.C. 4105, U.S.C. 4105, and are required to maintain community eligibility in the AGENCY: Federal Emergency and are in accordance with the National Management Agency (FEMA), Flood Insurance Act of 1968, 42 U.S.C. NFIP. No regulatory flexibility analysis Emergency Preparedness and Response 4001 et seq., and with 44 CFR part 65. has been prepared. For rating purposes, the currently Directorate, Department of Homeland Regulatory Classification Security. effective community number is shown and must be used for all new policies ACTION: Final rule. This final rule is not a significant and renewals. regulatory action under the criteria of SUMMARY: Modified Base (1% annual The modified BFEs are the basis for section 3(f) of Executive Order 12866 of chance) Flood Elevations (BFEs) are the floodplain management measures September 30, 1993, Regulatory finalized for the communities listed that the community is required to either Planning and Review, 58 FR 51735. below. These modified elevations will adopt or to show evidence of being be used to calculate flood insurance already in effect in order to qualify or Executive Order 12612, Federalism premium rates for new buildings and to remain qualified for participation in the National Flood Insurance Program This rule involves no policies that their contents. have federalism implications under EFFECTIVE DATES: The effective dates for (NFIP). These modified elevations, together Executive Order 12612, Federalism, these modified BFEs are indicated on dated October 26, 1987. the following table and revise the Flood with the floodplain management criteria Insurance Rate Map(s) (FIRMs) in effect required by 44 CFR 60.3, are the Executive Order 12778, Civil Justice for each listed community prior to this minimum that are required. They Reform date. should not be construed to mean that the community must change any This rule meets the applicable ADDRESSES: The modified BFEs for each existing ordinances that are more standards of section 2(b)(2) of Executive community are available for inspection stringent in their floodplain Order 12778. at the office of the Chief Executive management requirements. The Officer of each community. The List of Subjects in 44 CFR Part 65 community may at any time enact respective addresses are listed in the stricter requirements of its own, or table below. Flood insurance, Floodplains, pursuant to policies established by other Reporting and recordkeeping FOR FURTHER INFORMATION CONTACT: Federal, State or regional entities. requirements. Doug Bellomo, P.E., Hazard These modified elevations are used to Identification Section, Emergency meet the floodplain management ■ Accordingly, 44 CFR part 65 is Preparedness and Response Directorate, requirements of the NFIP and are also amended to read as follows: FEMA, 500 C Street, SW., Washington, used to calculate the appropriate flood PART 65—[AMENDED] DC 20472, (202) 646–2903. insurance premium rates for new SUPPLEMENTARY INFORMATION: FEMA buildings built after these elevations are ■ makes the final determinations listed 1. The authority citation for part 65 made final, and for the contents in these continues to read as follows: below of modified BFEs for each buildings. community listed. These modified The changes in BFEs are in Authority: 42 U.S.C. 4001 et seq.; elevations have been published in accordance with 44 CFR 65.4. Reorganization Plan No. 3 of 1978, 3 CFR, newspapers of local circulation and 1978 Comp., p. 329; E.O. 12127, 44 FR 19367, ninety (90) days have elapsed since that National Environmental Policy Act 3 CFR, 1979 Comp., p. 376. publication. The Mitigation Division This rule is categorically excluded § 65.4 [Amended] Director of the Emergency Preparedness from the requirements of 44 CFR part and Response Directorate has resolved 10, Environmental Consideration. No ■ 2. The tables published under the any appeals resulting from this environmental impact assessment has authority of § 65.4 are amended as notification. been prepared. follows:

Dates and name of news- State and county Location paper where notice was pub- Chief executive officer of community Effective date of Community lished modification No.

Alabama: Jefferson (FEMA City of Birmingham ... May 13, 2003, May 20, 2003, The Honorable Bernard A. Kincaid, Mayor May 6, 2003 ...... 010116 E Docket No. D– The Birmingham News. of the City of Birmingham, Birmingham 7541). City Hall, 710 North 20th Street, Bir- mingham, Alabama 35203. Montgomery City of Montgomery .. May 28, 2003, June 4, 2003, The Honorable Bobby N. Bright, Mayor of Aug. 5, 2003 ...... 010174 G (FEMA Docket Montgomery Advertiser. the City of Montgomery, City Hall, P.O. No. D–7543). Box 1111, Montgomery, Alabama 36101–1111. Connecticut:

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Dates and name of news- State and county Location paper where notice was pub- Chief executive officer of community Effective date of Community lished modification No.

Fairfield (FEMA Town of Greenwich .. May 6, 2003, May 13, 2003, Mr. Richard Bergstresser, Town of Green- Apr. 28, 2003 ...... 090008 C Docket No. D– Greenwich Time. wich First Selectman, Town Hall, 101 7541). Field Point Road, Greenwich, Con- necticut 06830. Delaware: New Castle Unincorporated Areas July 3, 2003, July 10, 2003 Mr. Thomas P. Gordon, New Castle Coun- Oct. 9, 2003 ...... 105085 G&H (FEMA Docket The News Journal. ty Executive, New Castle County Gov- No. D–7543). ernment Center, 87 Reads Way, New Castle, Delaware 19720. Florida: Dade (FEMA City of Miami ...... July 7, 2003, July 14, 2003, The Honorable Manuel A. Diaz, Mayor of July 26, 2003 ...... 120650 J Docket No. D– The Miami Herald. the City of Miami, 3500 Pan American 7543). Drive, Miami, Florida 33133. Santa Rosa Unincorporated Areas June 4, 2003, June 11, 2003, Mr. Hunter Walker, Santa Rosa County Ad- May 28, 2003 ...... 120274 C (FEMA Docket The Press Gazette. ministrator, 6495 Caroline Street, Suite No. D–7543). D, Milton, Florida 32570–4592. Hillsborough City of Tampa ...... May 20, 2003, May 27, 2003, The Honorable Dick A. Greco, Mayor of May 12, 2003 ...... 120114 C (FEMA Docket St. Petersburg Times. the City of Tampa, 306 East Jackson No. D–7541). Street, First Floor, Tampa, Florida 33602. Georgia: Bryan (FEMA Unincorporated Areas June 19, 2003, June 26, Mr. Brooks Warnell, Chairman of the Bryan Sept. 25, 2003 ...... 130016 A Docket No. D– 2003, Bryan County News. County Board of Commissioners, P.O. 7543). Box 430, Pembroke, Georgia 31321. Chatham (FEMA City of Savannah ...... May 22, 2003, May 29, 2003, The Honorable Floyd Adams, Jr., Mayor of May 15, 2003 ...... 135163 C Docket No. D– Savannah Morning News. the City of Savannah, P.O. Box 1027, 7541). Savannah, Georgia 31402. Maine: Camden (FEMA Town of Camden ...... June 26, 2003, July 3, 2003, Ms. Roberta Smith, Camden Town Man- June 18, 2003 ...... 230074 B Docket No. D– The Camden Herald. ager, P.O. Box 1207, Camden, Maine 7543). 04843. Massachusetts: Plymouth (FEMA Town of Plymouth .... April 9, 2003, April 16, 2003, Ms. Eleanor Beth, Plymouth Town Man- Apr. 1, 2003 ...... 250278 C Docket No. D– Old Colony Memorial. ager, Plymouth Town Hall, 11 Lincoln 7539). Street, Plymouth, Massachusetts 02360. Pennsylvania: Chester (FEMA Township of East July 2, 2003, July 9, 2003, Mr. Earl Emel, Chairman of the Township June 25, 2003 ...... 421479 D Docket No. D– Fallowfield. Daily Local News. of East Fallowfield Board of Supervisors, 7543). 2264 Strasburg Road, East Fallowfield, Pennsylvania 19320. Lebanon (FEMA Township of North June 13, 2003, June 20, Ms. Robin Getz, Lebanon County Planning Sept. 19, 2003 ...... 420576 C Docket No. D– Cornwall. 2003, Lebanon Daily News. and Zoning Department, 400 South Eight 7543). Street, Lebanon, Pennsylvania 17042. Wyoming (FEMA Township of April 30, 2003, May 7, 2003, Mr. Randy L. White, Chairman of the Apr. 23, 2003 ...... 422206 C Docket No. D– Tunkhannock. The New Age Examiner. Township of Tunkhannock Board of 7541). Commissioners, Township Building, 438 State Route 92 South, Tunkhannock, Pennsylvania 18657. South Carolina: Richland (FEMA Unincorporated Areas June 5, 2003, June 12, 2003, Mr. T. Cary McSwain, Richland County Ad- May 29, 2003 ...... 450170 H Docket No. D– The State. ministrator, 2020 Hampton Street, P.O. 7543). Box 192, Columbia, South Carolina 29202.

(Catalog of Federal Domestic Assistance No. DEPARTMENT OF HOMELAND the Base (1% annual chance) Flood 83.100, ‘‘Flood Insurance’’) SECURITY Elevations (BFEs), is appropriate Dated: February 3, 2004. because of new scientific or technical Anthony S. Lowe, Federal Emergency Management data. New Flood insurance premium Service Mitigation Division Director, Emergency rates will be calculated from the Preparedness and Response Directorate. modified BFEs for new buildings and 44 CFR Part 65 their contents. [FR Doc. 04–2791 Filed 2–9–04; 8:45 am] DATES: These modified BFEs are BILLING CODE 9110–12–P [Docket No. FEMA–D–7551] currently in effect on the dates listed in Changes in Flood Elevation the table and revise the Flood Insurance Determinations Rate Map(s) (FIRMs) in effect prior to this determination for each listed AGENCY: Federal Emergency community. Management Agency (FEMA) From the date of the second Emergency Preparedness and Response publication of these changes in a Directorate, Department of Homeland newspaper of local circulation, any Security. person has ninety (90) days in which to ACTION: Interim rule. request through the community that the Director reconsider the changes. The SUMMARY: This interim rule lists modified elevations may be changed commmunities where modification of during the 90-day period.

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ADDRESSES: The modified BFEs for each the National Flood Insurance Program Regulatory Classification community are available for inspection (NFIP). This interim rule is not a significant at the office of the Chief Executive These modified elevations, together regulatory action under the criteria of Officer of each community. The with the floodplain management criteria section 3(f) of Executive Order 12866 of respective addresses are listed in the required by 44 CFR 60.3, are the September 30, 1993, Regulatory table below. minimum that are required. They Planning and Review, 58 FR 51735. FOR FURTHER INFORMATION CONTACT: should not be construed to mean that Executive Order 12612, Federalism Doug Bellomo, P.E., Hazard the community must change any Identification Section, Emergency existing ordinances that are more This rule involves no policies that Preparedness and Response Directorate, stringent in their floodplain have federalism implications under FEMA, 500 C Street, SW., Washington, management requirements. The Executive Order 12612, Federalism, DC 20472, (202) 646–2903. community may at any time enact dated October 26, 1987. SUPPLEMENTARY INFORMATION: The stricter requirements of its own, or Executive Order 12778, Civil Justice modified BFEs are not listed for each pursuant to policies established by other community in this interim rule. Reform Federal, State or regional entities. However, the address of the Chief This rule meets the applicable Executive Officer of the community The changes in BFEs are in standards of section 2(b)(2) of Executive where the modified BFE determinations accordance with 44 CFR 65.4. Order 12778. are available for inspection is provided. National Environmental Policy Act Any request for reconsideration must List of Subjects in 44 CFR Part 65 be based upon knowledge of changed This rule is categorically excluded Flood Insurance, Floodplains, conditions, or upon new scientific or from the requirement of 44 CFR part 10, Reporting and recordkeeping technical data. Environmental Consideration. No requirements. The modifications are made pursuant environmental impact assessment has ■ Accordingly, 44 CFR part 65 is to section 201 of the Flood Disaster been prepared. amended to read as follows: Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Regulatory Flexibility Act PART 65—[AMENDED] Flood Insurance Act of 1968, 42 U.S.C. 4001 et. seq., and with 44 CFR part 65. The Mitigation Division Director of ■ 1. The authority citation for part 65 For rating purposes, the currently the Emergency Preparedness and continues to read as follows. effective community number is shown Response Directorate certifies that this rule is exempt from the requirements of Authority: 42 U.S.C. 4001 et seq.; and must be used for all new policies Reorganization Plan No. 3 of 1978, 3 CFR, and renewals. the Regulatory Flexibility Act because 1978 Comp., p.329; E.O. 12127, 44 FR 19367, The modified BFEs are the basis for modified BFEs are required by the Flood 3 CFR, 1979 Comp., p. 376. the floodplain management measures Disaster Protection Act of 1973, 42 that the community is required to either U.S.C. 4105, and are required to § 65.4 [Amended] adopt or to show evidence of being maintain community eligibility in the ■ 2. The tables published under the already in effect in order to qualify or NFIP. No regulatory flexibility analysis authority of § 65.4 are amended as shown to remain qualified for participation in has been prepared. below:

Dates and name of State and county Location newspaper where no- Chief executive officer Effective date of modi- Community tice was published of community fication No.

Florida: Walton ...... Unincorporated Areas December 29, 2003, Mr. Larry Jones, Chair- April 5, 2004 120317 F. January 5, 2004, man of the Walton Defuniak Springs County Board of Herald-Breeze. Commissioners, P.O. Drawer 1355, Defuniak Springs, Florida 32435. Georgia: Gwinnett ...... Unincorporated Areas January 8, 2004, Janu- Mr. F. Wayne Hill, December 29, 2003 130322 C. ary 15, 2004, Chairman of the Gwinnett Daily Post. Gwinnett County Board of Commis- sioners, Justice and Administration Cen- ter, 75 Langley Drive, Lawrenceville, Georgia 30045. Georgia: Bibb and Jones City of Macon and December 31, 2003, The Honorable C. Jack April 7, 2004 130011 E. Bibb County January 7, 2004, Ellis, Mayor of the The Macon Tele- City of Macon, 700 graph. Poplar Street, Macon, Georgia 31201.

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Dates and name of State and county Location newspaper where no- Chief executive officer Effective date of modi- Community tice was published of community fication No.

Massachusetts: Mid- Town of Andover December 9, 2003, Mr. Reginald S. March 16, 2004 250076 B. dlesex. December 16, 2003, Stapczynski, Man- The Eagle-Tribune. ager of the Town of Andover, Andover Town Office, 36 Bartlett Street, Ando- ver, Massachusetts 01810. Massachusetts: Mid- Town of Wilmington December 9, 2003, Mr. Michael Caira, March 16, 2004 250227 C&D. dlesex. December 16, 2003, Manager of the The Sun. Town of Wilmington, Wilmington Town Hall, 121 Glen Road, Wilmington, Massa- chusetts 01887. Pennsylvania: Lebanon .. City of Lebanon January 2, 2004, Janu- The Honorable Robert April 9, 2004 420573 B. ary 9, 2004, Leb- A. Anspach, Mayor anon Daily News. of the City of Leb- anon, 400 South Eight Street, Leb- anon, Pennsylvania 17042. Pennsylvania: Lebanon .. Township of South January 2, 2004, Janu- Mr. Curtis Kulp, Town- April 9, 2004 420581 C. Lebanon ary 9, 2004, Leb- ship of South Leb- anon Daily News. anon Manager, 1800 South Fifth Avenue, Lebanon, Pennsyl- vania 17042. Pennsylvania: Mont- Township of Spring- December 17, 2003, Mr. Donald Berger, December 10, 2003 425388 E. gomery. field December 24, 2003, Township of Spring- Ambler Gazette. field Manager, 1510 Papermill Road, Wyndmoor, Pennsyl- vania 19118. Pennsylvania: Mont- Township of Upper December 17, 2003, Mr. Paul Leonard, December 10, 2003 420708 E. gomery. Dublin December 24, 2003, Township of Upper Ambler Gazette. Dublin Manager, 801 Loch Alsh Avenue, Fort Washington, Pennsylvania 19304. New York: Niagara ...... Town of Newfane December 24, 2003, Mr. Eric Krueger, Town June 16, 2004 360504 B. December 31, 2003, of Newfane Super- Union & Sun Jour- visor, Newfane Town nal. Hall, 2896 Transit Road, Newfane, New York 14108. New York: Niagara ...... City of Niagara Falls December 23, 2003, The Honorable Irene J. June 16, 2004 360506 B. December 30, 2003, Elia, Mayor of the Niagara Falls Ga- City of Niagara Falls, zette. P.O. Box 69, Niag- ara Falls, New York 14302–0069. North Carolina: Gaston .. City of Belmont December 8, 2003, The Honorable Billy W. December 1, 2003 370320 E. December 15, 2003, Joye, Jr., Mayor of The Gaston Gazette. the City of Belmont, P.O. Box 431, Bel- mont, North Carolina 28012. North Carolina: Durham Unincorporated Areas June 24, 2003, July 1, Mr. Michael M. Ruffin, September 30, 2003. 370085 G. 2003, The Herald- Durham County Sun. Manager, 200 East Main Street, 2nd Floor, Durham, North Carolina 27701. North Carolina: Durham City of Durham June 24, 2003, July 1, The Honorable William September 30, 2003. 370086 G. 2003, The Herald- V. Bell, Mayor of the Sun. City of Durham, 101 City Hall Plaza, Dur- ham, North Carolina 27701.

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North Carolina: Durham Unincorporated Areas December 8, 2003, Mr. Jan Winters, Gas- December 1, 2003. 370099 E. December 15, 2003, ton County Manager, The Gaston Gazette. P.O. Box 1578, Gas- tonia, North Carolina 28053. North Carolina: Gaston .. City of Mount Holly December 8, 2003, The Honorable Robert December 1, 2003. 370102 E. December 15, 2003, Black, Mayor of the The Gaston Gazette. City of Mount Holly, P.O. Box 406, Mount Holly, North Carolina 28120. Pennsylvania: Mont- Township of December 17, 2003, Mr. Lawrence J. December 20, 2003. 420712 E. gomery. Whitemarsh December 24, 2003, Gregan, Township of Times Herald. Whitemarsh Man- ager, 616 German- town Pike, Lafeyette Hill, Pennsylvania 19444–1821. Puerto Rico ...... Commonwealth January 2, 2004, Janu- The Honorable Sila M. April 9, 2004. 720000 C. ary 9, 2004, The Calderon, Governor San Juan Star. of the Common- wealth of Puerto Rico, Office of the Governor, P.O. Box 9020082, San Juan, Puerto Rico 00902– 0082. South Carolina: Horry .... Unincorporated Areas December 29, 2003, Mr. Danny Knight, December 22, 2003 450104 H. January 5, 2004, Horry County Admin- The Sun News. istrator, P.O. Box 1236, Conway, South Carolina 29528. Tennessee: Rutherford .. City of La Vergne January 5, 2004, Janu- The Honorable Mike December 29, 2003 470167 E. ary 12, 2004, The Webb, Mayor of the Daily News Journal. City of LaVergne, 5093 Murfreesboro, Road, LaVergne, Tennessee 37086. Virginia: Fauquier ...... Unincorporated Areas January 8, 2004, Janu- Mr. G. Robert Lee, December 23, 2003 510055 A. ary 15, 2004, Fau- Fauquier County Ad- quier Citizen. ministrator, 40 Culpeper Street, Warrenton, Virginia 20186. Wisconsin: Dane ...... Unincorporated Areas November 20, 2003, Ms. Kathleen Falk, February 26, 2004 550077 F. November 27, 2003, Dane County Execu- Wisconsin State tive, City-Council Journal. Building, Room 421, 210 Martin Luther King, Jr., Boulevard, Madison, Wisconsin 53709. Wisconsin: Dane ...... Village of Mazomanie November 20, 2003, Mr. Jeff Wirth, February 26, 2004 550085 F. November 27, 2003, Mazomanie Village News-Sickle-Arrow. President, 133 Cres- cent Street, Mazomanie, Wis- consin 53560.

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(Catalog of Federal Domestic Assistance No. respective addresses are listed in the 10, Environmental Consideration. No 83.100, ‘‘Flood Insurance.’’) table below. environmental impact assessment has Dated: February 3, 2004. FOR FURTHER INFORMATION CONTACT: been prepared. Anthony S. Lowe, Doug Bellomo, P.E., Hazard Regulatory Flexibility Act Mitigation Division Director, Emergency Identification Section, Emergency Preparedness and Response Directorate. Preparedness and Response Directorate, The Mitigation Division Director of [FR Doc. 04–2789 Filed 2–9–04; 8:45 am] Federal Emergency Management the Emergency Preparedness and BILLING CODE 9110–12–M Agency, 500 C Street, SW., Washington, Response Directorate certifies that this DC 20472, (202) 646–2903. rule is exempt from the requirements of SUPPLEMENTARY INFORMATION: The the Regulatory Flexibility Act because DEPARTMENT OF HOMELAND modified BFEs are not listed for each modified base flood elevations are SECURITY community in this interim rule. required by the Flood Disaster However, the address of the Chief Protection Act of 1973, 42 U.S.C. 4105, Federal Emergency Management Executive Officer of the community and are required to maintain community Agency where the modified BFE determinations eligibility in the NFIP. No regulatory are available for inspection is provided. flexibility analysis has been prepared. 44 CFR Part 65 Any request for reconsideration must Regulatory Classification [Docket No. FEMA–P–7632] be based on knowledge of changed conditions or new scientific or technical This interim rule is not a significant Changes in Flood Elevation data. regulatory action under the criteria of Determinations The modifications are made pursuant section 3(f) of Executive Order 12866 of to section 201 of the Flood Disaster September 30, 1993, Regulatory AGENCY: Federal Emergency Protection Act of 1973, 42 U.S.C. 4105, Planning and Review, 58 FR 51735. Management Agency, Emergency and are in accordance with the National Preparedness and Response Directorate, Flood Insurance Act of 1968, 42 U.S.C. Executive Order 12612, Federalism Department of Homeland Security. 4001 et seq., and with 44 CFR part 65. This rule involves no policies that ACTION: Interim rule. For rating purposes, the currently have federalism implications under effective community number is shown Executive Order 12612, Federalism, SUMMARY: This interim rule lists and must be used for all new policies dated October 26, 1987. communities where modification of the and renewals. Base (1% annual-chance) Flood The modified BFEs are the basis for Executive Order 12778, Civil Justice Elevations (BFEs) is appropriate because the floodplain management measures Reform that the community is required to either of new scientific or technical data. New This rule meets the applicable adopt or to show evidence of being flood insurance premium rates will be standards of section 2(b)(2) of Executive already in effect in order to qualify or calculated from the modified BFEs for Order 12778. new buildings and their contents. to remain qualified for participation in DATES: These modified BFEs are the National Flood Insurance Program List of Subjects in 44 CFR Part 65 currently in effect on the dates listed in (NFIP). These modified BFEs, together with Flood insurance, Floodplains, the table below and revise the Flood Reporting and record keeping Insurance Rate Map(s) in effect prior to the floodplain management criteria required by 44 CFR 60.3, are the requirements. this determination for the listed ■ communities. minimum that are required. They Accordingly, 44 CFR part 65 is From the date of the second should not be construed to mean that amended to read as follows: the community must change any publication of these changes in a PART 65—[AMENDED] newspaper of local circulation, any existing ordinances that are more stringent in their floodplain person has ninety (90) days in which to ■ management requirements. The 1. The authority citation for part 65 request through the community that the community may at any time enact continues to read as follows: Mitigation Division Director of the stricter requirements of its own, or Authority: 42 U.S.C. 4001 et seq.; Emergency Preparedness and Response pursuant to policies established by other Reorganization Plan No. 3 of 1978, 3 CFR, Directorate reconsider the changes. The Federal, State, or regional entities. 1978 Comp., p. 329; E.O. 12127, 44 FR 19367, modified BFEs may be changed during The changes in BFEs are in 3 CFR, 1979 Comp., p. 376. the 90-day period. accordance with 44 CFR 65.4. § 65.4 [Amended] ADDRESSES: The modified BFEs for each community are available for inspection National Environmental Policy Act ■ 2. The tables published under the at the office of the Chief Executive This rule is categorically excluded authority of § 65.4 are amended as Officer of each community. The from the requirements of 44 CFR part follows:

Dates and name of newspaper Effective date of Community State and county Location where notice was published Chief executive officer of community modification No.

Illinois: Adams (Case No. Unincorporated Areas December 3, 2003, December Mr. Mike McLaughlin, Adams County Board Mar. 10, 2004 ...... 170001 03–05–5163P). 10, 2003, Quincy Herald- Chairman, Adams County Courthouse, Whig. 507 Vermont Street, Quincy, IL 62301. Calhoun (Case Unincorporated Areas December 3, 2003, December Mr. Vince Tepen, Chairman, Calhoun Coun- Mar. 10, 2004 ...... 170018 No. 03–05– 10, 2003, Calhoun News- ty Board of Commissioners, P.O. Box 5163P). Herald. 187, Hardin, IL 62047. Madison (Case Village of Hartford ..... November 19, 2003, Novem- The Honorable William Moore, Jr., Mayor, Dec. 8, 2003 ...... 170444 No. 03–05– ber 26, 2003, The Tele- Village of Hartford, 140 West Hawthorne, 5172P). graph. Hartford, IL 62048.

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Dates and name of newspaper Effective date of Community State and county Location where notice was published Chief executive officer of community modification No.

Pike (Case No. Village of Hull ...... December 2, 2003, December The Honorable Kirk Rued, Mayor, Village of Mar. 10, 2004 ...... 170553 03–05–5163P). 9, 2003, The Paper. Hull, Hull Village Hall, P.O. Box 70, Hull, IL 62343. Madison (Case Unincorporated Areas November 19, 2003, Novem- The Honorable Alan J. Dunstan, Madison Dec. 8, 2003 ...... 170436 No. 03–05– ber 26, 2003, The Tele- County Board Chairman, Madison County 5172P). graph. Administration Building, 157 N. Main Street, Suite 165, Edwardsville, IL 62025–1963. Pike (Case No. Unincorporated Areas December 3, 2003, December Mr. Scott Syrcle, Pike County Board Chair- Mar. 10, 2004 ...... 170551 03–05–5163P). 10, 2003, The Pike Press. man, 100 East Washington Street, Pitts- field, IL 62363. Pike (Case No. Village of Pleasant December 3, 2003, December Mr. William R. Graham, President, Village Mar. 10, 2004 ...... 170558 03–05–5163P). Hill. 10, 2003, The Pike Press. of Pleasant Hill, Village Hall, 104 West Quincy Street, Pleasant Hill, IL 62366. Madison (Case Village of Roxana ..... November 19, 2003, Novem- The Honorable Fred Hubbard, President, Dec. 8, 2003 ...... 170448 No. 03–05– ber 26, 2003, The Tele- Village of Roxana, 400 South Central Av- 5172P). graph. enue, Roxana, IL 62084. Iowa: Johnson (Case City of Coralville ...... November 7, 2003, November The Honorable Jim Fausett, Mayor, City of Feb. 13, 2004 ...... 190169 No. 03–07–105P). 14, 2003, Iowa City Press- Coralville, 1512 7th Street, Coralvillle, IA Citizen. 52241. Kansas: Douglas City of Lawrence ...... November 7, 2003, November The Honorable David M. Dunfield, Mayor, Feb. 13, 2004 ...... 200090 (Case No. 03–07– 14, 2003, Lawrence Journal City of Lawrence, 6 East 6th Street, Law- 1276P). World. rence, KS 66044. Michigan: Oakland City of Troy ...... December 4, 2003, December The Honorable Matt Pryor, Mayor, City of Mar. 11, 2004 ...... 260180 (Case No. 03–05– 11, 2003, The Troy Times. Troy, 500 West Big Beaver Road, Troy, 0535P). MI 48084. Minnesota: Le Sueur (Case City of New Prague .. December 4, 2003, December The Honorable Craig Sindelar, Mayor, City Mar. 11, 2004 ...... 270249 No. 03–05– 11, 2003, The New Prague of New Prague, City Hall, 118 Central Av- 1835P). Times. enue, New Prague, MN 56071. Sherburne (Case Unincorporated Areas December 19, 2003, Decem- Mr. Brian Bensen, Sherburne County Ad- Dec. 3, 2003, ...... 270435 No. 03–05– ber 26, 2003, St. Cloud ministrator, Sherburne County Govern- 3980P). Times. ment Center, 13880 Highway 10, Elk River, MN 55330. New Mexico: Bernalillo, (Case City of Albuquerque .. November 6, 2003, November The Honorable Martin Chavez, Mayor, City Oct. 21, 2003 ...... 350002 No. 03–06– 13, 2003, Albuquerque Jour- of Albuquerque, P.O. Box 1293, Albu- 1742P). nal. querque, NM 87103. Bernalillo (Case Unincorporated Areas November 6, 2003, November Mr. Tom Rutherford, Chairman, Bernalillo Oct. 21, 2003 ...... 350001 No. 03–06– 13, 2003, Albuquerque Jour- County, One Civic Plaza N.W., Albu- 1742P). nal. querque, NM 87102. Bernalillo (Case City of Albuquerque .. December 22, 2003, Decem- The Honorable Martin Chavez, Mayor, City Nov. 20, 2003 ...... 350002 No. 04–06– ber 29, 2003, Albuquerque of Albuquerque, P.O. Box 1293, Albu- 246P). Journal. querque, NM 87103. Bernalillo (Case City of Albuquerque .. December 22, 2003, Decem- The Honorable Martin Chavez, Mayor, City Nov. 20, 2003 ...... 350002 No. 04–06– ber 29, 2003, Albuquerque of Albuquerque, P.O. Box 1293, Albu- 242P). Journal. querque, NM 87103. Bernalillo (Case City of Albuquerque .. December 22, 2003, Decem- The Honorable Martin Chavez, Mayor, City Nov. 20, 2003 ...... 350002 No. 04–06– ber 29, 2003, Albuquerque of Albuquerque, P.O. Box 1293, Albu- 241P). Journal. querque, NM 87103. Bernalillo (Case City of Albuquerque .. December 22, 2003, Decem- The Honorable Martin Chavez, Mayor, City Nov. 20, 2003 ...... 350002 No. 04–06– ber 29, 2003, Albuquerque of Albuquerque, P.O. Box 1293, Albu- 245P). Journal. querque, NM 87103. Bernalillo (Case Unincorporated Areas December 22, 2003, Decem- Mr. Tom Rutherford, Chairman, Bernalillo Dec. 4, 2003 ...... 350001 No. 04–06– ber 29, 2003, Albuquerque County, One Civic Plaza, N.W., Albu- 243P). Journal. querque, NM 87102. Bernalillo (Case Unincorporated Areas December 22, 2003, Decem- Mr. Tom Rutherford, Chairman, Bernalillo Nov. 20, 2003 ...... 350001 No. 04–06– ber 29, 2003, Albuquerque County, One Civic Plaza, NW., Albu- 241P). Journal. querque, NM 87102. Bernalillo (Case Unincorporated Areas December 22, 2003, Decem- Mr. Tom Rutherford, Chairman, Bernalillo Nov. 20, 2003 ...... 350001 No. 04–06– ber 29, 2003, Albuquerque County, One Civic Plaza, NW., Albu- 242P). Journal. querque, NM 87102. Ohio: Allen (Case No. Allen County ...... December 22, 2003, Decem- Mr. Fred Eldridge, Allen County Adminis- Mar. 29, 2004 ...... 390758 03–05–0444P). ber 29, 2003, The Lima trator, 301 North Main, Lima, OH 45802. News. Delaware (Case Village of Powell ...... November 19, 2003, Novem- The Honorable Art Schultz, Mayor, Village Feb. 25, 2004 ...... 390626 No. 03–05– ber 26, 2003, Olentangy of Powell, 47 Hall Street, Powell, OH 2574P). Valley News. 43065. Oklahoma: Oklahoma (Case Unincorporated Areas November 18, 2003, Novem- Mr. Stan Inman, Chairman, Oklahoma Feb. 24, 2004 ...... 400466 No. 03–06– ber 25, 2003, The Daily County, Commission, 320 Robert S. Kerr 691P). Oklahoman. Avenue, Suite 621, Oklahoma City, OK 73102. Rogers (Case No. Unincorporated Areas August 29, 2003, September Mr. Gerry Payne, Chairman, Rogers Coun- Sept. 12, 2003 ...... 405379 03–06–1392P). 5, 2003, Claremore Daily ty, Board of Commissioners, 219 South Progress. Missouri, Claremore, OK 74017. Tulsa (Case No. City of Tulsa ...... November 18, 2003, Novem- The Honorable Bill LaFortune, Mayor, City Nov. 5, 2003 ...... 405381 03–06–831P). ber 25, 2003, Tulsa World. of Tulsa, City Hall, 200 Civic Center, Tulas, OK 74103. Texas:

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Dates and name of newspaper Effective date of Community State and county Location where notice was published Chief executive officer of community modification No.

Johnson (Case City of Burleson ...... December 3, 2003, December The Honorable Byron Black, Mayor, City of Mar. 10, 2004 ...... 485459 No. 03–06– 10, 2003, The Burleson Star. Burleson, 141 West Renfo, Burleson, TX 1544P). 76028. Dallas (Case No. City of Carrollton ...... November 14, 2003, Novem- The Honorable Mark Stokes, Mayor, City of Oct. 30, 2003 ...... 480167 03–06–838P). ber 21, 2003, Northwest Carrollton, 1945 E. Jackson Road, Morning News. Carrollton, TX 75006. Harris (Case No. Unincorporated Areas November 11, 2003, Novem- The Honorable Robert A. Eckels, Judge, Feb. 17, 2004 ...... 480287 03–06–405P). ber 18, 2003, The Houston Harris County, 1001 Preston, Suite 911, Chronicle. Houston, TX 77002. Hidalgo (Case Unincorporated Areas December 10, 2003, Decem- The Honorable Ramon Garcia, Judge, Hi- Mar. 17, 2004 ...... 480334 No. 03–06– ber 17, 2003, Edinburg dalgo County, 100 East Cano Street, Ed- 1738P). Daily Review. inburg, TX 78539. Harris (Case No. City of Houston ...... November 11, 2003, Novem- The Honorable Lee P. Brown, Mayor, City Feb. 17, 2004 ...... 480296 03–06–405P). ber 18, 2003, The Houston of Houston, P.O. Box 1562, Houston, TX Chronicle. 77251. Hays (Case No. City of Kyle ...... December 10, 2003, Decem- The Honorable James L. Adkins, Mayor, Nov. 17, 2003 ...... 480108 03–06–1735P). ber 17, 2003, The Kyle City of Kyle, 300 West Center, Kyle TX Eagle. 78640. Hidalgo (Case City of La Joya ...... December 10, 2003, Decem- The Honorable Billy Leo, Mayor, City of La Mar. 17, 2004 ...... 480341 No. 03–06– ber 17, 2003, Edinburg Joya, 100 West Expressway 83, La Joya, 1738P). Daily Review. TX 78560. Midland (Case City of Midland ...... November 12, 2003, Novem- The Honorable Michael J. Canon, Mayor, Oct. 21, 2003 ...... 480477 No. 03–06– ber 19, 2003, Midland Re- City of Midland, 300 North Loraine, Mid- 2541P). porter-Telegram. land, TX 79701. Harris (Case No. City of Pasadena ...... November 11, 2003, Novem- The Honorable John Manlove, Mayor, City Feb. 17, 2004 ...... 480307 03–06–1531P). ber 18, 2003, The Pasa- of Pasadena, City Hall, 1211 Southmore, dena Citizen. Pasadena, TX 77502. Dallas (Case No. City of Richardson .... December 4, 2003, December The Honorable Gary A. Slagel, Mayor, City Nov. 12, 2003 ...... 480184 03–06–427P). 11, 2003, The Richardson of Richardson, P.O. Box 830309, Rich- Morning News. ardson, TX 75083–0309. Bexar (Case No. City of San Antonio ... December 5, 2003, December The Honorable Ed Garza, Mayor, City of Mar. 12, 2004 ...... 480045 03–06–039P). 12, 2003, San Antonio Ex- San Antonio, P.O. Box 839966, San An- press News. tonio, TX 78283–3966.

(Catalog of Federal Domestic Assistance No. National Flood Insurance Program Protection Act of 1973, 42 U.S.C. 4104, 83.100, ‘‘Flood Insurance’’) (NFIP). and 44 CFR part 67. Dated: February 3, 2004. The Agency has developed criteria for Anthony S. Lowe, EFFECTIVE DATES: The date of issuance of the Flood Insurance Rate Map (FIRM) floodplain management in floodprone Mitigation Division Director, Emergency areas in accordance with 44 CFR part Preparedness and Response Directorate. showing BFEs and modified BFEs for each community. This date may be 60. [FR Doc. 04–2788 Filed 2–9–04; 8:45 am] obtained by contacting the office where Interested lessees and owners of real BILLING CODE 6718–04–P the maps are available for inspection as property are encouraged to review the indicated on the table below. proof Flood Insurance Study and FIRM DEPARTMENT OF HOMELAND ADDRESSES: The final BFEs for each available at the address cited below for SECURITY community are available for inspection each community. at the office of the Chief Executive The BFEs and modified BFEs are Federal Emergency Management Officer of each community. The made final in the communities listed Agency respective addresses are listed in the below. Elevations at selected locations table below. in each community are shown. 44 CFR Part 67 FOR FURTHER INFORMATION CONTACT: National Environmental Policy Act Final Flood Elevation Determinations Doug Bellomo, P.E., Hazard Identification Section, Emergency This rule is categorically excluded AGENCY: Federal Emergency Preparedness and Response Directorate, from the requirements of 44 CFR part Management Agency (FEMA), FEMA, 500 C Street SW., Washington, 10, Environmental Consideration. No Emergency Preparedness and Response DC 20472, (202) 646–2903. environmental impact assessment has Directorate, Department of Homeland SUPPLEMENTARY INFORMATION: FEMA been prepared. Security. makes the final determinations listed Regulatory Flexibility Act ACTION: Final rule. below for the modified BFEs for each community listed. These modified The Mitigation Division Director of SUMMARY: Base (1% annual chance) elevations have been published in the Emergency Preparedness and Flood Elevations (BFEs) and modified newspapers of local circulation and Response Directorate certifies that this BFEs are made final for the ninety (90) days have elapsed since that rule is exempt from the requirements of communities listed below. The BFEs publication. The Mitigation Division the Regulatory Flexibility Act because and modified BFEs are the basis for the Director of the Emergency Preparedness final or modified BFEs are required by floodplain management measures that and Response Directorate, has resolved the Flood Disaster Protection Act of each community is required either to any appeals resulting from this 1973, 42 U.S.C. 4104, and are required adopt or to show evidence of being notification. to establish and maintain community already in effect in order to qualify or This final rule is issued in accordance eligibility in the NFIP. No regulatory remain qualified for participation in the with section 110 of the Flood Disaster flexibility analysis has been prepared.

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Regulatory Classification #Depth in #Depth in feet above feet above ground ground This final rule is not a significant *Elevation *Elevation regulatory action under the criteria of Source of flooding and location in feet Source of flooding and location in feet section 3(f) of Executive Order 12866 of (NGVD) (NGVD) •Elevation •Elevation September 30, 1993, Regulatory in feet in feet Planning and Review, 58 FR 51735. (NAVD) (NAVD) Executive Order 12612, Federalism Craven County (Unincor- Craven County (Unincor- porated Areas) porated Areas) This rule involves no policies that Black Swamp Creek: East Prong Brice Creek: have federalism implications under Approximately 2.0 miles At the confluence with Brice downstream of Catfish Creek ...... •15 Executive Order 12612, Federalism, Lake Road ...... •30 Approximately 1.9 miles up- dated October 26, 1987. Approximately 0.9 mile up- stream of the confluence stream of Catfish Lake with Brice Creek ...... •19 Executive Order 12778, Civil Justice Road ...... •37 Craven County (Unincor- Reform Craven County (Unincor- porated Areas) porated Areas) East Prong Mortons Mill Pond: This rule meets the applicable Brice Creek: At the confluence with standards of section 2(b)(2) of Executive At upstream side of Old Air- Mortons Mill Pond ...... •8 port Road ...... •8 Approximately 1,500 feet up- Order 12778. At the confluence with East stream of NC 101 ...... •10 Prong Brice Creek ...... •15 List of Subjects in 44 CFR Part 67 Craven County (Unincor- Craven County (Unincor- porated Areas) porated Areas) Administrative practice and East Prong Slocum Creek: Bushy Fork: At the upstream side of Rail- procedure, flood insurance, reporting At the confluence with Little road Street ...... •15 • and recordkeeping requirements. Swift Creek ...... 23 Approximately 1.5 miles up- Approximately 0.8 mile up- stream of Railroad Street .. •19 ■ Accordingly, 44 CFR part 67 is stream of the confluence • City of Havelock, Craven amended as follows: with Little Swift Creek ...... 28 County (Unincorporated Craven County (Unincor- Areas) PART 67—[AMENDED] porated Areas) Fisher Swamp: Cahoogue Creek: At the confluence with Bea- Approximately 0.5 mile down- • ■ • ver Dam Swamp ...... 9 1. The authority citation for part 67 stream of State Route 306 8 Approximately 3.4 miles up- continues to read as follows: Approximately 0.3 mile up- stream of the confluence stream of NC Route 101 ... •19 • Authority: 42 U.S.C. 4001 et seq.; with Beaverdam Swamp ... 22 Craven County (Unincor- Craven County (Unincor- Reorganization Plan No. 3 of 1978, 3 CFR, porated Areas) porated Areas) 1978 Comp., p. 329; E.O. 12127, 44 FR 19367, Clayroot Swamp: Flat Branch: At the confluence with Swift 3 CFR, 1979 Comp., p. 376. • At the confluence with Core Creek ...... 19 Creek ...... •19 Approximately 0.5 mile up- § 67.11 [Amended] • Approximately 1.8 miles up- stream of Wilmer Road ..... 21 stream of NC 55 ...... •30 ■ 2. The tables published under the Craven County (Unincor- Craven County (Unincor- porated Areas) porated Areas) authority of § 67.11 are amended as Clubfoot Creek: follows: At the downstream side of Great Branch: • At the confluence with Brice Adam Creek Road ...... 8 • Approximately 1,850 feet Creek ...... 15 #Depth in Approximately 900 feet up- feet above downstream of Hodge • ground Road ...... •10 stream of Tebo Road ...... 19 *Elevation Craven County (Unincor- Craven County (Unincor- Source of flooding and location in feet porated Areas) porated Areas) (NGVD) Clubfoot Creek Tributary: Hancock Creek: •Elevation At the upstream side of NC in feet Approximately 1,800 feet • (NAVD) downstream of Adams 101 ...... 8 • Approximately 1.6 miles up- Creek Road ...... 8 • NORTH CAROLINA Approximately 300 feet up- stream of NC 101 ...... 21 stream of George Road .... •13 City of Havelock, Craven Craven County (Unincor- County (Unincorporated Craven County (FEMA Areas) Docket No. D–7574) porated Areas) Core Creek: Hollis Branch: Bachelor Creek: At the confluence with Bach- • At the confluence with Neuse At Washington Post Road .... 8 River ...... •19 elor Creek ...... •27 At the Craven/Jones County Approximately 540 feet up- • Approximately 0.8 mile up- boundary ...... 29 stream of Trenton Road .... •36 stream of Hillard Road ...... •36 Craven County (Unincor- Craven County (Unincor- Craven County (Unincor- porated Areas) porated Areas) porated Areas) Beaverdam Branch: Creeping Swamp: Hunters Creek: At the confluence with Bach- At the confluence with At the Craven/Carteret/Jones elor Creek ...... •10 Clayfoot Swamp ...... •21 County boundary ...... •24 Approximately 0.4 mile up- At the Craven/Beaufort Approximately 500 feet stream of Hyman Road ..... •12 County boundary ...... •33 downstream of Great Lake •40 Craven County (Unincor- Craven County (Unincor- Craven County (Unincor- porated Areas) porated Areas) porated Areas) Beaverdam Swamp: Deep Branch: Jumping Run: At the confluence with Little At the confluence with Bach- At the confluence with Bach- Swift Creek ...... •9 elor Creek ...... •14 elor Creek ...... •8 Approximately 800 feet up- Approximately 0.5 mile down- Approximately 250 feet stream of Hudnell Road .... •17 stream of Clarks Road ...... •14 downstream of Highway 55 •15

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#Depth in #Depth in #Depth in feet above feet above feet above ground ground ground *Elevation *Elevation *Elevation Source of flooding and location in feet Source of flooding and location in feet Source of flooding and location in feet (NGVD) (NGVD) (NGVD) •Elevation •Elevation •Elevation in feet in feet in feet (NAVD) (NAVD) (NAVD) Craven County (Unincor- Craven County (Unincor- Approximately 0.7 mile up- porated Areas) porated Areas) stream of Rollover Creek Little Swift Creek: Mosley Creek Tributary: Road ...... •37 At the confluence of Swift At the confluence with Craven County (Unincor- Creek ...... •9 Mosley Creek ...... •29 porated Areas) Approximately 650 feet up- Approximately 2 miles up- Round Tree Branch: stream of Beaver Dam stream of the confluence At the confluence with Bach- Road ...... •25 with Mosley Creek ...... •37 elor Creek ...... •8 Craven County (Unincor- Craven County (Unincor- Approximately 1.2 miles up- porated Areas) porated Areas) stream of the confluence Maple Cypress: Neuse River: with Bachelor Creek ...... •11 At the confluence with Neuse Approximately 0.7 mile up- Craven County (Unincor- River ...... •20 stream of the confluence of porated Areas) • Approximately 0.7 mile up- Swift Creek ...... 9 South Canal: stream of Harris Road ...... •29 Approximately 1.2 mile up- At the confluence with Hunt- stream of the confluence • Craven County (Unincor- • ers Creek ...... 33 porated Areas) with Contentnea Creek ...... 25 Approximately 0.9 mile up- Mauls Swamp: City of New Bern, Craven stream of the confluence County (Unincorporated with Hunters Creek ...... •38 At the upstream side of Mill Areas) Pond Road ...... •15 Craven County (Unincor- Palmetto Swamp: porated Areas) Approximately 1.1 miles up- At the confluence with Swift stream of the confluence of • Southwest Prong Slocum • Creek ...... 17 Creek: Mauls Swamp, Tributary 2 34 Approximately 1.5 miles up- Town of Vanceboro, Craven At the upstream side of Miller stream of Palmetto Swamp • County (Unincorporated Tributary 4 ...... •32 Boulevard ...... 8 Areas) Approximately 2.9 miles up- Craven County (Unincor- • Mauls Swamp Tributary 1: porated Areas) stream of Central Street .... 27 At the confluence with Mauls Palmetto Swamp Tributary 1: City of Havelock, Craven • Swamp ...... 23 At the confluence with Pal- County (Unincorporated Approximately 0.8 mile up- metto Swamp ...... •19 Areas) stream of the confluence Approximately 0.9 mile up- Spe Branch: with Mauls Swamp ...... •30 At the confluence with stream of the confluence • Craven County (Unincor- with Palmetto Swamp ...... •27 Cahoogue Creek ...... 10 porated Areas) Craven County (Unincor- Approximately 0.7 mile up- Mauls Swamp Tributary 2: stream of the confluence porated Areas) • At the confluence with Mauls Palmetto Swamp Tributary 2: with Cahoogue Creek ...... 15 Swamp ...... •28 At the confluence with Pal- Craven County (Unincor- Approximately 0.9 mile up- metto Swamp ...... •20 porated Areas) stream of the confluence Approximately 150 feet up- Swift Creek: with Mauls Swamp ...... •35 stream of Clark Road ...... •26 Approximately 1.8 mile up- Craven County (Unincor- Craven County (Unincor- stream of confluence with porated Areas) porated Areas) Neuse River ...... •9 Mill Branch: Palmetto Swamp Tributary 3: Approximately 300 feet up- At the confluence with Pal- stream of Gardnerville At the confluence with Core • Creek ...... •26 metto Swamp ...... •24 Road ...... 28 Approximately 4.5 miles up- Approximately 0.6 mile up- Town of Vanceboro, Craven stream of the confluence stream of the confluence County (Unincorporated with Core Creek ...... •56 with Palmetto Swamp ...... •28 Areas) Craven County (Unincor- Craven County (Unincor- Tracey Swamp: porated Areas) porated Areas) At the upstream side of Sand • Molocks Branch: Palmetto Swamp Tributary 4: Hill Road ...... 42 At the confluence with Pal- At the Craven/Jones County At the confluence with Han- • cock Creek ...... •8 metto Swamp ...... •29 boundary ...... 43 Approximately 800 feet up- Craven County (Unincor- Approximately 0.7 mile up- • stream of the confluence stream of Gray Road ...... 39 porated Areas) with Hancock Creek ...... •14 Craven County (Unincor- Upper Broad Creek (Neuse Craven County (Unincor- porated Areas) Portion): porated Areas) Pine Tree Swamp: Approximately 1.8 miles Morgan Swamp: At the confluence with Little downstream of the con- Swift Creek ...... •14 fluence of Deep Run ...... •8 At the confluence with Upper • Broad Creek ...... •10 At Cayton Road ...... 25 Approximately 2.9 miles up- Craven County (Unincor- stream of the confluence of Approximately 1.2 miles up- Possum Swamp ...... •29 stream of Morgan Swamp porated Areas) Road ...... •22 Pollard Swamp: Craven County (Unincor- At the confluence with porated Areas) Craven County (Unincor- • porated Areas) Creeping Swamp ...... 30 Upper Broad Creek (Tar- Approximately 1.4 miles up- Pamlico Portion): Mosley Creek: stream of Pollard Road ..... •41 Approximately 125 feet At the confluence with Neuse • Craven County (Unincor- downstream of the Craven/ River ...... 25 porated Areas) Beaufort County boundary •31 Approximately 1.7 miles up- Rollover Creek: Approximately 0.7 mile up- stream of the confluence • At the confluence with Bach- stream of the Craven/ with Neuse River ...... 25 elor Creek ...... •17 Beaufort County boundary •37

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#Depth in #Depth in #Depth in feet above feet above feet above ground ground ground *Elevation *Elevation *Elevation Source of flooding and location in feet Source of flooding and location in feet Source of flooding and location in feet (NGVD) (NGVD) (NGVD) •Elevation •Elevation •Elevation in feet in feet in feet (NAVD) (NAVD) (NAVD) Craven County (Unincor- Jones County (Unincor- Approximately 0.6 mile up- porated Areas) porated Areas) stream of Pleasant Hill Village Creek: Beaver Creek: Road ...... •49 At the confluence with Neuse At the confluence with Trent Jones County (Unincor- River ...... •20 River ...... •29 porated Areas) Approximately 400 feet up- Just downstream of Little Hall Creek: stream of Highway 55 ...... •45 Copeland Farm Road ...... •50 At the confluence with Trent Craven County (Unincor- Jones County (Unincor- River ...... •15 porated Areas) porated Areas) Approximately 1.7 miles up- West Prong Brice Creek: Beaverdam Branch 2: stream of State Highway At the confluence with Brice At the confluence with Mill 58 ...... •28 Creek ...... •15 Run ...... •16 Jones County (Unincor- Approximately 0.7 mile up- Approximately 0.5 mile up- porated Areas) stream of Catfish Lake stream of Davis Field Road •30 Long Branch: Road ...... •36 Jones County (Unincor- At the confluence with Trent Craven County (Unincor- porated Areas) River ...... •18 porated Areas) Beaverdam Creek 3: Approximately 500 feet up- West Prong Mortons Mill Pond: At the confluence with Trent stream of Ben Banks Road •34 • At the confluence with River ...... 19 Jones County (Unincor- Mortons Mill Pond ...... •8 Approximately 2.8 miles up- porated Areas) Approximately 1.3 miles up- stream of Ten Mile Fork Mill Branch: Road ...... •42 stream of North Carolina At the confluence with Trent Route 101 ...... •18 Jones County (Unincor- River ...... •40 porated Areas) City of Havelock Black Swamp: Approximately 1.2 miles up- Maps available for inspection stream of the confluence of At the confluence with Trent Trent River ...... •44 at the City of Havelock Plan- River ...... •49 ning Department, 199 Approximately 1.2 miles up- Jones County (Unincor- Cunningham Boulevard, stream of Foley Branch porated Areas) Havelock, North Carolina. Lane ...... •58 Holston Creek: City of New Bern Jones County (Unincor- At the confluence with White Oak River ...... •10 Maps available for inspection porated Areas) Chinquapin Branch: Approximately 2.6 miles up- at the New Bern Building In- stream of State Highway spection Department, 300 At the confluence with Trent • River ...... •30 58 ...... 23 Pollock Street, New Bern, Jones County (Unincor- North Carolina. Approximately 3.2 miles up- stream of Chinquapin porated Areas) Unincorporated Areas of Chapel Road ...... •39 Cypress Creek: Craven County Jones County (Unincor- At the confluence with Trent Maps available for inspec- porated Areas) River ...... •43 tion at the Craven County Island Branch Swamp: Approximately 2.9 miles up- Planning Department, Cra- At the confluence with Reso- stream of Old Comfort ven County Government, lution Branch ...... •27 Highway ...... •54 2828 Neuse Boulevard, Approximately 0.7 mile up- Jones County (Unincor- New Bern, North Carolina. stream of Henderson Road •30 porated Areas) ——— Jones County (Unincor- Deep Bottom Branch: porated Areas) At the confluence with Bea- Jones County (FEMA Docket Island Creek: ver Creek ...... •29 Nos. D–7562 and D–7570) Approximately 0.3 mile down- Approximately 1.6 miles up- Crooked Run: stream of the confluence of stream of Wyse Fork Road •54 At the confluence with Trent Long Branch ...... •8 Jones County (Unincor- River ...... •24 Approximately 1.2 mile up- porated Areas) Approximately 2.8 miles up- stream of Island Creek Flat Swamp: stream of Francks Field Road ...... •20 • At the confluence with Bea- Road ...... 45 Jones County (Unincor- ver Creek ...... •44 Township of Trenton, Jones porated Areas) Approximately 0.6 mile up- County (Unincorporated Joshua Creek: stream of the confluence of Areas) At the confluence with Trent Flat Swamp Tributary 1 ..... •50 • Trent River: River ...... 58 Jones County (Unincor- Approximately 2.8 miles At the Jones/Lenoir County • porated Areas) downstream of the con- boundary ...... 64 Flat Swamp Tributary: fluence of Mill Creek ...... •9 Jones County (Unincor- At the confluence with Flat At the Jones/Lenoir County porated Areas) Swamp ...... •49 boundary ...... •63 Jumping Creek: Approximately 1,300 feet up- Town of Pollockville, Town- At the confluence with Trent • stream of the confluence ship of Trenton, Jones River ...... 20 with Flat Swamp ...... •49 County (Unincorporated Approximately 1.3 miles up- Areas) stream of Ten Mile Fork Jones County (Unincor- Ash Branch: Road ...... •32 porated Areas) At the confluence with Vine Jones County (Unincor- Goshen Branch: • At the confluence with Trent Swamp ...... 56 porated Areas) • Approximately 0.5 mile up- Little Chinquapin Branch: River ...... 14 Approximately 475 feet up- stream of State Highway At the confluence with Trent • 58 ...... •61 River ...... •36 stream of Bell Loop Road 23

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#Depth in #Depth in #Depth in feet above feet above feet above ground ground ground *Elevation *Elevation *Elevation Source of flooding and location in feet Source of flooding and location in feet Source of flooding and location in feet (NGVD) (NGVD) (NGVD) •Elevation •Elevation •Elevation in feet in feet in feet (NAVD) (NAVD) (NAVD) Jones County (Unincor- Jones County (Unincor- Jones County (Unincor- porated Areas) porated Areas) porated Areas) Grape Branch: Raccoon Creek: Chinkapin Branch: At the confluence with Approximately 0.59 mile up- At the confluence with White Tuckahoe Swamp ...... •62 stream of the confluence Oak River ...... •38 • Approximately 0.9 mile up- with Trent River ...... 8 Approximately 0.7 mile up- stream of the confluence of Approximately 650 feet stream of the confluence • downstream of Island • Grape Branch Tributary ..... 73 • with White Oak River ...... 38 Jones County (Unincor- Creek Road ...... 21 Jones County (Unincor- porated Areas) Jones County (Unincor- porated Areas) porated Areas) Grape Branch Tributary 1: Rattlesnake Branch: Tracey Swamp: At the confluence with Grape At downstream limit of Coun- • At the confluence with Bea- • Branch ...... 64 ver Creek ...... •43 ty boundary ...... 43 Approximately 1,300 feet up- Approximately 0.4 mile up- Approximately 400 feet up- stream of the confluence stream of Moore Road ...... •50 stream of Burkett Road ..... •54 with Grape Branch ...... •67 Jones County (Unincor- Jones County (Unincor- Jones County (Unincor- porated Areas) porated Areas) porated Areas) Reedy Branch 1: Tracey Swamp Tributary: Heath Mill Run: At the confluence with Trent At the confluence with Tra- At the confluence with Bea- River ...... •48 cey Swamp ...... •47 ver Creek ...... •31 Approximately 1.3 miles up- Approximately 1.1 miles up- Approximately 1.6 miles up- stream of State Route 41 .. •58 stream with the confluence stream of Wyse Fork Road •51 Jones County (Unincor- of Tracey Swamp ...... •53 Jones County (Unincor- porated Areas) Jones County (Unincor- porated Areas) Resolution Branch: porated Areas) At the confluence with Trent Mill Creek: • White Oak River: At the confluence with Trent River ...... 27 At the confluence of Hunters River ...... •13 Approximately 0.8 mile up- Creek ...... •9 stream of Wyse Fork Road •45 Approximately 2.3 miles up- Jones County (Unincor- Approximately 2.8 miles up- stream of Bender Road ..... •37 stream of the confluence of porated Areas) • Township of Pollockville, Hunters Creek: Chinkapin Branch ...... 50 Jones County (Unincor- At the confluence with White Jones County (Unincor- porated Areas) Oak River ...... •9 porated Areas) Mill Creek Tributary 1: Approximately 1.3 miles up- White Oak River Tributary 1: At the confluence with Mill stream of the confluence of At the confluence with White Creek ...... •13 South Canal ...... •39 Oak River ...... •15 Approximately 0.5 mile up- Jones County (Unincor- Approximately 0.4 mile up- stream of the confluence of porated Areas) stream of Eighth Street/ Tributary to Mill Creek Tributary to Mill Creek Tributary State Highway 58 ...... •36 Tributary 1 ...... •24 1: Town of Maysville, Jones Jones County (Unincor- At the confluence with Mill County (Unincorporated porated Areas) Creek Tributary 1 ...... •18 Areas) Mill Run: Approximately 0.8 mile up- White Oak River Tributary 2: At the confluence with Trent stream of the confluence At the confluence with White River ...... •16 with Mill Creek Tributary 1 •27 Oak River Tributary 1 ...... •22 Approximately 1.4 miles up- Jones County (Unincor- Approximately 0.6 mile up- stream of the confluence of porated Areas) stream of Eighth Street/ Beaverdam Branch 2 ...... •28 Tuckahoe Creek: State Highway 58 ...... •35 At the confluence with Trent Jones County (Unincor- • Town of Maysville, Jones porated Areas) River ...... 51 County (Unincorporated Approximately 1,200 feet up- Areas) Musselshell Creek: stream of Lee Mills Road .. •59 At the confluence with Trent Hollis Branch: • Jones County (Unincor- River ...... 26 porated Areas) Approximately 450 feet Approximately 1.0 mile up- downstream of the Craven/ Tuckahoe Swamp: • stream of the confluence of At the confluence of Jones County boundary .... 35 Musselshell Creek Tribu- Tuckahoe Creek ...... •57 Approximately 800 feet up- tary 2 ...... •43 At the Jones/Lenoir County stream of the Craven/ Jones County (Unincor- boundary ...... •81 Jones County boundary .... •36 porated Areas) Jones County (Unincor- Jones County (Unincor- Pocoson Branch: porated Areas) porated Areas) At the confluence with Trent Vine Swamp: Town of Maysville • At the confluence with Bea- River ...... 33 Maps available for inspection Approximately 1.2 miles up- ver Creek ...... •49 • At the Jones/Lenoir County at the Town of Maysville stream of Highway 41 ...... 50 Public Works Department, Jones County (Unincor- boundary ...... •56 Jones County (Unincor- 404 Main Street, Maysville, porated Areas) North Carolina. Poplar Branch: porated Areas) Town of Pollocksville At the confluence with Trent Black Swamp Creek: River ...... •33 At the confluence with White Maps available for inspection Oak River ...... •11 at the Pollocksville Town Approximately 1.0 mile up- Approximately 0.9 mile up- stream of State Route 41 .. •47 Hall, 215 Foy Street, stream of Catfish Lake Pollocksville, North Carolina. Road ...... •37

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#Depth in #Depth in #Depth in feet above feet above feet above ground ground ground *Elevation *Elevation *Elevation Source of flooding and location in feet Source of flooding and location in feet Source of flooding and location in feet (NGVD) (NGVD) (NGVD) •Elevation •Elevation •Elevation in feet in feet in feet (NAVD) (NAVD) (NAVD) Township of Trenton Lenoir County (Unincor- Approximately 2,120 feet up- porated Areas) stream of Jesse Howard Maps available for inspection • at the Trenton Town Hall, Contentnea Creek: Road ...... 74 119 Jones Street, Trenton, At the confluence with Neuse Lenoir County (Unincor- North Carolina. River ...... •24 porated Areas) Approximately 2.6 miles up- Joshua Creek: Unincorporated Areas of Approximately 1,200 feet up- Jones County stream of Hugo Road ...... 34 Lenoir County (Unincor- stream of Fordham Road .. •63 Maps available for inspection porated Areas) Approximately 1.2 miles up- at the Jones County Building stream of Vine Swamp Neuse River: • and Inspections Department, At the confluence with Road ...... 82 101 Market Street, Trenton, Contentnea Creek ...... •24 Lenoir County (Unincor- North Carolina. At the Lenoir/Wayne County porated Areas) ——— boundary ...... •55 Neuse River Tributary: At the confluence with Neuse Lenoir County (FEMA Docket City of Kinston, Lenoir Coun- • No. D–7570) River ...... 42 ty (Unincorporated Areas) Approximately 1,400 feet up- Adkin Branch: Wheat Swamp: stream of railroad ...... •56 At the Lenoir/Greene County At the confluence with Neuse City of Kinston River ...... •35 boundary ...... •39 Approximately 0.4 mile up- Approximately 4 miles up- Southwest Creek Tributary: • stream of NC Route 58 ..... •77 At the confluence with South- stream of Carey Road ...... 76 • City of Kinston, Lenoir Coun- Lenoir County (Unincor- west Creek ...... 34 ty (Unincorporated Areas) porated Areas) Approximately 1,250 feet Bear Creek: Wheat Swamp Tributary: downstream of British Road ...... •35 At the confluence with Neuse At the Lenoir/Greene County • boundary ...... •40 City of Kinston, Lenoir Coun- River ...... 52 ty (Unincorporated Areas) At the Lenoir/Greene County Approximately 0.4 mile up- • stream of Research Farm Strawberry Branch: boundary ...... 82 At the confluence with South- Town of LaGrange, Lenoir Road ...... 56 • Lenoir County (Unincor- west Creek ...... 39 County (Unincorporated Approximately 150 feet Areas) porated Areas) Stonyton Creek: downstream of Whaley Southwest Creek: Road ...... •47 At the confluence with Neuse At the confluence with Neuse • City of Kinston, Lenoir Coun- River ...... •32 River ...... 29 ty (Unincorporated Areas) At the downstream side of Approximately 1,400 feet up- Tracey Swamp: railroad ...... •34 stream of the confluence • At the upstream side of Sand City of Kinston, Lenoir Coun- with Jerico Run ...... 30 Hill Road ...... •42 ty (Unincorporated Areas) Lenoir County (Unincor- At the Lenoir/Craven/Jones Moseley Creek into Falling porated Areas) County boundary ...... •43 Creek: Jerico Run: Lenoir County (Unincor- At the confluence with At the downstream LaGrange • porated Areas) corporate limit ...... •76 Stonyton Creek ...... 29 Trent River: Approximately 150 feet up- Approximately 300 feet At the Lenoir/Jones County downstream of State Route boundary ...... •62 stream of State Highway • 903 ...... •92 55 ...... 29 Approximately 0.5 mile up- Lenoir County (Unincor- Town of LaGrange stream of NC State Route porated Areas) 11 ...... •123 Briery Run: Mosley Creek to Neuse River: Lenoir County (Unincor- Approximately 1,000 feet up- At the confluence with Neuse porated Areas) stream of Rouse Road ...... •67 River ...... ∑25 Neuse River Tributary 2: Approximately 0.5 mile up- Approximately 650 feet down- At the confluence with Neuse stream of Dobbs Farm stream of Griffin Road ...... •31 River Tributary ...... •44 Road ...... •80 Lenoir County (Unincor- Approximately 1,800 feet up- City of Kinston, Lenoir Coun- porated Areas) stream of railroad ...... •62 ty (Unincorporated Areas) Beaverdam Swamp: City of Kinston Falling Creek: At the confluence with Trent Vine Swamp: At the confluence with Neuse River ...... •68 • At the Lenoir/Jones County River ...... 42 Approximately 200 feet up- boundary ...... •57 Approximately 1.6 miles up- stream of Rex-Howard • • Approximately 800 feet up- stream of Brothers Road ... 85 Road ...... 95 stream of Parker Farm City of Kinston, Lenoir Coun- Lenoir County (Unincor- Road ...... •81 ty (Unincorporated Areas) porated Areas) Lenoir County (Unincor- Taylors Branch: Deep Run: porated Areas) Approximately 300 feet up- Approximately 425 feet up- Vine Swamp Tributary: stream of Rouse Road ...... •72 stream of NC State High- At the confluence with Vine Approximately 1.4 miles up- way 11 ...... •87 Swamp ...... •62 stream of Rouse Road ...... •101 Approximately 0.7 mile up- Approximately 0.5 mile up- City of Kinston, Lenoir Coun- stream of NC State High- stream of Joe Williams ty (Unincorporated Areas) way 11 ...... •95 Road ...... •67 Eagle Swamp: Lenoir County (Unincor- Lenoir County (Unincor- At the confluence with porated Areas) porated Areas) Contentnea Creek ...... •25 Horse Branch: Tuckahoe Swamp: At the downstream side of At the confluence with Trent At the Lenoir/Jones County railroad ...... 25 River ...... •71 boundary ...... •81

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#Depth in #Depth in #Depth in feet above feet above feet above ground ground ground *Elevation *Elevation *Elevation Source of flooding and location in feet Source of flooding and location in feet Source of flooding and location in feet (NGVD) (NGVD) (NGVD) •Elevation •Elevation •Elevation in feet in feet in feet (NAVD) (NAVD) (NAVD) Approximately 0.5 mile down- Pamlico County (Unincor- Pamlico County (Unincor- stream of West Hill Pleas- porated Areas) porated Areas) ant Road ...... •87 Deep Run South: Neal Creek: Rivermont Tributary: At the confluence with Daw- Approximately 0.6 mile up- At the confluence with Neuse son Creek ...... •8 stream of confluence with River ...... •37 Approximately 900 feet up- South Prong Bay River ..... •7 Approximately 1,200 feet up- stream of Don Lee Road ... •9 Approximately 1.4 miles up- stream of Andrews Street •39 Deep Run North: stream of confluence with City of Kinston At the confluence with Upper South Prong Bay River ..... •10 Broad Creek ...... •11 Maps available for inspection Pamlico County (Unincor- Approximately 0.5 mile up- porated Areas) at the City of Kinston Plan- stream of the confluence ning Department, 301 East • North Prong Bay River: with Upper Broad Creek .... 15 Approximately 1.1 miles up- King Street, Kinston, North Pamlico County (Unincor- Carolina. stream of the confluence porated Areas) with Bay River ...... •7 Town of La Grange Deep Run Branch: Approximately 1.1 miles up- Maps available for inspection At the confluence with Goose stream of Mill Pond Road •10 at the La Grange Town Hall, Creek ...... •11 Approximately 0.5 mile up- Pamlico County (Unincor- 120 East Railroad Street, La porated Areas) Grange, North Carolina. stream of the confluence with Goose Creek ...... •13 Pamlico River: Lenoir County Area within Goose Creek Pamlico County (Unincor- • Unincorporated Areas porated Areas) State Refuge ...... 6 Maps available for inspection East Prong: Area within Goose Creek at the Lenoir County Building At the confluence with Beard State Refuge ...... •7 Inspectors Office, 201 East Creek ...... •8 Pamlico County (Unincor- King Street, Kinston, North Approximately 1.8 miles up- porated Areas) Carolina. stream of the confluence Possum Swamp: ——— with Beard Creek ...... •16 At the confluence with Upper Pamlico County (FEMA Pamlico County (Unincor- Broad Creek ...... •17 Docket No. D–7570) porated Areas) Approximately 0.9 mile up- Alexander Swamp: Fork Run: stream of the confluence of Approximately 0.7 mile down- • Approximately 500 feet up- Savannah Bridge Swamp .. 24 stream of confluence of Pamlico County (Unincor- stream of the confluence Deep South Run ...... •8 with Goose Creek ...... •8 porated Areas) Approximately 0.5 mile up- Sasses Branch: Approximately 2.0 miles • stream of Kershaw Road .. 11 At the confluence with Upper downstream of the con- Pamlico County (Unincor- fluence with Goose Creek •15 Broad Creek ...... •8 porated Areas) Approximately 0.9 mile up- Pamlico County (Unincor- Goose Creek: porated Areas) • stream of the confluence At Neuse Road ...... 8 with Upper Broad Creek .... •9 Bay River/Vandemere Creek: Approximately 1.7 miles up- At the intersection of 1st Pamlico County (Unincor- • stream of confluence of porated Areas) Lane and Water Lane ...... 7 Deep Run Branch ...... •15 City of Mesic Pamlico County (Unincor- Savannah Bridge Swamp: porated Areas), Town of At the confluence with Pos- Beard Creek: sum Swamp ...... •19 Approximately 0.8 mile down- Grantsboro Granny Gut: Approximately 0.5 mile up- stream of the confluence of stream of the confluence Cedar Gut ...... •8 At the confluence with Daw- • son Creek ...... •8 with Possum Swamp ...... 23 Approximately 0.8 mile up- Pamlico County (Unincor- stream of Roberts Road .... •14 Approximately 1,500 feet up- stream of Kershaw Road .. •8 porated Areas) Pamlico County (Unincor- South Prong Bay River: porated Areas) Pamlico County (Unincor- porated Areas) Approximately 1.0 mile up- Black Creek: Green’s Creek: stream of Cooper Road ..... •9 Approximately 0.8 mile down- • Approximately 1,750 feet Approximately 1.6 miles up- stream of Prescott Road ... 8 west-southwest of the stream of Cooper Road ..... •9 Approximately 600 feet up- • intersection of Harris Farm Pamlico County (Unincor- stream of Prescott Road ... 16 Road and Kershaw Road .. •9 porated Areas), Town of Pamlico County (Unincor- Pamlico County (Unincor- Alliance, Town of porated Areas) porated Areas) Grantsboro Caraway Creek: Kershaw Creek: Southwest Fork Trent Creek: Approximately 0.6 mile up- Approximately 1,500 feet Approximately 0.5 mile up- stream of confluence with north-northeast of the inter- • stream of confluence with Beard Creek ...... 8 section of Harris Farm Trent Creek ...... •6 Approximately 0.8 mile up- Road and Kershaw Road .. •7 Approximately 0.7 mile up- stream of Marvin Field Pamlico County (Unincor- stream of Isabelle Road .... •7 Road ...... •14 porated Areas) Pamlico County (Unincor- Pamlico County (Unincor- Mill Creek: porated Areas) porated Areas) Approximately 1,800 feet up- Trent Creek: Cedar Gut: stream of the confluence • At the confluence with Beard with Neuse River ...... •8 At Highway 55 ...... 6 Creek ...... •8 Approximately 1.8 miles up- Approximately 2.2 miles up- stream of confluence of Approximately 0.6 mile up- stream of the confluence • stream of Neuse Road ...... •13 with Neuse River ...... •9 Fork Run 1 ...... 7

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#Depth in DEPARTMENT OF HOMELAND Interested lessees and owners of real feet above property are encouraged to review the ground SECURITY *Elevation proof Flood Insurance Study and FIRM Source of flooding and location in feet Federal Emergency Management available at the address cited below for (NGVD) •Elevation Agency each community. in feet The BFEs and modified BFEs are (NAVD) 44 CFR Part 67 made final in the communities listed Pamlico County (Unincor- below. Elevations at selected locations porated Areas) Final Flood Elevation Determinations in each community are shown. Upper Broad Creek (Neuse Basin): AGENCY: Federal Emergency National Environmental Policy Act • Management Agency (FEMA), At Lee Landing Road ...... 8 This rule is categorically excluded Approximately 3.2 miles up- Emergency Preparedness and Response stream of Old Cross Road •29 Directorate, Department of Homeland from the requirements of 44 CFR Part Pamlico County (Unincor- Security. 10, Environmental Consideration. No porated Areas) environmental impact assessment has ACTION: Final rule. Upper Broad Creek (Tar- been prepared. Pamlico Basin): At the Beaufort/Pamlico SUMMARY: Base (1% annual chance) Regulatory Flexibility Act County boundary ...... •31 Flood Elevations (BFEs) and modified Approximately 1.8 miles BFEs are made final for the The Mitigation Division Director of downstream of the communities listed below. The BFEs the Emergency Preparedness and Beaufort/ Pamlico County Response Directorate certifies that this • and modified BFEs are the basis for the boundary ...... 37 rule is exempt from the requirements of Pamlico County (Unincor- floodplain management measures that porated Areas) each community is required either to the Regulatory Flexibility Act because Wheeler Gut: adopt or to show evidence of being final or modified BFEs are required by At the confluence with Fork the Flood Disaster Protection Act of • already in effect in order to qualify or Run ...... 8 remain qualified for participation in the 1973, 42 U.S.C. 4104, and are required Approximately 0.5 mile up- to establish and maintain community stream of the confluence National Flood Insurance Program with Fork Run ...... •9 (NFIP). eligibility in the NFIP. No regulatory Pamlico County (Unincor- flexibility analysis has been prepared. EFFECTIVE DATES: The date of issuance of porated Areas) Regulatory Classification Town of Alliance the Flood Insurance Rate Map (FIRM) showing BFEs and modified BFEs for Maps available for inspection This final rule is not a significant at the Pamlico County Build- each community. This date may be regulatory action under the criteria of ing Inspectors Office, 202 obtained by contacting the office where section 3(f) of Executive Order 12866 of Main Street, Bayboro, North the maps are available for inspection as September 30, 1993, Regulatory Carolina. indicated on the table below. Planning and Review, 58 FR 51735. Town of Grantsboro ADDRESSES: The final BFEs for each Executive Order 12612, Federalism Maps available for inspection community are available for inspection at the Pamlico County Build- ing Inspectors Office, 202 at the office of the Chief Executive This rule involves no policies that Main Street, Bayboro, North Officer of each community. The have federalism implications under Carolina and the Grantsboro respective addresses are listed in the Executive Order 12612, Federalism, Town Hall, Highway 55, table below. dated October 26, 1987. Grantsboro, North Carolina. City of Mesic FOR FURTHER INFORMATION CONTACT: Executive Order 12778, Civil Justice Maps available for inspection Doug Bellomo, P.E., Hazard Reform at the Pamlico County Build- Identification Section, Emergency ing Inspectors Office, 202 Preparedness and Response Directorate, This rule meets the applicable Main Street, Bayboro, North FEMA, 500 C Street SW., Washington, standards of section 2(b)(2) of Executive Carolina. DC 20472, (202) 646–2903. Order 12778. Pamlico County Unincorporated Areas SUPPLEMENTARY INFORMATION: FEMA List of Subjects in 44 CFR Part 67 Maps available for inspection makes the final determinations listed Administrative practice and at the Pamlico County Build- below for the modified BFEs for each procedure, flood insurance, reporting ing Inspectors Office, 202 community listed. These modified and recordkeeping requirements. Main Street, Bayboro, North elevations have been published in ■ Carolina. newspapers of local circulation and Accordingly, 44 CFR Part 67 is ninety (90) days have elapsed since that amended as follows: (Catalog of Federal Domestic Assistance No. publication. The Mitigation Division PART 67—[AMENDED] 83.100, ‘‘Flood Insurance’’) Director of the Emergency Preparedness Dated: February 3, 2004. and Response Directorate, has resolved ■ 1. The authority citation for part 67 Anthony S. Lowe, any appeals resulting from this continues to read as follows: Mitigation Division Director, Emergency notification. Authority: 42 U.S.C. 4001 et seq.; Preparedness and Response Directorate. This final rule is issued in accordance Reorganization Plan No. 3 of 1978, 3 CFR, with Section 110 of the Flood Disaster [FR Doc. 04–2794 Filed 2–9–04; 8:45 am] 1978 Comp., p. 329; E.O. 12127, 44 FR 19367, Protection Act of 1973, 42 U.S.C. 4104, 3 CFR, 1979 Comp., p. 376. BILLING CODE 9110–12–P and 44 CFR Part 67. The Agency has developed criteria for § 67.11 [Amended] floodplain management in floodprone ■ 2. The tables published under the areas in accordance with 44 CFR Part authority of § 67.11 are amended as 60. follows:

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#Depth in #Depth in #Depth in feet feet feet above above above ground. ground. ground. *Elevation *Elevation *Elevation Source of flooding and location in feet Source of flooding and location in feet Source of flooding and location in feet (NGVD) (NGVD) (NGVD) • Elevation • Elevation • Elevation in feet in feet in feet (NAVD) (NAVD) (NAVD)

FLORIDA ——— Approximately 0.5 mile up- Naples (City), Collier County stream of Southern Rail- Collier County (Unincor- (FEMA Docket No. D–7524) way bridge ...... *423 porated Areas) (FEMA Gulf of Mexico: Sugar Creek: Docket No. D–7524) Approximately 600 feet west At confluence with Kaskaskia River ...... *409 Gulf of Mexico: of intersection of Yucca Road and Gulf Shore Bou- Approximately 0.3 mile up- Approximately 300 feet west • stream of State Route 161 *425 of the intersection of Com- levard North ...... 16 At the intersection of Gordon Lake Branch: merce Street and Gulf At Alberson Road ...... *428 Shore Drive ...... •18 Drive and Champney Bay Court ...... •13 Approximately 1.2 miles up- At the intersection of Seagull stream of Wayne Road ..... *500 Avenue and Vanderbilt At the intersection of Yucca Drive ...... •13 Road and Banyan Boule- Carlyle Lake: vard ...... •10 Approximately 800 feet Entire shoreline ...... *463 southwest of the intersec- Maps available for inspection Maps available for inspection tion of Glendale Avenue at the Naples City Hall, 735 at the Clinton County Court- and Venetian Way ...... •13 8th Street South, Naples, house, 850 Fairfax, Carlyle, Florida. At the intersection of Guava Illinois. Drive and Coconut Circle ——— • ILLINOIS South ...... 6 Damiansville (Village), Clin- Maps available for inspection Albers (Village), Clinton ton County (FEMA Docket at the Collier County Admin- County (FEMA Docket No. No. D–7564) istrative Building, 3301 D–7564) Tamiami Trail, Naples, Flor- Sugar Creek: ida. Grassy Branch: Upstream side of Interstate ——— Upstream side of County Route 64 ...... *417 Road 8 ...... *421 Approximately 4,000 feet up- Everglades (City), Collier Approximately 0.64 mile up- stream of Interstate Route County (FEMA Docket No. stream of County Road 64 ...... *419 D–7524) 800 ...... *421 Maps available for inspection Gulf of Mexico: Sugar Creek: at the Damiansville Village At the intersection of Jas- Approximately 200 feet up- Hall, 225 East Main, mine Street and Storter stream of Southern Rail- Damiansville, Illinois. Avenue ...... •8 way ...... *422 Approximately 1,550 feet up- ——— At the intersection of Ever- Germantown (Village), Clin- green Street and Copeland stream of State Route 161 *425 • Maps available for inspection ton County (FEMA Docket Avenue ...... 7 No. D–7564) At end of Airport Road, at the Albers Village Hall, where it meets Everglade 206 West Dwight, Albers, Illi- Shoal Creek: nois. Airport ...... •10 Approximately 0.02 mile At intersection of Begonia ——— downstream of State Route Street and Buckner Ave- Carlyle (City), Clinton County 161 ...... *420 nue ...... •7 (FEMA Docket No. D–7564) At Southern Railway ...... *422 Maps available for inspection Carlyle Lake: Maps available for inspection at the Everglades City Hall, Approximately 0.7 mile north- at the Germantown Village 102 Broadway, Everglades, east of the intersection of Hall, 306 Prairie, German- Florida. 12th Street and Eula Mae town, Illinois. ——— Parkway ...... *463 Maps available for inspection Marco Island (City), Collier at the Carlyle City Hall, 850 (Catalog of Federal Domestic Assistance No. County (FEMA Docket No. Franklin Street, Carlyle, Illi- 83.100, ‘‘Flood Insurance’’) D–7524) nois. Dated: February 3, 2004. Gulf of Mexico: ——— Anthony S. Lowe, At intersection of Crescent Clinton County (Unincor- Street and Thrush Court ... •8 porated Areas) (FEMA Mitigation Division Director, Emergency At the intersection of Hon- Docket No. D–7564) Preparedness and Response Directorate. duras Avenue and Still- [FR Doc. 04–2793 Filed 2–9–04; 8:45 am] water Court ...... •7 Grassy Branch: Approximately 2,000 feet At confluence with Sugar BILLING CODE 9110–12–P west of the intersection of Creek ...... *421 Huron Court and Swallow Approximately 0.91 mile up- Avenue ...... •10 stream of County Road Approximately 900 feet 800 ...... *422 southwest of intersection of Kaskaskia River: South Barfield Drive and At downstream county Heights Court ...... •16 boundary ...... *402 Maps available for inspection Approximately 5.45 miles up- at the Marco Island City Hall, stream of confluence of 50 Bald Eagle Drive, Marco Shoal Creek ...... *413 Island, Florida. Shoal Creek: At confluence with Kaskaskia River ...... *411

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CORPORATION FOR NATIONAL AND ■ For the reasons discussed in the Management Budget (OMB). The COMMUNITY SERVICE Summary, the Corporation for National Commission will publish a document in and Community Service amends Parts the Federal Register announcing the 45 CFR Parts 2531 and 2533 2531 and 2533 of title 45 of the Code of effective date of that paragraph. RIN 3045–AA40 Federal Regulations as follows: FOR FURTHER INFORMATION CONTACT: Kathy Tofigh, Attorney, at (202) 418– Innovative and Demonstration PART 2531—INNOVATIVE AND 1553, Karen Franklin, Attorney, at (202) Programs and National Service SPECIAL DEMONSTRATION 418–7706, or Jennifer Schneider, Fellowships PROGRAMS Attorney, at (202) 418–0425 in the ■ Telecommunications Access Policy AGENCY: Corporation for National and 1. The authority citation for Part 2531 Division, Wireline Competition Bureau. Community Service. continues to read as follows: SUPPLEMENTARY INFORMATION: This is a ACTION: Final rule. Authority: 42 U.S.C. 12501 et seq. summary of the Commission’s Third SUMMARY: The Corporation for National § 2531.30 Other innovative and model Report and Order in CC Docket No. 02– and Community Service (hereinafter the programs. 6; FCC 03–323, released on December ‘‘Corporation’’) hereby amends its 23, 2003. There was also a Companion ■ 2. In § 2531.30, remove paragraph (c). regulations that require the Corporation Second Further Notice of Proposed to announce in the Federal Register its PART 2533—SPECIAL ACTIVITIES Rulemaking released in CC Docket No. grant application procedures, selection 02–6; FCC 03–323, on December 23, criteria, timing, and other requirements. ■ 1. The authority citation for Part 2533 2003. The full text of this document is The Grants.gov FIND module is now continues to read as follows: available for public inspection during regular business hours in the FCC used by all Federal agencies to post Authority: 42 U.S.C. 12501 et seq. electronically synopses of funding Reference Center, Room CY–A257, 445 ■ 2. Revise § 2533.10 to read as follows: opportunities under Federal financial Twelfth Street, SW., Washington, DC assistance programs that award § 2533.10 National service fellowships. 20554. discretionary grants and cooperative The Corporation may award national I. Introduction and Summary agreements. In addition, each agency service fellowships on a competitive 1. In this Third Report and Order, we must post the full announcement basis. electronically. (See 68 FR 58146, address several matters related to the October 8, 2003) The Corporation Dated: February 4, 2004. administration of the schools and fulfills this requirement by posting its Frank R. Trinity, libraries universal service mechanism grant announcements on its Web site: General Counsel. (also known as the e-rate program). http://www.cns.gov.whatshot/ [FR Doc. 04–2799 Filed 2–9–04; 8:45 am] First, we adopt rules that will limit the notices.html. These revisions will BILLING CODE 6050–$$–P ability of schools and libraries to engage eliminate provisions in certain in wasteful or fraudulent practices when regulations that state that the obtaining internal connections. Corporation will publish FEDERAL COMMUNICATIONS Specifically, we conclude that eligible announcements in the Federal Register. COMMISSION entities should be precluded from Because the Corporation is required to upgrading or replacing internal post its funding opportunities on 47 CFR Part 54 connections on a yearly basis. Instead, our rules will permit a particular Grants.gov, and post its full funding [CC Docket No. 02–6; FCC 03–323] announcement electronically on its eligible entity to receive support for Web-site (68 FR 58146), the Corporation Schools and Libraries Universal discounted internal connections considers these changes to be Service Support Mechanism services no more than twice in every administrative in nature. Further, this five years. We will permit, however, rule does not meet the definition of AGENCY: Federal Communications entities to receive discounts on basic ‘‘rule’’ in 5 U.S.C. 804(3)(A) because it Commission. maintenance associated with internal is a rule of ‘‘particular applicability.’’ ACTION: Final rule. connections on a yearly basis, but Therefore, it is not subject to the clarify our rules regarding permissible congressional review requirements in 5 SUMMARY: In this document, the maintenance costs to ensure that such U.S.C. 801–808. Commission addresses several matters discounts are appropriately narrow. We related to the administration of the DATES: These changes are effective as of also prohibit a school or library from schools and libraries universal service February 10, 2004. transferring equipment purchased with mechanism (also known as the e-rate universal service discounts, as part of FOR FURTHER INFORMATION CONTACT: Mr. program). The adopted rules will eligible internal connections services, William L. Hudson, Telephone: (202) advance the goals of the schools and for a period of three years except in 606–5000 ext. 265 or via Internet: libraries program by making support for limited circumstances. These rules will [email protected]. internal connections regularly available advance the goals of the schools and SUPPLEMENTARY INFORMATION: to a larger number of applicants and by libraries program by making support for discouraging waste, fraud, and abuse. List of Subjects internal connections regularly available The Commission also adopts rules that to a larger number of applicants and by 45 CFR Part 2531 provides additional certainty to discouraging waste, fraud, and abuse. Grant programs-social programs, applicants by clarifying existing rules We also adopt a rule creating a more Volunteers. and procedures. formal process for updating annually DATES: Effective March 11, 2004 except the list of services eligible for support. 45 CFR Part 2533 for § 54.513(c) which contains In addition, we codify the Universal Scholarships and fellowships, information collection requirements that Service Administrative Company’s Volunteers. have not been approved by the Office of (USAC or the Administrator) current

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practices for allocating costs of services effective beginning with support service discounts will likely continue to between eligible and ineligible received in Funding Year 2005. exceed the annual funding cap. Thus, components consistent with Commitments for Priority Two services we agree with commenters that without Commission rules and requirements, received in years prior to Funding Year revising our existing policies, some codify a prohibition on the provision of 2005 will not be considered in economically disadvantaged applicants free services to entities receiving determining an applicant’s eligibility to will continue to be denied Priority Two discounts, and codify with one receive support for Priority Two funding. We find that the twice-every- modification procedures for service services. five-years restriction is appropriate and substitutions. We also clarify existing 5. For the purpose of determining necessary to make advanced requirements for eligibility of certain whether an applicant is eligible to technologies more accessible to all equipment and services. Finally, we receive a funding commitment for schools and libraries. We further find adopt rules to implement our prior Priority Two services under this rule, that the twice-every-five-years policy decision to carry forward unused funds the five-year period begins in any year, will increase the mechanism’s funding from the schools and libraries starting with Funding Year 2005, in reach to a greater number of mechanism for use in subsequent which the entity receives discounted economically disadvantaged schools funding years. All rule changes and Priority Two services. The rule is and libraries. clarifications shall be implemented applicable to discounts for services that 8. It is important to note that even upon the effective date of this Order, are site-specific to the entity and for with this revised policy on the funding unless specified otherwise. services that are shared by the entity of internal connections, funding 2. This Order is one of a series of with other entities. Thus, if an entity commitments will continue to be made orders designed to simplify program receives support only for shared in accordance with the annual funding administration, ensure equitable services in a particular funding year, cap. Thus, it is conceivable that an distribution of funds, and protect that funding will be counted as one of applicant may be eligible to apply for against waste, fraud, and abuse. In the two years out of five that it may discounts on Priority Two services and taking these additional steps today, we receive support. The restriction does not still be denied funding because demand draw on information from a number of apply to consortium members who do for discounts exceeds available funding. sources, including issues raised in a not actually receive Priority Two In this instance, we encourage public forum held in May 2003 on ways funding when other members of the applicants to reapply for discounts to improve the schools and libraries consortium receive discounts in specific during the following funding year. We support mechanism, the Office of the funding periods. further note that it is the receipt of Inspector General’s semi-annual reports, 6. We find that, by limiting the support for Priority Two services, rather beneficiary audit reports, and the frequency in which applicants may than the application for support, that recommendations of USAC’s Waste, receive Priority Two discounts, funds counts toward the limitation that an Fraud, and Abuse Task Force. We will be made available to more eligible entity may receive in only two out of remain committed to making ongoing schools and libraries on a regular basis. five years. changes to ensure that this program Specifically, we find that the twice- 9. Furthermore, we conclude that, by continues to benefit school children and every-five-years rule we adopt balances precluding a particular entity from library patrons across America. this goal with the need to ensure that receiving support for Priority Two the most disadvantaged schools and discounts every year, our modified rule II. Third Report and Order libraries are able to maintain strengthens incentives for applicants to functioning internal connections fully use equipment purchased with A. Limits on Use of Internal Connections networks. Permitting applicants to universal service funds. Our current 3. In this Order, we adopt a rule receive support more often than twice rules permit applicants in the highest limiting each eligible entity’s receipt of every five years would not make funds discount bands to upgrade their discounts on internal connections to available to significantly more eligible equipment on a yearly basis, even when twice every five funding years. We schools and libraries, while limiting existing equipment continues to have a exempt basic maintenance services from applicants to support less frequently useful life. By limiting each eligible this restriction. We also clarify the types than twice every five years could entity’s ability to receive support for of maintenance services that are eligible prevent applicants from updating their internal connections, recipients will for discounts. In addition, we adopt a internal connections as necessary. have greater incentive not to waste rule that limits an entity’s ability to 7. We are not persuaded by those program resources by replacing or transfer equipment purchased with commenters that assert that the most upgrading equipment on an annual universal service funds. disadvantaged applicants will suffer basis. 4. Frequency of Discounts. We from a policy restricting receipt of 10. A few commenters maintain that conclude that each eligible entity may internal connections discounts. The limiting funding of internal connections receive commitments for discounts on Commission remains committed to will disrupt applicants’ planning and Priority Two services, except as ensuring that discounts continue to flow budgets. We recognize that our modified discussed further, no more than twice to schools and libraries that are rule will limit applicant flexibility to every five funding years. The practical economically disadvantaged. Indeed, some extent, particularly for those effect of this rule will be to permit program rules continue to provide applicants that wish to make modest applicants to receive funding once every greater discounts for the most infrastructure investments on a yearly three years for internal connections, as economically disadvantaged schools basis. But, we conclude that the benefits supported by the record, but will allow and libraries. We recognize, however, of the rule—namely, making support applicants to obtain internal that many applicants below the very available to more applicants on a regular connections in two consecutive years as highest discount levels are also basis and preventing wasteful and part of a staged implementation of economically disadvantaged and also abusive practices—outweigh the internal connections. In order to give unable to acquire internal connections potential impact on such applicants. We applicants sufficient planning time, we without universal service support. We find that the twice-every-five-years conclude that this rule will become also recognize that demand for universal restriction provides sufficient flexibility

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for applicants to make efficient use of 13. We instruct USAC to revise Block constitute basic maintenance. Such Priority Two funding, and thus is 5 of the FCC Form 471 to include a services are therefore ineligible for reasonable. In particular, we recognize separate category of service for discounts under the schools and that for a variety of different reasons, an maintenance requests, with this form libraries universal service mechanism. applicant may not be able to make change to take effect for Funding Year 16. We also provide greater clarity as efficient use of program discounts in a 2005. Maintenance requests will to how USAC should address requests single year. For example, an applicant’s continue to be funded as Priority Two for discounts on technical support for annual resources may require the funding. However, maintenance internal connections. When confronted applicant to extend its costs over a requests will be considered for funding with products or services that contain period of years. Our modified rule separately from other requests for both eligible and ineligible functions, allows an applicant to seek internal Priority Two funding and, therefore, USAC, in the past, has utilized cost connections discounts in two will not be subject to the twice-every- allocation to determine what portion of consecutive years, thus, enabling an five years funding rule we adopt in this the product price may receive entity to spread its costs over two Order. The revision of the FCC Form discounts. We generally endorse this funding years. We conclude that 471 will allow efficient review of the practice as a reasonable means of providing applicants the flexibility to Priority Two funding requests. addressing mixed use products and implement internal connections over 14. In response to allegations of waste, services. At the same time, however, we two consecutive years is sufficient to fraud, and abuse, we prospectively are concerned that it is administratively accommodate the differing planning and clarify the services eligible for Priority difficult and burdensome to derive budgetary needs of most applicants. We Two support as basic maintenance costs reasonable cost allocations for the expect applicants to assume the for internal connections. Although the eligible portions of services provided responsibility of adequately planning Universal Service Order allows support under a technical support contract. In a and budgeting to make the most for those internal connections services rapidly-changing marketplace, with effective use of discounts available to that are ‘‘necessary to transport vendors supplying complex packages of them. information all the way to individual services, it simply is not 11. USAC also suggests that in an classrooms’’ and public areas of a administratively feasible to determine effort to counter funding limitations, library, and specifically authorizes what portion of a technical support some applicants may request more support for ‘‘basic maintenance contract is directed to basic services’’ that are ‘‘necessary to the maintenance. Therefore, we hereby funding than they will be able to use in operation of the internal connections clarify prospectively that technical a given funding year. We emphasize that network,’’ our rules do not expressly support, including on-site Help Desks, existing program rules require specify the types of maintenance costs is not eligible under our rules if it applicants to examine their technology that are eligible for support. In light of provides any ineligible features or needs and budgetary resources before our concerns about allegations of waste, functions. A Help Desk system typically making funding requests to ensure that fraud, and abuse in this area and our goes beyond the level of support applicants make effective use of any changes, we conclude that we should authorized by the Commission in the discounted services that they receive. provide further clarity on what Universal Service Order, which stated Failure to have an approved technology maintenance services are ‘‘necessary’’ that ‘‘[s]upport should be available to plan is a violation of our current rules. under the terms of the Universal Service fund discounts on such items as routers, We expect funding requests to be based Order, and thus eligible for support and hubs, network file services, and wireless on an applicant’s technology plan, not exempt from the twice-every-five-years LANs and their installation and basic based on a scheme to maximize funding. rule. maintenance * * *.’’ There is no A funding request that is not reasonably 15. Basic maintenance services are language in the Universal Service Order based on a technology plan does not ‘‘necessary’’ if, but for the maintenance that contemplates the provision of constitute a bona fide request for at issue, the connection would not discounts for the comprehensive level of services. Further, the Administrator’s function and serve its intended purpose support typically provided by a Help review and enforcement of the with the degree of reliability ordinarily Desk. On the contrary, the Universal necessary resources certification must provided in the marketplace to entities Service Order indicates that support and will continue to serve as a safeguard receiving such services without e-rate will be provided for a product or service against unreasonable funding requests. discounts. Basic maintenance services ‘‘only if it is necessary to transport 12. Maintenance Costs. We agree with do not include services that maintain information all the way to individual commenters that maintenance costs equipment that is not supported or that classrooms. That is, if the service is an should be exempt from the twice-every- enhance the utility of equipment essential element in the transmission of five-years restriction. The Universal beyond the transport of information, or information within the school or library Service Order, 62 FR 32862, June 17, diagnostic services in excess of those ***.’’ We conclude that if a technical 1997, provides that support for internal necessary to maintain the equipment’s support contract provides more than connections includes ‘‘basic ability to transport information. For basic maintenance, it shall be ineligible maintenance.’’ Maintenance costs example, basic maintenance will for discounts under our modified rules. associated with internal connections include repair and upkeep of previously We instruct USAC to review and fund services are currently eligible for purchased eligible hardware, wire and requests for discounts on maintenance discounts as a Priority Two service. cable maintenance, and basic technical services in accordance with this Proper maintenance of internal support, including configuration clarification, as of the effective date of connections products ensures that changes. On-site technical support is this Order. equipment functions properly, thereby not necessary to the operation of the 17. Equipment Transfers. We also find limiting uneconomical replacement of internal connection network when off- it appropriate to amend our rules equipment. We therefore continue to site technical support can provide basic expressly to prohibit, except as allow applicants to apply for discounts maintenance on an as-needed basis. provided below, the transfer of for maintenance of equipment each Services such as 24-hour network equipment purchased with discounts funding year. monitoring and management also do not from the schools and libraries universal

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service support mechanism. The Act reasons. Under these circumstances, we results in achieving these goals. We also prohibits the sale or transfer of find that it would be economically conclude that developing and enforcing equipment purchased with discounts rational and consistent with the goals of useful life criteria would add a from the universal service program in the schools and libraries program for the significant degree of complexity to the consideration of money or anything else support recipient to transfer any program, which would result in of value. Here, in order to promote the equipment it has purchased with increased administrative costs and goal of preventing waste, fraud, and universal service discounts to another burden for both recipients and USAC. abuse, we extend that prohibition to all eligible location where the equipment B. Eligible Services transfers, without regard to whether may be used effectively. We therefore money or anything of value has been conclude that a recipient may transfer 23. Although the current cost received in return for a period of three equipment purchased with universal allocation approach used by the years after purchase. service discounts to other eligible Administrator reasonably implements 18. Recipients of support are expected entities if the particular location where the Commission’s rules and requirement to use all equipment purchased with the equipment was originally installed regarding eligible and ineligible universal service discounts at the is permanently or temporarily closed. In services, we conclude that particular location, for the specified these limited circumstances, we note administration of the schools and purpose for a reasonable period of time. that it is not necessary for the libraries support mechanism would Purchasing equipment with universal transferring and receiving entities to benefit from an explicit rule regarding service discounts and then replacing or have comparable discount levels, as the cost allocation for services with upgrading that equipment annually or long as each is eligible under the mixed eligibility. We also conclude that almost annually is unnecessary and not schools and libraries program. the eligibility process would be economically rational. Unnecessary 20. In the event that a recipient is improved by adopting a rule for the replacement of equipment suggests that permanently or temporarily closed and yearly updating of the eligible services entities are not fully utilizing the equipment is transferred, the list. Additionally, we codify rules equipment purchased with universal transferring entity must notify the prohibiting the provision of ‘‘free’’ service discounts. We agree with Administrator of the transfer, and both services to recipient schools and commenters that such practices deprive the transferring and receiving entities libraries by service providers that also other eligible entities of the full benefits must maintain detailed records provide supported services to those of the schools and libraries universal documenting the transfer and the reason schools and libraries and codify services program. Moreover, the practice for the transfer for a period of five years. procedures for applicants to modify of purchasing equipment with universal We instruct the Administrator to verify funding requests that have been granted service funds, then transferring that compliance with this requirement as but not yet funded. Finally, we provide equipment to other schools and libraries part of its beneficiary audit reviews. In additional guidance on the provision of with lower discount rates would order to enable the Administrator to discounts on services that include the undermine the intent of the verify compliance with this transfer lease of on-premises equipment. Commission’s priority rules, and is prohibition, we require all recipients of 24. Cost Allocation. We specifically therefore prohibited. We find, however, internal connections support to amend our rules to make clear how that it would be wasteful to prevent maintain asset and inventory records for applicants and service providers should recipients from transferring equipment a period of five years sufficient to verify allocate costs of a service or product that, after a reasonable period of time, the actual location of such equipment. that, although generally eligible for has been replaced or upgraded. We 21. This rule change shall be universal service support, contains both therefore permit recipients freely to implemented upon the effective date of eligible and ineligible components. In transfer equipment to other eligible this Order. To facilitate enforcement of the Universal Service Order, the entities three years or more after the this rule, we will amend the FCC Form Commission concluded that, when a purchase of such equipment. Consistent 471 for Funding Year 2005 to include a school or library signs a contract for with the Act, however, such transfers reasonable use certification. In order to both eligible and ineligible services, the must not be in consideration of money receive discounts, applicants must contract must break out the price of or anything else of value. certify that they will use all equipment eligible services separately from 19. We agree also with commenters purchased with universal service ineligible services. Since that time, the that argue that applicants may have discounts at the particular location for marketplace has seen an evolution of legitimate reasons to transfer internal the specified purpose. Applicants will products and services that contain both connections equipment due to the thereafter be held accountable for their eligible and ineligible features but closing of a school or other eligible compliance with the reasonable use which are not commercially available facilities. For example, due to a natural certification. on an unbundled basis. Thus, the issue disaster, a school district may conclude 22. We decline to institute useful life has evolved from merely separately that its needs are best served by criteria for equipment purchased with listing eligible services and products temporarily or permanently closing a universal service funds. Useful life from ineligible services and products to particular school and transferring its criteria could provide a more equitable one of determining what components or students, as well as any valuable distribution of Priority Two funding and features of an otherwise eligible service equipment purchased with supported ensure that more applicants receive the or product may be ineligible when the discounts, to other locations. Similarly, full benefit of the program by ensuring service or product is not commercially a school district may choose to close, that applicants did not replace available on an unbundled basis. remodel, or consolidate a particular equipment components of internal Consistent with the Commission’s school to meet changing demographic connections services more frequently directive to separate these costs, the needs or fiscal realities, and thereby than necessary. We believe, however, Administrator has generally required transfer the students and useable school that measures adopted, including the schools, libraries, or the service property to a nearby school. Likewise, a restriction of transfers and our revised provider to separate the costs of an county or municipality may choose to policy governing the funding of Priority ineligible component from what close a library branch for financial Two equipment, will provide similar generally would be an eligible service or

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product. As explained, the the interests of ensuring that support be eligible entity by a service provider that Administrator has provided reasonable provided only for eligible services, the is also providing discounted services to guidance, consistent with Commission Administrator also should continue to the entity. The Commission requires rules and requirements, to schools, employ the use of the cost allocation that an entity must pay the entire libraries, and service providers in method when necessary. undiscounted portion of the cost of any determining the allocation approach. 27. The Commission recently services it receives through the schools 25. As part of our efforts to improve addressed those circumstances where an and libraries program. For the purpose the operation of the eligibility applicant erroneously identifies certain of this program, the provision of determination process, we explicitly costs as eligible for support by adopting unrelated free services by the service amend our rules to include cost the 30 percent rule. Specifically, we provider to the entity constitutes a allocation rules for services and concluded in the Second Report and rebate of the undiscounted portion of products that contain mixed eligible and Order, 68 FR 36931, June 20, 2003, that the costs, a violation of the ineligible components, features, or where less than 30 percent of a request Commission’s rules. Codifying this functions to provide greater clarity in for support is ineligible, the existing restriction will clarify the this area. Under these rules, if a product Administrator is permitted to grant obligations of schools and libraries that or service contains ineligible support, reduced by the amount of receive discounted services under the components, costs should be allocated ineligible services. We clarify that the schools and libraries program and to the extent that a clear delineation can Administrator may rely on the cost improve the ability of the Commission be made between the eligible and allocation methods we adopt today in to take appropriate enforcement action. ineligible components. The clear applying the 30 percent rule and 30. Service Substitution. Again, as delineation must have a tangible basis performing any resulting adjustments. part of our efforts to improve the and the price for the eligible portion 28. Eligible Services List. We now operation of the schools and libraries must be the most cost-effective means of adopt a more formalized process for support mechanism, we also formally receiving the eligible service. If the updating the eligible services list, adopt and codify the Administrator’s ineligible functionality is ancillary, the beginning with Funding Year 2005. current procedures relating to requests costs need not be allocated to the Under the new rule, USAC will be for service or equipment changes. These ineligible functionality. An ineligible required to submit by June 30 of each procedures provide flexibility to functionality may be considered year a draft of its updated eligible applicants where it has become ‘‘ancillary’’ if (1) a price for the services list for the following funding necessary to make a minor modification ineligible component that is separate year. The Commission will issue a to their original funding request. We and independent from the price of the Public Notice seeking comment on find that the Administrator’s service eligible components cannot be USAC’s proposed eligible services list. substitution procedures are consistent determined, and (2) the specific package At least sixty days prior to the opening with the Commission’s goal of affording remains the most cost-effective means of of the window for the following funding schools and libraries maximum receiving the eligible services, without year, the Commission will then issue a flexibility to choose the offering that regard to the value of the ineligible public notice attaching the final eligible meets their needs most effectively and functionality. services list for the upcoming funding efficiently. We conclude that codifying 26. These cost allocation rules address year. The Commission anticipates that these existing procedures in our rules the widespread availability of products this public notice will be released on or will facilitate USAC’s administration of and services with mixed eligibility and before September 15 of each year. This the schools and libraries support are fully consistent with the overriding process will provide greater mechanism. In codifying USAC’s requirement that support be provided transparency to the development of the procedures in our rules, we make one for eligible services, while preventing eligible services list. The yearly updated modification, however. USAC’s current support for ineligible services. By list will interpret what may be funded procedures permit a service substitution providing service providers and under current rules, and will represent only if the substitution does not result applicants a means of allocating costs a safe harbor that all applicants can rely in an increase in the pre-discount price between eligible and ineligible on in preparing their applications for of the eligible service. We will permit components, features or functions of the coming funding year. It will provide applicants to substitute an eligible what would otherwise be an eligible interested parties, both recipients and service with a higher pre-discount price, service, the cost allocation method service providers, an opportunity to but will provide support based on the increases the variety of service options bring to the Commission’s attention lower, original price, rather than the available to schools and libraries, areas of ambiguity in the application of higher price for the substituted service. improving each school or library’s current rules in a rapidly changing We agree with commenters that this will ability to purchase the most useful and marketplace. Currently, the only way an further maximize flexibility for schools cost-effective service possible. Without applicant can determine whether a and libraries to meet their needs this cost allocation approach, applicants particular service or product is eligible effectively and efficiently, without may fail to pursue the purchase of under our current rules is to seek additional cost to the E-rate program. certain advanced telecommunications funding for that service or product, and 31. Accordingly, we amend our rules and information services, contrary to the then seek review of the Administrator’s to specify that service change requests intent of section 254. Our E-rate rules decision to deny discounts. The rule we will be granted for a substitute service should not drive the development of adopt today will simplify program or product where (1) that service or communications services and administration and facilitate the ability product has the same functionality; (2) technologies, but rather should permit of both vendors and applicants to the substitution does not violate any the marketplace to flourish and innovate determine what services are eligible for contract provisions or state or local in ways that meet consumer needs and discounts. procurement laws; (3) the substitution facilitate access to these innovations. 29. Prohibition of ‘‘Free’’ Services. We does not result in an increase in the Schools and libraries should continue to also take this opportunity to clarify and percentage of ineligible services or allocate eligible and ineligible costs in amend our rules to codify a prohibition functions, but (4) support shall be their contracts with service providers. In on the provision of free services to an provided based on the lesser of the pre-

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discount price of the original service or transport information within the termination point for a Priority One the substitute service. In order to ensure schools’ instructional buildings on a service. The language in the 1999 the integrity of the competitive bidding single campus. Further, the Commission Tennessee Order stating that facilities process, we require the applicant’s found that other indicia—the ownership located on the school premises are request for a service change to include of the facility, the lack of a lease- presumed to be internal connections a certification that the requested change purchase arrangement, the lack of an was enunciated in the context of in service is within the scope of the exclusivity arrangement, and the fact considering the status of network hubs controlling Form 470, including any that the service provider was and routers, and should not be read to associated Requests for Proposal (RFP), responsible for its maintenance— encompass basic termination for the original services. We also require supported its conclusion that, on equipment. A basic terminating that support not be provided in excess balance, the facilities should be deemed component, though normally located on of the amount for which the applicant part of an end-to-end service. The a customer’s premises, is necessary to originally would have been eligible. By Commission found that these factors receive the end-to-end Internet access adopting these procedures as rules, we weighed against a finding of internal service because it provides translation recognize that events may occur connections, even though the cost of of the digital transmission using the between the time of the original funding leasing those facilities represented appropriate protocols. In the case of a request and the time when nearly 67 percent of the total funding cable modem, it would not be possible commitments are made that make the request. The decision was based on the to receive the Internet access service in original funding request impractical or facts presented; the Commission did not question without the cable modem on even impossible to fulfill. establish a per se requirement that an the customer’s premises. Conversely, 32. Eligibility of On-Premises applicant must meet all factors in order the internal connections on the site Equipment as Part of Priority One to receive discounts on service provider would continue to function without the Service. In the Schools and Libraries charges for the cost of leasing on- cable modem. Moreover, while NPRM, 67 FR 7327, February 19, 2002, premises equipment. customers may obtain cable modems the Commission sought comment on 35. We conclude it is administratively from other sources, providers of cable whether to modify its policies regarding efficient for USAC to use the factors modem service typically offer customers the funding of Priority One services relied upon in the 1999 Tennessee the opportunity to lease a cable modem (telecommunications service and Order as a processing standard. USAC in conjunction with the provision of Internet access) that include service has posted an advisory on its website cable modem service. We also note that provider charges for capital investments providing guidance to help applicants the cost of leasing a cable modem is a for wide area networks. Those policies and service providers understand how it relatively low proportion of the yearly were established in the 1999 Tennessee has implemented the 1999 Tennessee cost of the service. The fact that Order and the Brooklyn Order. Order. Specifically, USAC has provided technical limitations would, as a 33. We decline at this time to modify guidance that a private branch exchange practical matter, preclude the service our existing policies in this area, and in (PBX) that routes calls within a school provider from using the cable modem to the companion Further Notice of or library is not eligible for support as deliver service to other customers, Proposed Rulemaking seek more Priority One on-premises equipment. creating a de facto exclusivity focused comment on specific rule This guidance is consistent with our arrangement, in our view does not changes that would limit the availability 1999 Tennessee Order because a PBX, support a finding that such equipment of discounts for service provider charges like most on-premises equipment, is must be viewed as internal connections. that recoup the cost of significant presumed to be Priority Two internal Rather, we conclude that it is infrastructure investment. We do, connections. Moreover, it is unlikely appropriate to provide discounts on the however, clarify the scope of the that an applicant would be able to lease of a single basic terminating existing requirements in this area to establish a rebuttal to that presumption, component used at a site as a Priority facilitate USAC’s processing of because the PBX functions to transmit One service. applications. information from and between multiple 37. We also clarify that it is 34. In the 1999 Tennessee Order, the locations within a local network. If the appropriate to provide Priority One Commission addressed the issue of PBX were removed from a school, the discounts on service provider charges to whether certain facilities located on the school would lose its ability to route recoup the cost of leasing optical applicant’s premises (namely, routers phone calls within the building or equipment to light fiber, when that and hubs) are part of an end-to-end campus, but could maintain its access to optical equipment is the single basic Internet access service or part of internal the public switched telephone network. terminating component of an end-to-end connections. The Commission In other words, the PBX is necessary to network and it is necessary to provide determined that facilities located on an maintain the internal communications an end-to-end telecommunications or applicant’s premises should be network, but not its end-to-end access to Internet access service. We reach that presumed to be internal connections, telecommunications services. conclusion even though the optical but that an applicant may rebut that 36. We now clarify that the 1999 equipment on the customer’s end, as a presumption. In analyzing the facts Tennessee Order does not preclude the technical matter, is dedicated to the presented in the 1999 Tennessee Order, provision of support for on-premises customer’s sole use. the Commission concluded that this equipment that constitutes basic presumption had been rebutted. In termination equipment. Accordingly, an C. Carryover of Funds support of the rebuttal, the Commission applicant may receive a discount for the 38. We adopt the procedures for noted that the hub sites at issue lease of a cable modem as part of carrying forward unused funds for the constituted the Internet access Priority One Internet access. A cable schools and libraries program proposed provider’s points of presence and that modem is a type of basic terminating in the Schools and Libraries Further the applicant’s internal connections component. It is analogous to a channel Notice, 68 FR 36961, June 20, 2003. networks would continue to function service unit/data service unit (CSU/ Specifically, we amend our rules to without the hub sites, indicating that DSU) or a network interface device require the Administrator to provide the hub sites were not necessary to (NID) in that it functions as the quarterly estimates to the Commission

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regarding the amount of unused funds annual funding cap. For example, the 43088, August 12, 1998. Section that will be available for carryover in Commission will carry forward the 54.509(b) provides that, if the estimates the subsequent full funding year. We unused funds as of second quarter 2004 of future funding needs of schools and further amend our rules so that the for use in the Schools and Libraries libraries lead to a prediction by the Commission will carry forward Funding Year 2004, thereby increasing Administrator that total funding available unused funds from prior years the available funds in Funding Year requests will exceed available funding on an annual basis. We find that, in 2004 above the annual funding cap of for a funding year, the Administrator light of the high demand for discounts, $2.25 billion. The Wireline Competition shall adjust the discount matrix by such action is consistent with section Bureau will announce the availability of calculating a percentage reduction of 254 and the public interest, as well as carryover funds during the second support to all schools and libraries, the framework established in the quarter of the calendar year, when it except those in the two most Schools and Libraries Order, 67 FR announces the universal service disadvantaged categories, in order to 41862, June 20, 2002. Accordingly, we contribution factor for the third quarter permit all requests in the next funding amend § 54.507(a) of our rules. of each year. The amount of unused year to be fully funded. The technical 39. The Administrator shall continue funds to be carried forward will be correction we make to § 54.509(b) to estimate unused funds as the deemed approved by the Commission if clarifies that the reduction in percentage difference between the amount of funds it takes no action within 14 days of discounts explained in § 54.509(b) does collected, or made available for that release of the public notice announcing not apply within a filing window or particular funding year, and the amount the contribution factor and the amount period, as described in § 54.507(c). of funds disbursed or to be disbursed. of unused funds. Priority within a filing window is We note that the Administrator already 42. We determine that it is in the determined in accordance with considers the remaining appeals for a public interest to carry forward unused § 54.507(g)(1) of the rules. Thus, funding year when identifying unused funds for disbursement on an annual § 54.509(b) applies only during a funds. Therefore, we do not believe that basis in the second quarter of the funding year in which the the carryover of unused funds will calendar year. Distribution of unused Administrator is acting in accordance detract from the funding of outstanding funds on an annual basis allows the with § 54.507(g)(2). We find that the rule appeals. Administrator to refine its calculation of change is exempt from the notice and 40. Consistent with the proposed available funds over four reporting comment requirements of the rules in the Schools and Libraries quarters as the funding year progresses Administrative Procedure Act because it Further Notice, we also amend the rules starting with the third quarter of the concerns a non-substantive technical to require the Administrator to file with calendar year. The annual carryover of change to the existing rules. the Commission quarterly estimates of funds during the second quarter of the unused funds from prior years of the calendar year also coincides with the III. Procedural Matters schools and libraries support time of year the Administrator begins A. Paperwork Reduction Act Analysis mechanism when it submits its making funding commitment decisions projection of schools and libraries for the upcoming funding year. We 45. The action contained herein has program demand for the upcoming believe that the timing of this process been analyzed with respect to the quarter. This amendment codifies the provides certainty regarding when Paperwork Reduction Act of 1995 (PRA) Administrator’s existing reporting unused funds will be carried forward for and found to impose new or modified practice and reporting cycle. The use in the schools and libraries program reporting and/or recordkeeping quarterly estimate serves to prepare the with minimal disruption to the requirements or burdens on the public. Administrator for the annual release of administration of the program. Implementation of these new or carryover funds and provides schools 43. In order to implement the modified reporting and/or and libraries with general notice Commission’s prior decision to carry recordkeeping requirements will be regarding the amount of unused funds over funds beginning April 1, 2003, we subject to approval by the Office of that may be made available in the modify the schedule for this year only Management and Budget (OMB) as subsequent year. We disagree with the in order to implement the process for prescribed by the PRA. Specifically, National Association of Independent Funding Year 2003. We direct the § 54.513(c) will go into effect upon Schools (NAIS) that the quarterly Administrator to carry forward unused announcement in the Federal Register reporting procedure would become too funds as projected for the first quarter of of OMB approval, to the extent OMB cumbersome and hinder the ‘‘overall 2004 for use during the remainder of approval is required. integrity of the program.’’ We do not Funding Year 2003. While there will be believe that the Administrator will be an increase in the amount of funds B. Final Regulatory Flexibility Analysis overburdened by this requirement available in Funding Year 2003, we note 46. As required by the Regulatory because it has been reporting quarterly that no decisions previously made by Flexibility Act of 1980, as amended estimates of unused funds for six USAC concerning the distribution of (RFA), an Initial Regulatory Flexibility quarters without a problem. funds for Funding Year 2003 will be Analysis (IRFA) was incorporated in the 41. We further amend the rules to reversed or revisited. Only funding Schools and Libraries NPRM. The make unused funds available annually requests that are currently pending will Commission sought written public in the second quarter of each calendar be considered for the Funding Year comment on the proposals in the year for use in the next full funding year 2003 carryover funding. Henceforth, Schools and Libraries NPRM, including of the schools and libraries mechanism. starting with the second quarter of 2004, comment on the IRFA. This present Based on the estimates provided by the funds will be carried over on an annual Final Regulatory Flexibility Analysis Administrator, the Commission will basis as described in the previous (FRFA) conforms to the RFA. announce a specific amount of unused paragraph. funds from prior funding years to be 44. Finally, we take this opportunity 1. Need for, and Objectives of, the Third carried forward in accordance with the to revise § 54.509(b) of the Report and Order public interest to increase funds for the Commission’s rules to conform to the 47. In this Third Report and Order, we next full funding year in excess of the Fifth Order on Reconsideration, 63 FR adopt rules whereby eligible entities

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may receive discount rates for internal townships, of which 37,546 b. Telecommunications Service connections services, except for certain (approximately 96.2%) have Providers basic maintenance services, twice every populations of fewer than 50,000, and of 52. We have included small five years and that prohibit a school or which 1,498 have populations of 50,000 incumbent local exchange carriers in library from transferring equipment or more. Thus we estimate the number this RFA analysis. A ‘‘small business’’ purchased with universal service of small governmental jurisdictions under the RFA is one that, inter alia, discounts, except in limited overall to be 84,098 or fewer. meets the pertinent small business size circumstances. These rules will advance 50. The Commission has determined standard (e.g., a telephone the goals of the schools and libraries that the group of small entities directly communications business having 1,500 program by making support for internal affected by the rules herein includes or fewer employees), and ‘‘is not connections regularly available to a eligible schools and libraries and the dominant in its field of operation.’’ The larger number of applicants and by eligible service providers offering them SBA’s Office of Advocacy contends that, reducing the likelihood of waste, fraud, for RFA purposes, small incumbent and abuse. discounted services, including telecommunications service providers, local exchange carriers are not dominant 2. Summary of Significant Issues Raised Internet Service Providers (ISPs) and in their field of operation because any by Public Comments in Response to the vendors of internal connections. Further such dominance is not ‘‘national’’ in IRFA descriptions of these entities are scope. We have therefore included small 48. There were no comments filed provided. In addition, the Universal incumbent carriers in this RFA analysis, specifically in response to the IRFA. Service Administrative Company is a although we emphasize that this RFA Nevertheless, the agency has considered small organization (non-profit) under action has no effect on the the potential impact of the rules the RFA, and we believe that Commission’s analyses and proposed in the IRFA on small entities. circumstances triggering the new determinations in other, non-RFA Based on analysis of the relevant data, reporting requirement will be limited contexts. the Commission concludes the new and does not constitute a significant 53. Incumbent Local Exchange rules limit the burdens on small entities economic impact on that entity. Carriers (LECs). Neither the Commission and result in a de minimis nor the SBA has developed a size recordkeeping requirement. The a. Schools and Libraries standard for small incumbent local exchange services. The closest size Commission also concludes that the 51. As noted, ‘‘small entity’’ includes new rules will positively impact schools standard under SBA rules is for Wired non-profit and small government Telecommunications Carriers. Under and libraries, including small ones, entities. Under the schools and libraries seeking universal service support. that size standard, such a business is universal service support mechanism, small if it has 1,500 or fewer employees. 3. Description and Estimate of the which provides support for elementary According to Commission data, 1,337 Number of Small Entities to Which and secondary schools and libraries, an incumbent carriers reported that they Rules Will Apply elementary school is generally ‘‘a non- were engaged in the provision of local 49. The RFA directs agencies to profit institutional day or residential exchange services. Of these 1,337 provide a description of and, where school that provides elementary carriers, an estimated 1,032 have 1,500 feasible, an estimate of the number of education, as determined under state or fewer employees and 305 have more small entities that may be affected by law.’’ A secondary school is generally than 1,500 employees. Consequently, the proposed rules, if adopted. The RFA defined as ‘‘a non-profit institutional the Commission estimates that most generally defines the term ‘‘small day or residential school that provides providers of incumbent local exchange entity’’ as having the same meaning as secondary education, as determined service are small businesses that may be the terms ‘‘small business,’’ ‘‘small under state law,’’ and not offering affected by the rules and policies organization,’’ and ‘‘small governmental education beyond grade 12. For-profit adopted herein. jurisdiction.’’ In addition, the term schools and libraries, and schools and 54. Competitive Local Exchange ‘‘small business’’ has the same meaning libraries with endowments in excess of Carriers (CLECs), Competitive Access as the term ‘‘small business concern’’ $50,000,000, are not eligible to receive Providers (CAPs) and ‘‘Other Local under the Small Business Act. A small discounts under the program, nor are Exchange Carriers.’’ Neither the business concern is one which: (1) Is libraries whose budgets are not Commission nor the SBA has developed independently owned and operated; (2) completely separate from any schools. a size standard for small businesses is not dominant in its field of operation; Certain other statutory definitions apply specifically applicable to providers of and (3) satisfies any additional criteria as well. The SBA has defined for-profit, competitive exchange services or to established by the SBA. A small elementary and secondary schools and competitive access providers or to organization is generally ‘‘any not-for- libraries having $6 million or less in ‘‘Other Local Exchange Carriers.’’ The profit enterprise which is independently annual receipts as small entities. In closest applicable size standard under owned and operated and is not Funding Year 2 (July 1, 1999 to June 20, SBA rules is for Wired dominant in its field.’’ Nationwide, as of 2000) approximately 83,700 schools and Telecommunications Carriers. Under 1992, there were approximately 275,801 9,000 libraries received funding under that size standard, such a business is small organizations. The term ‘‘small the schools and libraries universal small if it has 1,500 or fewer employees. governmental jurisdiction’’ is defined as service mechanism. Although we are According to Commission data, 609 ‘‘governments of cities, towns, unable to estimate with precision the companies reported that they were townships, villages, school districts, or number of these entities that would engaged in the provision of either special districts, with a population of qualify as small entities under SBA’s competitive access provider services or less than fifty thousand.’’ As of 1997, size standard, we estimate that fewer competitive local exchange carrier there were about 87,453 governmental than 83,700 schools and 9,000 libraries services. Of these 609 companies, an jurisdictions in the United States. This might be affected annually by our estimated 458 have 1,500 or fewer number includes 39,044 county action, under current operation of the employees and 151 have more than governments, municipalities, and program. 1,500 employees. In addition, 35

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carriers reported that they were ‘‘Other business’’ is an entity that, together with recent available Census Bureau data Local Exchange Carriers.’’ Of the 35 its affiliates and controlling principals, indicates that there are 1,187 ‘‘Other Local Exchange Carriers,’’ an has average gross revenues that are not establishments with fewer than 1,000 estimated 34 have 1,500 or fewer more than $3 million for the preceding employees in the United States that employees and one has more than 1,500 three years. An auction of Metropolitan manufacture radio and television employees. Consequently, the Economic Area licenses commenced on broadcasting and communications Commission estimates that most February 24, 2000, and closed on March equipment, and 271 companies with providers of competitive local exchange 2, 2000. Of the 985 licenses auctioned, less than 1,000 employees that service, competitive access providers, 440 were sold. Fifty-seven companies manufacture other communications and ‘‘Other Local Exchange Carriers’’ claiming small business status won. At equipment. Some of these are small entities that may be affected present, there are approximately 24,000 manufacturers might not be by the rules and policies adopted Private-Paging site-specific licenses and independently owned and operated. herein. 74,000 Common Carrier Paging licenses. Consequently, we estimate that the 55. Interexchange Carriers (IXCs). According to Commission data, 474 majority of the 1,458 internal Neither the Commission nor the SBA carriers reported that they were engaged connections manufacturers are small. has developed a size standard for small in the provision of either paging and e. Miscellaneous Entities businesses specifically applicable to messaging services or other mobile interexchange services. The closest services. Of those, the Commission 60. Wireless Communications applicable size standard under SBA estimates that 457 are small, under the Equipment Manufacturers. The SBA has rules is for Wired Telecommunications SBA approved small business size established a small business size Carriers. Under that size standard, such standard. standard for radio and television a business is small if it has 1,500 or broadcasting and wireless fewer employees. According to the c. Internet Service Providers communications equipment Commission’s most recent data, 261 58. Internet Service Providers. The manufacturing. Under this standard, companies reported that their primary SBA has developed a small business firms are considered small if they have telecommunications service activity was size standard for ‘‘On-Line Information 750 or fewer employees. Census Bureau the provision of payphone services. Of Services,’’ North American Industry data for 1997 indicate that, for that year, these 261 companies, an estimated 223 Classification System (NAICS) code there were a total of 1,215 have 1,500 or fewer employees and 48 514191. This category comprises establishments in this category. Of have more than 1,500 employees. establishments ‘‘primarily engaged in those, there were 1,150 that had Consequently, the Commission providing direct access through employment under 500, and an estimates that the majority of payphone telecommunications networks to additional 37 that had employment of service providers are small entities that computer-held information compiled or 500 to 999. The percentage of wireless may be affected by the rules and published by others.’’ Under this small equipment manufacturers in this policies adopted herein. business size standard, a small business category is approximately 61.35%, so 56. Wireless Service Providers. The is one having annual receipts of $18 the Commission estimates that the SBA has developed a small business million or less. Based on firm size data number of wireless equipment size standard for wireless small provided by the Bureau of the Census, manufacturers with employment under businesses within the two separate 3,123 firms are small under SBA’s $18 500 was actually closer to 706, with an categories of Paging and Cellular and million size standard for this category additional 23 establishments having Other Wireless Telecommunications. code. Although some of these Internet employment of between 500 and 999. Under both SBA categories, a wireless Service Providers (ISPs) might not be The Commission estimates that the business is small if it has 1,500 or fewer independently owned and operated, we majority of wireless communications employees. According to the are unable at this time to estimate with equipment manufacturers are small Commission’s most recent data, 1,761 greater precision the number of ISPs businesses. companies reported that they were that would qualify as small business 4. Description of Projected Reporting, engaged in the provision of wireless concerns under SBA’s small business Recordkeeping, and Other Compliance service. Of these 1,761 companies, an size standard. Consequently, we Requirements for Small Entities estimated 1,175 have 1,500 or fewer estimate that there are 3,123 or fewer employees and 586 have more than small entity ISPs that may be affected by 61. In this Third Report and Order, we 1,500 employees. Consequently, the this analysis. adopt a rule that prohibits the transfer Commission estimates that most of equipment purchased with universal d. Vendors of Internal Connections wireless service providers are small service discount, except in limited entities that may be affected by the rules 59. The Commission has not circumstances. Further, we provide that and policies adopted herein. developed a small business size the excepted, limited circumstances 57. Private and Common Carrier standard specifically directed toward consist of a discount recipient Paging. In the Paging Third Report and manufacturers of internal network temporarily or permanently closing its Order, 62 FR 16004, April 3, 1997, we connections. The closest applicable operations where the original developed a small business size definitions of a small entity are the size equipment was installed. In that standard for ‘‘small businesses’’ and standards under the SBA rules instance, we require a recipient, who ‘‘very small businesses’’ for purposes of applicable to manufacturers of ‘‘Radio closes permanently or temporarily and determining their eligibility for special and Television Broadcasting and transfers equipment to another eligible provisions such as bidding credits and Communications Equipment’’ (RTB) and entity, to notify the Administrator of a installment payments. A ‘‘small ‘‘Other Communications Equipment.’’ transfer and require the transferring and business’’ is an entity that, together with According to the SBA’s regulations, receiving entities to maintain detailed its affiliates and controlling principals, manufacturers of RTB or other records of the transfer consistent with has average gross revenues not communications equipment must have the Commission’s recordkeeping exceeding $15 million for the preceding 750 or fewer employees in order to requirements for five years. We do not three years. Additionally, a ‘‘very small qualify as a small business. The most believe that these reporting and

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recordkeeping requirements will result maintain the records. However, we List of Subjects in 47 CFR Part 54 in a significant economic impact. conclude that requiring a filing with Reporting and recordkeeping 62. The rule adopted today, limiting USAC would be more burdensome for requirements, Telecommunications, the frequency of receiving discount rates the recipient than having the recipient Telephone. for internal connections, does not collect and maintain its equipment involve additional reporting, transfer records. Complying with the Federal Communications Commission. recordkeeping, or compliance processes promulgated by USAC would Marlene H. Dortch, requirements for small entities. be more burdensome than requiring Secretary. Similarly, the rule adopted in this Third each beneficiary to retain its own files Final Rules Report and Order, creating a more because the beneficiary would have to formal process for annually updating do more than send the documents to ■ For the reasons discussed in the the list of services eligible for support, USAC. The beneficiary would have to preamble, the Federal Communications does not involve additional reporting, comply with the procedural scheme Commission amends 47 CFR part 54 as recordkeeping, or compliance devised by USAC for compiling, and follows: requirements for small entities. The mailing or delivering the records, and rules adopted governing cost allocation quality control measures for assuring PART 54—UNIVERSAL SERVICE between eligible and ineligible services, that the records submitted were ■ 1. The authority citation continues to provision of free services, and service properly identified with the correct read as follows: substitution do not impose additional beneficiary. In the RFA, an exemption of reporting, recordkeeping, or compliance small entities from the recordkeeping Authority: 47 U.S.C. 1, 4(i), 201, 205, 214, and 254 unless otherwise noted. requirements for small entities. Finally, requirements is listed as a possible ■ the rules regarding carryover of unused alternative. In this instance, exemption 2. Amend § 54.504 by revising funds do not require additional from the recordkeeping requirement paragraph (b)(2)(iii) and by adding reporting or recordkeeping for small would impede the Commission’s ability paragraphs (f) and (g) to read as follows: entities participating in the schools and to account for funds distributed through § 54.504 Requests for services. libraries universal support mechanism. the schools and libraries program and * * * * * 5. Steps Taken To Minimize the would undermine the Commission’s (b) * * * Significant Economic Impact on Small efforts to prevent waste, fraud, and (2) * * * Entities, and Significant Alternatives abuse. (iii) The services will not be sold, Considered 65. Report to Congress: The resold, or transferred in consideration 63. The RFA requires an agency to Commission will send a copy of the for money or any other thing of value, describe any significant alternatives that Order, including this FRFA, in a report and will not be transferred, with or it has considered in developing its to be sent to Congress pursuant to the without consideration for money or any approach, which may include the Congressional Review Act, see 5 U.S.C. other thing of value, except as permitted following four alternatives (among 801(a)(1)(A). In addition, the by the Commission’s rules; others): ‘‘(1) establishment of differing Commission will send a copy of the * * * * * compliance or reporting requirements or Order, including the FRFA, to the Chief (f) Service substitution. (1) The timetables that take into account the Counsel for Advocacy of the Small Administrator shall grant a request by resources available to small entities; (2) Business Administration. A copy of the an applicant to substitute a service or the clarification, consolidation, or Order and FRFA (or summaries thereof) product for one identified on its FCC simplification of compliance and will also be published in the Federal Form 471 where: reporting requirements under the rule Register. (i) The service or product has the for such small entities; (3) the use of IV. Ordering Clauses same functionality; performance rather than design (ii) The substitution does not violate standards; and (4) an exemption from 66. Pursuant to the authority any contract provisions or state or local coverage of the rule, or any part thereof, contained in sections 1, 4(i), 4(j), 201– procurement laws; for such small entities.’’ 205, 214, 254, and 403 of the (iii) The substitution does not result 64. Although we received no IRFA Communications Act of 1934, as in an increase in the percentage of comments, we considered alternatives amended, this Third Report and Order ineligible services or functions; and to the proposed recordkeeping is adopted. (iv) The applicant certifies that the requirements for small entities. In 67. Part 54 of the Commission’s rules, requested change is within the scope of creating the narrow exception to the is amended as set forth, effective March the controlling FCC Form 470, including equipment transfer policy adopted in 11, 2004 except for § 54.513(c) which any associated Requests for Proposal, for this Third Report and Order, we contains information collection the original services. recognize the Commission’s need to requirements that have not been (2) In the event that a service protect the integrity of the schools and approved by the Office of Management substitution results in a change in the libraries support mechanism by curbing Budget (OMB). The Commission will pre-discount price for the supported waste, fraud, and abuse while publish a document in the Federal service, support shall be based on the acknowledging circumstances that Register announcing the effective date lower of either the pre-discount price of justify permitting the transfer of of that section. the service for which support was discounted equipment received by a 68. The Commission’s Consumer and originally requested or the pre-discount program beneficiary, small or large. We Governmental Affairs Bureau, Reference price of the new, substituted service. recognize that we must require certain Information Center, shall send a copy of (3) For purposes of this rule, the broad recordkeeping to verify the appropriate this Third Report and Order, including categories of eligible services use of universal service funds. the Final Regulatory Flexibility (telecommunications service, Internet Consideration was afforded to having Analysis, to the Chief Counsel for access, and internal connections) are not the recipient file equipment transfer Advocacy of the Small Business deemed to have the same functionality records with USAC and having USAC Administration. with one another.

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(g) Mixed eligibility services. A constitute an internal connection if it (b) Reduction in percentage discounts. request for discounts for a product or crosses a public right-of-way. At all times other than within a filing service that includes both eligible and (b) Basic maintenance services. Basic period described in § 54.507(c), if the ineligible components must allocate the maintenance services shall be eligible as estimates schools and libraries make of cost of the contract to eligible and an internal connections service if, but their future funding needs lead the ineligible components. for the maintenance at issue, the Administrator to predict that total (1) Ineligible components. If a product internal connection would not function funding request for a funding year will or service contains ineligible and serve its intended purpose with the exceed the available funding, the components, costs must be allocated to degree of reliability ordinarily provided Administrator shall calculate the the extent that a clear delineation can be in the marketplace to entities receiving percentage reduction to all schools and made between the eligible and ineligible such services. Basic maintenance libraries, except those in the two most components. The delineation must have services do not include services that disadvantaged categories, necessary to a tangible basis, and the price for the maintain equipment that is not permit all requests in the next funding eligible portion must be the most cost- supported or that enhance the utility of year to be fully funded. effective means of receiving the eligible equipment beyond the transport of * * * * * service. information, or diagnostic services in ■ (2) Ancillary ineligible components. If excess of those necessary to maintain 6. In § 54.513, revise the section a product or service contains ineligible the equipment’s ability to transport heading and add paragraph (c) to read as components that are ancillary to the information. follows: eligible components, and the product or (c) Frequency of discounts for internal § 54.513 Resale and transfer of services. service is the most cost-effective means connections services. Each eligible * * * * * of receiving the eligible component school or library shall be eligible for (c) Eligible services and equipment functionality, without regard to the support for internal connections components of eligible services value of the ineligible component, costs services, except basic maintenance purchased at a discount under this need not be allocated between the services, no more than twice every five subpart shall not be transferred, with or eligible and ineligible components. funding years. For the purpose of without consideration of money or any Discounts shall be provided on the full determining eligibility, the five-year other thing of value, for a period of three cost of the product or service. An period begins in any funding year, years after purchase, except that eligible ineligible component is ‘‘ancillary’’ if a starting with Funding Year 2005, in services and equipment components of price for the ineligible component which the school or library receives eligible services may be transferred to cannot be determined separately and discounted internal connections another eligible school or library in the independently from the price of the services other than basic maintenance event that the particular location where eligible components, and the specific services. If a school or library receives the service originally was received is package remains the most cost-effective internal connections services other than permanently or temporarily closed. If an means of receiving the eligible services, basic maintenance services that are eligible service or equipment without regard to the value of the shared with other schools or libraries component of a service is transferred ineligible functionality. (for example, as part of a consortium), due to the permanent or temporary (3) The Administrator shall utilize the the shared services will be attributed the closure of a school or library, the cost allocation requirements of this school or library in determining transferor must notify the Administrator subparagraph in evaluating mixed whether it is eligible for support. of the transfer, and both the transferor eligibility requests under § 54.504(d)(1). ■ 4. Amend § 54.507 by adding and recipient must maintain detailed ■ 3. Section § 54.506 is revised to read as paragraphs (a)(1) and (a)(2) to read as follows: records documenting the transfer and follows: the reason for the transfer for a period § 54.506 Internal connections. § 54.507 Cap. of five years. (a) A service is eligible for support as (a) * * * ■ 7. Amend § 54.516 by adding a second a component of an institution’s internal (1) Amount of unused funds. The sentence to paragraph (a) to read as connections if such service is necessary Administrator shall report to the follows: to transport information within one or Commission, on a quarterly basis, more instructional buildings of a single funding that is unused from prior years § 54.516 Auditing. school campus or within one or more of the schools and libraries support (a) * * * Schools and libraries shall be non-administrative buildings that mechanism. required to maintain asset and inventory comprise a single library branch. (2) Application of unused funds. On records of equipment purchased as Discounts are not available for internal an annual basis, in the second quarter components of supported internal connections in non-instructional of each calendar year, all funds that are connections services sufficient to verify buildings of a school or school district, collected and that are unused from prior the actual location of such equipment or in administrative buildings of a years shall be available for use in the for a period of five years after purchase. library, to the extent that a library next full funding year of the schools and * * * * * system has separate administrative libraries mechanism in accordance with ■ 8. Add § 54.522 to subpart F to read as buildings, unless those internal the public interest and notwithstanding follows: connections are essential for the the annual cap, as described in effective transport of information to an paragraph (a) of this section. § 54.522 Eligible services list. instructional building of a school or to * * * * * The Administrator shall submit by a non-administrative building of a ■ 5. Amend § 54.509 by revising June 30 of each year a draft list of library. Internal connections do not paragraph (b) to read as follows: services eligible for support, based on include connections that extend beyond the Commission’s rules, in the following a single school campus or single library § 54.509 Adjustments to the discount funding year. The Commission will branch. There is a rebuttable matrix. issue a Public Notice seeking comment presumption that a connection does not * * * * * on the Administrator’s proposed eligible

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services list. At least 60 days prior to the 67 FR 5961, February 8, 2002. The Naples, Channel 223C2, by removing opening of the window for the following reference coordinates for the Channel Channel 222A and adding Channel 221A funding year, the Commission shall 223C2 allotment at South Jordan, Utah, at Payson, by adding South Jordan, release a Public Notice attaching the are 40–39–35 and 112–12–05.The Channel 223C2, by removing Tooele, final eligible services list for the reference coordinates for the Channel Channel 221C3, by removing Channel upcoming funding year. 223C allotment at Naples, Utah, are 40– 221C3 and adding Channel 237C3 at ■ 9. Add § 54.523 to subpart F to read as 35–08 and 109–42–08. The reference Wellington. follows: coordinates for the Channel 276C Federal Communications Commission. allotment at Coalville, Utah, are 40–55– John A. Karousos, § 54.523 Payment for the non-discount 46 and 111–00–26. The reference portion of supported services. Assistant Chief, Audio Division, Media coordinates for the Channel 291C0 Bureau. An eligible school, library, or allotment at Rupert, Idaho, are 42–23– [FR Doc. 04–2841 Filed 2–9–04; 8:45 am] consortium must pay the non-discount 40 and 113–42–05. The reference portion of services or products coordinates for the Channel 221A BILLING CODE 6712–01–P purchased with universal service allotment at Payson, Utah, are 40–03–20 discounts. An eligible school, library, or and 111–49–43. The reference consortium may not receive rebates for FEDERAL COMMUNICATIONS coordinates for the Channel 237C3 COMMISSION services or products purchased with allotment at Wellington, Utah, are 39– universal service discounts. For the 32–33 and 110–44–05. The reference 47 CFR Part 73 purpose of this rule, the provision, by coordinates for the Channel 271C3 the provider of a supported service, of allotment at Castle Dale, Utah, are 39– [DA 04–30; MB Docket No. 03–164; RM– free services or products unrelated to 12–48 and 111–01–18. 10737] the supported service or product DATES: Effective March 1, 2004. constitutes a rebate of the non-discount Radio Broadcasting Services; Marmet FOR FURTHER INFORMATION CONTACT: portion of the supported services. and Montgomery, WV Robert Hayne, Media Bureau, (202) 418– [FR Doc. 04–2732 Filed 2–9–04; 8:45 am] 2177. AGENCY: Federal Communications Commission. BILLING CODE 6712–01–P SUPPLEMENTARY INFORMATION: This is a synopsis of the Report and Order in MB ACTION: Final rule. Docket No.02–14 adopted January 14, SUMMARY: In response to a Notice of FEDERAL COMMUNICATIONS 2004, and Released January 16, 2004. COMMISSION Proposed Rule Making, 68 FR 43704 The full text of this decision is available (July 24, 2003), this document reallots 47 CFR Part 73 for inspection and copying during Channel 227A from Montgomery, West normal business hours in the FCC Virginia, to Marmet, West Virginia, and [DA 04–29; MM Docket No. 02–14; RM– Reference Information Center at Portals 10358; RM–10764] provides Marmet with its first local ll, CY–A257, 445 12th Street, SW., aural transmission service. The Washington, DC. The complete text of Radio Broadcasting Services; Castle coordinates for Channel 227A at Marmet this decision may also be purchased Dale, UT, Coalville, UT; Huntsville, UT, are 38°13′09″ North Latitude and from the Commission’s copy contractor, Jerome, ID, Ketchum, ID, Naples, UT, 81°25′05″ West Longitude, with a site Qualex International, Portals II, 445 Parowan, UT, Payson, UT, Rupert, ID, restriction of 13.4 kilometers (8.3 miles) 12th Street, SW., Room CY–B402, and South Jordan, Salina, Tooele, east of Marmet, West Virginia. Washington, DC 20554, telephone (202) Wellington, UT DATES: Effective March 1, 2004. 863–2893, facsimile (202) 863–2898, or FOR FURTHER INFORMATION CONTACT: AGENCY: Federal Communications via e-mail [email protected]. R. Commission. Barthen Gorman, Media Bureau, (202) List of Subjects in 47 CFR Part 73 418–2180. ACTION: Final rule. Radio, Radio broadcasting. SUPPLEMENTARY INFORMATION: This is a SUMMARY: In response to a ■ Part 73 of the Code of Federal synopsis of the Commission’s Report counterproposal in this proceeding filed Regulations is amended as follows: and Order, MB Docket No. 03–164, jointly by Millcreek Broadcasting, adopted January 14, 2004, and released L.L.C., Community Wireless of Park PART 73—RADIO BROADCAST January 16, 2004. The full text of this City, Inc., and George S. Flinn, Jr., this SERVICES Commission decision is available for document modifies the respective inspection and copying during normal ■ authorizations of Station KUUU to 1. The authority citation for part 73 business hours in the FCC’s Reference specify operation on Channel 223C2 at continues to read as follows: Information Center at Portals II, CY– South Jordan, Utah, Station KCUA to Authority: 47 U.S.C. 154, 303, 334 and 336. A257, 445 12th Street, SW., specify operation on Channel 223C at Washington, DC. This document may § 73.202 [Amended] Naples, Utah, and Station KPED to also be purchased from the specify operation on Channel 276C at ■ 2. Section 73.202(b), the Table of FM Commission’s duplicating contractors, Coalville, Utah. To accommodate these Allotments under Idaho, is amended by Qualex International, Portals II, 445 modifications, this document modifies removing Channel 223C and adding 12th Street, SW., Room CY–B402, the licenses of Station KKMV, Rupert, Channel 291C0 at Rupert. Washington, DC, 20554, telephone 202– Idaho, to specify operation on Channel ■ 3. Section 73.202(b), the Table of FM 863–2893, facsimile 202–863–2898, or 291C0 and Station KTCE, Payson, Utah, Allotments under Utah, is amended by via e-mail [email protected]. to specify operation on Channel 221A. removing Channel 237C3 and adding List of Subjects in 47 CFR Part 73 To accommodate Channel 221A at Channel 271C3 at Castle Dale, by Payson, this document substitutes removing Channel 223C3 and by adding Radio, Radio broadcasting. Channel 237C3 at Wellington, Utah, and Channel 276C at Coalville, by removing ■ Part 73 of title 47 of the Code of Federal Channel 271C3 at Castle Dale, Utah. See Huntsville, Channel 276C3, by adding Regulations is amended as follows:

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PART 73—RADIO BROADCAST The complete text of this decision may allotment site for Channel 258A at SERVICES also be purchased from the Frederiksted, Virgin Islands. The Commission’s duplicating contractor, coordinates for Channel 257A at ■ 1. The authority citation for Part 73 Qualex International, Portals II, 445 Charlotte Amalie are 18–21–25 North reads as follows: 12th Street, SW., Room CY–B402, Latitude and 64–58–00 West Longitude. Authority: 47 U.S.C. 154, 303, 334 and 336. Washington, DC 20554, (202) 863–2893, See SUPPLEMENTARY INFORMATION, infra. facsimile (202) 863–2898, or via e-mail DATES: Effective March 1, 2004. A filing § 73.202 [Amended] [email protected]. window for Channel 257A at Charlotte ■ 2. Section 73.202(b), the Table of FM List of Subjects in 47 CFR Part 73 Amalie, Virgin Islands, and Channel Allotments under West Virginia, is 258A at Frederiksted, Virgin Islands, amended by adding Marmet, Channel Radio, Radio broadcasting. will not be opened at this time. Instead, 227A, and removing Montgomery, ■ Part 73 of title 47 of the Code of Federal the issue of opening these allotments for Channel 227A. Regulations is amended as follows: auction will be addressed by the Federal Communications Commission. Commission in a subsequent Order. PART 73—RADIO BROADCAST Since these allotments require the John A. Karousos, SERVICES substitution of Channel 293B for Assistant Chief, Audio Division, Media ■ Channel 258B at Christiansted, Virgin Bureau. 1. The authority citation for part 73 continues to read as follows: Islands, any requisite conditions for the [FR Doc. 04–2840 Filed 2–9–04; 8:45 am] channel change will be stipulated in Authority: 47 U.S.C. 154, 303, 334 and 336. BILLING CODE 6712–01–P said Order. § 73.202 [Amended] FOR FURTHER INFORMATION CONTACT: FEDERAL COMMUNICATIONS ■ 2. Section 73.202(b), the Table of FM Sharon P. McDonald, Media Bureau, COMMISSION Allotments under Kansas, is amended by (202) 418–2180. adding Shawnee, Channel 299C1 and by SUPPLEMENTARY INFORMATION: This is a 47 CFR Part 73 removing Channel 299C at Topeka. synopsis of the Commission’s Report [DA 04–87; MB Docket No. 03–26; RM– Federal Communications Commission and Order, MM Docket No. 00–102, adopted December 31, 2003, and 10638] John A. Karousos, released January 16, 2004. The full text Assistant Chief, Audio Division, Media of this Commission decision is available Radio Broadcasting Services; Bureau. Shawnee and Topeka, KS for inspection and copying during [FR Doc. 04–2839 Filed 2–9–04; 8:45 am] normal business hours in the FCC AGENCY: Federal Communications BILLING CODE 6712–01–P Reference Information Center (Room Commission. CY–A257), 445 12th Street, SW., ACTION: Final rule. Washington, DC. The complete text of FEDERAL COMMUNICATIONS this decision may also be purchased SUMMARY: The Audio Division, at the COMMISSION request of Cumulus Licensing Corp., from the Commission’s copy contractor, licensee of FM Station KMAJ, Channel 47 CFR Part 73 Qualex International, Portals II, 445 12th Street, SW., Room CY–B402, 299C, Topeka, Kansas, removes Channel [DA 03–4120; MM Docket No. 00–102, RM– 299C at Topeka, Kansas, from the FM Washington, DC 20054. 9888] Additionally, Channel 258A can be Table of Allotments, allots Channel allotted to Frederiksted in compliance 299C1 at Shawnee, Kansas, as the Radio Broadcasting Services; with the Commission’s minimum community’s first local FM service, and Charlotte Amalie, Christiansted, and distance separation requirements at city modifies the license of FM Station Frederiksted, VI reference coordinates. The coordinates KMAJ to specify operation on Channel AGENCY: for Channel 258A at Frederiksted are 299C1 at Shawnee. Channel 299C1 can Federal Communications 17–42–48 North Latitude and 64–53–00 be allotted to Shawnee, Kansas, in Commission. West Longitude. To accommodate the compliance with the Commission’s ACTION: Final rule. allotments, Channel 293B can be minimum distance separation SUMMARY: The Audio Division, at the substituted at Christiansted in requirements with a site restriction of joint request of Ocean FM Media and compliance with the Commission’s 41.3 km (25.6 miles) west of Shawnee. Island Prime Media, allots Channel minimum distance separation The coordinates for Channel 299C1 at 257A at Charlotte Amalie, Virgin requirements at Station WVIQ–FM’s Shawnee, Kansas, are 39°09′06″ North Islands, as the community’s ninth local presently licensed site. The coordinates Latitude and 95°09′28″ West Longitude. FM transmission service. Additionally, for Channel 293B at Christiansted are DATES: Effective March 8, 2004. we allot Channel 258A at Frederiksted, 17–44–07 North Latitude and 64–40–46 FOR FURTHER INFORMATION CONTACT: Virgin Islands, as the community’s West Longitude. Deborah Dupont, Media Bureau, (202) fourth local FM transmission service. To 418–2180. accommodate the allotments, we also List of Subjects in 47 CFR Part 73 SUPPLEMENTARY INFORMATION: This is a substitute Channel 293B for Channel Radio, Radio broadcasting. synopsis of the Commission’s Report 258B at Christiansted, Virgin Islands, ■ Part 73 of title 47 of the Code of Federal and Order, MB Docket No. 03–26, and modify Station WVIQ–FM’s license Regulations is amended as follows: adopted January 20, 2004, and released accordingly. See 65 FR 37754, June 16, January 23, 2004. The full text of this 2000. Channel 257A can be allotted to PART 73—RADIO BROADCAST Commission decision is available for Charlotte Amalie in compliance with SERVICES inspection and copying during normal the Commission’s minimum distance business hours in the FCC Information separation requirements with a site ■ 1. The authority citation for part 73 Center, Portals II, 445 12th Street, SW., restriction of 4.2 kilometers (2.6 miles) continues to read as follows: Room CY–A257, Washington, DC 20554. west to avoid a short-spacing to the Authority: 47 U.S.C. 54, 303, 334, 336.

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§ 73.202 [Amended] Washington, DC 20554. The complete Federal Communications Commission. ■ 2. Section 73.202(b), the Table of FM text of this decision may also be John A. Karousos, Allotments under Virgin Islands, is purchased from the Commission’s Assistant Chief, Audio Division, Media amended by adding Channel 257A at duplicating contractor, Qualex Bureau. Charlotte Amalie; by adding Channel International, Portals II, 445 12th Street, [FR Doc. 04–2837 Filed 2–9–04; 8:45 am] 258A at Frederiksted; and by removing SW., Room CY–B402, Washington, DC BILLING CODE 6712–01–P Channel 258B and adding Channel 293B 20554, (202) 863–2893, facsimile (202) at Christiansted. 863–2898, or via e-mail [email protected]. FEDERAL COMMUNICATIONS Federal Communications Commission. COMMISSION John A. Karousos, The Audio Division further allots, at the request of Linda Crawford, Channel Assistant Chief, Audio Division, Media 47 CFR Part 73 Bureau. 296C2 at Big Lake, Texas, as the [FR Doc. 04–2838 Filed 2–9–04; 8:45 am] community’s fourth local FM service. See 67 FR 57203, September 9, 2002. [DA 03–4121, MM Docket No. 96–100; RM– BILLING CODE 6712–01–P Channel 296C2 can be allotted to Big 9963] Lake, Texas, in compliance with the Radio Broadcasting Services; Amherst FEDERAL COMMUNICATIONS Commission’s minimum distance and Lynchburg, VA COMMISSION separation requirements with a site restriction of 26.9 km (16.7 miles) south AGENCY: Federal Communications 47 CFR Part 73 of Big Lake. The coordinates for Commission. Channel 296C2 at Big Lake, Texas, are [DA 03–4122; MB Docket No. 02–251,RM– ACTION: 30–57–18 North Latitude and 101–23– Final rule. 10315; MB Docket No. 02–254, RM–10550; 48 West Longitude. A filing window for MB Docket No. 02–370, RM–10612] SUMMARY: At the request of Greater Channel 296C2 at Big Lake, Texas, will Lynchburg Stereo Broadcasters, this Radio Broadcasting Services; Big not be opened at this time. Instead, the document allots Channel 229A to Lake, Muleshoe and Turkey, TX issue of opening this allotment for Lynchburg, Virginia, and denies a auction will be addressed by the proposal to allot Channel 294A to AGENCY: Federal Communications Commission in a subsequent Order. Commission. Amherst, Virginia. See 65 FR 59164, The Audio Division further allots, at ACTION: Final rule. published October 4, 2000. The the request of Linda Crawford, Channel reference coordinates for the Channel SUMMARY: This document grants three 269A at Turkey, Texas, as the 229A allotment at Lynchburg, Virginia, proposals that allot new FM channels to community’s second local FM service. are 37–21–33 and 79–09–37. See 67 FR 78402, December 24, 2002. Muleshoe, Texas; Big Lake, Texas; and DATES: Effective March 1, 2004. Turkey, Texas. The Audio Division Channel 269A can be allotted to Turkey, allots, at the request of Linda Crawford, Texas, in compliance with the FOR FURTHER INFORMATION CONTACT: Channel 227C1 at Muleshoe, Texas, as Commission’s minimum distance Robert Hayne, Media Bureau (202) 418– the community’s second local FM separation requirements with a site 2177. service. See 67 FR 57203, September 9, restriction of 14.5 km (9.0 miles) SUPPLEMENTARY INFORMATION: This is a 2002. Channel 227C1 can be allotted to southwest of Turkey. The coordinates synopsis of the Commission’s Report Muleshoe, Texas, in compliance with for Channel 269A at Turkey, Texas, are and Order in MM Docket No. 96–100, the Commission’s minimum distance 34–17–32 North Latitude and 100–59– adopted December 31, 2003, and separation requirements with a site 52 West Longitude. A filing window for released January 16, 2004. The full text restriction of 35.8 km (22.3 miles) Channel 269A at Turkey, Texas, will not of this decision is available for southwest of Muleshoe. The coordinates be opened at this time. Instead, the issue inspection and copying during normal for Channel 227C1 at Muleshoe, Texas, of opening this allotment for auction business hours in the FCC’s Reference are 34–02–03 North Latitude and 103– will be addressed by the Commission in Information Center at Portals II, CY– 02–08 West Longitude. A filing window a subsequent Order. A257, 445 12th Street SW., Washington, for Channel 227C1 at Muleshoe, Texas, List of Subjects in 47 CFR Part 73 DC. The complete text of this decision will not be opened at this time. Instead, may also be purchased from the the issue of opening this allotment for Radio, Radio broadcasting. Commission’s copy contractor, Qualex auction will be addressed by the International, Portals ll, 445 12th Street Commission in a subsequent Order. See ■ Part 73 of title 47 of the Code of Federal SW., Room CY–B402, Washington, DC SUPPLEMENTARY INFORMATION infra. Regulations is amended as follows: 20554, telephone (202) 863–2893, DATES: Effective March 1, 2004. facsimile (202) 863–2898, or via e-mail PART 73—RADIO BROADCAST [email protected]. FOR FURTHER INFORMATION CONTACT: SERVICES Deborah Dupont, Media Bureau, (202) List of Subjects in 47 CFR Part 73 418–2180. ■ 1. The authority citation for Part 73 Radio, Radio broadcasting. SUPPLEMENTARY INFORMATION: This is a continues to read as follows: synopsis of the Commission’s Report ■ Part 73 of title 47 of the Code of Federal Authority: 47 U.S.C. 154, 303, 334 and 336. and Order, MB Docket Nos. 02–251, 02– Regulations is amended as follows: 254, and 02–370, adopted December 31, § 73.202 [Amended] 2003, and released January 16, 2004. PART 73—RADIO BROADCAST The full text of this Commission ■ 2. Section 73.202(b), the Table of FM SERVICES decision is available for inspection and Allotments under Texas, is amended by copying during normal business hours adding Channel 227C1 at Muleshoe, ■ 1. The authority citation for part 73 in the FCC Information Center, Portals Channel 296C2 at Big Lake, and Channel continues to read as follows: II, 445 12th Street SW., Room CY–A257, 269A at Turkey. Authority: 47 U.S.C. 154, 303, 334 and 336.

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§ 73.202 [Amended] by Providing Appropriate Tools explosives in commerce continue in ■ 2. Section 73.202(b), the Table of FM Required to Intercept and Obstruct effect. Terrorism Act (USA PATRIOT Act; Pub. Allotments under Virginia, is amended A. Comments Beyond the Scope of the L. 107–56, October 25, 2001, 115 Stat. by adding Channel 229A at Lynchburg. HM–232C Rulemaking 272) and regulations adopted by the Federal Communications Commission. Transportation Security Administration The May 5, 2003 IFR amended Part John A. Karousos, (TSA) and the Federal Motor Carrier 177 of the HMR to require motor carriers Assistant Chief, Audio Division, Media Safety Administration (FMCSA) to who transport hazardous materials in Bureau. implement the background check commerce to comply with Part 383 of [FR Doc. 04–2836 Filed 2–9–04; 8:45 am] provisions of the Act. Further, the IFR the Federal Motor Carrier Safety BILLING CODE 6712–01–P described actions taken by the Federal Regulations (FMCSRs). Part 383 Aviation Administration (FAA), TSA, establishes commercial driver license and the U.S. Coast Guard to address requirements. On May 5, 2003, TSA DEPARTMENT OF TRANSPORTATION security issues associated with the published regulations to establish transportation of hazardous materials by procedures for making determinations Research and Special Programs air and vessel. The IFR also as to whether an individual poses a Administration incorporated into the Hazardous security threat warranting denial of a Materials Regulations (HMR; 49 CFR hazardous materials endorsement for a 49 CFR Parts 107, 171, 176, and 177 parts 171–180) a requirement that commercial driver’s license (interim final rule; 68 FR 23851). Also on May [Docket No. RSPA–03–14982 (HM–232C)] shippers and transporters of hazardous materials comply with applicable 5, 2003, FMCSA amended Part 383 to RIN 2137–AD79 Federal security regulations and revised prohibit states from issuing a commercial driver’s license with a Hazardous Materials: Enhancing the procedures for applying for an exemption from the HMR to require hazardous materials endorsement unless Hazardous Materials Transportation the Attorney General has conducted a Security applicants to certify compliance with applicable Federal transportation background records check of the AGENCY: Research and Special Programs security laws and regulations. Finally, applicant and TSA has determined that Administration (RSPA), DOT. DOT, in consultation with TSA, the applicant does not pose a security threat warranting denial of the ACTION: Final rule. determined that these regulations hazardous materials endorsement adequately address the security risks SUMMARY: This final rule revises the (interim final rule; 68 FR 23843). posed by persons engaged in the Wisconsin-Minnesota Cooperatives, procedures for applying for an transportation of explosives in exemption from the Hazardous Texas, and TTD express concern about commerce, and, accordingly, the various aspects of the background check Materials Regulations, adopted in an provisions of 18 U.S.C. 842(i), which interim final rule published May 5, requirements in the TSA and FMCSA address categories of persons who are regulations. These comments are 2003, to require certain applicants to prohibited from possessing explosives, certify compliance with provisions of beyond the scope of this rulemaking. do not apply to persons while they are We have placed the comments in the the Safe Explosives Act. In addition, engaged in the transportation of this final rule adopts without change appropriate TSA and FMCSA dockets to explosives in commerce by motor be addressed as those agencies finalize provisions in the interim final rule that carrier, aircraft, or vessel. require motor carriers and vessel the interim final rules they adopted on operators to comply with applicable II. Response to Comments Received on May 5, 2003. The FMCSA IFR amended Part 383 of licensing requirements for drivers and IFR the FMCSRs to require commercial crewmen, respectively. We received six comments on the drivers of motor vehicles used to EFFECTIVE DATE: This final rule is IFR—from the Institute of Makers of transport select agents regulated by the effective March 11, 2004. Explosives (IME), the Dangerous Goods Centers for Disease Control and FOR FURTHER INFORMATION CONTACT: Advisory Council (DGAC), the Prevention under 42 CFR part 73 to Susan Gorsky, (202) 366–8553, Office of Pennsylvania Department of obtain a commercial driver’s license Hazardous Materials Standards, Transportation (Pennsylvania DOT), the with a hazardous materials Research and Special Programs Texas Department of Public Safety endorsement. Pennsylvania DOT Administration. (Texas), Transportation Trades suggests that motor vehicles used to SUPPLEMENTARY INFORMATION: Department (TTD), and a joint comment transport select agents should be from the Wisconsin Federation of placarded. Again, this comment is I. Background Cooperatives and the Minnesota beyond the scope of this rulemaking. On May 5, 2003, the Research and Association of Cooperatives (Wisconsin- We considered whether placarding for Special Programs Administration Minnesota Cooperatives). These certain infectious substances should be (RSPA, we) published an interim final comments are summarized below. required under Docket HM–226 rule (IFR) to enhance hazardous In response to the comments (ANPRM published September 2, 1998, materials transportation security (68 FR submitted, we are revising the 63 FR 46843; NPRM published January 23832). The IFR described the current procedures adopted in the IFR for 22, 2001, 66 FR 6941; final rule system of regulations applicable to the persons applying for an exemption to published August 14, 2002, 67 FR transportation of hazardous materials in transport certain explosives in 53118). For the reasons outlined in the commerce, and reviewed Department of commerce by aircraft. The revisions are HM–226 NPRM (66 FR 6946), we Transportation (DOT) activities to minor and do not affect the security determined that current hazard enhance the security of hazardous risks posed by such transportation. communication requirements for materials shipments. In addition, the Therefore, the determinations made in infectious substances shipments are rule summarized the requirements of the IFR concerning the applicability of sufficient to enable transportation the Uniting and Strengthening America 18 U.S.C. 842(i) to the transportation of workers and emergency response

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personnel to identity and address any apply to the transport of placarded and (with the limited exception of employee potential hazards and, thus, decided non-placarded amounts of explosives by drivers). against a placarding requirement. common, contract, or private motor D. Procedures for Applying for an IME offers a number of comments carriers within the meaning of 18 U.S.C. Exemption concerning the application of 845(a)(1), and the provisions of 18 regulations promulgated by the Bureau U.S.C. 842(i), accordingly, do not apply The May 5, 2003 IFR adopted two of Alcohol, Tobacco, Firearms, and to persons engaged in such new requirements for applicants seeking Explosives (ATF) to the transportation transportation in commerce. an exemption from the HMR. First, the of explosives. These comments are IME also requests that we clarify the IFR requires an applicant for an beyond the scope of this rulemaking and effect of the transportation exception in exemption to certify compliance with are appropriately addressed by ATF. 18 U.S.C. 842(i) on non-driver/crew transportation security laws and employees of companies that offer for B. Procedures for Adopting IFRs regulations. Second, the IFR requires an transportation or transport explosives in applicant for an exemption to transport DGAC suggests that RSPA has no commerce. As explained in the otherwise prohibited explosives on procedures for adopting interim final preamble to the May 5, 2003 IFR, DOT passenger or cargo-only aircraft to rules and asks if the requirements has determined that non-placarded certify that no person within the adopted in the IFR are intended to be shipments of explosives do not present prohibited persons categories listed in temporary. DGAC is not correct that a sufficient security risk to justify 18 U.S.C. 842(i) will participate in the there are no procedures for adopting detailed background check or other transportation of the material. IFRs. Section 553(b) of the security requirements at this time; in In their comments, DGAC and IME Administrative Procedure Act (5 U.S.C. light of this determination, the express concern about the first 500 et seq.) permits an agency to issue provisions of 18 U.S.C. 842(i) do not a rule without prior notice and requirement. DGAC notes that the text apply to persons engaged in such in § 107.105(c)(10) is inconsistent with comment when the agency for good transportation in commerce. For cause finds that notice and comment are the summary and preamble of the IFR in placarded shipments of explosives, the that it does not limit the certification impracticable, unnecessary, or contrary determinations explained in the to the public interest. Section 106.35 of requirement to Federal transportation preamble to the May 5, 2003 IFR with security laws and regulations. Both 49 CFR part 106 sets forth the regard to the transportation by common/ procedures for issuing an interim final DGAC and IME note that the contract motor carriers, vessel, and air requirement is quite broad and could be rule that were adopted by RSPA in a and the determinations concerning rail read to include state or local final rule published July 25, 2002 (67 FR transportation of explosives explained transportation security laws and 42947). Section 106.35 explains that, in a notice published jointly by FRA, regulations; DGAC makes the additional consistent with section 553(b) of the RSPA, and TSA on June 9, 2003 (68 FR point that the IFR could be interpreted Administrative Procedure Act, RSPA 34470) apply to drivers employed by to apply to packaging manufacturers in may issue an IFR without first motor carriers and crews employed by addition to persons who offer or publishing a notice of proposed vessel, air, and rail carriers. rulemaking and accepting public Non-driver employees of motor transport hazardous materials for comments if the agency finds for good carriers were not specifically addressed transportation. cause that notice and public comment in the May 5, 2003 IFR. DOT and TSA Our intention in adopting the general are impracticable, unnecessary, or have assessed the security risks posed certification requirement for exemption contrary to the public interest. After by these individuals and have applicants was to assure that they were considering comments received on an determined that no further regulation is aware of and in compliance with IFR, § 106.35 provides that the agency needed at this time. Accordingly, the applicable Federal security may revise the interim final rule and provisions of 18 U.S.C. 842(i) do not requirements, including security issue a final rule. In this rulemaking, we apply to non-driver employees of motor requirements promulgated by agencies are doing precisely that. carriers when they are performing outside DOT. We agree with transportation functions regulated under commenters that the requirement in the C. Determinations Made in the IFR the HMR. As defined in a final rule IFR is not clear as to its applicability. IME is the only commenter that published October 30, 2003 (68 FR Upon further consideration, moreover, addressed the determinations made in 61906)), transportation functions are we have determined that the the preamble to the May 5 IFR and is functions performed as part of the actual requirement is not necessary to assure generally supportive of those movement of a hazardous material in that exemption holders comply with determinations. The IFR provides an commerce and include certain loading, applicable security regulations. Instead exception, pursuant to 18 U.S.C. unloading, and storage operations. (See of requiring applicants to certify 845(a)(1), to the prohibited persons the October 30, 2003 final rule for a compliance with applicable Federal provisions in 18 U.S.C. 842(i) for ‘‘any complete discussion of the applicability security laws and regulations, we will aspect of the transportation of explosive of the HMR to specific transportation include in the actual exemption materials via railroad, water, highway, functions.) document, where applicable, an or air, which are regulated by the United The exemption under 18 U.S.C. indication that the exemption does not States Department of Transportation 845(a)(1) does not apply to non-driver exempt the holder from compliance (DOT) and agencies thereof, and which employees of Federal explosives with the security plan requirements in pertain to safety.’’ licensees and permittees regulated by Subpart I of Part 172 of the HMR, the IME requests that we clarify the effect the Bureau of Alcohol, Tobacco, security training requirements in of the transportation exception in 18 Firearms, and Explosives (ATF). In fact, § 172.704 of the HMR, and other specific U.S.C. 842(i) on motor private carriers all persons who are employed by Federal requirements that may apply to and their personnel. The TSA and Federal explosives licensees and the exemption holder’s operations. FMCSA regulations implementing the permittees and who possess explosives Therefore, in this final rule, the USA PATRIOT Act and incorporated in the course of their employment are requirement for an applicant for an into the HMR in the May 5, 2003 IFR subject to 18 U.S.C. 842(i) prohibitions exemption to certify compliance with

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transportation security laws and seeking to be parties to existing (‘‘Proper Consideration of Small Entities regulations is deleted. exemptions to transport explosives in in Agency Rulemaking’’) and DOT’s IME also expresses concern that the amounts that would otherwise be procedures and policies to promote IFR requires applicants seeking an prohibited for air transportation using compliance with the Regulatory exemption for the transportation of aircraft with a maximum certificated Flexibility Act to ensure that potential explosives that are otherwise prohibited weight of less than 12,500 pounds to impacts of draft rules on small entities for air transportation to certify that no certify that no person within the are properly considered. person within the prohibited persons prohibited persons categories listed in C. Executive Order 13132 categories listed in 18 U.S.C. 842(i) will 18 U.S.C. 842(i) will participate in the participate in the transportation of the transportation of the material. This final rule has been analyzed in material. IME notes that exemption accordance with the principles and III. IFR Provisions Adopted Without applicants must demonstrate an criteria contained in Executive Order Change equivalent level of safety, including 13132 (‘‘Federalism’’). This final rule security, and suggests that this should The May 5, 2003 IFR adopted several preempts State, local, and Indian tribe be sufficient to assure the security of provisions designed to assure that requirements but does not impose any explosives shipped under exemption. shippers and carriers comply with regulation with substantial direct effects As explained in the May 5 IFR, we security requirements promulgated by on the States, the relationship between have issued a limited number of other Federal agencies, as appropriate. the National government and the States, exemptions that permit the First, the IFR amended § 171.12a to or the distribution of power and transportation of explosives that would require rail and motor carriers responsibilities among the various be placarded if transported by highway transporting Class 1 materials from levels of government. Therefore, the or rail, including Division 1.1 and 1.2 Canada into the United States to comply consultation and funding requirements explosives. All but one of these with TSA regulations applicable to such of Executive Order 13132 do not apply. exemptions were issued to operators transportation. Second, the IFR added a that are subject to TSA security new § 176.7 to require vessel owners D. Executive Order 13175 requirements, including finger-print and operators to assure that vessel This final rule has been analyzed in based background checks for all personnel are licensed or documented accordance with the principles and flightcrew members. The exception is an as required under U.S. Coast Guard criteria contained in Executive Order exemption that was issued for the regulations. Third, the IFR amended 13175 (‘‘Consultation and Coordination transportation of explosives on aircraft § 177.804 to require motor carriers to with Indian Tribal Governments’’). with a maximum certificated takeoff comply with driver licensing Because this final rule does not have weight of less than 12,500 pounds; requirements in the Federal Motor aircraft with a certificated takeoff weight tribal implications, does not impose Carrier Safety Regulations. No persons substantial direct compliance costs on under 12,500 pounds are not subject to commented on these provisions. They the TSA security requirements. IME is Indian tribal governments, and does not are adopted without change in this final preempt tribal law, the funding and correct that exemption applicants who rule. are subject to TSA security requirements consultation requirements of Executive should not also need to certify that no IV. Regulatory Analyses and Notices Order 13175 do not apply and a tribal person within the prohibited persons summary impact statement is not A. Executive Order 12866 and DOT required. categories listed in 18 U.S.C. 842(i) will Regulatory Policies and Procedures participate in the transportation of the E. Unfunded Mandates Reform Act of material. However, for applicants for This final rule is not a significant 1995 exemptions to transport explosives who regulatory action under Executive Order are not subject to TSA security 12866 and the regulatory policies or This final rule does not impose requirements, the certification procedures of the Department of unfunded mandates under the requirement will help to assure that Transportation (44 FR 11034). This final Unfunded Mandates Reform Act of prohibited persons under 18 U.S.C. rule imposes minimal new compliance 1995. It does not result in annual costs 842(i) are not involved in the costs on the regulated industry. The of $100 million or more, in the transportation of the explosives. In this self-certification requirement for certain aggregate, to any of the following: State, final rule, we are modifying the applicants for exemptions from the local, or Indian tribal governments, or certification requirement to clarify that HMR will apply to one or two the private sector. it applies only to applicants for applicants each year. F. Paperwork Reduction Act exemptions to transport explosives in B. Regulatory Flexibility Act amounts that would otherwise be Under the Paperwork Reduction Act prohibited for air transportation using The Regulatory Flexibility Act (5 of 1995, no person is required to aircraft with a maximum certificated U.S.C. 601 et seq.) requires an agency to respond to a collection of information weight of less than 12,500 pounds. The review regulations to assess their impact unless it displays a valid OMB control certification requirement is not on small entities unless the agency number. RSPA has a current necessary for flight crews on aircraft determines that a rule is not expected to information collection approval under with a maximum certificated takeoff of have a significant impact on a OMB No. 2137–0051, ‘‘Rulemaking, 12,500 pounds or more because all such substantial number of small entities. Exemption, and Preemption individuals are subject to the TSA This final rule imposes minimal new Requirements’’ with 4,219 burden security requirements. compliance costs on the regulated hours, which includes information The May 5, 2003 IFR inadvertently industry. I hereby certify that the collection estimates for the exemptions omitted adding the new certification requirements of this final rule will not application process. The Office of requirement for applicants for party have a significant impact on a Management and Budget approved the status to existing exemptions. Therefore, substantial number of small entities. extension of this information collection in this final rule we are amending 49 This final rule has been developed in on May 16, 2003, with an expiration CFR 107.107 to require applicants accordance with Executive Order 13272 date of May 31, 2006.

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We estimate that an application for an Reporting and recordkeeping or cargo-only aircraft with a maximum exemption requires 5 hours to complete. requirements. certificated takeoff weight of less than An application to renew an exemption 12,500 pounds must certify that no 49 CFR Part 177 requires one hour to complete. The person within the categories listed in 18 addition of a security certification as Hazardous materials transportation, U.S.C. 842(i) will participate in the part of an exemption application will Motor carriers, Radioactive materials, transportation of the Class 1 material. not add any appreciable time to this Reporting and recordkeeping * * * * * requirements. process. ■ 4. In § 107.109, revise paragraph (a)(6) ■ Requests for a copy of the information Accordingly, the interim final rule to read as follows: collection should be directed to Deborah amending 49 CFR parts 107, 171, 176, Boothe or T. Glenn Foster, Office of and 177 that was published at 68 FR § 107.109 Application for renewal. Hazardous Materials Standards (DHM– 23832 on May 5, 2003, is adopted as a (a) * * * 10), Research and Special Programs final rule with the following changes: (6) When a Class 1 material is Administration, Room 8102, 400 forbidden for transportation by aircraft PART 107—HAZARDOUS MATERIALS Seventh Street, SW., Washington, DC except under an exemption (see PROGRAM PROCEDURES 20590–0001, telephone (202) 366–8553. Columns 9A and 9B in the table in 49 G. Regulation Identifier Number (RIN) ■ 1. The authority citation for part 107 CFR 172.101), an applicant to renew an continues to read as follows: exemption to transport such Class 1 A regulation identifier number (RIN) material on passenger-carrying or cargo- is assigned to each regulatory action Authority: 49 U.S.C. 5101–5127, 44701; Section 212–213, Pub. L. 104–121, 110 Stat. only aircraft with a maximum listed in the Unified Agenda of Federal 857; 49 CFR 1.45, 1.53. certificated takeoff weight of less than Regulations. The Regulatory Information ■ 12,500 pounds must certify that no Service Center publishes the Unified 2. In § 107.105, revise paragraph (c)(10) to read as follows: person within the categories listed in 18 Agenda in April and October of each U.S.C. 842(i) will participate in the year. The RIN contained in the heading § 107.105 Application for exemption. transportation of the Class 1 material. of this document can be used to cross- * * * * * * * * * * reference this action with the Unified (c) * * * Agenda. Issued in Washington DC on February 3, (10) When a Class 1 material is 2004, under authority delegated in 49 CFR H. Environmental Assessment forbidden for transportation by aircraft Part 1. except under an exemption (see Samuel G. Bonasso, There are no significant Columns 9A and 9B in the table in 49 environmental impacts associated with Deputy Administrator, Research and Special CFR 172.101), an applicant for an Programs Administration. this final rule. It imposes a self- exemption to transport such Class 1 [FR Doc. 04–2751 Filed 2–9–04; 8:45 am] certification requirement for certain material on passenger-carrying or cargo- applicants for exemptions from the only aircraft with a maximum BILLING CODE 4910–60–U HMR. certificated takeoff weight of less than I. Privacy Act 12,500 pounds must certify that no person within the categories listed in 18 DEPARTMENT OF COMMERCE Anyone is able to search the U.S.C. 842(i) will participate in the National Oceanic and Atmospheric electronic form of any written transportation of the Class 1 material. communications and comments Administration received into any of our dockets by the * * * * * name of the individual submitting the ■ 3. In § 107.107, revise paragraphs (b)(3) 50 CFR Part 679 document (or signing the document, if and (b)(4) and add paragraph (b)(5), to read as follows: [Docket No. 030808196–4036–03; I. D. submitted on behalf of an association, 062403C] business, labor union, etc.). You may § 107.107 Application for party status. review DOT’s complete Privacy Act RIN 0648–AR13 * * * * * Statement in the Federal Register (b) * * * Fisheries of the Exclusive Economic published on April 11, 2000 (65 FR (3) State the name, street and mailing 19477) or you may visit http:// Zone (EEZ) Off Alaska; Provisions of addresses, e-mail address (optional), the American Fisheries Act (AFA) dms.dot.gov. and telephone number of the applicant; List of Subjects if the applicant is not an individual, AGENCY: National Marine Fisheries state the name, street and mailing Service (NMFS), National Oceanic and 49 CFR Part 107 addresses, e-mail address (optional), Atmospheric Administration (NOAA), Administrative practice and and telephone number of an individual Commerce. procedure, Hazardous materials designated as the applicant’s agent for ACTION: Final rule; removal of expiration transportation, Penalties, Reporting and all purposes related to the application; date. recordkeeping requirements. (4) If the applicant is not a resident of the United States, provide a designation SUMMARY: NMFS issues a final rule to 49 CFR Part 171 of agent for service in accordance with remove the expiration date of Exports, Hazardous materials § 105.40 of this subchapter; and regulations published in the Federal transportation, Hazardous waste, (5) For a Class 1 material that is Register on December 30, 2002, Imports, Reporting and recordkeeping forbidden for transportation by aircraft implementing the AFA. The AFA final requirements. except under an exemption (see rule inadvertently specified a period of Columns 9A and 9B in the table in 49 effectiveness that will expire December 49 CFR Part 176 CFR 172.101), an applicant for party 31, 2007. This rule will make the Hazardous materials transportation, status to an exemption to transport such amendments to the AFA rule Maritime carriers, Radioactive materials, Class 1 material on passenger-carrying permanent, as originally intended. This

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action is necessary to implement the the entire final rule. This action corrects DEPARTMENT OF COMMERCE AFA consistent with statutory that error by stating that the phrase requirements, and is intended to do so ‘‘effective through December 31, 2007’’ National Oceanic and Atmospheric in a manner consistent with the applies only to those paragraphs dealing Administration objectives of the Magnuson-Stevens with the observer program (i.e., Conservation and Management Act § 679.50), and that the other provisions 50 CFR Part 679 (Magnuson-Stevens Act) and other in the final rule are effective [I.D. 020204C] applicable laws. indefinitely. DATES: The December 31, 2007, Fisheries of the Exclusive Economic expiration date is removed from the rule Comments and Responses Zone Off Alaska; Sablefish Managed published December 30, 2002, at 67 FR Under the Individual Fishing Quota NMFS received one written comment 79692, except for § 679.50, which still Program expires on December 31, 2007. on the proposed rule. AGENCY: ADDRESSES: The Final Environmental Comment. Any regulations National Marine Fisheries Impact Statement/Regulatory Impact promulgated by NMFS are not to be Service (NMFS), National Oceanic and Review/Final Regulatory Flexibility trusted because the fishery management Atmospheric Administration (NOAA), Analysis (FEIS/RIR/FRFA) prepared for councils that recommend regulatory Commerce. Amendments 61/61/13/8 is available in changes to NMFS are composed of ACTION: Notice of fishing season dates. the NEPA section of the NMFS Alaska representatives who seek to enlarge SUMMARY: NMFS is opening directed Region home page at http:/ their profits instead of being concerned fishing for sablefish with fixed gear www.fakr.noaa.gov. Paper copies may about the overall health of marine life. managed under the Individual Fishing be obtained from the NMFS, Alaska NMFS should act in the best interests of Quota (IFQ) program. The season will Region, P.O. Box 21668, Juneau, AK the American people as a whole, and open 1200 hrs, Alaska local time (A.l.t.), 99802–1668, Attn: Lori Durall, 907-586- not only the commercial fishing public. February 29, 2004, and will close 1200 7247. Response. The commenter’s concerns hrs, A.l.t., November 15, 2004. This FOR FURTHER INFORMATION CONTACT: are noted. However, the comment does period is the same as the 2004 IFQ and Patsy A. Bearden, NMFS, 907–586–7228 not specifically address the purpose of Community Development Quota season or [email protected]. this rule, which is to make an for Pacific halibut adopted by the SUPPLEMENTARY INFORMATION: The administrative change to an effective International Pacific Halibut background regarding this action is date as required by statute. Rather, the Commission (IPHC). The IFQ halibut detailed in the preamble to the proposed comment indicates a general mistrust season is specified by a separate rule (68 FR 51147, August 25, 2003). publication in the Federal Register of This action is necessary to make the for the fishery management process. This rule is not intended to make any annual management measures pursuant regulations implementing the AFA to 50 CFR 300.62. consistent with statutory requirements. substantive changes to the conservation DATES: Effective 1200 hrs, A.l.t., The AFA implementing regulations and management of fishery stocks. February 29, 2004, until 1200 hrs, A.l.t., were published on December 30, 2002 Classification November 15, 2004. (67 FR 79692), became effective January 29, 2003, and were corrected on August This final rule has been determined to FOR FURTHER INFORMATION CONTACT: 18, 2003 (68 FR 49374). be not significant for purposes of Glenn Merrill, 907–586–7228. NMFS manages the groundfish fishery Executive Order 12866. SUPPLEMENTARY INFORMATION: Beginning in the Gulf of Alaska (GOA) Exclusive in 1995, fishing for Pacific halibut The Chief Counsel for Regulation of Economic Zone in accordance with the (Hippoglossus stenolepis) and sablefish the Department of Commerce certified Fishery Management Plan for (Anoplopoma fimbria) with fixed gear Groundfish of the Gulf of Alaska and the to the Chief Counsel for Advocacy of the in the IFQ regulatory areas defined in Fishery Management Plan for the Small Business Administration during § 679.2 has been managed under the IFQ Groundfish Fishery of the Bering Sea the proposed rule stage that this action Program. The IFQ Program is a and Aleutian Islands Area (FMPs). The would not have a significant economic regulatory regime designed to promote FMPs were prepared by the North impact on a substantial number of small the conservation and management of Pacific Fishery Management Council entities. No comments were received these fisheries and to further the (Council) under the Magnuson-Stevens regarding this certification. As a result, objectives of the Magnuson-Stevens Act. While the FMPs are implemented a regulatory flexibility analysis was not Fishery Conservation and Management by regulations at 50 CFR part 679, prepared. Act and the Northern Pacific Halibut general regulations pertaining to these Act. Persons holding quota share receive List of Subjects in 50 CFR Part 679 fisheries are codified in subpart H of 50 an annual allocation of IFQ. Persons CFR part 600. Alaska, Fisheries, Recordkeeping and receiving an annual allocation of IFQ The fisheries in the BSAI are subject reporting requirements. are authorized to harvest IFQ species to observer requirements under within specified limitations. Further regulations at § 679.50. These observer Dated: February 4, 2004. information on the implementation of requirements have an independent Rebecca Lent, the IFQ Program, and the rationale sunset date of December 31, 2007. The Deputy Assistant Administrator for supporting it, are contained in the AFA implementing regulations (67 FR Regulatory Programs, National Marine preamble to the final rule implementing 79692, December 30, 2002) made Fisheries Service. the IFQ Program published in the changes to the observer regulations. [FR Doc. 04–2870 Filed 2–9–04; 8:45 am] Federal Register, November 9, 1993 (58 While the DATES section to that action BILLING CODE 3510–22–S FR 59375) and subsequent amendments. contained a reference to the sunset date This announcement is consistent with for these observer requirements, the § 679.23(g)(1), which requires that the sunset date was mistakenly applied to directed fishing season for sablefish

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managed under the IFQ program be Classification the management objective for specified by the Administrator, Alaska This action responds to the best simultaneous opening of these two Region, and announced by publication available information recently obtained fisheries. in the Federal Register. This method of from the fishery. The Assistant The AA also finds good cause to season announcement was selected to Administrator for Fisheries, NOAA, waive the 30-day delay in the effective facilitate coordination between the (AA), finds good cause to waive the date of this action under 5 U.S.C. sablefish season, chosen by the requirement to provide prior notice and 553(d)(3). This finding is based upon Administrator, Alaska Region, and the opportunity for public comment the reasons provided above for waiver of halibut season, chosen by the IPHC. The pursuant to the authority set forth at 5 prior notice and opportunity for public directed fishing season for sablefish U.S.C. 553(b)(B) as such requirement is comment. with fixed gear managed under the IFQ impracticable and contrary to the public This action is required by program will open 1200 hrs, A.l.t., interest. This requirement is § 679.23(g)(1) and is exempt from February 29, 2004, and will close 1200 impracticable and contrary to the public review under Executive Order 12866. hrs, A.l.t., November 15, 2004. This interest as it would prevent the Agency Authority: 16 U.S.C. 1801 et seq. period runs concurrently with the IFQ from responding to the most recent season for Pacific halibut announced by fisheries data in a timely fashion and Dated: February 4, 2004. the IPHC. The IFQ halibut season will would delay the opening of the sablefish Bruce C. Morehead, be specified by a separate publication in fishery thereby increasing bycatch and Acting Director, Office of Sustainable the Federal Register of annual regulatory discards between the Fisheries, National Marine Fisheries Service. management measures pursuant to 50 sablefish fishery and the halibut fishery, [FR Doc. 04–2871 Filed 2–9–04; 8:45 am] CFR 300.62. and preventing the accomplishment of BILLING CODE 3510–22–S

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Proposed Rules Federal Register Vol. 69, No. 27

Tuesday, February 10, 2004

This section of the FEDERAL REGISTER proposed to revise regulations covering (conglomerates) under a separate contains notices to the public of the proposed the storage of commodities in which assessment procedure and solicits issuance of rules and regulations. The CCC has an interest. For the most part, comments on these assessment purpose of these notices is to give interested those commodities are acquired in procedures. persons an opportunity to participate in the connection with non-recourse OTS also proposes to amend the rule making prior to the adoption of the final existing rules governing the calculation rules. commodity loan programs that benefit farmers. The rule will consolidate the of savings association semi-annual regulations for all commodities stored assessments. Specifically, OTS proposes DEPARTMENT OF AGRICULTURE by CCC into one set of regulations. In to eliminate the alternative calculation addition, the rule would, in some for the asset size component currently Commodity Credit Corporation instances, revise the substantive available to small ‘‘qualifying savings provisions that are in effect under the associations.’’ 7 CFR Part 1423 existing regulations. DATES: Comments must be received on RIN 0560–AE50 The Agency believes that the request or before March 26, 2004. for additional time to comment on the ADDRESSES: Mail: Send comments to Standards for Approval of Warehouses proposed rule is reasonable and will Regulation Comments, Chief Counsel’s for CCC Interest Commodity Storage still allow the rulemaking to proceed in Office, Office of Thrift Supervision, a timely manner. As a result of the 1700 G Street, NW., Washington, DC AGENCY: Commodity Credit Corporation, reopening and extension, the comment 20552, Attention: No. 2004–06. USDA. period for the proposed rule will close Commenters should be aware that there ACTION: Proposed rule; reopening and on March 11, 2004. have been some unpredictable and extension of comment period. Signed in Washington, DC, January 23, lengthy delays in postal deliveries to the SUMMARY: The Commodity Credit 2004. Washington, DC area and may prefer to Corporation (CCC) is reopening and James R. Little, make their comments via facsimile, e- extending the comment period for the Executive Vice President, Commodity Credit mail, or hand delivery. proposed rulemaking, ‘‘Standards for Corporation. Delivery: Hand deliver comments to Approval of Warehouses for CCC [FR Doc. 04–2785 Filed 2–9–04; 8:45 am] the Guard’s Desk, East Lobby Entrance, Interest Commodity Storage.’’ The BILLING CODE 3410–05–P 1700 G Street, NW., from 9 a.m. to 4 original comment period for the p.m. on business days, Attention: proposed rule closed on January 20, Regulation Comments, Chief Counsel’s Office, No. 2004–06. 2004, and CCC is reopening and DEPARTMENT OF THE TREASURY extending it for 30 days. This action Facsimiles: Send facsimile responds to requests from warehouse Office of Thrift Supervision transmissions to Fax Number (202) 906– operators to provide more time to 6518, Attention: No. 2004–06. E-Mail: Send e-mails to comment on the proposed rule. 12 CFR Part 502 [email protected], Attention: DATES: Comments are due March 11, [No. 2004–06] No. 2004–06, and include your name 2004. and telephone number. ADDRESSES: Comments and requests for RIN 1550–AB47 Availability of comments: OTS will additional information should be post comments and the related index on Assessments and Fees directed to Howard Froehlich, Chief, the OTS Internet Site at Program Development Branch, AGENCY: Office of Thrift Supervision, www.ots.treas.gov. You may inspect Warehouse and Inventory Division, Treasury. comments at the Public Reading Room, Farm Service Agency, United States ACTION: Notice of proposed rulemaking. 1700 G Street, NW., by appointment. To Department of Agriculture, 1400 make an appointment for access, call Independence Avenue, SW., STOP SUMMARY: The Office of Thrift (202) 906–5922, send an e-mail to 0553, Washington, DC 20250–0553, Supervision (OTS) is proposing to [email protected], or send a telephone: (202) 720–7398, FAX: (202) amend its rules on assessments and fees. facsimile transmission to (202) 906– 690–3123, e-mail: The proposed rule would replace 7755. (Please identify the materials you [email protected]. examination fees for savings and loan would like to inspect to assist us in Persons with disabilities who require holding companies (SLHCs) with semi- serving you.) We schedule alternative means for communication annual assessments on top-tier SLHCs. appointments on business days between for regulatory information (braille, large OTS would charge a base assessment 10 a.m. and 4 p.m. In most cases, print, audiotape, etc.) should contact amount on all top-tier SLHCs, and appointments will be available the USDA’s TARGET Center at (202) 720– would add up to three additional business day after the date we receive a 2600 (voice and TDD). components to this base amount. The request. SUPPLEMENTARY INFORMATION: On three components would be based on FOR FURTHER INFORMATION CONTACT: November 20, 2003, CCC published a the risk or complexity of the SLHC’s Donna Deale, Manager, Affiliates and proposed rule, ‘‘Standards for Approval business, its organizational form, and its Holding Company Supervision, (202) of Warehouses for CCC Interest condition. OTS is also considering 906–7488; or Karen Osterloh, Special Commodity Storage’’ in the Federal assessing certain SLHCs that are large Counsel, Regulations and Legislation Register (68 FR 65412). The rule and complex enterprises Division, Chief Counsel’s Office, (202)

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906–6639; Office of Thrift Supervision, component currently available to small amount of OTS staff time devoted to off- 1700 G Street, NW., Washington, DC ‘‘qualifying savings associations.’’ site monitoring and supervision of 20552. SLHCs. Moreover, the current system A. SLHC Semi-Annual Assessment can result in sharply fluctuating or SUPPLEMENTARY INFORMATION: Under the existing assessment unexpected examination billings. As I. Background regulation at 12 CFR 502.50, OTS may conditions and activities at the SLHC assess fees for examining or change from year-to-year, OTS attempts The Home Owners’ Loan Act (HOLA) investigating savings association to adjust its examination scope to authorizes the OTS Director to assess affiliates, including SLHCs. OTS conduct its work in a risk-focused fees against savings associations and currently charges SLHCs for time spent manner. Therefore, examiners do not holding companies to fund OTS’s direct conducting on-site examinations and spend the same amount of time at a and indirect expenses as the Director working on off-site examination related particular SLHC during each 1 deems necessary or appropriate. OTS issues. examination. The time spent on-site can also may assess savings associations and As SLHCs have become more complex also vary considerably depending upon affiliates of savings associations for the in both structure and nature of the amount of time spent off-site both in 2 costs of conducting examinations. operations, OTS staff has spent preparation for and concluding the OTS has promulgated regulations substantially more off-site time examination. OTS believes that the implementing this authority at 12 CFR addressing supervisory and examination recovery of supervisory costs based on part 502. Under these rules, OTS related issues, as well as monitoring the regular assessments offers a measure of currently charges each savings financial condition of SLHCs. To predictability as to the amount and the association a semi-annual assessment, attempt to better capture off-site time timing of payments and will aid SLHCs which includes a size component, a spent on these supervisory issues, OTS in their budgetary planning processes. condition component, and a complexity enhanced its system for tracking time OTS believes that the proposed component. In addition, OTS charges an devoted by regional and headquarters change will better support our risk- examination fee for thrifts that have staff to specific SLHCs, and issued a focused examination and supervisory trust assets that are under the $1 billion Thrift Bulletin stating that OTS would processes and encourage efforts to complexity component threshold. OTS bill SLHCs directly for these off-site perform exam related SLHC work off also charges SLHCs and other thrift services. Thrift Bulletin 48–19 premise, when possible. With SLHC affiliates fees for investigating and (September 23, 2003). assessment fees set at fixed rates based examining their operations. These Following the publication of the on a variety of factors, staff will be examination-related fees are assessed at Thrift Bulletin, various members of the encouraged to conduct its SLHC an hourly rate for examiner time spent industry contacted OTS to discuss the supervision in the most effective and performing the examination. proposed assessment of off-site efficient manner based on each SHLC’s examination hours. In addition to overall profile. With fixed assessments, II. Description of the Proposal industry feedback, OTS conducted an staff will not feel undue pressure to OTS proposes to revise its current analysis of off-site examination time expand or restrict on-site examination rules to more accurately apportion the records and collected input from staff time due to concerns about the potential cost of OTS supervision among savings on the process of collecting and tracking examination charges. associations, SLHCs, and other affiliates. off-site examination time. Based on the In today’s rulemaking, OTS proposes The agency has three primary goals: (1) industry and staff feedback, OTS has to eliminate most examination related Keep charges as low as possible while determined that the administrative fees for SLHCs, and substitute semi- providing the agency with the resources burden of collecting and billing off-site annual assessments. In establishing the essential to effectively supervise a hours outweighs the cost-recovery proposed assessment structure, OTS is changing industry; (2) tailor its charges benefit. aware that every type of SLHC does not to more accurately reflect the agency’s In response to these developments, require an equal amount of supervisory costs of supervising institutions and OTS is proposing a revision of its attention. Accordingly, OTS has their affiliates; and (3) provide assessment regulation to permit OTS to developed a rule that considers institutions and their affiliates with recoup supervisory expenses related to important factors, such as the consistent and predictable assessments the examination of SLHCs through semi- complexity and risk of the SLHC to facilitate financial planning. annual assessments rather than to enterprise, the total amount of SLHC Consistent with these principles, OTS directly bill for OTS hours. In assets, the organizational form of the is proposing several amendments to its connection with this change, OTS will SLHC, and the condition of SLHCs in existing assessments rule. OTS expects cease charging most fees connected with the holding company structure. to implement the proposed changes in staff time spent on SLHC and affiliate 1. Assessment of Top-Tier SLHCs the July 2004 semi-annual assessment. examination related issues.3 OTS’s goal is to tailor its charges in In most cases, OTS performs only one OTS proposes the following changes. examination of each SLHC structure, First, OTS proposes to eliminate most relation to its supervisory efforts and to provide transparency and predictability even though the examination often examination fees for SLHCs and instead includes a review of multiple tiers of charge semi-annual assessments to these to the industry regarding costs. The current system primarily bases SLHC direct and indirect thrift ownership. entities. In addition, OTS proposes to Because our SLHC examination and revise the assessment procedures for fees on on-site examiner hours. This method does not capture the significant supervisory efforts consider the entire savings associations by eliminating the holding company structure, OTS does alternative calculation for the asset size 3 OTS will, however, retain the authority to not propose to assess any charge on charge a fee to recover extraordinary expenses intermediate-level SLHCs in a holding 1 12 U.S.C. 1467(k). See also 12 U.S.C. 1462a, related to examination, investigation, regulation, or company structure. Instead, the 1463, 1467, 1467a. supervision of savings associations and their 2 12 U.S.C. 1467(a) and (b) and 1467a(b)(4). See affiliates. 12 CFR 502.60(e). OTS will also continue proposed rule would institute a semi- also 12 U.S.C. 1467(d) (trust examinations of to charge application fees as outlined in TB 48–19 annual assessment only on the top-tier savings associations). (September 23, 2003). SLHC. The top-tier SLHC is defined as

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the highest level of ownership by a program,4 conducting off-site activities In assigning a particular SLHC to a registered holding company in the in preparation for such an examination,5 risk category, OTS assesses the holding company structure. and performing off-site monitoring following factors: 6 • Occasionally two or more SLHCs own between examinations. OTS also will SLHC financial condition. OTS will a controlling interest in a savings recover a portion of its operating costs, review whether the SLHC lacks a association. This occurs, for example, such as the cost of OTS facilities and consistent source of reliable cash flow where two companies each directly examination support personnel and stable earnings from operations, owns 50 percent of the savings allocated to these activities. other than proceeds from the thrift or association’s voting stock. Where there OTS is currently considering affiliates that are regulated financial are two or more distinct controlling establishing a fixed charge of $ 3,000 for entities; is significantly leveraged, either interests in a savings association, OTS each semi-annual assessment. This with high debt levels, hybrid examines each ownership structure charge would equate to approximately instruments with debt-like features, or separately. Accordingly, OTS would 21 hours at OTS’s current billing rate of highly volatile instruments; has major impose a semi-annual assessment on the $145 per hour. OTS will separately investments that can rapidly require top-tier SLHC in each ownership path. publish the amount of the final fixed significant cash expenditures; is in a OTS would not reduce the amount of charge in a Thrift Bulletin. We cyclical industry that is distressed or the assessment to reflect overlaps in specifically request comment on the experiencing adverse trends; has a amount of this base charge.7 these ownership structures. history of volatile operations; or has Risk and Complexity Component. The recently had a downgrade in debt rating In some cases, a top-tier SLHC is a first component of the general SLHC by a major debt rating agency. trust that holds a controlling interest in semi-annual assessment is the risk and • Financial independence. OTS will an intermediate-tier SLHC. When OTS complexity component. OTS will consider whether the savings examines such structures, the vast compute the amount of this component association or affiliates that are majority of its efforts are expended in using schedules that set out charges regulated financial entities are the review of the intermediate tier based on OTS holding company risk dependent on the SLHC for access to SLHC. OTS specifically requests classifications and total consolidated capital markets and whether they are comment on whether it should assess holding company assets. unlikely to survive the financial the intermediate SLHC, rather than the Currently, OTS classifies SLHCs into collapse of the SLHC or a major SLHC top-tier SLHC, in these instances. two categories.8 This process affiliate. • 2. Calculation of Semi-Annual distinguishes low risk or noncomplex Operational independence. OTS Assessment holding company enterprises (Category will determine whether the management I) from those that have complex and board of the savings association or OTS intends to calculate the semi- operations or structures or exhibit a affiliates that are regulated financial annual assessments for most SLHC higher risk profile (Category II). To entities consistently act in a manner enterprises under the procedures recognize that OTS spends greater beholden to the SLHC; their operational described at section II.A.2.a. of this resources to supervise Category II systems are dependent on the SLHC or preamble. OTS is also considering SLHCs, the proposed rule would permit any affiliate; the thrift or affiliates that assessing those SLHCs that are large and OTS to establish separate risk and are regulated financial entities have few particularly complex enterprises complexity component schedules for full time employees dedicated to them; (conglomerates) under a separate different categories of SLHCs.9 audit functions are consolidated within assessment procedure described at the SLHC, rather than in a separate section II.A.2.b. of this preamble. 4 See Holding Company Handbook, Section 720, audit department; key functions are Abbreviated Holding Company Examination a. Calculation of Semi-Annual Program. performed by the SLHC or any other Assessment—In General. OTS intends to 5 This would include, for example, the costs of affiliate; the compensation of employees calculate the semi-annual assessments completing pre-examination procedures and the is tied directly or indirectly to the for most SLHC enterprises as follows. risk classification checklist for a low risk, performance of the SLHC; or there are noncomplex SLHC. See Holding Company First, OTS would impose a base Handbook, Section 710 Holding Company significant or abusive inter-company or assessment amount on top-tier SLHCs. Administrative Program. insider transactions. • OTS would then add up to three 6 These costs would include the costs to review Reputational risk. In reviewing this components to this base assessment and analyze basic reports filed by the savings factor, OTS reviews whether the public association and SLHCs (e.g., Schedule HC of the identity of the thrift or affiliates that are amount. These three components would Thrift Financial Report (TFR), the SLHC’s quarterly be based on the risk or complexity of the H–(b)11 reports, and relevant private sector regulated financial entities are linked to SLHC’s business, its organizational information). the SLHC through similar names or form, and its condition. See proposed 7 The amounts included as examples in this marketing strategies; whether there is § 502.26. The calculation of the base preamble are subject to change in the Thrift Bulletin significant cross-selling of proprietary implementing the final rule. These amounts reflect products; whether the thrift and charge and the three components is OTS’s current costs and the proposed assessment discussed below. structure. Because OTS cannot predict what its final affiliates that are regulated financial entities serve only to facilitate the sales Base Charge. As noted above, OTS rule will look like, OTS cannot determine with certainty what assessment amounts will appear in of SLHC services and products; or will establish the amount of the base the implementing Thrift Bulletin. At the same time, whether all assets or liabilities of the assessment charge for top-tier SLHCs. OTS wants to be as informative as possible about thrift or affiliates that are regulated The amount of the charge will reflect potential assessments under the proposed rule. It financial entities come from the SLHC OTS’s estimate of the base cost of hopes that SLHCs will find the proposed amounts useful in determining how the proposed regulation or other affiliates. conducting on- and off-site supervision may affect them. • Management experience. In of small low risk, noncomplex SLHCs. 8 See Holding Companies Handbook, Section 100, reviewing this factor, OTS considers the Supervisory Approach, and Section 710, OTS anticipates that these costs will management experience of the SLHC in reflect the costs of conducting on-site Administrative Program. 9 There is also a limited, select number of large examinations using the abbreviated and complex enterprises (conglomerates), which procedure described at section II.A.2.b. of this holding company examination OTS will assess under a separate assessment preamble.

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running regulated financial entities; the CORE Holding Company component would increase as the whether the thrift (or affiliates that are Examination Program.10 OTS intends to amount of the total consolidated SLHC regulated financial entities) are de novo assess these enterprises a lower amount assets increase.11 This would reflect the entities or have existing management under the risk and complexity fact that OTS’s supervisory efforts and with a proven track record; whether the component. related costs typically increase as the SLHC is newly established or has a Category II holding company overall size of the top-tier SLHC record of successful operation; or structures, on the other hand, include increases. Because a flat rate for all asset whether the SLHC is engaged in a complex structures and entities that sizes would fail to reflect economies of significantly different business other exhibit characteristics that present a scale in the supervision of larger than financial services. higher degree of risk. OTS examinations structures, the scheduled amounts If a holding company enterprise is of these entities generally require greater established under this section would classified as Category I, OTS considers resources in order to review the current also reflect marginal assessment rates the structure to be noncomplex and to and prospective risks that the entity that decrease as asset size increases. have relatively low risk. OTS may pose to the thrift. Usually, OTS will examination and supervision of these examine these entities using the CORE OTS will establish and publish these entities requires limited OTS resources. Holding Company Examination schedules in a Thrift Bulletin. To assist Typically, OTS will examine these Program, although all CORE procedures commenters in assessing the impact of entities using an abbreviated may not be required. the proposed rule, OTS is considering examination program, although the Similar to the size component establishing the following schedules examination staff may also apply some currently assessed on thrifts, amounts under the risk and complexity of the more detailed procedures from assessed under the risk and complexity component:12

SCHEDULE FOR CATEGORY I SLHCS

If you are a top-tier Category I SLHC and your total consolidated Your risk and complexity component is . . . assets are . . . Plus—this mar- Over . . . But not over . . . This amount . . . ginal rate . . . Of assets over . . .

$0 ...... $150 Million ...... $0 N/A $0. $150 Million ...... $250 Million ...... 0 0.000007500000 $150 Million. $250 Million ...... $500 Million ...... 750 0.000003000000 $250 Million. $500 Million ...... $1 Billion ...... 1,500 0.000002000000 $500 Million. $1 Billion ...... $5 Billion ...... 2,500 0.000000500000 $1 Billion. $5 Billion ...... $50 Billion ...... 4,500 0.000000055556 $5 Billion. $50 Billion ...... $100 Billion ...... 7,000 0.000000040000 $50 Billion. $100 Billion ...... $300 Billion ...... 9,000 0.000000017500 $100 Billion. Over $300 Billion ...... 12,500 0.000000007857 $300 Billion.

SCHEDULE FOR CATEGORY II SLHCS

If you are a top-tier Category II SLHC and your total consolidated Your risk and complexity component is . . . assets are . . . Plus—this mar- Over . . . But not over . . . This amount . . . ginal rate . . . Of assets over . . .

$0 ...... $150 Million ...... $1,000 0.00001333335 $0. $150 Million ...... $250 Million ...... 3,000 0.00001000000 $150 Million. $250 Million ...... $500 Million ...... 4,000 0.00000800000 $250 Million. $500 Million ...... $1 Billion ...... 6,000 0.00000600000 $500 Million. $1 Billion ...... $5 Billion ...... 9,000 0.00000225000 $1 Billion. $5 Billion ...... $50 Billion ...... 18,000 0.00000017778 $5 Billion. $50 Billion ...... $100 Billion ...... 26,000 0.00000014000 $50 Billion. $100 Billion ...... $300 Billion ...... 33,000 0.00000006000 $100 Billion. Over $300 Billion ...... 45,000 0.00000002000 $300 Billion.

In applying the assessment schedules, as a Category I or Category II holding inform SLHC enterprises of their risk OTS will use the most recent risk company. At publication, approximately classification category upon request. classification assigned by OTS of which 80 percent of SLHCs are Category I. To Using the proposed schedule, the risk a SLHC enterprise has been notified in assist commenters in responding to the and complexity component for a writing before an assessment’s due date. issues raised in this proposed Category I SLHC with total consolidated OTS does not currently inform SLHC rulemaking, OTS regional staff will assets of $1.0 billion is $2,500. enterprises whether they are identified Assuming the organizational form

10 The CORE Holding Company Examination 11 OTS would use total consolidated top-tier assessment; and the March 31 TFR or report H– Program focuses on four primary areas of review: SLHC assets, as reported in Schedule HC of the (b)11 to determine amounts due at the July 31 Capital, Organizational Structure, Relationship and TFR. Where the depository institution does not assessment. Earnings. Holding Company Handbook, Section submit Schedule HC, OTS would use consolidated 12 See footnote 7. 730, CORE Holding Company Examination assets reported on the quarterly report H–(b)11. Program. OTS would use the September 30 TFR or report H– (b)11 to determine amounts due at the January 31

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component and condition component operations of the SLHC. When it several large insurance companies and do not apply to the SLHC, OTS would undertakes the examination of a section securities firms that control savings add the base assessment amount 10(l) holding company, however, OTS associations that provide only trust ($3,000) and the risk and complexity has little direct information on the services and do not accept insured component ($2,500), and would impose operations of the state subsidiary deposits from the public. Because the a semi-annual assessment of $5,500 on depository institution and must proposed assessment is based on the this SLHC. undertake a more extensive review to amount of consolidated holding Organizational Form Component. The understand those operations. OTS is company assets, OTS is concerned that second component of the general SLHC also responsible for ensuring that the the assessment for these companies, as semi-annual assessment is the state subsidiary depository institution calculated under the proposed rule, may organizational form component. OTS- complies with a number of requirements not correspond to the actual costs of regulated SLHCs can own thrifts in a applicable under section 10 of the supervision. Under the proposed rule, variety of forms, including stock HOLA. For example, a state savings an organizational form component may holding companies, mutual holding bank (or a cooperative bank) that is be a positive or negative amount. In companies, and trust holding deemed to be a savings association for these instances, it may be appropriate to companies. Certain SLHCs own thrifts purposes of section 10 of the HOLA calculate a negative amount under the that operate as trust only institutions must comply with section 10(d) of the organizational component. Accordingly, and do not accept insured deposits from HOLA, which subjects it to additional OTS specifically requests comment on the public. In addition, OTS regulates transactions with affiliate restrictions.14 how it should treat SLHCs where the certain holding companies under In addition, section 10(f) of the HOLA sole savings association in the structure section 10(l) of the HOLA, which requires the subsidiary insured is a trust-only institution. permits a state savings bank (or state institution to file advance notices of Condition Component. The third cooperative bank) to elect to be treated dividend declarations with OTS. OTS component of the general SLHC as a savings association for the purposes must also ensure that the state savings assessment is the condition component. of regulating the holding company.13 bank (or a cooperative bank) meets the Under proposed § 502.29, OTS would OTS may incur different supervisory requirements of a qualified thrift lender. add an additional amount to an costs to properly supervise SLHC with See 12 U.S.C. 1467a(l)(2). assessment if the most recent This review also requires OTS to work a particular organizational form. To examination rating assigned to the top- closely with other federal and state allow OTS to tailor its assessments to tier SLHC (or the most recent regulators. For example, OTS examiners these costs of supervising a particular examination rating assigned to any must communicate with these regulators form of SLHC, the proposed rule would savings and loan holding company to determine whether they have any permit OTS to modify the amount of the directly or indirectly controlled by the special concerns with the depository assessment charged under the top-tier SLHC) was ‘‘unsatisfactory.’’16 subsidiary/holding company organizational form component. OTS OTS will use the most recent would compute the amount of the relationship. They must also obtain data from one or more of 50 state regulators, examination rating of which the SLHC organizational form component by has been notified in writing before an adding the base assessment to the risk which may or may not be in an automated format readily transferable assessment due date. and complexity component, and Under OTS’s holding company rating multiplying this total by a factor and usable by OTS. OTS also attempts to coordinate with appropriate system, an unsatisfactory rating is (positive or negative) established for the reserved for SLHCs that have a particular organizational form. OTS regulators to conduct its examination of section 10(l) holding companies in detrimental or burdensome effect on the would establish the applicable factors in thrift. These companies typically exhibit a Thrift Bulletin. See proposed § 502.28. conjunction with the examination of the subsidiary depository institution. troublesome operating weaknesses. OTS is currently considering applying Either the SLHC inordinately relies on this component only to section 10(l) To assist commenters in assessing the impact of the proposed rule, OTS is the thrift for cash flow, revenue, or holding companies. OTS regulation of dividends, or the thrift is inordinately section 10(l) holding companies considering establishing an organizational form component reliant upon the SLHC for critical presents many challenges. OTS’s operating systems. Without immediate primary regulatory goal for section 10(l) multipler of 50 percent for section 10(l) holding companies.15 Building on the corrective action, the thrift’s viability holding companies is the same as its may be impaired. regulatory goal for SLHCs—to example described above, the base understand how holding company assessment ($3,000) plus the risk and Historically, OTS has not frequently operations may affect the operations of complexity component for a Category I assigned unsatisfactory ratings to SLHC with consolidated assets of $1.0 SLHCs. Currently, only 11 SLHCs have the subsidiary depository institution. 17 When OTS examines a SLHC that billion ($2,500) would total $5,500. If unsatisfactory ratings. Nonetheless, controls a savings association, it already this SLHC is a section 10(l) holding OTS must devote considerably more has a thorough knowledge of thrift company, its complexity component resources to the supervision of these few operations because it has examined the would be an additional $2,750 (50 SLHC structures than it devotes to thrift. As a result, OTS can focus its percent times $5,500). Assuming the SLHCs with satisfactory or above primary efforts on understanding the SLHC was not subject to the condition average ratings. For similar reasons, component discussed below, its semi- OTS imposes an additional assessment 13 By making such an election, the holding annual assessment would be $8,250. amount on savings associations that company is regulated by OTS as a SLHC for OTS specifically requests comment receive a ‘‘3,’’ ‘‘4,’’ or ‘‘5’’ rating under purposes of section 10 of the HOLA, rather than by whether the organizational form the Uniform Financial Institutions the Federal Reserve Board as a bank holding component should apply to other types Rating System (UFIRS) (also referred to company. However, another appropriate federal of SLHCs. For example, OTS supervises banking regulator and the appropriate State regulator, not OTS, continue to be the primary 16 See Holding Companies Handbook page 200.8. regulators of the subsidiary state bank or 14 See section 11 of the HOLA. 12 U.S.C. 1468. 17 These numbers are based on ratings data as of cooperative bank. 15 See footnote 7. December 6, 2003.

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as the CAMELS rating system). See 12 procedures in sufficient detail to permit account or does not maintain funds in CFR 502.20. their codification in the final rule. the account sufficient to pay the semi- Under the proposed rule, the OTS is considering various annual assessment when it is due, the condition component of the SLHC approaches to calculating assessments proposed rule would permit OTS to assessment would be equal to 100 for complex conglomerates.18 For charge the SLHC a fee to cover OTS percent of the total of the base example, OTS may impose: administrative costs of collecting and assessment, the risk and complexity • A set charge or flat fee. billing for the assessment. This fee is in • component, and the organizational A variable charge that is based upon addition to interest on delinquent component. As a result, the semi-annual a percentage of the total holding assessments charged under proposed assessment for a SLHC rated as company assets or some other financial § 502.45. Like other fees and unsatisfactory would be twice as much measure. The applicable percentage may assessments, OTS will establish the as a similar SLHC rated as satisfactory. vary as the size of holding company amount of the fee and publish the Building on the example described more assets (or other financial measure) amount of the fee in a Thrift Bulletin.19 fully above, the semi-annual assessment increases or may represent a multiple of While OTS anticipates that it will for an unsatisfactory-rated, section 10(l) the Category II SLHC assessment have its new SLHC assessment structure SLHC in Category I with consolidated schedule. in place for the July 2004 semi-annual • assets of $1.0 billion would be $16,500. An additional charge for complex assessment, it does not believe that it b. Calculation of Semi-Annual multinational conglomerates with will be prepared to directly debit SLHC Assessment— Conglomerates. OTS also activities that require a high degree of accounts at insured depository supervises a limited, select number of coordination with other regulators. See institutions until the January 2005 semi- large and particularly complex e.g., Holding Company Handbook, annual assessment. Accordingly, OTS enterprises (conglomerates) that are Section 940A, Financial Activities in will not assess a fee for a SLHC’s failure made up of a number of different the European Union. • to establish the direct debit account companies, or legal entities that operate A fee structure that combines some until the January 2005 semi-annual in diversified fields. Unlike traditional of the elements listed above. For assessment. SLHCs, these conglomerates are often example, OTS may include a flat fee for Proposed § 502.45(a) states that an highly integrated and are managed with each complex conglomerate and an assessment is delinquent if it is not paid less regard for separate corporate additional charge based on a percentage by the due date. OTS will charge existence and with more focus on of total holding company assets. interest on delinquent assessments that product lines or geographic areas. OTS OTS requests comment on these accrues at a rate (that OTS will examines and supervises these SLHCs possible calculations and any determine quarterly) equal to 150 along functional or centralized lines in alternative methods for calculating percent of the average of the bond- order to match the SLHC’s business semi-annual assessments for complex equivalent rates of 13-week Treasury practices. OTS’s supervision of these conglomerates. bills auctioned during the calendar entities often involves increased 3. Collection of Semi-Annual SLHC quarter preceding the assessment. planning and off-site monitoring; a more Assessments Pursuant to the authority in section formalized supervisory process that Under the proposed rule, OTS will 9(c) of the HOLA, proposed § 502.45(b) focuses OTS’s efforts on major risk areas states that if a SLHC fails to pay an and evaluates the enterprise across bill SLHCs using the same procedures it uses to bill the semi-annual assessments assessment within 60 days of the due business lines; and substantial date, OTS may assess and collect the coordination with other domestic and from savings associations. OTS will bill each SLHC enterprise semi-annually for assessment with interest from a foreign regulators. See Holding subsidiary savings association. If a Company Handbook, Section 940, Large assessments. Assessments would be due January 31 and July 31 of each year. At SLHC controls more than one savings and Complex Enterprises association, the Director may assess and (Conglomerates). The examination and least seven days before the assessment collect the assessment from each savings regulation of these conglomerates is due, OTS will mail the top-tier of the association as the Director may consume a disproportionate amount of SLHC enterprise a notice that indicates prescribe.20 agency resources vis a vis other SLHCs. the amount of the assessment, explains One of the goals of the proposed rule how OTS calculated the amount, and B. Savings Association Semi-Annual is to closely tailor OTS charges to the specifies when payment is due. See Assessment actual costs of supervision. To ensure proposed § 502.25. The proposed rule Under 12 CFR part 502, OTS currently that the costs of supervision for would clarify that where an assessment charges each savings association a semi- conglomerates are not subsidized by due date is a Saturday, Sunday, or other SLHCs, OTS intends to assess Federal holiday, assessments would be 19 OTS has also made a clarifying amendment to complex conglomerates (i.e., those due on the first day preceding the due existing § 502.25(a). This rule requires every savings SLHCs examined under section 940 of date that is not also a Saturday, Sunday association that is a member of a Federal Home the Holding Company Handbook) under or Federal holiday. Loan Bank (FHLB) to maintain a demand deposit separate assessment procedures. OTS Proposed § 502.35(b) would permit a account at the FHLB with sufficient funds to pay the assessment. Some FLHBs no longer offer anticipates that these assessments will SLHC to establish an account at an demand deposit accounts to their members. substantially exceed the amounts insured depository institution and Accordingly, the proposed rule would require these prescribed for other SLHCs under the authorize OTS to debit the account for thrifts to maintain an account at the association. proposed rule. OTS has not included the semi-annual SLHC assessment. If the OTS will directly debit these accounts for the amount of the assessment. See proposed rule text addressing these procedures as top-tier SLHC does not establish such an § 502.25(a)(1) and (2). part of today’s rulemaking because it 20 This provision is based on existing § 502.75 believes that information gathered 18 In addition to this separate assessment and 12 U.S.C. 1467(c). If OTS collects the SLHC through the public comment process procedure, OTS may still exercise its existing assessment from the thrift in this manner, the authority to recover extraordinary expenses related thrift’s payment will be considered to be an will be critical in crafting these to the examination, investigation, regulation, or unsecured loan to the SLHC and would raise issues procedures. However, OTS intends to supervision of complex conglomerates and their under sections 23A and 23B of the Federal Reserve describe the possible assessment affiliates under 12 CFR 502.60(e). Act. 12 U.S.C. 371c and 371c–1.

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annual assessment. OTS determines more equitable for institutions of all As noted above, assessments computed each institution’s semi-annual sizes. In analyzing the effects of various using the alternative asset size assessment by totaling three assessment rates, however, OTS feared computation remain fixed at 1998 components. These components address that its changes to the asset size levels, even as OTS has periodically the following factors: component would have a increased the base assessment rate and • Asset size. To compute the asset disproportionate impact on the smallest marginal rates to reflect inflation.22 As size component, OTS applies an institutions, which might not have been a result, qualifying savings associations assessment rate to the total asset size of in a position to absorb new costs. 63 FR now receive a much greater reduction to the institution as reported on the TFR. 65665. their assessment. For example, the asset The applicable rate schedule OTS is proposing to abandon the size component computed under the incorporates OTS fixed rates as an alternative asset size computation for standard method for an institution with explicit fixed charge and marginal qualifying savings associations. OTS’s $67 million in assets was $11,584 for assessment rates that decrease in size as assessment regulation, to the maximum the January 1999 semi-annual the asset size increases. OTS provides a extent possible, attempts to tailor rates assessment. The alternate computation lower alternate asset size component for and charges to the agency’s costs of reduced the asset size component to certain small savings associations supervising particular institutions. $11,575, a net reduction of only $9. See (‘‘qualifying savings associations’’). While OTS believes that it may have • Condition. OTS assesses an been appropriate to provide qualifying TB 48–15 (November 30, 1998). For the additional assessment amount based on savings associations with an initial January 2004 semi-annual assessment, the condition of the institution, as period to adjust to the 1998 assessment however, the asset size component determined by the most recent regime, OTS questions whether it is computed under the standard method composite rating under the CAMELS equitable to continue to require non- for a $67 million institution is $13,252. rating system. This additional amount is qualifying savings associations to carry The alternate computation reduced the equal to 50% of the size component for some of the cost burdens for qualifying asset component to $11,575, a net 3-rated institutions, and 100% percent savings associations. reduction of $1,677. Because the of the size component for 4- or 5-rated Non-qualifying savings associations, alternate computation remains fixed at institutions. which include some small savings 1998 levels, the amount of this disparity • Complexity. The complexity associations,21 have now carried an under the alternative computation will component addresses certain complex extra burden for qualifying institutions become more pronounced as OTS assets or activities, including trust assets for five years. The burden has not revises its assessment schedules upward administered by a thrift, assets covered remained static, but rather has increased over time. by a thrift’s recourse obligations or over the five-year period, as a result of OTS believes that all institutions, direct credit substitutes, and loans two factors. even small institutions, should be able serviced by the thrift for others. OTS First, more savings associations use to plan for, adjust to, and carry the applies the complexity component only the alternative computation method. burden of inflation-related and cost where the thrift exceeds $1 billion in an The alternative computation did not changes to the assessments schedule. asset category. initially benefit all qualifying savings Accordingly, OTS does not believe that As noted above, OTS provides an associations. Based on the assessment it is appropriate to hold assessments for alternate asset size component rates for the January 1999 semi-annual certain institutions at pre-1998 levels, calculation for qualifying savings assessment, only qualifying savings and compel other institutions to carry associations. To be eligible for this associations with less than $67.5 an increased burden. Accordingly, OTS calculation, a savings association must million in assets benefited from lower proposes to delete the alternative have been a savings association as of assessments under the alternative asset computation under the asset size January 1, 1999, and its total assets must size computation. As a result of computation. not exceed $100 million at the end of subsequent revisions to OTS’s the current or any previous quarter. assessment schedules reflecting To help interested persons Under the alternate calculation, the inflation and increased costs, all understand this proposal and to provide asset size component for a qualifying qualifying savings associations now the greatest opportunity to review the savings association is its assessment benefit from the alternative probable assessment rates that will calculated under pre-1998 assessment computation. apply to all savings associations, OTS is tables. In addition, non-qualifying savings publishing the asset size schedule that OTS developed the alternative asset associations have shouldered, and in the will apply if the proposed rule is size component in its 1998 rulemaking. absence of regulatory change will finalized without substantive changes. 63 FR 65663 (November 30, 1998). One continue to shoulder, an increasing This schedule reflects the rates for non- of the primary purposes of the 1998 rule burden as OTS modifies its assessment qualifying small institutions contained changes was to make OTS assessments schedule to adjust for increases in costs. in TB 48–20 (December 2, 2003).

If total assets (SC60) is: The size component is: Over: But not over: This amount: Plus: Of excess over:

$0 ...... $67 million ...... $2,042 .000116731 $0. $67 million ...... $215 million ...... 13,252 .000111160 $67 million. $215 million ...... $1 billion ...... 29,769 .00008928 $215 million. $1 billion ...... $6.03 billion ...... 99,853 .00007142 $1 billion.

21 While the alternate asset size calculation was all small institutions. Savings associations even when their asset size returns to below $100 originally promulgated to relieve the organized after 1998 may not take advantage of the million. disproportionate impact of the size component on changes and institutions that go over $100 million 22 See TB 48–20 (December 2, 2003). small institutions, this calculation does not benefit in assets do not qualify for the alternative program,

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If total assets (SC60) is: The size component is: Over: But not over: This amount: Plus: Of excess over:

$6.03 million ...... $18 billion ...... 459,096 .00006126 $6.03 billion. $18 billion ...... $35 billion ...... 1,192,378 .00004518 $18 billion. $35 billion ...... 1,960,438 .00003388 $35 billion.

By contrast, the alternative size small institutions proposed for deletion assessment schedule for qualifying in this rule is as follows:

Alternative size assessment schedule for qualifying small institutions Over: But not over: This amount: Plus: Of excess over:

$0 ...... $67 million ...... $0 .000172761 $0. $67 million ...... $100 million ...... 11,575 .000133872 $67 million.

OTS encourages comments on all A. Legal Basis for the Rule; Objectives of B. Impact of the Rule 23 aspects of this proposal. the Rule The proposed rule would affect small III. Solicitation of Comments Regarding The HOLA authorizes the Director to savings associations and small SLHCs. It the Use of Plain Language assess fees against savings associations would not affect other small businesses, and holding companies to fund OTS’s small organizations, or small Section 722 of the Gramm-Leach direct and indirect expenses as the governmental jurisdictions. OTS Bliley Act (12 U.S.C. 4809) requires Director deems necessary or addresses the impact of the rule on federalbanking agencies to use ‘‘plain appropriate.25 OTS also may assess small savings associations and small language’’ in all proposed and final savings associations and affiliates of SLHCs below. OTS also considered rules published after January 1, 2000. savings associations for the costs of various alternatives to the proposed rule OTS invites comments on how to make conducting examinations.26 to reduce the impact of the rule on small this proposed rule easier to understand. OTS has promulgated regulations savings associations and small SLHCs. For example: implementing this authority at 12 CFR These alternatives are also discussed part 502. Under these rules, OTS (1) Have we organized the material to below. currently charges each savings suit your needs? If not, how could the association a semi-annual assessment, 1. Effect on Small SLHCs material be better organized? which includes a size component, a a. Size standard for small SLHCs. The (2) Do we clearly state the condition component, and a complexity Small Business Administration (SBA) requirements in the rule? If not, how component. In addition, OTS charges prescribes size standards for various could the rule be more clearly stated? thrifts an examination fee for thrifts that economic activities and industries using (3) Does the rule contain technical have trust assets that are under the $1 the North American Industry language or jargon that is not clear? If billion complexity component Classification System (NAICS).27 Under so, what language requires clarification? threshold. OTS also charges SLHCs and the SBA’s standards, companies that are other thrift affiliates fees for primarily engaged in holding securities (4) Would a different format (grouping investigating and examining their and order of sections, use of headings, of (or other equity interests in) operations. These examination related depository institutions for the purpose paragraphing) make the rule easier to fees are assessed at an hourly rate for understand? If so, what changes to the of controlling those companies are examiner time spent preparing for and addressed at NAICS Codes 551111 and format would make the rule easier to conducting the examination. understand? 551112 (Office of Bank Holding OTS is proposing this rule to more Companies and Offices of Other Holding IV. Executive Order 12866 accurately apportion the cost of OTS Companies). Companies within this supervision among savings associations, group are considered to be small if they The Director of OTS has determined SLHCs, and other affiliates. The agency have annual receipts of $6 million or that this final rule does not constitute a has three primary goals: (1) Keep less. Companies that are primarily ‘‘significant regulatory action’’ for the charges as low as possible while engaged in holding the securities of purposes of Executive Order 12866. providing the agency with the resources depository institutions and operating essential to effectively supervise a V. Regulatory Flexibility Act Analysis these entities are classified under changing industry; (2) tailor its charges NAICS Codes 522110–522190. Under section 605(b) of the to more accurately reflect the agency’s Companies classified in this group are Regulatory Flexibility Act of 1980,24 costs of supervising institutions and considered to be small if their total OTS has evaluated the impact that this their affiliates; and (3) providing assets are less than $150 million. final rule will have on small businesses, institutions and their affiliates with In this IRFA, OTS has analyzed the small organizations, and small consistent and predictable assessments impact of this rule using both the $150 governmental jurisdictions. As required, to facilitate financial planning. million asset size standard and the $6 OTS has prepared the following initial million annual receipts standard. OTS regulatory flexibility analysis (IRFA). 25 12 U.S.C. 1467(k). See also 12 U.S.C. 1462a, specifically requests comment on its use 1463, 1467, 1467a. 26 12 U.S.C. 1467(a) and (b) and 1467a(b)(4). See of these standards. Commenters are 23 See footnote 7. also 12 U.S.C. 1467(d) (trust examinations of 24 5 U.S.C. 605(b). savings associations). 27 13 CFR part 121.

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invited to address whether these or varying degrees. Specifically, the holding companies that are Category II other size standards are appropriate. various aspects of the rule would have SLHCs, this component would also b. Impact on small SLHCs. The the following impacts: increase the semi-annual assessment by proposed rule would replace Base assessment charge. The base 50 percent. The increase to the semi- examination fees for SLHCs with semi- assessment charge will affect all small annual assessment for these SLHCs annual assessments on each top-tier SLHCs. Under the current proposal, under this component would range from SLHC. For small SLHCs, OTS would these small SLHCs would be assessed a $2,000 to $3,000 ($4,000 to $6,000 per impose a base assessment amount, and charge of $3,000 for each semi-annual year).31 The actual amount of the would add up to three components to assessment (or $6,000 per year). increase will depend upon total this base amount. The three components Risk and complexity component. consolidated SLHC assets. would be based on the risk and Under the anticipated schedules, OTS is OTS regulates 47 section 10(l) SLHCs. complexity of the SLHC’s business, its not proposing to impose any additional Nineteen of these section 10(l) SLHCs organizational form, and its condition. charge on small Category I SLHCs under are small under the asset size standard. No small SLHC would be subject to the the risk and complexity component. Of these 19 small section 10(l) SLHCs, alternative assessment on conglomerate Small Category II SLHCs, however, 14 are Category I and 5 are Category II. enterprises. would be assessed an additional semi- OTS estimates that 12 section 10(l) OTS calculates that there are 946 annual charge of $1,000 to $3,000 (or SLHCs are small under the annual OTS-regulated SLHCs, including many $2,000 to $6,000 per year) under the receipts standard, and that 9 of these intermediate holding companies within anticipated schedules, depending on small SLHCs are Category I and 3 of a single ownership structure. The total consolidated assets. these SLHCs are Category II. proposed rule would charge semi- There are 147 small Category I SLHCs annual assessment fees only on the top- and 16 small Category II SLHCs under Condition component. The proposed tier SLHC in each holding company the asset size standard. OTS estimates rule would impose an additional charge structure. OTS regulates 509 top tier that there are 93 small Category I SLHCs on SLHCs that are rated SLHCs. Of these 509 top tier SLHCs, 163 and 10 small Category II SLHCs under ‘‘unsatisfactory.’’ For these small have total consolidated assets of less the annual receipts standard.29 SLHCs, the proposed condition than $150 million and are considered to Organizational form component. The component would increase the be small under the asset size standard. proposed organizational form assessment by 100 percent. Applying OTS estimates that 103 top-tier SLHCs component would apply only to section the asset size standard, only 5 small have annual receipts of $6 million or 10(l) SLHCs. For small section 10(l) SLHCs are rated unsatisfactory. Under less and would be considered to be holding companies that are Category I the annual receipts standard, only 3 32 small under the annual receipts SLHCs, this component would increase small SLHC are rated unsatisfactory. standard.28 the semi-annual assessment by an The following chart summarizes the The proposed assessment amount additional 50 percent or $1,500 ($3,000 impact of the proposed rule on the semi- would affect all of these small SLHCs in per year).30 For small section 10(l) annual assessment for small SLHCs:

A B C D Number of small SLHCs Base Risk and com- Organizational Total semi- assessment plexity compo- form compo- annual amount 33 nent 34 nent 35 assessment 36

Small Category I SLHCs that are not 133 (asset size standard) ...... $3,000 $0 N/A $3,000 section 10(l) SLHCs. 84 (receipts standard) Small Category II SLHCs that are not 11 (asset size standard) ...... 3,000 *3,000 N/A *6,000 section 10(l) SLHCs. 7 (receipts standard) Small Category I SLHCs that are 14 (asset size standard) ...... 3,000 0 $1,500 4,500 section 10(l) SLHCs. 9 (receipts standard) Small Category II SLHCs that are 5 (asset size standard) ...... 3,000 *3,000 *3,000 *9,000 section 10(l) SLHCs. 3 (receipts standard) * Maximum. 33 OTS has proposed a $3,000 base semi-annual assessment amount for all SLHCs. 34 Amounts in Column B are from the proposed schedule for the risk and complexity component. 35 Amounts in Column C are 50% of the total of Column A + Column B. 36 Amounts in Column D equal Column A + Column B + Column C.

As noted above, for the five SLHCs of the semi-annual assessment is The amounts charged under the new that are rated unsatisfactory, the amount doubled. assessments rule for SLHC would be

28 OTS electronically collects information on total 29 As noted above, OTS does not electronically 31 This $2,000 to $3,000 range for the semi-annual consolidated assets held by most SLHCs. However, collect annual receipts data for SLHCs. OTS has organizational component is 50 percent times the it does not electronically collect annual receipts estimated the number of small Category I and II total of the base charge ($3,000) plus the risk and data. OTS has estimated the number of small SLHCs SLHCs, small section 10(l) SLHCs, and small complexity component for a Category II SLHC. As unsatisfactorily rated SLHCs under the annual under the annual receipts standard by analyzing noted above, the risk and complexity component for revenues standard by applying the proportion of a Category II SLHC will range from $1,000 to 3,000. actual trailing 12-month revenues reported for 277 small SLHCs in these categories under the asset size publicly traded SLHCs for the fiscal/calendar year standard. 32 OTS cannot provide a more specific breakdown ending December 31, 2003. Source: SNLDataSource. 30 The additional semi-annual organizational regarding the impact of the condition component on Using total revenue figures, OTS has concluded that charge of $1,500 is 50 percent times the total of the each of these small SLHCs because such approximately 20.2% of the 509 holding company base assessment component ($3,000) plus the risk information may result in the public disclosure of structures are small under the annual receipts and complexity component for Category I SLHCs sensitive and privileged supervisory rating standard. ($0). information for specific SLHCs. See 12 CFR 510.5.

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offset by the elimination of the periodic supervising others.37 For the reasons set savings associations and that 289 of SLHC examination fees. Although the forth in the preamble, OTS further these small savings associations will amount of this offset will vary from believes that continuing to assess take advantage of the alternative size SLHC-to-SLHC, OTS estimates that the examination fees would not provide calculation for the January 2004 average examination for a small SLHC is SLHCs with consistency and assessment. conducted every 18 months, and predictability of assessments to facilitate Under the alternate calculation, the consumes approximately 39 examiner financial planning. asset size component for a qualifying OTS specifically requests comments hours. At the current OTS billing rate of savings association is its assessment on each of these alternatives, and any $145 per hour, OTS estimates that the calculated under pre-1998 assessment average small SLHC will avoid on-site other alternatives that may minimize the impact of the rule on small SLHCs schedules, rather than the current examination charges of $5,655 or an assessment schedules. Unlike the pre- annualized charge of $3,770 per year. consistent with the goals of this rulemaking. 1998 assessment schedules, the current In any event, OTS has considered assessment schedules use rates that alternatives to the proposed assessment 2. Effect on Small Savings Associations have been adjusted for inflation and rule. OTS considered, for example, This proposed rule would effect small include a base charge for certain fixed assessing all SLHCs the same base savings associations by eliminating the costs that are the same or nearly the assessment amount; computing the alternative calculation of the size same for all institutions. Because the semi-annual assessment amount for all component currently available to certain amount of the size component varies SLHCs using the same asset-based small savings associations. To be with the size of the institution, the assessment schedule; and continuing to eligible for this calculation, a savings impact of the proposed change on the assess only on-site examination and off- association must have been a savings 289 small thrifts will vary. Using the site examination related fees rather than association as of January 1, 1999, and its most recent assessment table published semi-annual assessments. total assets must not exceed $100 in TB 48–20 for the January 2004 semi- OTS does not believe that the first two million at the end of the current or any annual assessment, the asset size alternatives would further the goal of previous quarter. component computed under the tailoring OTS charges more closely to Small savings associations are defined standard method and the alternative the costs of supervising various types of as institutions with assets under $150 methods for institutions of various SLHCs, and could result in some SLHCs million.38 OTS estimates that it selected sizes is illustrated by the subsidizing the increased costs of regulates approximately 478 small following chart:

IMPACT OF THE ALTERNATIVE SIZE COMPUTATION ON INSTITUTIONS OF SELECTED SIZES

Asset size compo- nent computed Alternative asset Net reduction of Asset size under TB 48–20 size component assessment schedules computation

$0 Million ...... $2,042 $0 $2,042 $35 Million ...... 7,898 6,046 1,852 $67 Million ...... 13,252 11,575 1,677 $100 Million ...... 16,935 15,993 942

Approximately 20 of the 289 small 100 percent of the size component. For smaller institutions, or phasing out the savings associations are currently rated these three institutions, the overall alternative schedule over time. ‘‘3’’ and are subject to an additional benefit of the alternative size calculation OTS’s assessment regulation, to the assessment under the condition is 200 percent of figure in the final maximum extent possible, attempts to component. This additional assessment column of the chart. The overall semi- tailor rates and charges to the agency’s is equal to 50 percent of the size annual benefit from the alternative size costs of supervising particular component. For these 20 thrifts, the calculation for any individual 4- or 5- institutions. While it may have been overall benefit of the alternative size rated savings association will range appropriate to provide qualifying calculation is 150 percent of the amount from $1,884 to $4,084, depending on the savings associations with an initial in the final column of the chart. Thus, institution’s asset size.39 period to adjust to the assessment the overall semi-annual benefit from the regulation originally adopted in 1998, it OTS considered various alternatives alternative size calculation for any is not equitable to continue to require to the proposed rule. For example, it individual 3-rated savings association non-qualifying savings associations to considered retaining the alternative will range from $1,413 to $3,063, carry the cost burdens for qualifying depending on the institution’s asset asset size component for qualifying savings associations. Non-qualifying size. Three small savings associations savings associations, prescribing a savings associations, which include are rated ‘‘4’’ or ‘‘5’’ and are subject to separate asset size schedule for smaller many small savings associations,40 have an additional assessment under the institutions with a lower base carried an extra burden for qualifying condition component that is equal to assessment rate or lower rates for institutions for five years. As described

37 Moreover, OTS believes that requiring 38 13 CFR 121.201. sensitive and privileged supervisory rating unsatisfactory-rated SLHCs to pay for their extra 39 See 12 CFR 502.20. These numbers are based information for specific institutions. See 12 CFR supervisory costs will provide an added incentive on ratings data as of December 6, 2003. OTS cannot 510.5. for those SLHCs to promptly address the provide a more specific breakdown regarding the 40 OTS estimates that 189 of the 478 institutions supervisory concerns that could adversely impact impact of the condition component on each of these with assets under $150 million are not qualifying the depository subsidiary and to take other actions small savings associations because such to improve their ratings. information may result in the public disclosure of savings associations.

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above at Section II.B.1., the burden has expenditure by state, local, and tribal notices, applications, and securities not remained static, but rather has governments, in the aggregate, or by the filings. The Director may charge a fee for increased over the five-year period. OTS private sector, of $100 million or more any service including publications, believes that all institutions, even small in any one year. If a budgetary impact seminars, certifications for official institutions, should be able to plan for, statement is required, section 205 of the copies of agency documents, and adjust to, and carry the burden of Unfunded Mandates Act also requires records or services requested by other inflation-related and cost changes an agency to identify and consider a agencies. The Director also assesses fees reflected in OTS’s assessments reasonable number of regulatory for examining and investigating savings schedule. Accordingly, OTS does not alternatives before promulgating a rule. associations that administer trust assets believe that it is appropriate to compel OTS has determined that the final rule of $1 billion or less, and savings other institutions to continue to carry an will not result in expenditures by state, association affiliates. If OTS incurs increased burden. local, or tribal governments or by the extraordinary expenses related to OTS specifically requests comments private sector of $100 million or more. examination, investigation, regulation, on each of these alternatives, and any Accordingly, this rulemaking is not or supervision of a savings association other alternatives that may minimize the subject to section 202 of the Unfunded or its affiliate, the Director may charge impact of the rule on small savings Mandates Act. the savings association or the affiliate a associations consistent with the goals of List of Subjects in 12 CFR Part 502 fee to fund those expenses. Subpart B of this rulemaking. this part describes OTS’s fee procedures Assessments, Federal home loan C. Other Matters and requirements. banks, Reporting and recordkeeping 3. Revise part 502, subpart A to read The proposed rule imposes no requirements, Savings associations. as follows: reporting, recordkeeping, or other Accordingly, the Office of Thrift compliance requirements. The current Supervision proposes to amend part Subpart A—Assessments savings association assessment and the 502, chapter V, title 12, Code of Federal new SLHC assessment would be based Regulations as set forth below. Savings Associations—Calculation of on information contained in TFRs or in Assessments report H–(b)11, which savings PART 502—ASSESSMENTS AND FEES § 502.10 How does OTS calculate the associations and their SLHCs otherwise 1. The authority citation for part 502 semi-annual assessment for savings must file with OTS. While state- continues to read as follows: associations? regulated depository institutions held by section 10(l) SLHCs do not currently Authority: 12 U.S.C. 1462a, 1463, 1467, (a) If you are a savings association, submit holding company asset size 1467a. OTS determines your semi-annual information to OTS in Schedule HC of 2. In § 502.5, revise paragraphs (b) and assessment by totaling three the TFR, OTS is considering revising its (c) to read as follows: components: Your size, your condition, TFR filing requirements to collect this and the complexity of your business. information electronically through § 502.5 Who must pay assessments and OTS determines the amounts of each Schedule HC filings. fees? component under §§ 502.15 through OTS will continue to use its current * * * * * 502.25 of this part. collection procedures for savings (b) Assessments. If you are a savings (b) OTS uses the September 30 Thrift associations and would use similar association or a top-tier savings and Financial Report to determine amounts procedures for billing and collecting loan holding company, and OTS due at the January 31 assessment; and semi-annual assessments from SLHCs. regulates you on the last day of January the March 31 Thrift Financial Report to No federal rules duplicate, overlap, or or on the last day of July of each year, determine amounts due at the July 31 conflict with this final rule. you must pay a semi-annual assessment assessment. For purposes of §§ 502.10 due on that day. Subpart A of this part through 502.25 of this part, total assets VI. Unfunded Mandates Act of 1995 describes OTS’s assessment procedures are your total assets as reported on Section 202 of the Unfunded and requirements. Thrift Financial Reports filed with OTS. Mandates Reform Act of 1995, Pub. L. (c) Fees. If you make a filing with OTS 104–4 (Unfunded Mandates Act), or use OTS services, the Director may § 502.15 How does OTS determine my size requires an agency to prepare a require you to pay a fee to cover the component? budgetary impact statement before costs of processing your submission or (a) Chart. If you are a savings promulgating a rule that includes a providing those services. The Director association, OTS uses the following federal mandate that may result in may charge a fee for any filing including chart to calculate your size component:

If your total assets are: Your size component is: This amount– Over– But not over– base assess- Plus–marginal Of assets over— ment amount rate class floor

Column A Column B Column C Column D Column E

0 ...... $67 million ...... C1 D1 0. $67 million ...... 215 million ...... C2 D2 $67 million. 215 million ...... 1 billion ...... C3 D3 215 million. 1 billion ...... 6.03 billion ...... C4 D4 1 billion. 6.03 billion ...... 18 billion ...... C5 D5 6.03 billion. 18 billion ...... 35 billion ...... C6 D6 18 billion. 35 billion ...... C7 D7 35 billion.

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(b) Calculation. To calculate your size threshold if you have more than $1 the amount of each component under component, find the row in Columns A billion in any of the following: §§ 502.27 through 502.29 of this part. and B that describes your total assets. (1) Trust assets that you administer. (c) For purposes of the semi-annual Reading across in that same row, find (2) The outstanding principal assessment of savings and loan holding your base assessment amount in balances of assets that are covered, fully companies: Column C, your marginal rate in or partially, by your recourse obligations (1) The top-tier holding company is Column D, and your class floor in or direct credit substitutes. the highest level of ownership by a (3) The principal amount of loans that Column E. Calculate how much your registered holding company in the total assets exceed your Column E class you service for others. (b) Assessment rates. OTS will holding company structure. floor. Multiply this number by your (2) Total consolidated holding Column D marginal rate. Add this establish one or more assessment rates for each of the types of activities listed company assets are the total assets as number to your Column C base reported on Thrift Financial Reports, assessment amount. The total is your in paragraph (a) of this section. OTS will publish those assessment rates in a Schedule HC. If Schedule HC is size component. OTS will establish the unavailable, OTS will use total assets base assessment amounts and the Thrift Bulletin. (c) Calculation of complexity reported on report H–(b)11. OTS uses marginal rates in columns C and D in a component. OTS separately considers information contained in the September Thrift Bulletin. each of the thresholds in paragraph (a) 30 Thrift Financial Report or report H– § 502.20 How does OTS determine my of this section in calculating your (b)11 to determine amounts due at the condition component? complexity component. OTS first January 31 assessment; and the March calculates the amount by which you 31 Thrift Financial Report or report H– (a) If you are a savings association, exceed any of those thresholds. OTS (b)11 to determine amounts due at the OTS uses the following chart to multiplies the amount by which you July 31 assessment. determine your condition component: exceed any thresholds in paragraph (a) § 502.27 How does OTS determine the risk of this section by the applicable and complexity component for a savings If your Then your condition composite assessment rate(s) under paragraph (b) and loan holding company? rating is: component is: of this section. OTS then totals the results. This total is your complexity (a) OTS computes the risk and 1 or 2 ...... Zero. component. complexity component for top-tier 3 ...... 50 percent of your size com- savings and loan holding companies ponent. Savings and Loan Holding using schedules that set out charges 4 or 5 ...... 100 percent of your size com- Companies—Calculation of based on OTS holding company risk ponent. Assessments classifications and total consolidated § 502.26 How does OTS calculate the holding company assets. OTS will (b) For the purposes of this section, semi-annual assessment for savings and establish these schedules in a Thrift OTS uses the most recent composite loan holding companies? Bulletin. rating, as defined in 12 CFR part 516, of (a) OTS will assess a base assessment (b) For the purposes of this section, which you have been notified in writing amount on all top-tier savings and loan the holding company risk classification before an assessment’s due date. holding companies. The base is the most recent risk classification assigned by OTS of which the savings § 502.25 How does OTS determine my assessment amount will reflect OTS’s complexity component? estimate of the base costs of conducting and loan holding company has been on- and off-site supervision of a notified in writing before an If you are a savings association and noncomplex, low risk savings and loan assessment’s due date. OTS holding your portfolio exceeds any of the holding company. OTS will establish company risk classifications reflect thresholds in paragraph (a) of this the amount of the base assessment OTS’s assessment of a holding section, OTS will calculate your component in a Thrift Bulletin. company’s financial condition, financial complexity component according to (b) OTS will add three components to independence, operational paragraph (c) of this section. If your the base assessment amount to compute independence, reputational risk, and portfolio does not exceed any of the the amount of the semi-annual management experience, as more fully thresholds in paragraph (a) of this assessment for top-tier savings and loan described in OTS Holding Company section, your complexity component is holding companies: a component based Handbook. zero. on the risk and complexity of the (c) OTS uses the following chart to (a) Thresholds for complexity savings and loan holding company’s compute the risk and complexity component. OTS uses three separate business, a component based on its component under this section. OTS will thresholds in calculating your organizational form, and a component establish the amounts in column C and complexity component. You exceed a based on its condition. OTS determines D in the Thrift Bulletin.

If your total consolidated assets are . . . Your risk and complexity component is . . . Plus—this mar- Over . . . But not over . . . This amount . . . ginal rate . . . Of assets over . . .

Column A Column B Column C Column D Colume E

$0 ...... $150 Million ...... $0. $150 Million ...... $250 Million ...... $150 Million. $250 Million ...... $500 Million ...... $250 Million. $500 Million ...... $1 Billion ...... $500 Million. $1 Billion ...... $5 Billion ...... $1 Billion. $5 Billion ...... $50 Billion ...... $5 Billion. $50 Billion ...... $100 Billion ...... $50 Billion.

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If your total consolidated assets are . . . Your risk and complexity component is . . . Plus—this mar- Over . . . But not over . . . This amount . . . ginal rate . . . Of assets over . . .

Column A Column B Column C Column D Colume E

$100 Billion ...... $300 Billion ...... $100 Billion. Over $300 Billion ...... $300 Billion.

(d) To compute your risk and company rating system. OTS uses the § 502.40 Will OTS refund or prorate my complexity component, find the row in most recent rating of which the savings assessment? the appropriate schedule that describes and loan holding company has been (a) OTS will not refund or prorate your total consolidated assets by notified in writing before an your assessment, even if you cease to be referring to the amounts in Columns A assessment’s due date. a savings association or a savings and and B. In that row, calculate how much loan holding company. Payment of Assessments your total consolidated assets exceed (b) If you are a savings association for the class floor (Column E); multiply this § 502.30 When must I pay my whom a conservator or receiver has number by your marginal rate (Column assessment? been appointed, you must continue to D); and add the product to the amount pay assessments in accordance with this OTS will bill you semi-annually for part. OTS will not increase or decrease in Column C. The total is your risk and your assessments. Assessments are due complexity component. your assessment based on events that January 31 and July 31 of each year, occur after the date of the Thrift § 502.28 How does OTS determine the unless that date is a Saturday, Sunday, Financial Report upon which your organizational form component for a or Federal holiday. If the due date is a assessment is based. savings and loan holding company? Saturday, Sunday or Federal holiday, (a) OTS may determine that a your assessment is due on the first day § 502.45 What will happen if I do not pay particular organizational form used by preceding the due date that is not a my assessment on time. savings and loan holding companies Saturday, Sunday or Federal holiday. At (a) Your assessment is delinquent if causes OTS to incur different least seven days before your assessment you do not pay it on the date it is due supervisory costs, and may modify the is due, the Director will mail you a under § 502.30 of this part. The Director assessment charged to such top-tier notice that indicates the amount of your will charge interest on delinquent savings and loan holding companies assessment, explains how OTS assessments. Interest will accrue at a under the organizational form calculated the amount, and specifies rate (that OTS will determine quarterly) component. when payment is due. equal to 150 percent of the average of (b) OTS computes the organizational the bond-equivalent rates of 13-week form component for top-tier savings and § 502.35 How do I pay my assessment? Treasury bills auctioned during the loan holding companies by adding the (a) Savings associations. (1) If you are calendar quarter preceding the base assessment to the risk and a member of a Federal Home Loan Bank assessment. complexity component, and multiplying that offers demand deposit accounts, (b) If a savings and loan holding this amount times a factor (positive or you must maintain a demand deposit company fails to pay an assessment negative) established for the particular account at your Federal Home Loan within 60 days of the date it is due organizational form. Bank with sufficient funds to pay your under § 502.30 of this part, the Director (c) OTS will establish applicable assessment when due. OTS will notify may assess and collect the assessment factors in a Thrift Bulletin. OTS may your Federal Home Loan Bank of the with interest from a subsidiary savings establish different factors for different amount of your assessment. OTS will association. If a savings and loan organizational forms and based on the debit your account for your assessments. holding company controls more than amount of total consolidated holding (2) If paragraph (a)(1) of this section one savings association, the Director company assets. does not apply to you, OTS will directly may assess and collect the assessment from each savings association as the § 502.29 How does OTS determine the debit an account you must maintain at your association. Director may prescribe. condition component for a savings and loan 4. Revise § 502.50 to read as follows: holding company? (b) Savings and loan holding (a) If the most recent examination companies. You may establish an § 502.50 What fees does OTS charge? rating assigned to a top-tier savings and account at an insured depository (a) The Director assesses fees for loan holding company (or the most institution and authorize OTS to debit examining or investigating savings recent examination rating assigned to a the account for your semi-annual associations that administer trust assets savings and loan holding company assessment. If you do not establish an of $1 billion or less, and saving controlled by the top-tier savings and account and maintain funds in the association affiliates. Because OTS loan holding company) was account sufficient to pay the semi- recovers the ordinary costs of examining ‘‘unsatisfactory,’’ OTS will assess a annual assessment when due, OTS may and investigating savings and loan charge under the condition component. charge you a fee to cover its holding companies through the semi- The amount of the condition component administrative costs of collecting and annual assessment under §§ 502.25 is equal to 100 percent of the assessment billing your assessment. This fee is in through 502.29 of this part, the Director amounts computed under §§ 502.26 addition to interest on delinquent will not generally charge an through 502.28 of this part. assessments charged under § 502.45 of examination fee to a savings and loan (b) For the purposes of this section, this part. OTS will establish the amount holding company. ‘‘Affiliate’’ has the examination ratings are the ratings that of the administrative fee and publish the meaning in 12 U.S.C. 1462(9), except OTS assigns under the OTS holding amount of the fee in a Thrift Bulletin. that, for this part only, ‘‘affiliate’’ does

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not include any entity that is DATES: Comments must be received on Model A–1 up to B–2, serial number (S/ consolidated with a savings association or before April 12, 2004. N) all, and Model C–1, S/N 7500 up to on the Consolidated Statement of the ADDRESSES: Submit comments in 7545. The LBA advises that during tail Condition of the Thrift Financial Report. triplicate to the Federal Aviation boom production, metal sheeting of 0.6- (b) The Director assesses fees for Administration (FAA), Office of the millimeter (mm) thickness was found processing notices, applications, Regional Counsel, Southwest Region, instead of the specified 0.8-mm securities filings, and requests, and for Attention: Rules Docket No. 2003–SW– thickness for the skin paneling of providing other services. 38–AD, 2601 Meacham Blvd., Room several tail booms. 5. Revise § 502.75(b) to read as 663, Fort Worth, Texas 76137. You may ECD has issued Alert Service Bulletin follows: also send comments electronically to No. ASB–MBB–BK117–30–109, the Rules Docket at the following Revision 1, dated July 3, 2003, which § 502.75 What will happen if I do not pay specifies measuring the wall thickness my fees on time? address: [email protected]. Comments may be inspected at the of the skin paneling of the vertical fin * * * * * Office of the Regional Counsel between to determine the thickness. The LBA (b) Failure to pay. If you are a savings 9 a.m. and 3 p.m., Monday through classified this service bulletin as association and your holding company, Friday, except Federal holidays. mandatory and issued AD No. 2003– affiliate, or subsidiary fails to pay any 219, dated August 21, 2003, to ensure FOR FURTHER INFORMATION CONTACT: fee within 60 days of the date specified the continued airworthiness of these in a bill, the Director may assess and Richard Monschke, Aviation Safety helicopters in the Federal Republic of collect that fee, with interest, from you. Engineer, FAA, Rotorcraft Directorate, Germany. If the holding company, affiliate, or Rotorcraft Standards Staff, Fort Worth, This helicopter model is subsidiary is related to more than one Texas 76193–0110, telephone (817) manufactured in the Federal Republic of savings association, the Director may 222–5116, fax (817) 222–5961. Germany and is type certificated for assess the fee against and collect it from SUPPLEMENTARY INFORMATION: operation in the United States under the each savings association as the Director Comments Invited provisions of 14 CFR 21.29 and the may prescribe. applicable bilateral agreement. Pursuant Interested persons are invited to Dated: February 4, 2004. to the applicable bilateral agreement, participate in the making of the the LBA has kept the FAA informed of By the Office of Thrift Supervision. proposed rule by submitting such the situation described above. The FAA Richard M. Riccobono, written data, views, or arguments as has examined the findings of the LBA, Deputy Director. they may desire. Communications reviewed all available information, and [FR Doc. 04–2846 Filed 2–9–04; 8:45 am] should identify the Rules Docket determined that AD action is necessary BILLING CODE 6720–01–P number and be submitted in triplicate to for products of this type design that are the address specified above. All certificated for operation in the United communications received on or before States. DEPARTMENT OF TRANSPORTATION the closing date for comments will be This previously described unsafe considered before taking action on the condition is likely to exist or develop on Federal Aviation Administration proposed rule. The proposals contained other helicopters of the same type in this document may be changed in design registered in the United States. 14 CFR Part 39 light of the comments received. Therefore, the proposed AD would Comments are specifically invited on require, within 100 hours time-in- [Docket No. 2003–SW–38–AD] the overall regulatory, economic, service, using external calipers, environmental, and energy aspects of measuring the wall thickness, including RIN 2120–AA64 the proposed rule. All comments primer coating, of the skin paneling of Airworthiness Directives; Eurocopter submitted will be available, both before the vertical fin. If the wall thickness, Deutschland Model MBB–BK 117 A–1, and after the closing date for comments, including the primer coating, of the A–3, A–4, B–1, B–2, and C–1 in the Rules Docket for examination by paneling is less than 0.778 millimeter interested persons. A report (0.03063 inch) at any of the measured AGENCY: Federal Aviation summarizing each FAA-public contact locations, this proposed AD would also Administration, DOT. concerned with the substance of this require replacing the vertical fin with an ACTION: Notice of proposed rulemaking proposal will be filed in the Rules airworthy part before further flight. (NPRM). Docket. The FAA estimates that this proposed Commenters wishing the FAA to AD would affect 132 helicopters of U.S. SUMMARY: This document proposes acknowledge receipt of their mailed registry and the proposed actions would adopting a new airworthiness directive comments submitted in response to this take approximately 1 hour per (AD) for the specified Eurocopter proposal must submit a self-addressed, helicopter to accomplish at an average Deutschland (ECD) model helicopters. stamped postcard on which the labor rate of $65 per work hour. Based This proposal would require inspecting following statement is made: on these figures, we estimate the total the vertical fin skin paneling to ‘‘Comments to Docket No. 2003–SW– cost impact of the proposed AD on U.S. determine if it was manufactured with 38–AD.’’ The postcard will be date operators to be $8580 assuming no the correct wall thickness. This proposal stamped and returned to the vertical fins will need to be replaced. is prompted by a report from the commenter. The regulations proposed herein manufacturer that some vertical fins would not have a substantial direct may have been produced with the Discussion effect on the States, on the relationship wrong vertical fin skin thickness. The The Luftfahrt-Bundesamt (LBA), the between the national Government and actions specified by this proposed AD airworthiness authority for the Federal the States, or on the distribution of are intended to prevent failure of the Republic of Germany, notified the FAA power and responsibilities among the vertical fin and subsequent loss of that an unsafe condition may exist on various levels of government. Therefore, control of the helicopter. ECD Model MBB–BK117 helicopters, it is determined that this proposal

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would not have federalism implications List of Subjects in 14 CFR Part 39 Eurocopter Deutschland: Docket No. 2003– under Executive Order 13132. Air transportation, Aircraft, Aviation SW–38–AD. For the reasons discussed above, I safety, Safety. Applicability: Model MBB–BK 117 A–1, A– 3, A–4, B–1, and B–2, all serial numbers (S/ certify that this proposed regulation (1) The Proposed Amendment is not a ‘‘significant regulatory action’’ N), and Model C–1, S/N 7500 through 7545, certificated in any category. under Executive Order 12866; (2) is not Accordingly, pursuant to the Compliance: Required within 100 hours a ‘‘significant rule’’ under the DOT authority delegated to me by the Administrator, the Federal Aviation time in service, unless accomplished Regulatory Policies and Procedures (44 Administration proposes to amend part previously. FR 11034, February 26, 1979); and (3) if 39 of the Federal Aviation Regulations To prevent failure of the vertical fin and promulgated, will not have a significant (14 CFR part 39) as follows: subsequent loss of control of the helicopter, economic impact, positive or negative, do the following: on a substantial number of small entities PART 39—AIRWORTHINESS (a) Using external calipers, measure the under the criteria of the Regulatory DIRECTIVES wall thickness, including primer coating, of Flexibility Act. A copy of the draft the skin paneling of the vertical fin at the 1. The authority citation for part 39 regulatory evaluation prepared for this locations shown in Figure 1 of this AD. continues to read as follows: action is contained in the Rules Docket. Note 1: Eurocopter Deutschland (ECD) A copy of it may be obtained by Authority: 49 U.S.C. 106(g), 40113, 44701. Alert Service Bulletin No. ASB–MBB– contacting the Rules Docket at the § 39.13 [Amended] BK117–30–109, Revision 1, dated July 3, location provided under the caption 2. Section 39.13 is amended by 2003, pertains to the subject of this AD. ADDRESSES. adding a new airworthiness directive to BILLING CODE 4910–13–P read as follows:

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(b) If the wall thickness, including the Issued in Fort Worth, Texas, on DEPARTMENT OF TRANSPORTATION primer coating, of the paneling is less than January 30, 2004. 0.778 millimeter (0.03063 inch) at any of the Federal Aviation Administration measured locations, replace the vertical fin David A. Downey, with an airworthy part before further flight. Manager, Rotorcraft Directorate, Aircraft 14 CFR Parts 60 and 121 (c) To request a different method of Certification Service. compliance or a different compliance time [FR Doc. 04–2783 Filed 2–9–04; 8:45 am] [Docket No. FAA–2002–12461; Notice No. 02–11] for this AD, follow the procedures in 14 CFR BILLING CODE 4910–13–C 39.19. Contact the Safety Management Group, RIN 2120–AH07 Rotorcraft Directorate, FAA, for information about previously approved alternative Flight Simulation Device Initial and methods of compliance. Continuing Qualification and Use Note 2: The subject of this AD is addressed AGENCY: Federal Aviation in Luftfahrt-Bundesamt (Federal Republic of Administration (FAA), DOT. Germany) AD 2003–219, dated August 21, 2003. ACTION: Proposed rule; reopening of comment period.

SUMMARY: On September 25, 2002, the FAA published a Notice of Proposed Rulemaking (NPRM) to establish a new

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part regarding flight simulation device to the economic, environmental, energy, Any person may obtain a copy of this qualification requirements. The or federalism impacts that might result document by submitting a request to the comment period closed on February 24, from adopting the proposals in this Federal Aviation Administration, Office 2003; however, the FAA is reopening document. The most helpful comments of Rulemaking, ARM–1, 800 the comment period for an additional 30 reference a specific portion of the Independence Avenue SW., days in order to give the public an proposal, explain the reason for any Washington, DC 20591, or by calling opportunity to comment on recommended change, and include (202) 267–9680. Communications must recommendations received from an supporting data. We ask that you send identify the notice number or docket Aviation Rulemaking Committee us two copies of written comments. number of this NPRM. established by the Administrator on July We will file in the docket all Persons interested in being placed on 2, 2003. comments we receive, as well as a the mailing list for future rulemaking DATES: Comments must be received on report summarizing each substantive documents should request from the or before March 11, 2004. public contact with FAA personnel above office a copy of Advisory Circular ADDRESSES: You may send comments concerning this proposed rulemaking. No. 11–2A, Notice of Proposed [identified by Docket Number FAA– The docket is available for public Rulemaking Distribution System, which 2002–12461] using any of the following inspection before and after the comment describes the application procedure. methods: closing date. If you wish to review the • DOT Docket Web site: Go to docket in person, go to the address in Background http://dms.dot.gov and follow the the ADDRESSES section of this preamble On September 25, 2002, the FAA instructions for sending your comments between 9 a.m. and 5 p.m., Monday published in the Federal Register electronically. through Friday, except Federal holidays. Notice 02–11, entitled ‘‘Flight • Government-wide rulemaking Web You may also review the docket using Simulation Device Initial and site: Go to http://www.regulations.gov the Internet at the Web address in the and follow the instructions for sending ADDRESSES section. Continuing Qualification and Use’’ (67 your comments electronically. Privacy Act: Using the search function FR 60284). The comment period closed • Mail: Docket Management Facility; of our docket Web site, anyone can find on February 24, 2003. In order to resolve U.S. Department of Transportation, 400 and read the comments received into comments and provide a forum for the Seventh Street, SW., Nassif Building, any of our dockets, including the name FAA and the aviation community to Room PL–401, Washington, DC 20590. of the individual sending the comment discuss and resolve issues regarding • Fax: 1–202–493–2251. (or signing the comment on behalf of an FSDs, the FAA established the Flight • Hand Delivery: Room PL–401 on association, business, labor union, etc.). Simulation Device Aviation Rulemaking the plaza level of the Nassif Building, You may review DOT’s complete Committee (ARC) on July 2, 2003. The 400 Seventh Street, SW., Washington, Privacy Act Statement in the Federal general goal of the ARC is to provide DC, between 9 a.m. and 5 p.m., Monday Register published on April 11, 2000 advice, guidance, and recommendations through Friday, except Federal holidays. (65 FR 19477–78) or you may visit on FSD issues including but not limited For more information on the http://dms.dot.gov. to safety of flight issues; the suitability rulemaking process, see the Before acting on this proposal, we and/or the application of the simulation SUPPLEMENTARY INFORMATION section of will consider all comments we receive to flight crewmember training, testing, this document. on or before the closing date for or checking activities; and Privacy: We will post all comments comments. We will consider comments implementation of technical changes or we receive, without change, to http:// filed late if it is possible to do so scientific advancements in simulation. dms.dot.gov, including any personal without incurring expense or delay. We This ARC provided a forum for the FAA information you provide. For more may change this proposal in light of the and affected members of the aviation information, see the Privacy Act comments we receive. community to discuss issues. The ARC discussion in the SUPPLEMENTARY If you want the FAA to acknowledge also allowed members of the aviation INFORMATION section of this document. receipt of your comments on this community to reach consensus on Docket: To read background proposal, include with your comments certain recommendations that would be documents or comments received, go to a pre-addressed, stamped postcard on submitted to the FAA, to develop http://dms.dot.gov at any time or to which the docket number appears. We resolutions to facilitate the evolution of Room PL–401 on the plaza level of the will stamp the date on the postcard and FSDs. The ARC’s initial task was to Nassif Building, 400 Seventh Street, mail it to you. review the FAA’s proposed new rules in SW., Washington, DC, between 9 a.m. Notice 02–11 (Docket No. FAA–2002– and 5 p.m., Monday through Friday, Availability of NPRMs 12461), published on September 25, except Federal holidays. An electronic copy of this document 2002. On November 24, 2003, the ARC FOR FURTHER INFORMATION CONTACT: may be downloaded using a modem and submitted to the FAA its Edward Cook, National Simulator suitable communications software from recommendations on how the proposed Program Staff (AFS–205), Flight the FAA regulations section of the rule language should be clarified and Standards Service, Federal Aviation FedWorld electronic bulletin board reorganized. The ARC believes its Administration, 100 Hartsfield Centre service (telephone: (703) 321–3339) or recommendations are within the scope Parkway, Suite 400, Atlanta, GA 30354; the Government Printing Office (GPO)’s of the original NPRM. telephone: (404) 832–4700 electronic bulletin board service In order to give the public an SUPPLEMENTARY INFORMATION: (telephone: (202) 512–1661). opportunity to comment on the Internet users may reach the FAA’s recommendations received from the Comments Invited Web page at http://www.faa.gov/avr/ ARC, the FAA is reopening the The FAA invites interested persons to arm/nprm/nprm.htm or the GPO’s Web comment period for an additional 30 participate in this rulemaking by page at http://www.access.gpo.gov/nara days. The FAA finds that it is in the submitting written comments, data, or to access recently published rulemaking public interest to reopen the comment views. We also invite comments relating documents. period for 30 days.

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Issued in Washington, DC, on February 2, dot.gov. You may review the public operators who have responded to this 2004. docket containing comments to these proposed rule. John M. Allen, proposed regulations in person in the The Internet allows us to overcome Acting Director, Flight Standards Service. Dockets Office between 9 a.m. and 5 the barriers of geography and enables [FR Doc. 04–2872 Filed 2–9–04; 8:45 am] p.m., Monday through Friday, except anyone with an Internet connection to BILLING CODE 4910–13–P Federal holidays. The Dockets Office is participate in a public discussion of the on the plaza level at the Department of issues. A further advantage of a public Transportation building at the address meeting on the Internet is that it is not DEPARTMENT OF TRANSPORTATION above. Also, you may review public limited by time. A traditional public dockets on the Internet at http:// meeting would be scheduled at a Federal Aviation Administration dms.dot.gov. particular place, on a particular day, at a specific time. Anyone with a schedule 14 CFR Parts 61, 91, 119, 121, 135, and FOR FURTHER INFORMATION CONTACT: conflict may be unable to participate. A 136 Alberta Brown, Air Transportation public meeting on the Internet can be Division, Flight Standards Service, [Docket No. FAA–1998–4521; Notice No. 04– available 24 hours per day over a period 02] AFS–200, Federal Aviation of several weeks. A public meeting held Administration, 800 Independence on the Internet, like a traditional public RIN 2120–AF07 Avenue, SW., Washington, DC 20591; meeting, provides the opportunity to telephone (202) 267–8166; e-mail: National Air Tour Safety Standards obtain useful information from the [email protected]. public. It has the additional advantage AGENCY: Federal Aviation SUPPLEMENTARY INFORMATION of allowing much broader participation Administration (FAA), DOT. throughout the country. We have ACTION: Notice of public meeting on the Background therefore decided to hold a public Internet. We published a notice of proposed meeting on the Internet. SUMMARY: On October 22, 2003, the FAA rulemaking on October 22, 2003 (68 FR How the Public Meeting Will Be published a notice of proposed 60572) that proposes to regulate Conducted rulemaking (NPRM) that proposes commercial air tours throughout the To facilitate an organized and useful regulations to govern commercial air United States. The notice provided a 90- discussion of the issues, we will divide tours throughout the United States. We day comment period that was to end on the discussion into three forums that are announcing an Internet public January 20, 2004. We received will address specific areas of the meeting to supplement the traditional significant response to this NPRM, proposed rule. The three forums will be: comment period. The public meeting including numerous requests to extend 1. Community and charity events. will help us consider the concerns of the comment period and to conduct a This forum will discuss portions of the those who may be most affected by the series of public meetings. On January proposed rule that may affect persons proposed rule as we develop a final rule 16, 2004, we published a notice to who provide aerial sightseeing rides for that will promote safety in the extend the comment period an charitable purposes or at community commercial air tour industry. additional 90 days to April 19, 2004 (69 events. DATES: You may access the public FR 2529). 2. Part 91 sightseeing in accordance meeting at any time beginning February Public Meeting on the Internet with the 25-mile exception. This forum 23, 2004, at 9 a.m. EST and ending on will discuss portions of the proposed March 5, 2004, at 4:30 p.m. EST. We have carefully considered the rule that may affect persons who are not ADDRESSES: You may access the on-line requests for a series of public meetings. currently required to obtain an public meeting at http://www.faa.gov/ Traditionally, public meetings have operating certificate because they avr/arm/ been useful when we have been able to conduct nonstop sighseeing flights that rulemakingforum.cfm?nav=part. Under identify a geographic area that may be begin and end at the same airport and the ‘View Docket/Comments’ column, most affected by a proposed rule. We are conducted within a 25-mile radius click once on ‘Enter Public Meeting.’ could then supplement the comment of that airport under the exception Follow the instructions to participate in period with a public meeting that would found in section 119.1(e)(2). the discussion. allow those most affected to express 3. Part 121 and part 135 commercial You may submit written comments to their views directly to FAA air tour operators. This forum will the docket, whether or not you representatives. As of the date of this include discussion of portions of the participate in the public meeting. notice, we have received approximately proposed rule that may affect Address your comments to the Docket 1,500 comments in docket FAA–1998– commercial air tour operators who Management System, U.S. Department 4521. Most of the comments are from conduct tours with an air carrier of Transportation, Room Plaza 401, 400 individuals or small aviation certificate under part 119 and operate Seventh St., SW., Washington, DC businesses. The persons who submitted under the rules of part 121 or 135 of 20590–0001. You must identify the these comments are widely dispersed Chapter 14 of the Code of Federal docket number FAA–1998–4521 at the throughout the country, many of them Regulations. beginning of your comments, and you in small communities. It would be It is possible that some may wish to should submit two copies of your impractical to conduct a public meeting participate in more than one forum comments. The public meeting on the in every community in America where within the public meeting. You can Internet is intended to supplement the someone could be affected by the participate in as many forums as you docket. A copy of the discussion from proposed rule. If we were to choose to wish. To focus the discussion and the public meeting will be submitted to hold public meetings only in areas encourage responses that will help us the docket after the close of the public where large tour operators are located, address both safety issues and concerns meeting. they would have a disproportionate of those affected by the proposed rule, You may also submit comments opportunity to participate, to the in each forum we will solicit responses through the Internet to http://dms/ disadvantage of the many small to specific questions. You will be able

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to read the questions on-line and submit Sound, 1519 Alaskan Way South, area in the vicinity of the air show in your answers and comments Seattle, WA 98134, (206) 217–6232. order to minimize the dangers that low- electronically. We will participate in the SUPPLEMENTARY INFORMATION: flying aircraft present to persons and discussion throughout the 2-week forum vessels. These dangers include, but are and may ask you clarifying questions. Request for Comments not limited to excessive noise and the While we have selected topics that we We encourage you to participate in risk of falling objects from any accidents are particularly interested in, we still this rulemaking by submitting associated with low flying aircraft. In welcome all of your comments and comments and related material. If you the event that an aircraft(s) requires suggestions. We will not make any do so, please include your name and emergency assistance, rescuers must commitments or draw any conclusions address, identify the docket number for have immediate and unencumbered while the docket is open for public this rulemaking (CGD13–04–002), access to the aircraft. The Coast Guard, comment. indicate the specific section of this through this action, intends to promote Issued in Washington, DC, on February 5, document to which each comment the safety of personnel, vessels, and 2004. applies, and give the reason for each facilities in the area of the Blue Angels Anthony F. Fazio, comment. Please submit all comments air show. Entry into this zone will be Director, Office of Rulemaking. and related material in an unbound prohibited unless authorized by the format, no larger than 81⁄2 by 11 inches, [FR Doc. 04–2911 Filed 2–6–04; 11:13 am] Captain of the Port or his representative. suitable for copying. If you would like BILLING CODE 4910–13–P Coast Guard personnel will enforce this to know they reached us, please enclose safety zone. a stamped, self-addressed postcard or envelope. We will consider all Regulatory Evaluation DEPARTMENT OF HOMELAND comments and material received during SECURITY This proposed rule is not a the comment period. We may change ‘‘significant regulatory action’’ under Coast Guard this proposed rule in view of them. section 3(f) of Executive Order 12866, Public Meeting Regulatory Planning and Review, and 33 CFR Part 165 does not require an assessment of We do not now plan to hold a public potential costs and benefits under [CGD13–04–002] meeting. But you may submit a request section 6(a)(3) of that Order. The Office for a meeting by writing to Marine RIN 1625–AA00 of Management and Budget has not Safety Office Puget Sound at the address reviewed it under that Order. It is not Safety Zone Regulations, Seafair Blue under ADDRESSES explaining why one ‘‘significant’’ under the regulatory Angels Air Show Performance, Lake would be beneficial. If we determine policies and procedures of the Washington, WA that one would aid this rulemaking, we Department of Homeland Security will hold one at a time and place (DHS). AGENCY: Coast Guard, DHS. announced by a later notice in the We expect the economic impact of ACTION: Notice of proposed rulemaking. Federal Register. this proposed rule to be so minimal that SUMMARY: The Coast Guard proposes to Background and Purpose a full Regulatory Evaluation under the establish a safety zone on the waters of The Coast Guard has issued regulatory policies and procedures of Lake Washington, Seattle, Washington. temporary final rules establishing safety DHS is unnecessary. The Coast Guard is taking this action to zones in the past for the Blue Angels This expectation is based on the fact safeguard participants and spectators Seafair Air Show Performance (see, e.g., that the regulated area established by from the safety hazards associated with 68 FR 44888, July 31, 2003 (CGD13–03– the proposed regulation would the Seafair Blue Angels Air Show 023), 33 CFR 165T.13–014). The Blue encompass an area near the middle of Performance. Entry into this zone is Angels air show has become a Lake Washington, not frequented by prohibited unless authorized by the permanent part of the Seafair events and commercial navigation. The safety zone Captain of the Port, Puget Sound or his takes place during the Seafair unlimited is also of limited time and duration. The designated representatives. hydroplane races. The air show poses regulation is established for the benefit DATES: Comments and related material several dangers to the public including and safety of the recreational boating must reach the Coast Guard on or before excessive noise and objects falling from public, and any negative recreational May 10, 2004. any accidents by low flying aircraft. boating impact is offset by the benefits ADDRESSES: You may mail comments Permanent regulations already exist of allowing the Blue Angels to fly. For and related material to Commanding which restrict general navigation during the above reasons, the Coast Guard does Officer, Marine Safety Office Puget the Seafair unlimited hydroplane races not anticipate any significant economic Sound, 1519 Alaskan Way South, (33 CFR 100.1301). The proposed rule impact. Seattle, Washington 98134. Marine complements the existing regulations Small Entities Safety Office Puget Sound maintains the contained in 33 CFR 100.1301, which public docket for this rulemaking. are intended to ensure public safety Under the Regulatory Flexibility Act Comments and material received from during Seafair. (5 U.S.C. 601–612), we have considered the public, as well as documents whether this proposed rule would have indicated in this preamble as being Discussion of Proposed Rule a significant economic impact on a available in the docket, will become part The Coast Guard proposes substantial number of small entities. of this docket and will be available for establishing a permanent safety zone on The term ‘‘small entities’’ comprises inspection or copying at Marine Safety the waters of Lake Washington, Seattle, small businesses, not-for-profit Office Puget Sound between 8 a.m. and Washington, for the Seafair Blue Angels organizations that are independently 4 p.m., Monday through Friday, except Performance. The Coast Guard, in owned and operated and are not Federal holidays. consultation with the U.S. Navy and dominant in their fields, and FOR FURTHER INFORMATION CONTACT: LT J. Federal Aviation Administration has governmental jurisdictions with Argudo, c/o Captain of the Port Puget determined it is necessary to close the populations of less than 50,000.

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The Coast Guard certifies under 5 Unfunded Mandates Reform Act of Information and Regulatory Affairs U.S.C. 605(b) that this proposed rule The Unfunded Mandates Reform Act has not designated it as a significant would not have a significant economic of 1995 (2 U.S.C. 1531–1538) requires energy action. Therefore, it does not impact on a substantial number of small Federal agencies to assess the effects of require a Statement of Energy Effects entities. This rule will affect the their discretionary regulatory actions. In under Executive Order 13211. following entities, some of which may particular, the Act addresses actions Environment be small entities: The owners or that may result in the expenditure by a operators of vessels intending to transit State, local, or tribal government, in the We have analyzed this proposed rule this portion of Lake Washington during aggregate, or by the private sector of under Commandant Instruction the time this regulation is in effect. The $100,000,000 or more in any one year. M16475.lD, which guides the Coast zone will not have a significant Though this proposed rule would not Guard in complying with the National economic impact due to its short result in such an expenditure, we do Environmental Policy Act of 1969 duration and small area. The only discuss the effects of this rule elsewhere (NEPA) (42 U.S.C. 4321–4370f), and vessels likely to be impacted will be in this preamble. have concluded that there are no factors recreational boaters and small passenger in this case that would limit the use of vessel operators. The event is held for Taking of Private Property a categorical exclusion under section the benefit and entertainment of those This proposed rule would not effect a 2.B.2 of the Instruction. Therefore, this above categories. Because the impacts of taking of private property or otherwise rule is categorically excluded, under this proposal are expected to be so have taking implications under figure 2–1, paragraph (34)(g), of the minimal, the Coast Guard certifies Executive Order 12630, Governmental Instruction, from further environmental under 605(b) of the Regulatory Actions and Interference with documentation. The environmental Flexibility Act (5 U.S.C. 601 et seq.) that Constitutionally Protected Property analysis and Categorical Exclusion this final rule will not have a significant Rights. Determination are available in the economic impact on a substantial docket for inspection and copying Civil Justice Reform number of small entities. where indicated under ADDRESSES. All If you think that your business, This proposed rule meets applicable standard environmental measures organization, or governmental standards in sections 3(a) and 3(b)(2) of remain in effect. Executive Order 12988, Civil Justice jurisdiction qualifies as a small entity List of Subjects in 33 CFR Part 165 and that this rule would have a Reform, to minimize litigation, significant economic impact on it, eliminate ambiguity, and reduce Harbors, Marine safety, Navigation please submit a comment (see burden. (water), Reporting and record keeping requirements, Security measures, ADDRESSES) explaining why you think it Protection of Children qualifies and how and to what degree Waterways. We have analyzed this proposed rule this rule would economically affect it. For the reasons discussed in the under Executive Order 13045, preamble, the Coast Guard proposes to Assistance for Small Entities Protection of Children from amend 33 CFR part 165 as follows: Environmental Health Risks and Safety Under section 213(a) of the Small Risks. This rule is not an economically PART 165—REGULATED NAVIGATION Business Regulatory Enforcement significant rule and would not create an AREAS AND LIMITED ACCESS AREAS Fairness Act of 1996 (Public Law 104– environmental risk to health or risk to 121), we want to assist small entities in safety that might disproportionately 1. The authority citation for Part 165 understanding this proposed rule so that affect children. continues to read as follows: they can better evaluate its effects on Indian Tribal Governments Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. them and participate in the rulemaking. Chapter 701; 50 U.S.C. 191, 195; 33 CFR If the rule would affect your small This proposed rule does not have 1.05–1(g), 6.04–1, 6.04–6, and 160.5; Pub. L. business, organization, or governmental tribal implications under Executive 107–295, 116 Stat. 2064; Department of jurisdiction and you have questions Order 13175, Consultation and Homeland Security Delegation No. 0170.1 concerning its provisions or options for Coordination with Indian Tribal 2. Add § 165.1319 to read as follows: compliance, please contact the person Governments, because it would not have listed in the FOR FURTHER INFORMATION a substantial direct effect on one or § 165.1319 Safety Zone Regulations, CONTACT section. more Indian tribes, on the relationship Seafair Blue Angels Air Show Performance, Seattle, WA. Collection of Information between the Federal government and Indian tribes, or on the distribution of (a) Enforcement period. This section This proposed rule would call for no power and responsibilities between the will be enforced annually during the new collection of information under the Federal government and Indian tribes. last week in July and the first two weeks Paperwork Reduction Act of 1995 (44 of August from 8 a.m. until 4 p.m. U.S.C. 3501–3520.). Energy Effects Pacific Daylight Time each day during We have analyzed this proposed rule the event. The event will be one week Federalism under Executive Order 13211, Actions or less in duration. The specific event A rule has implications for federalism Concerning Regulations That dates during this time frame will be under Executive Order 13132, Significantly Affect Energy Supply, published in the Federal Register. Federalism, if it has a substantial direct Distribution, or Use. We have (b) Location. The following is a safety effect on State or local governments and determined that it is not a ‘‘significant zone: All waters of Lake Washington, would either preempt State law or energy action’’ under that order because Washington State, enclosed by the impose a substantial direct cost of it is not a ‘‘significant regulatory action’’ following points: Near the termination compliance on them. We have analyzed under Executive Order 12866 and is not of Roanoke Way 47°35′44″ N, 122°14′47″ this proposed rule under that Order and likely to have a significant adverse effect W; thence to 47°35′48″ N, 122°15′45″ W; have determined that it does not have on the supply, distribution, or use of thence to 47°36′02.1″N, 122°15′50.2″ W; implications for federalism. energy. The Administrator of the Office thence to 47°35′56.6″ N, 122°16′29.2″ W;

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thence to 47°35′42″ N, 122°16′24″ W; DATES: Comments and related material charter fishing vessels each year from thence to the east side of the entrance must reach the Coast Guard on or before May through October. Throughout the to the west highrise of the Interstate 90 April 12, 2004. summer months and fishing season, the bridge; thence westerly along the south ADDRESSES: You may mail comments waters immediately surrounding the side of the bridge to the shoreline on the and related material to Waterways Station and within a quarter mile radius western terminus of the bridge; thence Management, Coast Guard Group/ of the Station become heavily congested southerly along the shoreline to Marine Safety Office Long Island Sound, with vessels, mainly consisting of Andrews Bay at 47°33′06″ N, 122°15′32″ 120 Woodward Avenue, New Haven, CT recreational boaters. The accumulation W; thence northeast along the shoreline 06512. Coast Guard Group/MSO Long of vessels immediately in front of the of Bailey Peninsula to its northeast Island Sound maintains the public station present a continuous hindrance point at 47°33′44″ N, 122°15′04″ W; docket for this rulemaking. Comments to the safety of Coast Guard vessels thence easterly along the east-west line and material received from the public, responding to search and rescue or other drawn tangent to Bailey Peninsula; as well as documents indicated in this maritime emergencies, and hamper their thence northerly along the shore of preamble as being available in the ability to respond expeditiously. The Mercer Island to the point of origin. docket, will become part of this docket proposed zone would be established by [Datum: NAD 1983] and will be available for inspection or reference to coordinates, representing an (c) Regulations. In accordance with copying at Group/MSO Long Island area approximately 100 yards seaward the general regulations in 33 CFR Part Sound, New Haven, CT, between 9 a.m. from STA Fire Island vessels, facilities 165, Subpart C, no person or vessel may and 3 p.m., Monday through Friday, and property. enter or remain in the zone except for except Federal holidays. The proposed zone has been tailored to fit the needs of safety, while support vessels and support personnel, FOR FURTHER INFORMATION CONTACT: vessels registered with the event minimizing the impact on the maritime Lieutenant A. Logman, Waterways community. All coordinates are North organizer, or other vessels authorized by Management Officer, Coast Guard the Captain of the Port or his designated American Datum 1983. Group/Marine Safety Office Long Island No person or vessel would be representatives. Vessels and persons Sound at (203) 468–4429. granted authorization to enter the safety permitted to enter or remain in a SUPPLEMENTARY INFORMATION: zone shall obey all lawful orders or prescribed safety zone for any time without the permission of the COTP. directions of the Captain of the Port or Request for Comments Each person or vessel in the proposed his designated representatives. We encourage you to participate in safety zone would be required to obey Dated: January 16, 2004. this rulemaking by submitting any direction or order of the COTP. Any Danny Ellis, comments and related material. If you violation of the proposed safety zone Captain, U.S. Coast Guard, Captain of the do so, please include your name and described herein, would be punishable Port, Puget Sound. address, identify the docket number for by, among others, civil penalties (not to [FR Doc. 04–2748 Filed 2–9–04; 8:45 am] this rulemaking (CGD01–03–025), exceed $32,500 per violation, where BILLING CODE 4910–15–P indicate the specific section of this each day of a continuing violation is a document to which each comment separate violation), criminal penalties applies, and give the reason for each (imprisonment for not more than 6 years DEPARTMENT OF HOMELAND comment. Please submit all comments and a fine of not more than $250,000), SECURITY and related material in an unbound in rem liability against the offending format, no larger than 81⁄2 by 11 inches, vessel, or license sanctions. This Coast Guard suitable for copying. If you would like regulation is proposed under the to know if your submission reached us, authority contained in 33 U.S.C. 1223 33 CFR Part 165 please enclose a stamped, self-addressed and 1225 and the regulations postcard or envelope. We will consider promulgated thereunder. [CGD01–03–025] all comments and material received Regulatory Evaluation during the comment period. We may This proposed rule is not a RIN 1625–AA00 change this proposed rule in view of them. ‘‘significant regulatory action’’ under section 3(f) of Executive Order 12866, Safety Zone; Coast Guard Station Fire Public Meeting Island, Fire Island, NY Regulatory Planning and Review, and We do not now plan to hold a public does not require an assessment of AGENCY: Coast Guard, DHS. meeting, but you may submit a request potential costs and benefits under ACTION: Notice of proposed rulemaking. for a meeting by writing to Coast Guard section 6(a)(3) of that Order. The Office Group/Marine Safety Office Long Island of Management and Budget has not SUMMARY: The Coast Guard proposes to Sound at the address under ADDRESSES reviewed it under that Order. It is not establish a safety zone in the waters explaining why one would be ‘‘significant’’ under the regulatory adjacent to Coast Guard Station Fire beneficial. If we determine that one policies and procedures of the Island, Fire Island, New York. This would aid this rulemaking, we will hold Department of Homeland Security proposed zone would ensure safety of one at a time and place announced by (DHS). the boating community and Coast Guard a later notice in the Federal Register. We expect the economic impact of vessels when prompt response is this proposed rule to be so minimal that needed for Coast Guard vessels to Background and Purpose a full Regulatory Evaluation under the respond to mariners’ or other requests United States Coast Guard Station regulatory policies and procedures of for assistance. This zone would exclude (STA) Fire Island is located in Babylon, DHS is unnecessary. This proposed all vessels from operating within the New York, on the northern shore of Fire regulation could have some impact on prescribed safety zone without first Island, Long Island, New York. The the public, but these potential impacts obtaining authorization from the waters north of Station, Fire Island Inlet, would be minimized because the Captain of the Port, Long Island Sound. attract numerous recreational and small proposed safety zone would encompass

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only a small portion of Fire Island Inlet annually and rates each agency’s Order 13175, Consultation and allowing sufficient room for vessels to responsiveness to small business. If you Coordination with Indian Tribal operate or anchor outside of the zone. wish to comment on actions by Governments, because it would not have employees of the Coast Guard, call 1– a substantial direct effect on one or Small Entities 888–REG–FAIR (1–888–734–3247). more Indian tribes, on the relationship Under the Regulatory Flexibility Act Collection of Information between the Federal government and (5 U.S.C. 601–612), we have considered Indian tribes, or on the distribution of whether this proposed rule would have This proposed rule would call for no power and responsibilities between the a significant economic impact on a new collection of information under the Federal government and Indian tribes. substantial number of small entities. Paperwork Reduction Act of 1995 (44 To help the Coast Guard establish The term ‘‘small entities’’ comprises U.S.C. 3501–3520). regular and meaningful consultation small businesses, not-for-profit Federalism and collaboration with Indian and organizations that are independently Alaskan Native tribes, we published a owned and operated and are not A rule has implications for federalism notice in the Federal Register (66 FR under Executive Order 13132, dominant in their fields, and 36361, July 11, 2001) requesting Federalism, if it has a substantial direct governmental jurisdictions with comments on how to best carry out the effect on State or local governments and populations of less than 50,000. Order. We invite your comments on would either preempt State law or The Coast Guard certifies under 5 how this proposed rule could impact impose a substantial direct cost of U.S.C. 605(b) that this proposed rule tribal governments, even if that impact compliance on them. We have analyzed would not have a significant economic would not constitute a ‘‘tribal this proposed rule under that Order and impact on a substantial number of small implication’’ under the Order. entities. This proposed rule may affect have determined that it would not have the following entities, some of which implications for federalism. Energy Effects may be small entities: The owners or Unfunded Mandates Reform Act We have analyzed this proposed rule operators of vessels intending to transit The Unfunded Mandates Reform Act under Executive Order 13211, Actions or anchor in that portion of Fire Island Concerning Regulations That Inlet covered by the proposed safety of 1995 (2 U.S.C. 1531–1538) requires Federal agencies to assess the effects of Significantly Affect Energy Supply, zone. Distribution, or Use. We have For the reasons outlined in the their discretionary regulatory actions. In particular, the Act addresses actions determined that it would not be a Regulatory Evaluation section above, ‘‘significant energy action’’ under that this proposed rule would not have a that may result in the expenditure by a State, local, or tribal government, in the order because it would not be a significant impact on a substantial ‘‘significant regulatory action’’ under number of small entities. aggregate, or by the private sector of $100,000,000 or more in any one year. Executive Order 12866 and would not If you think that your business, likely have a significant adverse effect organization, or governmental Though this proposed rule would not result in such an expenditure, we do on the supply, distribution, or use of jurisdiction qualifies as a small entity energy. It has not been designated by the and that this proposed rule would have discuss the effects of this rule elsewhere in this preamble. Administrator of the Office of a significant economic impact on it, Information and Regulatory Affairs as a please submit a comment (see Taking of Private Property significant energy action. Therefore, it ADDRESSES) explaining why you think it This proposed rule would not effect a does not require a Statement of Energy qualifies and how and to what degree taking of private property or otherwise Effects under Executive Order 13211. this rule would economically affect it. have taking implications under Environment Assistance for Small Entities Executive Order 12630, Governmental The Coast Guard considered the Under subsection 213(a) of the Small Actions and Interference with environmental impact of this proposed Business Regulatory Enforcement Constitutionally Protected Property rule and concluded that, under figure 2– Fairness Act of 1996 (Pub. L. 104–121), Rights. 1, paragraph 34(g), of Commandant the Coast Guard wants to assist small Civil Justice Reform Instruction M16475.1D, this proposed entities in understanding this proposed This proposed rule meets applicable rule is categorically excluded from rule so that they can better evaluate its standards in sections 3(a) and 3(b)(2) of further environmental documentation. effects on them and participate in the Executive Order 12988, Civil Justice A ‘‘Categorical Exclusion rulemaking. If the proposed rule would Reform, to minimize litigation, Determination’’ is available in the affect your small business, organization, eliminate ambiguity, and reduce docket where indicated under or governmental jurisdiction and you burden. ADDRESSES. have questions concerning its provisions or options for compliance, Protection of Children List of Subjects in 33 CFR Part 165 please call Lieutenant A. Logman, We have analyzed this proposed rule Harbors, Marine safety, Navigation Waterways Management Officer, Group/ under Executive Order 13045, (water), Reporting and recordkeeping Marine Safety Office Long Island Sound, Protection of Children from requirements, Security measures, at (203) 468–4429. Environmental Health Risks and Safety Waterways. Small businesses may send comments Risks. This proposed rule is not an For the reasons discussed in the on the actions of Federal employees economically significant rule and would who enforce, or otherwise determine preamble, the Coast Guard proposes to not concern an environmental risk to amend 33 CFR part 165 as follows: compliance with, Federal regulations to health or risk to safety that may the Small Business and Agriculture disproportionately affect children. PART 165—REGULATED NAVIGATION Regulatory Enforcement Ombudsman AREAS AND LIMITED ACCESS AREAS and the Regional Small Business Indian Tribal Governments Regulatory Fairness Boards. The This proposed rule would not have 1. The authority citation for part 165 Ombudsman evaluates these actions tribal implications under Executive continues to read as follows:

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Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. Veterans Affairs is revising and final rules section of this Federal Chapter 701; 50 U.S.C. 191, 195; 33 CFR republishing its part 3 compensation Register, EPA is approving West 1.05–1(g), 6.04–1, 6.04–6, and 160.5; Pub. L. and pension regulations to make them Virginia’s SIP submittal as a direct final 107–295, 116 Stat. 2064; Department of easier to understand and apply. To rule without prior proposal because the Homeland Security Delegation No. 0170.1. ensure that this proposal is consistent Agency views this as a noncontroversial 2. Add § 165.152 to read as follows: with other related regulations being submittal and anticipates no adverse § 165.152 Coast Guard Station Fire Island, rewritten and published in that project, comments. A detailed rationale for the Long Island, New York—safety zone. it is being withdrawn at this time. The approval is set forth in the direct final rule. If no adverse comments are (a) Location. The safety zone consists Regulation Rewrite Project plans to received in response to this action, no of all waters of Fire Island Inlet republish this proposed rulemaking further activity is contemplated. If EPA encompassed by a line connecting the within one of its packages of receives adverse comments, the direct following points, 40°37.523′ N, regulations, ‘‘General Evidence final rule will be withdrawn and public 073°15.685′ W; then north to 40°37.593′ Requirements, Effective Dates, Revision comments received will be addressed in N, 073°15.719′ W; then east to 40– of Decisions, and Protection of Existing a subsequent final rule based on this 37.612 N, 073°15.664′ W; then east to Ratings.’’ proposed rule. EPA will not institute a 40°37.630′ N, 073°15.610′ W; then east FOR FURTHER INFORMATION CONTACT: Bill second comment period. Any parties to 40°37.641′ N, 073°15.558′ W; then Russo, Chief of C&P Rewrite Projects ° ′ ° ′ (00REG2), Office of Regulation Policy interested in commenting on this action southeast to 40 37.630 N, 073 15.475 should do so at this time. W; then southeast to 40°37.625′ N, and Management, Department of DATES: 073°15.369′ W; then southeast to Veterans Affairs, 810 Vermont Avenue, Comments must be received in writing by March 11, 2004. 40°37.627′ N, 073°15.318′ W; then NW., Washington, DC 20420, telephone southeast to point on shore at 40°37.565′ (202) 273–9515. This is not a toll-free ADDRESSES: Comments may be N, 073°15.346′ W. All coordinates are number. submitted either by mail or North American Datum 1983. Approved: February 3, 2004. electronically. Written comments should be mailed to Larry Budney, (b) Regulations. (1) The general Anthony J. Principi, regulations contained in 33 CFR Energy, Radiation and Indoor Secretary of Veterans Affairs. Environment Branch, Mailcode 3AP23, § 165.23 apply. [FR Doc. 04–2795 Filed 2–9–04; 8:45 am] (2) All persons and vessels must U.S. Environmental Protection Agency, comply with the Coast Guard Captain of BILLING CODE 8320–01–P Region III, 1650 Arch Street, the Port or designated on-scene patrol Philadelphia, Pennsylvania 19103. personnel. These personnel comprise Electronic comments should be sent commissioned, warrant and petty ENVIRONMENTAL PROTECTION either to [email protected] or to officers of the U.S. Coast Guard. Upon AGENCY http://www.regulations.gov, which is an alternative method for submitting being hailed by a U.S. Coast Guard 40 CFR Part 52 vessel by siren, radio, flashing light or electronic comments to EPA. To submit other means, the operator of the vessel [WV063–6032b; FRL–7613–1] comments, please follow the detailed shall proceed as directed. instructions described in the Approval and Promulgation of Air Supplementary Information section. Dated: November 17, 2003. Quality Implementation Plans; West Copies of the documents relevant to this Joseph J. Coccia, Virginia; MOBILE6-Based Motor action are available for public Captain, U.S. Coast Guard, Captain of the Vehicle Emission Budgets for inspection during normal business Port, Long Island Sound. Greenbrier County and the Charleston, hours at the Air Protection Division, [FR Doc. 04–2746 Filed 2–9–04; 8:45 am] Huntington, and Parkersburg 1-Hour U.S. Environmental Protection Agency, BILLING CODE 4910–15–P Ozone Maintenance Areas Region III, 1650 Arch Street, AGENCY: Environmental Protection Philadelphia, Pennsylvania 19103; and Agency (EPA). at the West Virginia Department of DEPARTMENT OF VETERANS Environmental Protection, Division of ACTION: Proposed rule. AFFAIRS Air Quality, 7012 MacCorkle Avenue, SUMMARY: SE., Charleston, WV 25304–2943. 38 CFR Part 3 EPA proposes to approve revisions to the West Virginia State FOR FURTHER INFORMATION CONTACT: RIN 2900–AL38 Implementation Plan (SIP). The Larry Budney, (215) 814–2184, or by e- revisions amend the 1-hour ozone mail at [email protected]. Testimony Certified or Under Oath maintenance plans for Greenbrier SUPPLEMENTARY INFORMATION: For AGENCY: Department of Veterans Affairs. County and the Charleston, Huntington further information, please see the ACTION: Withdrawal of proposed rule. and Parkersburg areas. These revisions information provided in the direct final amend the maintenance plan’s base year action, with the same title, that is SUMMARY: This document withdraws a and 2005 highway mobile volatile located in the ‘‘Rules and Regulations’’ proposed rule that would have removed organic compound (VOC) and nitrogen section of this Federal Register the adjudication regulation that requires oxide (NOX) emission inventories and publication. written and oral testimony to be the 2005 motor vehicle emissions You may submit comments either certified or given under oath or budgets (MVEBs) to reflect the use of electronically or by mail. To ensure affirmation in most cases. This proposed MOBILE6. These revisions also proper receipt by EPA, identify the rule was erroneously published in the reallocate a portion of each plans’ safety appropriate rulemaking identification Federal Register on July 31, 2002, at 67 margins which results in an increase in number, WV063–6032, in the subject FR 49646, under a previously deleted the MVEBs. The revised plans continue line on the first page of your comment. Regulatory Identification Number (RIN to demonstrate maintenance of the 1- Please ensure that your comments are 2900–AK24). The proposal is being hour national ambient air quality submitted within the specified comment withdrawn because the Department of standard (NAAQS) for ozone. In the period. Comments received after the

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close of the comment period will be listed in the ADDRESSES section of this 4. If you estimate potential burden or marked ‘‘late.’’ EPA is not required to document. costs, explain how you arrived at your consider these late comments. For public commenters, it is estimate. 1. Electronically. If you submit an important to note that EPA’s policy is 5. Provide specific examples to electronic comment as prescribed that public comments, whether illustrate your concerns. below, EPA recommends that you submitted electronically or in paper, 6. Offer alternatives. include your name, mailing address, will be made available for public 7. Make sure to submit your and an e-mail address or other contact viewing at the EPA Regional Office, as comments by the comment period information in the body of your EPA receives them and without change, deadline identified. comment. Also include this contact unless the comment contains 8. To ensure proper receipt by EPA, information on the outside of any disk copyrighted material, confidential identify the appropriate regional file/ or CD ROM you submit, and in any business information (CBI), or other rulemaking identification number in the cover letter accompanying the disk or information whose disclosure is subject line on the first page of your CD ROM. This ensures that you can be restricted by statute. When EPA response. It would also be helpful if you identified as the submitter of the identifies a comment containing provided the name, date, and Federal comment and allows EPA to contact you copyrighted material, EPA will provide Register citation related to your in case EPA cannot read your comment a reference to that material in the comments. due to technical difficulties or needs version of the comment that is placed in Please note that if EPA receives further information on the substance of the official public rulemaking file. The adverse comment on an amendment, your comment. EPA’s policy is that EPA entire printed comment, including the paragraph, or section of this rule and if will not edit your comment, and any copyrighted material, will be available that provision may be severed from the identifying or contact information at the Regional Office for public remainder of the rule, EPA may adopt provided in the body of a comment will inspection. as final those provisions of the rule that be included as part of the comment that Submittal of CBI Comments—Do not are not the subject of an adverse is placed in the official public docket. submit information that you consider to comment. If EPA cannot read your comment due be CBI electronically to EPA. You may Dated: January 14, 2004. to technical difficulties and cannot claim information that you submit to contact you for clarification, EPA may James W. Newsom, EPA as CBI by marking any part or all Acting Regional Administrator, Region III. not be able to consider your comment. of that information as CBI (if you submit i. E-mail. Comments may be sent by [FR Doc. 04–2708 Filed 2–9–04; 8:45 am] CBI on disk or CD ROM, mark the electronic mail (e-mail) to outside of the disk or CD ROM as CBI BILLING CODE 6560–50–P [email protected], attention WV063–6032. EPA’s e-mail system is and then identify electronically within not an ‘‘anonymous access’’ system. If the disk or CD ROM the specific information that is CBI). Information so DEPARTMENT OF HOMELAND you send an e-mail comment directly SECURITY without going through Regulations.gov, marked will not be disclosed except in EPA’s e-mail system automatically accordance with procedures set forth in 40 CFR Part 2. In addition to one Federal Emergency Management captures your e-mail address. E-mail Agency addresses that are automatically complete version of the comment that includes any information claimed as captured by EPA’s e-mail system are 44 CFR Part 67 included as part of the comment that is CBI, a copy of the comment that does placed in the official public docket. not contain the information claimed as [Docket No. FEMA–D–7582] ii. Regulations.gov. Your use of CBI must be submitted for inclusion in Regulation.gov is an alternative method the official public regional rulemaking Proposed Flood Elevation of submitting electronic comments to file. If you submit the copy that does not Determinations EPA. Go directly to http:// contain CBI on disk or CD ROM, mark AGENCY: Federal Emergency www.regulations.gov, then select the outside of the disk or CD ROM Management Agency (FEMA), ‘‘Environmental Protection Agency’’ at clearly that it does not contain CBI. Emergency Preparedness and Response the top of the page and use the ‘‘go’’ Information not marked as CBI will be Directorate, Department of Homeland button. The list of current EPA actions included in the public file and available Security. available for comment will be listed. for public inspection without prior Please follow the online instructions for notice. If you have any questions about ACTION: Proposed rule. submitting comments. The system is an CBI or the procedures for claiming CBI, please consult the person identified in SUMMARY: Technical information or ‘‘anonymous access’’ system, which comments are requested on the means EPA will not know your identity, the FOR FURTHER INFORMATION CONTACT section. proposed Base (1% annual chance) e-mail address, or other contact Flood Elevations (BFEs) and proposed information unless you provide it in the Considerations When Preparing BFE modifications for the communities body of your comment. Comments to EPA listed below. The BFEs are the basis for iii. Disk or CD ROM. You may submit the floodplain management measures comments on a disk or CD ROM that You may find the following that the community is required either to you mail to the mailing address suggestions helpful for preparing your adopt or to show evidence of being identified in the ADDRESSES section of comments: already in effect in order to qualify or this document. These electronic 1. Explain your views as clearly as remain qualified for participation in the submissions will be accepted in possible. National Flood Insurance Program WordPerfect, Word or ASCII file format. 2. Describe any assumptions that you (NFIP). Avoid the use of special characters and used. any form of encryption. 3. Provide any technical information DATES: The comment period is ninety 2. By Mail. Written comments should and/or data you used that support your (90) days following the second be addressed to the EPA Regional office views. publication of this proposed rule in a

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newspaper of local circulation in each proposed elevations are used to meet September 30, 1993, Regulatory community. the floodplain management Planning and Review, 58 FR 51735. requirements of the NFIP and are also ADDRESSES: The proposed BFEs for each Executive Order 12612, Federalism community are available for inspection used to calculate the appropriate flood This proposed rule involves no at the office of the Chief Executive insurance premium rates for new policies that have federalism Officer of each community. The buildings built after these elevations are implications under Executive Order respective addresses are listed in the made final, and for the contents in these 12612, Federalism, dated October 26, table below. buildings. 1987. FOR FURTHER INFORMATION CONTACT: National Environmental Policy Act Doug Bellomo, P.E., Hazard Executive Order 12778, Civil Justice This proposed rule is categorically Reform Identification Section, Emergency excluded from the requirements of 44 Preparedness and Response Directorate, CFR part 10, Environmental This proposed rule meets the FEMA, 500 C Street, SW., Washington, Consideration. No environmental applicable standards of section 2(b)(2) of DC 20472, (202) 646–2903. impact assessment has been prepared. Executive Order 12778. SUPPLEMENTARY INFORMATION: FEMA List of Subjects in 44 CFR Part 67 proposes to make determinations of Regulatory Flexibility Act BFEs and modified BFEs for each The Mitigation Division Director of Administrative practice and community listed below, in accordance the Emergency Preparedness and procedure, Flood insurance, Reporting with section 110 of the Flood Disaster Response Directorate certifies that this and recordkeeping requirements. Protection Act of 1973, 42 U.S.C. 4104, proposed rule is exempt from the Accordingly, 44 CFR part 67 is and 44 CFR 67.4(a). requirements of the Regulatory proposed to be amended as follows: These proposed base flood and Flexibility Act because proposed or PART 67—[AMENDED] modified BFEs, together with the modified BFEs are required by the Flood floodplain management criteria required Disaster Protection Act of 1973, 42 1. The authority citation for part 67 by 44 CFR 60.3, are the minimum that U.S.C. 4104, and are required to continues to read as follows: are required. They should not be establish and maintain community Authority: 42 U.S.C. 4001 et seq.; construed to mean that the community eligibility in the NFIP. As a result, a Reorganization Plan No. 3 of 1978, 3 CFR, must change any existing ordinances regulatory flexibility analysis has not 1978 Comp., p. 329; E.O. 12127, 44 FR 19367, that are more stringent in their been prepared. 3 CFR, 1979 Comp., p. 376. floodplain management requirements. Regulatory Classification The community may at any time enact § 67.4 [Amended] stricter requirements of its own, or This proposed rule is not a significant 2. The tables published under the pursuant to policies established by other regulatory action under the criteria of authority of § 67.4 are proposed to be Federal, state or regional entities. These section 3(f) of Executive Order 12866 of amended as follows:

#Depth in feet above ground. *Elevation in feet (NGVD) *Elevation in feet State City/town/county Source of flooding Location (NAVD) Existing Modified

North Carolina ...... Person County (Unin- Deep Creek ...... At the Person/Durham County boundary ... None *419 corporated Areas). Approximately 0.8 mile upstream of Smith None *419 Road. Maps available for inspection at Person County Planning and Zoning Department, 20A Court Street, Roxboro, North Carolina. Send comments to Mr. Steve Carpenter, Person County Manager, 304 South Morgan Street, Room 212, Roxboro, North Carolina 27573.

(Catalog of Federal Domestic Assistance No. CORPORATION FOR NATIONAL AND of certain volunteer expense items. The 83.100, ‘‘Flood Insurance’’) COMMUNITY SERVICE specific amendments are as follows: Dated: February 3, 2004. Section 2551.42(c) is modified to 45 CFR Part 2551 Anthony S. Lowe, increase the ceiling on medical Mitigation Division Director, Emergency RIN 3045–AA39 expenses that may be deducted for Preparedness and Response Directorate. determining income for eligibility [FR Doc. 04–2792 Filed 2–9–04; 8:45 am] The Senior Companion Program; purposes from 15 percent to 50 percent Amendments BILLING CODE 9110–12–P of the applicable income guideline; and AGENCY: Corporation for National and §§ 2551.45 and 2551.93(d) are modified Community Service. to allow project funds, including the required non-federal share, to be used to ACTION: Proposed rule. reimburse volunteers for expenses, SUMMARY: These proposed amendments including transportation costs, incurred to the regulations governing the Senior while performing volunteer Companion Program (SCP) modify assignments, and for purchase of provisions concerning deductions for equipment or supplies for volunteers on medical expenses and the allowability assignment.

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DATES: Submit comments on or before C. Volunteer Expenses (3) That the Unfunded Mandates March 26, 2004. The Senior Companion Program Reform Act of 1995 (2 U.S.C. chapter 25, ADDRESSES: You may submit comments, regulations currently distinguish subchapter II) does not apply because identified by the title of the program, by between volunteer expenses that may be the amendment does not result in any any of the following methods: paid or reimbursed with federal and annual expenditures of $100 million by (1) By mail sent to: Corporation for required non-federal grant funds and State, local, Indian Tribal governments National and Community Service, volunteer expenses that must be paid by or the private sector; National Senior Service Corps; the volunteer station to which a Senior (4) That the Paperwork Reduction Act Attention Peter Boynton, Program Companion is assigned. Grant funds does not apply because the amendments Officer; 9th Floor, 1201 New York may be used only to pay for volunteer do not impose any additional reporting Avenue, NW., Washington, DC 20525. stipends, insurance, transportation to or record-keeping requirements; (2) By hand delivery or by courier to and from volunteer assignments and (5) That the Small Business the Corporation’s mailroom at Room official project activities, annual Regulatory Enforcement Fairness Act of 6010 at the mail address given in physical examinations, meals taken on 1996 does not apply because it is not a paragraph (1) above, between 9 a.m. and assignment, and service recognition major rule as defined by section 251 of 4 p.m. Monday through Friday, except expenses. With the exception of certain the Small Business Regulatory Federal holidays. meals, volunteer stations must pay for Enforcement Fairness Act of 1996, and (3) By fax to: (202) 565–2743, would not result in an annual effect on Attention Peter Boynton, Program all expenses incurred while performing volunteer assignments. the economy of $100 million or more; Officer. result in an increase in cost or prices; or (4) Electronically through the In ‘‘Principles and Reforms for a have significant adverse effects on Corporation’s e-mail address system: Citizen Service Act,’’ issued by competition, employment, investment, [email protected]. President Bush April 9, 2002, the Administration proposed to create productivity, innovation, or on the FOR FURTHER INFORMATION CONTACT: greater flexibility in the use of Federal ability of United States-based Peter L. Boynton, 202–606–5000, ext. resources by easing requirements that companies to compete with foreign- 554. govern the activities and support of based companies in domestic and SUPPLEMENTARY INFORMATION: volunteers. The proposed amendment export markets; and (6) That Executive Order 13132, Background would allow Senior Companion Program sponsors to determine, in ‘‘Federalism’’ does not apply because it A. Program Description consultation with volunteer stations, would not have substantial direct effects The Senior Companion Program how best to fund volunteer expenses. on the States or the relationship provides a way for limited-income The respective responsibilities of the between the national government and people age 60 and older to provide sponsor and volunteer station for the States. assistance and friendship to adults who volunteer expenses would be List of Subjects in 45 CFR Part 2551 have difficulty with daily living tasks, incorporated in the memorandum of such as grocery shopping and bill understanding negotiated by the Aged, Grant programs—social paying. Senior Companions spend from sponsor with each station. Sponsors programs, Volunteers. 15 to 40 hours a week helping two to would be free to maintain the current For the reasons set forth in the four adult clients live independently in division of responsibility for volunteer preamble, the Corporation for National their own homes. Senior Companions expenses but have the flexibility to use and Community Service proposes to provide relief to caregivers and alert federal and required non-federal funds amend 45 CFR part 2551 as follows: doctors and family members to potential to cover any volunteer expense when problems. In return for their service, the sponsor determines that doing so PART 2551—THE SENIOR Senior Companions receive a stipend of would be in the best interest of the COMPANION PROGRAM $2.65 an hour, accident and liability project. The provisions of the applicable 1. The authority citation for part 2551 insurance and meals while on duty, OMB Cost Principles Circulars continues to read as follows: reimbursement for transportation, and referenced in Section 2551.93(a)(4) monthly training. Approximately 15,000 would continue to apply to all expenses Authority: 42 U.S.C. 4950 et seq. Senior Companions tend to the needs of paid with federal or required non- § 2551.42 [Amended] more than 60,000 adults each year. federal funds. 2. In § 2551.42(c), remove the words B. Medical Expenses Deduction Impact of Various Acts and Executive ‘‘15 percent’’ and add the words ‘‘50 Income eligibility for the Senior Orders percent’’ in their place. Companion Program is determined After carefully reviewing the changes § 2551.45 [Amended] based on annual income from all implemented by this amendment, and sources after deducting medical after coordination with the Office of 3. In § 2551.45, add a new paragraph expenses. Currently the allowable Management and Budget, it was (f), to read as follows: medical expenses may not exceed 15 determined that: * * * * * percent of the applicable income (1) This was a significant regulatory (f) Other Volunteer Expenses. Senior eligibility guideline. In order to increase action under section 3(f)(4) of Executive Companions may be reimbursed for the pool of seniors eligible to serve as Order 12866 ‘‘Regulatory Planning and expenses incurred while performing Senior Companions, and in recognition Review’’, and required a review by the their volunteer assignments provided that the cost of medical care and Office of Management and Budget; these expenses are described in the insurance have increased significantly, (2) The Corporation hereby certifies Memorandum of Understanding the Corporation proposes to increase the that the Regulatory Flexibility Act does negotiated with the volunteer station to ceiling for allowable medical expenses not apply because there is no which the volunteer is assigned, and to 50 percent of the applicable income ‘‘significant economic impact on a there are sufficient funds available to eligibility guideline. substantial number of small entities’’; cover these expenses and meet all other

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requirements identified in the notice of and youth with exceptional needs. how best to fund volunteer expenses. grant award. Foster Grandparents serve from 15 to 40 The respective responsibilities of the hours a week in schools, hospitals, sponsor and volunteer station for § 2551.93 [Amended] correctional institutions, day-care volunteer expenses would be 4. In § 2551.93, remove paragraph (d) facilities, Head Start centers, and small incorporated in the memorandum of and redesignate paragraphs (e) through community-based organizations, both understanding negotiated by the (i) as paragraphs (d) through (h). faith-based and secular. They help sponsor with each station. Sponsors Dated: February 3, 2004. children who have been abused or would be free to maintain the current Tess Scannell, neglected, mentor troubled teenagers division of responsibility for volunteer Director, National Senior Service Corps. and young mothers, and care for expenses but have the flexibility to use premature infants and children with federal and required non-federal funds [FR Doc. 04–2802 Filed 2–9–04; 8:45 am] physical disabilities. In return for their to cover any volunteer expense when BILLING CODE 6050–$$–P service, Foster Grandparents receive a the sponsor determines that doing so stipend of $2.65 an hour, accident and would be in the best interest of the CORPORATION FOR NATIONAL AND liability insurance and meals while on project. The provisions of the applicable COMMUNITY SERVICE duty, reimbursement for transportation, OMB Cost Principles Circulars and monthly training. More than 30,000 referenced in 2552.93(4) would 45 CFR Part 2552 Foster Grandparents tend to the needs of continue to apply to all expenses paid 275,000 young children and teenagers with federal or required non-federal RIN 3045–AA39 each year. funds. The Foster Grandparent Program; B. Medical Expenses Deduction Impact of Various Acts and Executive Amendments Income eligibility for the Foster Orders AGENCY: Corporation for National and Grandparent Program is determined After carefully reviewing the changes Community Service. based on annual income from all implemented by this amendment, and sources after deducting medical ACTION: Proposed rule. after coordination with the Office of expenses. Currently the allowable Management and Budget, it was SUMMARY: These proposed amendments medical expenses may not exceed 15 determined that: to the regulations governing the Foster percent of the applicable income (1) This was a significant regulatory Grandparent Program (FGP) modify eligibility guideline. In order to increase action under section 3(f)(4) of Executive provisions concerning deductions for the pool of seniors eligible to serve as Order 12866 ‘‘Regulatory Planning and medical expenses and the allowability Foster Grandparents, and in recognition Review’’, and required a review by the of certain volunteer expense items. that the cost of medical care and Office of Management and Budget; insurance have increased significantly, (2) The Corporation hereby certifies DATES: Submit comments on or before the Corporation proposes to increase the March 26, 2004. that the Regulatory Flexibility Act does ceiling for allowable medical expenses not apply because there is no ADDRESSES: You may submit comments, to 50 percent of the applicable income ‘‘significant economic impact on a identified by the title of the program, by eligibility guideline. substantial number of small entities’’; any of the following methods: (3) That the Unfunded Mandates C. Volunteer Expenses (1) By mail sent to: Corporation for Reform Act of 1995 (2 U.S.C. chapter 25, National and Community Service, The Foster Grandparent Program subchapter II) does not apply because National Senior Service Corps; regulations currently distinguish the amendment does not result in any Attention Peter Boynton, Program between volunteer expenses that may be annual expenditures of $100 million by Officer; 9th Floor, 1201 New York paid or reimbursed with federal and State, local, Indian Tribal governments Avenue, NW., Washington, DC 20525. required non-federal grant funds and or the private sector; (2) By hand delivery or by courier to volunteer expenses that must be paid by (4) That the Paperwork Reduction Act the Corporation’s mailroom at Room the volunteer station to which a Foster does not apply because the amendments 6010 at the mail address given in Grandparent is assigned. Grant funds do not impose any additional reporting paragraph (1) above, between 9 a.m. and may be used only to pay for volunteer or record-keeping requirements; 4 p.m. Monday through Friday, except stipends, insurance, transportation to (5) That the Small Business Federal holidays. and from volunteer assignments and Regulatory Enforcement Fairness Act of (3) By fax to: (202) 565–2743, official project activities, annual 1996 does not apply because it is not a Attention Peter Boynton, Program physical examinations, meals taken on major rule as defined by section 251 of Officer. assignment, and service recognition the Small Business Regulatory (4) Electronically through the expenses. With the exception of certain Enforcement Fairness Act of 1996, and Corporation’s e-mail address system: meals, volunteer stations must pay for would not result in an annual effect on [email protected]. all expenses incurred while performing the economy of $100 million or more; FOR FURTHER INFORMATION CONTACT: volunteer assignments. result in an increase in cost or prices; or Peter L. Boynton, 202–606–5000, ext. In ‘‘Principles and Reforms for a have significant adverse effects on 554. Citizen Service Act,’’ issued by competition, employment, investment, President Bush April 9, 2002, the productivity, innovation, or on the SUPPLEMENTARY INFORMATION: Administration proposed to create ability of United States-based Background greater flexibility in the use of Federal companies to compete with foreign- resources by easing requirements that based companies in domestic and A. Program Description govern the activities and support of export markets; and The Foster Grandparent Program volunteers. The proposed amendment (6) That Executive Order 13132, provides a way for limited-income would allow Foster Grandparent ‘‘Federalism’’ does not apply because it people age 60 and older, to serve as Program sponsors to determine, in would not have substantial direct effects extended family members to children consultation with volunteer stations, on the States or the relationship

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between the national government and 2553.43 and 2553.73(d) are modified to be paid by the volunteer station to the States. allow project funds, including the which a RSVP volunteer is assigned. required non-federal share, to be used to Grant funds may be used only to pay for List of Subjects in 45 CFR Part 2552 reimburse volunteers for expenses, volunteer stipends, insurance, Aged, Grant programs—social including transportation costs, incurred transportation to and from volunteer programs, Volunteers. while performing volunteer assignments and official project For the reasons set forth in the assignments, and for purchase of activities, annual physical preamble, the Corporation for National equipment or supplies for volunteers on examinations, meals taken on and Community Service proposes to assignment. assignment, and service recognition amend 45 CFR part 2552 as follows: DATES: Submit comments on or before expenses. With the exception of certain March 26, 2004. meals, volunteer stations must pay for PART 2552—FOSTER GRANDPARENT all expenses incurred while performing ADDRESSES: You may submit comments, PROGRAM volunteer assignments. identified by the title of the program, by In ‘‘Principles and Reforms for a 1. The authority citation for part 2552 any of the following methods: Citizen Service Act,’’ issued by (1) By mail sent to: Corporation for continues to read as follows: President Bush April 9, 2002, the National and Community Service, Authority: 42 U.S.C. 4950 et seq. Administration proposed to create National Senior Service Corps; greater flexibility in the use of Federal § 2552.42 [Amended] Attention Peter Boynton, Program resources by easing requirements that 2. In § 2552.42(c), remove the phrase Officer; 9th Floor, 1201 New York govern the activities and support of ‘‘15 percent’’ and add in its place the Avenue, NW., Washington, DC 20525. volunteers. The proposed amendment phrase ‘‘50 percent’’. (2) By hand delivery or by courier to would allow Retired and Senior the Corporation’s mailroom at Room § 2552.45 [Amended] Volunteer Program sponsors to 6010 at the mail address given in determine, in consultation with 3. In § 2552.45, add a new paragraph paragraph (1) above, between 9 a.m. and volunteer stations, how best to fund (f), as follows: 4 p.m. Monday through Friday, except volunteer expenses. The respective * * * * * Federal holidays. responsibilities of the sponsor and (f) Other Volunteer Expenses. Foster (3) By fax to: (202) 565–2743, volunteer station for volunteer expenses Grandparents may be reimbursed for Attention Peter Boynton, Program would be incorporated in the expenses incurred while performing Officer. memorandum of understanding their volunteer assignments provided (4) Electronically through the negotiated by the sponsor with each these expenses are described in the Corporation’s e-mail address system: station. Sponsors would be free to Memorandum of Understanding [email protected]. maintain the current division of negotiated with the volunteer station to FOR FURTHER INFORMATION CONTACT: responsibility for volunteer expenses which the volunteer is assigned and Peter L. Boynton, 202–606–5000, ext. but have the flexibility to use federal meet all other requirements identified in 554. and required non-federal funds to cover the notice of grant award. SUPPLEMENTARY INFORMATION: any volunteer expense when the § 2552.93 [Amended] sponsor determines that doing so would Background be in the best interest of the project. The 4. In § 2552.93, remove paragraph (d) A. Program Description provisions of the applicable OMB Cost and redesignate paragraphs (e) through Principles Circulars referenced in (i) as (d) through (h) accordingly. RSVP, one of the largest volunteer 2553.73(a)(4) would continue to apply Dated: February 3, 2004. efforts in the nation, engages people age to all expenses paid with federal or Tess Scannell, 55 and older in a diverse range of required non-federal funds. Director, National Senior Service Corps. volunteer activities. Volunteers organize neighborhood watch programs, tutor Impact of Various Acts and Executive [FR Doc. 04–2801 Filed 2–9–04; 8:45 am] children, renovate homes, teach English Orders BILLING CODE 6050–$$–P to immigrants, assist victims of natural After carefully reviewing the changes disasters, and serve their communities implemented by this amendment, and CORPORATION FOR NATIONAL AND in a myriad of other ways. Through after coordination with the Office of COMMUNITY SERVICE RSVP, more than 480,000 volunteers Management and Budget, it was serve a few hours a week to nearly full determined that: 45 CFR Part 2553 time at an estimated 65,000 local and (1) This was a significant regulatory national nonprofit groups, government action under section 3(f)(4) of Executive RIN 3045–AA39 agencies, and small community-based Order 12866 ‘‘Regulatory Planning and The Retired and Senior Volunteer organizations, both faith-based and Review’’, and required a review by the Program; Amendments secular. Volunteers are not paid, but Office of Management and Budget; sponsoring organizations may reimburse (2) The Corporation hereby certifies AGENCY: Corporation for National and them for some costs incurred during that the Regulatory Flexibility Act does Community Service. service, including meals and not apply because there is no ACTION: Proposed rule. transportation. ‘‘significant economic impact on a substantial number of small entities’’; SUMMARY: These proposed amendments B. Volunteer Expenses (3) That the Unfunded Mandates to the regulations governing the Retired The Retired and Senior Volunteer Reform Act of 1995 (2 U.S.C. chapter 25, and Senior Volunteer Program (RSVP) Program regulations currently subchapter II) does not apply because modify provisions concerning the distinguish between volunteer expenses the amendment does not result in any allowability of certain volunteer that may be paid or reimbursed with annual expenditures of $100 million by expense items. The specific federal and required non-federal grant State, local, Indian Tribal governments amendments are as follows: Sections funds and volunteer expenses that must or the private sector;

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(4) That the Paperwork Reduction Act FEDERAL COMMUNICATIONS Twelfth Street, SW., Room 5–B540, does not apply because the amendments COMMISSION Washington, DC 20554. See do not impose any additional reporting Supplemental Information for further or record-keeping requirements; 47 CFR Part 54 filing instructions. (5) That the Small Business [CC Docket No. 02–6; FCC 03–323] FOR FURTHER INFORMATION CONTACT: Regulatory Enforcement Fairness Act of Kathy Tofigh, Attorney, at (202) 418– 1553, Karen Franklin, Attorney, at (202) 1996 does not apply because it is not a Schools and Libraries Universal 418–7706, or Jennifer Schneider, major rule as defined by section 251 of Service Support Mechanism Attorney, at (202) 418–0425 in the the Small Business Regulatory AGENCY: Federal Communications Telecommunications Access Policy Enforcement Fairness Act of 1996, and Commission. Division, Wireline Competition Bureau. would not result in an annual effect on ACTION: Notice of proposed rulemaking. For additional information concerning the economy of $100 million or more; the information collection(s) contained result in an increase in cost or prices; or SUMMARY: In this document, the in this document, contact Judith B. have significant adverse effects on Commission addresses several matters Herman at 202–418–0214, or via the competition, employment, investment, related to the administration of the Internet at [email protected]. productivity, innovation, or on the schools and libraries universal service SUPPLEMENTARY INFORMATION: This is a ability of United States-based mechanism (also known as the e-rate summary of the Commission’s Second companies to compete with foreign- program). The Commission seeks Further Notice of Proposed Rulemaking based companies in domestic and comment on several issues, including (Second FNPRM) in CC Docket No. 02– export markets; and whether we should change the discount 6; FCC 03–323, released on December matrix used to determine the level of 23, 2003. A companion Order was also (6) That Executive Order 13132, discounts for which applicants are ‘‘Federalism’’ does not apply because it released in CC Docket No. 02–6; FCC eligible, the current competitive bidding 03–323, on December 23, 2003. The full would not have substantial direct effects process, the definition of ‘‘rural area’’ on the States or the relationship text of this document is available for used in the program, the definition of public inspection during regular between the national government and Internet access, current rules relating to the States. business hours in the FCC Reference wide area networks, and current Center, Room CY–A257, 445 Twelfth List of Subjects in 45 CFR Part 2553 procedures for recovery of funds. The Street, SW., Washington, DC 20554. Commission also seeks comment on Aged, Grant programs—social measures to limit waste, fraud, and I. Introduction programs, Volunteers. abuse and improve the Commission’s 1. In this Second Further Notice of ability to enforce the rules governing the Proposed Rulemaking, we address For the reasons set forth in the program. several matters related to the preamble, the Corporation for National DATES: Comments are due on or before administration of the schools and and Community Service proposes to March 11, 2004. Reply comments are libraries universal service mechanism amend 45 CFR part 2553 as follows: due on or before April 12, 2004. Written (also known as the e-rate program). In the Second FNPRM, we seek comment PART 2553—THE RETIRED AND comments on the proposed information on several issues, including whether we SENIOR VOLUNTEER PROGRAM collection(s) must be submitted by the public, Office of Management and should change (1) the discount matrix used to determine the level of discounts 1. The authority citation for part 2553 Budget OMB), and other interested for which applicants are eligible, (2) the continues to read as follows: parties on or before April 12, 2004. ADDRESSES: All filings must be sent to current competitive bidding process, (3) Authority: 42 U.S.C. 4950 et seq. the Commission’s Secretary, Marlene H. the definition of ‘‘rural area’’ used in the Dortch, Office of the Secretary, Federal program, (4) the definition of Internet 2. In § 2553.43, add a new paragraph access, (5) current rules relating to wide (e) to read as follows: Communications Commission, 445 12th Street, SW., Washington, DC 20554. In area networks, and (6) current * * * * * addition to filing comments with the procedures for recovery of funds. We (e) Other Volunteer Expenses. RSVP Secretary, a copy of any Paperwork also seek comment on measures to limit volunteers may be reimbursed for Reduction Act (PRA) comments on the waste, fraud, and abuse and improve the expenses incurred while performing information collection(s) contained Commission’s ability to enforce the their volunteer assignments provided herein should be submitted to Judith B. rules governing the program. Finally, we these expenses are described in the Herman, Federal Communications seek additional comment on how to Memorandum of Understanding Commission, Room 1–C804, 445 12th ensure the goals of section 254 continue to be met. negotiated with the volunteer station to Street, SW., Washington, DC 20554, or which the volunteer is assigned. via the Internet to Judith- II. Second Further Notice of Proposed [email protected], and to Kim A. Rulemaking § 2553.73 [Amended] Johnson, OMB Desk Officer, Room A. Discount Matrix 3. In § 2553.73, remove paragraph (d) 10236 NEOB, 725 17th Street, NW., Washington, DC 20503, or via the 2. Under the Commission’s rules, and redesignate paragraphs (e) through Internet to eligible schools and libraries may (i) as paragraphs (d) through (h). [email protected] or by fax receive discounts ranging from 20 Dated: February 3, 2004. to 202–395–5167. Parties should also percent to 90 percent of the pre- Tess Scannell, send three paper copies of their filings discount price of eligible services, based Director, National Senior Service Corps. to Sheryl Todd, Telecommunications on indicators of need. We seek comment [FR Doc. 04–2803 Filed 2–9–04; 8:45 am] Access Policy Division, Wireline on the effectiveness and efficiency of Competition Bureau, Federal the discount matrix used to determine BILLING CODE 6050–$$–P Communications Commission, 445 support payments for eligible

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applicants. In particular, we seek intended to make support available to After the FCC Form 470 has been posted comment on changing the matrix to more applicants on a regular basis. How to the Administrator’s website for 28 adjust the levels of discounts received does this action affect the need to adjust days, the applicant may contract for the by schools and libraries for supported the discount matrix? We further seek provision of services and file an FCC services. We also particularly seek comment on which discount rates in the Form 471, requesting discounts for the comment from the State members of the matrix, if any, other than the highest services. We seek comment on whether Federal-State Joint Board on Universal discount rate band, should be reduced. this process typically results in Service, and commit to ongoing Additionally, we seek comment on competitive bids, and ask commenters informal consultations on these issues. whether developing a separate discount to elaborate on the characteristics of 3. Interested parties have indicated matrix for Priority Two funding would recipients that do not ordinarily receive that an altered discount matrix may effectively address issues of waste, multiple bids. We seek comment on better serve the schools and libraries fraud, and abuse and expand the reach whether this process continues to suit program. In response to the Schools and of funds to a larger number of schools the needs of the schools and libraries Libraries NPRM, 67 FR 7327, February and libraries. Many parties have program, or if a different application 19, 2002, several commenters asserted suggested that, at a minimum, the process would better suit the program’s that reducing the discount rate would maximum discount level for internal needs. We specifically request that make applicants more accountable for connections be lowered to 70 percent. commenters discuss how the current their funding requests and dissuade What would be the effect of such a process and any proposed processes vendors from improperly offering to change? While we seek comment address the Commission’s goal of forgive or refund the 10 percent generally on revisions to the discount minimizing waste, fraud, and abuse in contribution required of applicants in matrix, we note that we are not seeking the program, while encouraging the the highest discount band. In addition, comment on whether to combine the benefits of competition as set out in the commenters stated that altering the existing Priority One and Priority Two Universal Service Order. discount rate would be an effective way funding categories. 7. A number of parties have suggested to increase the availability of funds for 5. We ask that commenters address that the current Form 470 posting eligible applicants outside the highest implementation issues surrounding a process should be modified for certain discount band. While the Universal change in the discount matrix. types of services. For instance, one Service Order, 62 FR 32862, June 17, Currently, in the event that there are not participant in the Commission’s public 1997, prioritized support for entities sufficient funds remaining under the forum on the ways to improve the with the greatest level of economic annual cap to support all requests for administration of the schools and disadvantage, some interested parties discounts at a particular discount level, libraries mechanism suggested that the have suggested that greater emphasis funds are allocated on a pro rata basis Form 470 process be eliminated for should be given to the equitable among applicants at that discount level. requests for funding local telephone distribution of E-rate funds to eligible Should funds continue to be allocated service. Others suggest that the FCC applicants from all discount bands, to among all applicants at the discount simplify the application process for ensure that they have comparable access level on a pro rata basis, or is there some applications that only seek funding for to advanced telecommunications and other means of allocating the remaining local and long distance service information services. Participants in the funds? We seek comment on how (including cell phone service), or that Commission’s Public Forum on the E- changes to the discount matrix should seek to continue an existing rate program in May 2003 also suggested be implemented across all levels of telecommunications service or Internet that the Commission amend its discount need. Should certain existing discount access service. We seek comment on matrix, and USAC’s Task Force on levels be combined? For example, whether it would serve our goals to Waste, Fraud, and Abuse has should the 90 and 80 percent discount simplify or eliminate the current FCC recommended that the discount level for levels be combined? In the alternative, Form 470 posting process in such internal connections be lowered from 90 should each discount level be reduced situations. What other mechanisms percent to 80 percent. by a fixed amount? For example, should would ensure that our objective of 4. For these reasons, we seek each discount level be reduced by 10 ensuring that applicants are aware of comment on whether the Commission percent? Is there some other method of potential service providers and select should amend the discount matrix to re-setting other discount levels below reasonably priced services is met? What reduce the discounts available in some the highest discount level? Finally, we would be the costs and benefits of such or all of the discount bands, including seek comment on how the transition to a change? the current 90 percent discount band. a new discount matrix, if adopted, 8. We also seek comment on how we We propose that such a change, if should be implemented in order to can ensure that applicants select cost adopted, become effective in Funding minimize burdens on applicants and effective services in situations in which Year 2005. We seek comment on disruptions to the program. no entity, or only one entity, responds whether the current discount matrix to a Form 470 posting. In some provides sufficient incentives for B. Competitive Bidding Process situations, there may be only one schools and libraries to limit funding 6. We seek comment on the current service provider capable of, or willing requests to services that can be process of applying for discounted to, provide the requested service. How efficiently used and for vendors to services. Pursuant to competitive can we ensure that the prices for such competitively price their services. We bidding requirements, eligible schools services are reasonable, and do not also seek comment on whether it would and libraries that wish to receive waste scarce universal service funds? be appropriate to adjust the discount support for discounted services must Should we adopt bright line rules that matrix in order to expand the reach of submit FCC Form 470 to the would impose limits on the amount of funding to lower discount bands. We Administrator. The FCC Form 470 discounts that could be available in note that the rules we adopt in the describes the applicant’s such situations? companion Order, limiting the telecommunication needs and notifies 9. We further seek comment on availability of support for internal service providers of the applicant’s whether the Commission, as a condition connections to twice every five years, is intent to contract for eligible services. of support, should require that each

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service provider certify that the prices Others propose to define rural as non- expressed concern about providing in its bid have been independently urbanized areas, as specified by the funding for Internet access bundled developed. Such a certification could be Census Bureau. We also recently sought with subject matter content. The record modeled after the certificate of comment on the definition of ‘‘rural developed on this issue, in conjunction independent price determination area’’ in the context of increasing with recent changes made in the rural required under federal acquisition flexibility and the deployment of health care program, leads us to seek regulations. A fair and open competitive spectrum-based services in rural areas. more focused comment on whether we bidding process is critical to preventing There we identified and sought should alter the definition of Internet waste, fraud, and abuse of program comment on the following potential access used for the schools and libraries resources. Adopting a certification definitions of ‘‘rural area,’’ in addition program. Support for Internet access requirement would ensure that service to the ones already identified above: (1) under the schools and libraries program providers are fully aware that they may Counties with a population density of is provided only for ‘‘basic conduit not communicate with other service 100 persons or fewer per square mile; access to the Internet.’’ Support in the providers in a way that subverts the (2) Rural Service Areas; (3) non-nodal Internet access category has not been competitive bidding process. Moreover, counties within an Economic Area; (4) provided for virtual private networks, service providers that violate a non- the definition of ‘‘rural’’ used by the nor has it been provided for Internet collusion certification will, in many Rural Utility Service for its broadband access services that enable instances, also violate federal antitrust program; (5) the definition of ‘‘rural’’ communications through private laws. Requiring certifications of based on census tracts as outlined by networks. In our recent Rural Health independent pricing would better the Economic Research Service of the Care Order, we concluded that the enable the Commission or other USDA; and (6) any census tract that is definition currently used in the schools government agencies to enforce the not within ten miles of any incorporated and libraries context was too limited for Commission’s rules and to seek criminal or census-designated place containing the rural health care program, because it sanctions where appropriate. We also more than 2,500 people, and is not precludes support for features that seek comment on whether the within a county or county equivalent provide the capability to generate or Commission’s rules should specifically which has an overall population density alter the content of information. We require that records related to the of more than 500 persons per square concluded that adopting such a competitive bidding process for services mile of land. Finally, some commenters limitation in the rural health care must be maintained by both the in that proceeding assert that if the context would significantly undercut recipient and the service provider for a Commission adopts a new definition of the utility of providing support for period of five years. rural, it should grandfather existing Internet access to rural health care areas that currently qualify as rural area, C. Definition of Rural Area providers, because the ability to alter if they would no longer qualify under and interact with information over the 10. We seek comment on the new definition. Internet is a functionality that could modifications to the definition of ‘‘rural 12. Commenters are encouraged to facilitate improved medical care in rural area’’ for the schools and libraries describe the effects of any new areas. mechanism. Currently, an area qualifies definition on the reach of the schools as rural under our rules for the schools and libraries program, e.g., how many 14. We now seek comment on and libraries support mechanism if it is existing rural areas would become non- whether we should amend our located in a non-metropolitan county as rural and vice versa, and whether and definition of Internet access in the defined by the Office of Management how the Commission should consider schools context to conform to the and Budget or is specifically identified any such changes in adopting a new definition recently adopted for the rural in the Goldsmith Modification to 1990 definition for ‘‘rural area.’’ We also seek health care mechanism. The Census data published by the Office of comment on whether it is necessary or Administrator has utilized cost Rural Health Care Policy (ORHP). We desirable to use the same definition of allocation to ensure that support is not understand, however, that OHRP no ‘‘rural’’ for both the schools and provided for features deemed ineligible longer utilizes the definition adopted by libraries program and rural health care under the Commission’s definition of the Commission in 1997, and that there program. Internet access in the schools context, will be no Goldsmith Modification to and also has provided discounts on the most recent 2000 Census data. D. Definition of Internet Access services that provide ineligible features 11. We seek comment on whether we 13. In the Schools and Libraries when that ineligible portion is provided should adopt a new definition of rural NPRM, the Commission sought on an ancillary basis. While we area for the schools and libraries comment on whether modifying our conclude that this has been a reasonable program, and, if so, what that new rules governing the funding of Internet way to implement our rules in an definition should be. We seek comment content would improve program administratively workable fashion, we on whether there are definitions for operation consistent with our other are concerned that the definition rural areas used by other government goals of ensuring a fair and equitable adopted in 1997 may unintentionally agencies that would be appropriate for distribution of benefits and preventing preclude support for features of Internet the schools and libraries program. In waste, fraud, and abuse. In particular, access that would provide substantial addition to describing any proposed the Commission sought comment on benefits to school children and library new definitions, we ask commenters to whether to permit funding for an patrons in the United States. We are address the specific proposals that have Internet access package that includes concerned that the rule adopted six already been raised in the rural health content if that package is the most cost years ago may not adequately address care proceeding. In particular, several effective form of Internet access. the full ranges of features and commenters in the rural health care Comments we received in response to functionalities in Internet access proceeding suggest that the Commission the Schools and Libraries NPRM services that are available in the adopt the rural designation system indicated that parties had widely marketplace today. Moreover, we seek currently utilized by ORHP, the Rural varying views of what should be viewed comment on whether amending the Urban Commuting Area (RUCA) system. as ‘‘content,’’ although many parties current definition of Internet access

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would simplify and streamline program investment made by a service provider year applicants who had received administration. We also seek comment in an amount equal to the investment commitments and disbursements in on how broadening the definition of prorated equally over a term of at least violation of Commission rules. Shortly Internet access (a Priority One service) three years. We now seek focused thereafter, pursuant to the Commitment will impact the availability of funds for comment on whether we should adopt Adjustment Order, USAC submitted to Priority Two services. To the extent a rule that discounts for any service the Commission its plan to collect commenters argue that the definition of provider charges for capital investment universal service funds that were Internet access should differ for the of $500,000 or more must be prorated erroneously disbursed in the first year of schools and libraries program, and the over a period of at least five years. Like the program in violation of the statute. rural health care program, they should the other proposal, such a rule could Subsequently, in 2000, the Commission provide specific arguments outlining the serve to spread funding for Priority One adopted with minor modifications legal, policy, or technical reasons for services more evenly across all USAC’s plan to implement the that position. recipients, and could limit the extent to requirements of the Commitment which the universal service fund is used Adjustment Order. In that Order, the E. Wide Area Networks to finance significant service provider Commission also emphasized that the 15. In the Schools and Libraries infrastructure investment. recovery plan ‘‘is not intended to cover NPRM, the Commission sought 19. We also take this opportunity to the rare cases in which the Commission comment on whether to modify its address other issues related to the has determined that a school or library policies regarding the funding of provision of service over wide area has engaged in waste, fraud or abuse.’’ Priority One services networks. Under our current rules, The Commission stated that it would (telecommunications service and schools and libraries may receive address such situations on a case-by- Internet access) that include service support to obtain telecommunications case basis. provider charges for capital investments services using lit fiber. Schools and 22. At the time the Commission for wide area networks. The record we libraries may also receive discounts adopted the Commitment Adjustment received demonstrated a wide range of when they obtain Internet access that Order, USAC had been distributing views on what changes, if any, should uses lit fiber. In order to receive support funds through the schools and libraries be made in this area. for services using lit fiber as a Priority universal service support mechanism 16. In light of our decision to impose One service, the school or library must for approximately one year. The limitations on funding of internal purchase a functioning service from Commission and USAC then faced a connections, we recognize that there either a telecommunications service limited range of situations in which may be even greater incentives than provider or internet access provider, errors had occurred requiring the before for service providers to which in turn is responsible for recovery of funds. Since then, through characterize charges for facilities that ensuring that both the fiber and the the audit process, the Commission and also could be viewed as internal equipment to light the fiber are USAC have become aware of additional connections as Priority One services. provided. If a school or library enters a scenarios that may require recovery of We believe it desirable, therefore, to contract to lease unlit fiber, and obtain funds due to errors made by applicants seek more focused comment on specific telecommunications service or Internet and/or service providers. While the proposals in this area to ensure that access using lit fiber, it must segregate Commitment Adjustment funds are distributed in a fair and the cost of the unsupported unlit fiber Implementation Order implemented equitable fashion. If we adopt rules in from the cost of the supported lit fiber procedures, consistent with the this area, we anticipate that those rules service in its application for support. Commission’s debt collection rules, for would be effective no earlier than 20. We seek comment on the recovery of funds that were disbursed in Funding Year 2005. We seek comment provision of funding for unlit (dark) violation of statutory requirements, the on the advantages and disadvantages of fiber under the schools and libraries Commission has not comprehensively the proposals set forth. support mechanism. We note that the addressed the question of what recovery 17. We seek comment on whether to Commission has addressed dark fiber in procedures would be appropriate in refine a standard for determining several different contexts. We seek situations where it is determined that whether expenditures that subsidize comment on whether we should permit funds have been disbursed in violation infrastructure investment, either on- funding for dark fiber, pursuant to of particular programmatic rules that do premises or off-premises, may properly section 254(h), to provide additional not implicate statutory requirements. be viewed as Priority One services. In flexibility to applicants in meeting their Likewise, the Commission has not particular, we seek comment on communications needs. We also seek addressed the question of what whether we should adopt a rule that comment on whether any limitations procedures are needed to govern the would limit recipients from receiving should be adopted to preclude recovery of funds that have been discounts for service provider upfront discounts on the full cost of dark fiber committed or disbursed in situations capital investments to the extent those network buildout when the applicant later determined to involve waste, fraud capital investments exceed 25 percent of will not be utilizing the full capacity of or abuse. the funding request for the service in that network. 23. In administering the schools and question. Such a rule could serve to libraries program, we have become spread funding for Priority One services F. Recovery of Funds aware of instances in which funds were more evenly across all recipients, and 21. In 1999, the Commission adopted disbursed erroneously, and, depending could limit the extent to which the the Commitment Adjustment Order, upon the circumstances surrounding the universal service fund is used to finance which directed the Administrator to particular error as well as the procedure significant service provider recover funding erroneously committed or rule implicated, we determined infrastructure investment. to schools and libraries in violation of whether recovery was appropriate. In 18. In the Brooklyn Order, the the Telecommunications Act of 1996. light of these experiences, we now Commission determined that recipients The Commission adopted a companion consider whether we should implement may receive discounts on non-recurring order on the same day granting a limited procedures or adopt rules governing charges associated with capital waiver of four Commission rules to first fund recovery across particular

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situations and, more generally, whether not violate the statute, may be minor in the entity be subjected to such enhanced additional safeguards or procedures are nature and may not affect the integrity scrutiny? needed to address the matter of of or otherwise undermine policies 28. Commenters should provide erroneously disbursed funds. central to administration of the program. discrete proposals with examples or 24. In particular, we ask whether we We invite comment on whether there data to support their suggestions. should adopt specific recovery rules for are situations in which such errors G. Other Actions To Reduce Waste, funds that are disbursed in violation of would warrant a Commission decision Fraud, and Abuse statutory requirements. We also seek not requiring the recovery of funds. For comment on whether the Commission example, should we waive recovery if 29. We seek comment on a number of should implement procedures or adopt the dollars at issue are de minimis, proposals intended to improve the rules for funds that are disbursed in either on absolute dollar or percentage abilities of the Commission and the violation of one or more programmatic of disbursement basis, and if so, what Administrator to identify and enforce rules or procedures under the schools dollar level or percentage would be an violations of the Commission’s rules and libraries program or in situations appropriate threshold for deeming a and, thereby, to reduce waste, fraud, involving waste, fraud or abuse. If so, violation to be de minimis? Parties and abuse in the schools and libraries we ask whether we should adopt for all advocating such a position should universal service mechanism. instances of improperly disbursed describe what mechanism the 30. Cost-Effective Funding Requests. funds, procedures comparable to those Commission should use to reach such a We seek comment on whether we adopted in the Commitment Adjustment result, such as waiving the rules that are should codify additional rules to ensure Implementation Order, or whether we not statutory, are minor and do not that applicants make informed and should modify any of those procedures. affect program integrity, focusing reasonable decisions in deciding for We note that, through petitions for particularly on how such a result could which services they will seek discounts. reconsideration of the Commitment be achieved with administrative ease. Currently, our rules specify that, in Adjustment Order and in comments 26. In addressing the issues, we also selecting a service provider, a recipient filed in support of those petitions, invite commenters to explain whether must carefully consider all bids particular service providers have argued any additional policies or rules directed submitted and must select the most that the Commission should recover at circumstances involving waste, fraud cost-effective service offering. Moreover, erroneously disbursed funds from the and abuse would be necessary, or the Universal Service Order makes clear party that received the benefit of the whether procedures we may adopt in that applicants must request services disbursement, specifically the school or response to our questions will be based on an assessment of their library. Although the Commission sufficient in correcting waste, fraud and reasonable needs. Our rules do not continues to believe that there are valid abuse. In doing so, parties should expressly require, however, that the reasons for seeking recovery only from consider whether certain violations are applicant consider whether a particular service providers, we ask whether there more critical in our attempts to control package of services are the most cost are any circumstances under which waste, fraud and abuse than others. Are effective means of meeting its recovery would be more appropriately the circumstances where waste, fraud technology needs. Nor do our rules sought from a school or library and abuse are found the type that expressly establish a bright line test for applicant. At this time we do not should result in recovery of funds from what is a ‘‘cost effective’’ service. Would resolve the specific issues raised in the the entity that is responsible for the it be beneficial and administratively pending petitions for reconsideration. waste, fraud and abuse? How should we feasible to develop such a test, or, for Instead, we seek to further develop the proceed if both the applicant and the example, a benchmark or formula for record in this area in light of particular service provider are culpable for such ‘‘cost-effective’’ funding requests, such issues that have come to our attention misconduct? We seek proposals that as a specified dollar amount per student and as to which we seek comment in include detailed procedures for dealing or per library patron for specified types this notice. with waste, fraud and abuse cases. of service? Should we adopt a ceiling on 25. We note that in some 27. We also seek comment on whether the total amount of annual funding that circumstances, there may be a series of we should implement other measures to an applicant can request? If so, how rule violations that neither collectively ensure service provider and applicant would such a ceiling is calculated? Are nor individually implicate the full accountability. In particular, we seek there other rule changes that would amount of the funding commitment. In comment on whether we should ensure applicants are not requesting the event that the full amount of the implement procedures or adopt rules to discounts for services beyond their funding commitment has been defer action on any additional funding reasonable needs? disbursed under such circumstances, we request involving a beneficiary for 31. Recordkeeping Requirements. We seek comment on what circumstances whom there is an outstanding seek comment on whether to amend our would make recovery of the full amount commitment adjustment proceeding. rules governing the maintenance of of the funding commitment appropriate Under such a policy, no discounts records related to the receipt of or inappropriate. We seek comment would flow to the beneficiary in universal service discounts. Currently, specifically on whether a pattern of subsequent years until there was full the Commission rules require each systematic noncompliance with satisfaction of the outstanding entity receiving supported services to Commission rules warrants recovery of commitment adjustment. We also seek keep records related to the receipt of the full amount disbursed, irrespective comment on whether any applicant that discounted services similar to those that of the dollars associated with specific has previously been subject to a the entity maintains for other purchases, audit findings. We note that, unlike commitment adjustment proceeding but do not specify how long such errors resulting in statutory violations, should be subjected to more rigorous records should be maintained. Nor do the Commission may waive non- scrutiny before receiving commitments our rules expressly require all entities to compliance with regulations in in the future. If we were to implement maintain records to demonstrate appropriate circumstances. We such a policy, what additional showing compliance with all rules. Recent recognize that some errors made by should be required of the applicant in beneficiary audits conducted by USAC’s applicants and/or service providers may subsequent years, and how long should independent auditor identify a number

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of instances in which the independent and law enforcement officials, to requirements that necessitate third party auditor was unable to perform certain identify and prosecute individuals that contact or certification; natural or man- procedures due to lack of may seek to manipulate the competitive made disasters that prevent timely filing documentation. We seek comment on bidding process or engage in other of invoices; good Samaritan BEARs; and whether to amend our rules to require illegal acts. We also seek comment on circumstances beyond the service that all records related to the receipt of whether we should adopt a rule that providers control. We seek comment on or delivery of discounted services, would prohibit an entity that seeks to whether to codify the described sufficient to demonstrate compliance become a service provider from procedures providing for an extension with the Commission’s rules governing providing any form of technology of the deadline to file invoices. the schools and libraries mechanism, be planning or procurement management 37. Technology Plans. We seek maintained by the beneficiary for a assistance to applicants. Under such a comment on whether the Commission period of five years after the last day of rule, any entity that provides should revise its rules regarding the delivery of the discounted services. management support services, technical technology plans. To ensure applicants We also seek comment on what types of assistance, consulting services, make a bona fide request for services, documents would be sufficient to assistance in technical evaluations, or the Commission requires applicants to demonstrate compliance. systems engineering services to a undertake a technology assessment 32. In addition, the Commission’s particular recipient would be barred before making a request for services. rules require service providers to keep from competing for the contracts for Section 54.504(b)(2)(vii) states that in its and retain records of rates charged to eligible services with that recipient. FCC Form 470 the applicant must and discounts allowed for entities 35. Distribution of Support Payments. certify that it has a technology plan that receiving supported services. We seek We seek comment on whether the has been certified by its state, the comment on requiring that service Commission should amend its rules to Administrator, or an independent entity providers retain all records related to codify certain existing administrative approved by the Commission. The the delivery of discounted services for a procedures related to the payment of instructions for FCC Form 470 permit period of five years after the completion support for discounted services. There applicants to certify that their of the discounted services. Further, we are two methods by which support for technology plan will be approved by the seek comment on a requirement that discounts is distributed. One method is relevant body no later than the time service providers comply with random for the service provider to submit an when service commences. The audits or reviews that the Commission invoice to the Administrator, seeking Commission adopted specific or USAC may undertake periodically to payment for the discounted portion of requirements for information that must assure program compliance, including the supported service using FCC Form be included in the FCC Form 470, but identifying the portions of applicant’s 474. The other method is for the did not adopt specific rules addressing bills that represent the costs of services recipient of the discounted services to what should be included in a provided to eligible entities for eligible pay the service provider and then seek technology plan. In the Universal purposes. In accordance with this reimbursement from the Administrator Service Order, however, the proposed requirement, we also seek using FCC Form 473. Under either Commission set forth what applicants comment on requiring beneficiaries to method, the Administrator requires that should address in their technology authorize the release of such a completed Service Provider Annual plans, which USAC implemented in its information. Certification (or FCC Form 473) must be guidelines for technology plans. We 33. Commenters are specifically filed in order for payment to be made. seek comment on whether we should requested to address the impact that We seek comment on whether this codify USAC’s current guidelines these rule changes would have on the procedure should be codified in the regarding technology plans. Should we Commission’s ability to enforce its Commission’s rules. We also seek require that, as part of the technology substantive rules and reduce waste, comment on whether the Commission plan process, applicants analyze the fraud, and abuse in the schools and should codify rules regarding the cost of leasing versus purchasing E-rate libraries universal service program. establishment of deadlines for service eligible products and services? Should Commenters are also requested to providers to file invoices with the we require the applicant to consider the identify with particularity any Administrator. The timely receipt and most cost-effective way to meet its additional recordkeeping requirements payment of invoices is extremely educational objectives? In addition, we that would improve the Commission’s important to the administration of the seek comment on whether the ability to enforce its rules in the schools program in accordance with the Commission’s technology planning and libraries program. Commission’s rules. Accordingly, we requirements should be amended to be 34. Consultants and Outside Experts. seek comment on whether to codify the made more consistent with the We seek comment on whether Administrator’s existing policy not to technology planning goals and applicants should be required to provide support for untimely filed requirements of the U.S. Department of identify any consultants or other outside invoices. Education and the U.S. Institute for experts, whether paid or unpaid, that 36. USAC provides an extension of Museum and Library Services. We also aid in the preparation of the applicant’s the deadline to file invoices under seek comment on whether the technology plan or in the applicant’s certain conditions. Under current USAC Commission’s technology planning procurement process. Additionally, we procedures, these circumstances requirements could be strengthened seek comment on whether consultants include: authorized service provider through additional or different and other outside experts offering their changes; authorized service qualifications for entities, including services to applicants should be substitutions; no timely notice to USAC states, which approve technology plans. required to register with USAC and to (e.g., the service providers’ Form 486 38. Prevention of Unauthorized disclose any potential conflicts of Notification Letter is returned to USAC Applications by Subunits. We seek interests derived from relationships as undeliverable); USAC errors that comment on whether the Commission with service providers. Identifying these result in a late invoice; USAC delays in should adopt rules to prevent subunits, consultants and outside experts could data entering a form that ultimately such as individual schools or library facilitate the ability of the Commission, result in a late invoice; documentation branches, from filing applications

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without the authorization of the central considerable progress has been made in including whether the information shall authorities over those subunits, such as achieving the congressional goal of have practical utility; (b) the accuracy of school districts and library systems. We enhancing access of school classrooms the Commission’s burden estimates; (c) also seek comment on how such and libraries to advanced ways to enhance the quality, utility, and restrictions should be implemented, if telecommunications and information clarity of the information collected; and adopted. For example, should an services, we are concerned that our (d) ways to minimize the burden of the applicant be required to certify that it rules as currently structured may collection of information on the has the appropriate authorization from preclude full attainment of that goal. As respondents, including the use of its central authority, or should a central noted, a number of commenters in this automated collection techniques or authority be permitted to request the proceeding have suggested that altering other forms of information technology. Administrator to reject any application the discount rate would be an effective B. Initial Regulatory Flexibility Analysis filed by one of its subunits? way to increase the availability of funds 39. Use of Surveys to Determine for eligible applicants outside the 43. As required by the Regulatory School Lunch Eligibility. The Universal highest discount band. We seek Flexibility Act (RFA), the Commission Service Order stated that a school may comment on whether other measures has prepared this Initial Regulatory use federally-approved alternative should be adopted to further the Flexibility Analysis (IRFA) of the mechanisms which rely on actual objectives set forth in section possible significant economic impact on counts of low-income children to 254(h)(2)(A). In particular, we seek small entities by the policies and rules determine the level of poverty for comment on whether we should provide proposed in the Second FNPRM. purposes of the schools and libraries priority for internal connections to those Written public comments are requested universal service discount mechanism. applicants that have not yet achieved on this IRFA. Comments must be USAC implemented this provision by Internet connectivity in their classrooms identified as responses to the IRFA and permitting schools to collect this or libraries. If we were to adopt such a must be filed by the deadlines for information from surveys. Currently, proposal, should the priority for funding comments on the Second FNPRM. The USAC procedures require a response be targeted to those entities where 50 Commission will send a copy of this rate of at least 50 percent to ensure a percent or more of students are eligible Second FNPRM, including this IRFA, to statistically valid sample to project the for the school lunch program? Under the Chief Counsel for Advocacy of the percentage of eligibility for all students such a proposal, any entity in an area Small Business Administration (SBA). in the school. We seek comment on where 50 percent or more of students In addition, the Second FNPRM and whether to codify this procedure, and if are eligible for free school lunch that IRFA (or summaries thereof) will be so, should we alter the required certifies it has not yet implemented published in the Federal Register. response rate? Is a 50 percent response internal connections to achieve Internet 1. Need for, and Objectives of, the rate higher than necessary to ensure a connectivity in any classrooms or in the Proposed Rules statistically valid sample? We seek to library would receive funding for streamline program administration in 44. In the Second FNPRM, we seek internal connections in advance of all comment on whether the current this area while protecting against any applicants seeking funding for internal potential abuse. Should the required discount matrix provides sufficient connections that certify that they have incentives for schools and libraries to response rate depend on the size of the implemented internal connections to population being surveyed? limit funding requests to services that achieve Internet connectivity in can be efficiently used and whether H. Miscellaneous multiple classrooms or locations. Are modifying the discount matrix would 40. Determining Whether Rates Are there other rule changes that would make funds available to a greater Affordable. We seek comment generally ensure that all entities are able to number of schools and libraries. on how we can ensure that we continue provide access to the Internet from Further, we ask whether the to meet the requirements of section 254 individual classrooms or the library? Commission should adopt rules in an efficient and equitable manner. III. Procedural Matters adjusting the discount matrix for certain Congress mandated that schools and supported services. To the extent that libraries across the United States have A. Initial Paperwork Reduction Act of commenters support creating a separate access to advanced telecommunications 1995 Analysis discount matrix for priority two and information services at affordable 42. This Second Further Notice of services, we seek comment on the rates. As the expert agency charged with Proposed Rulemaking (Second FNPRM) structure and implementation issues this critical task, we believe it important contains either a proposed or modified associated with a new discount matrix. to consider periodically how we should information collection. As part of a In light of the limitations placed on determine what funding is necessary to continuing effort to reduce paperwork applications for internal connection ensure access at ‘‘affordable’’ rates. Give burdens, we invite the general public discounts, which are Priority Two the myriad of service offerings in and the Office of Management and services, we seek comment on measures today’s marketplace, how can we Budget (OMB) to take this opportunity to deter the mischaracterization of measure our progress in ensuring to comment on the information internal connections as Priority One ‘‘affordable’’ access? collections contained in this Second services. 41. Priority for Applicants that Have FNPRM, as required by the Paperwork 45. In addition, we seek comment on Not Achieved Connectivity. We note Reduction Act of 1995, Pub. L. 104–13. whether the current process for that, in 1996, prior to implementation of Public and agency comments are due at applying for discounted services the E-rate program, 14 percent of public the same time as other comments on sufficiently addresses the Commission’s school instructional rooms (i.e., this Second FNPRM; OMB comments goals of minimizing waste, fraud, and classrooms) were connected to the are due April 12, 2004. Comments abuse in the program, while Internet. According to the most recently should address: (a) Whether the encouraging the benefits of competition available data, in 2002, 92 percent of proposed collection of information is as set out in the Universal Service public school classrooms were necessary for the proper performance of Order. In that regard, we solicit connected to the Internet. While the functions of the Commission, comment on the current competitive

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bidding process and the efficiency and to identify any consultants or other proposals. For this Initial Regulatory effectiveness of using Form 470 and outside experts, whether paid or Flexibility Analysis, we hereby requested comment regarding any unpaid, that aid in the preparation of incorporate those entity descriptions by means by which the Commission could the applicant’s technology plan or in the reference. ensure that applicants select cost- applicant’s procurement process. In 4. Description of Projected Reporting, effective services. Also, we seek further addition, we solicit comment on the Recordkeeping, and Other Compliance comment whether the Commission, as a adoption of a rule requiring the filing of Requirements condition of support, should require a Service Provider Annual Certification that each service provider certify that (or FCC Form 473) with the 52. With one exception, the specific the prices in its bid have been Administrator for remittance of proposals under consideration in this independently developed. Further, we payment. We also seek comment as to Second FNPRM would not, if adopted, request comment on whether the whether the Commission should codify result in additional recordkeeping Commission’s rules should specifically rules establishing deadlines for service requirements for small businesses. With require that records related to the providers to file invoices with the regard to the one exception, we propose competitive bidding process for services Administrator and whether the adoption of a rule that requires each be maintained by both the recipient and Administrator’s existing policy to deny entity receiving supported services to service provider for a period of five support for untimely filed invoices, keep all records related to the receipt of years. except in limited circumstances, should or delivery of discounted services for a 46. Next, we seek comment on be codified. In an effort to further period of five years after modifications to the definition of ‘‘rural reduce waste, fraud and abuse in the E- implementation of the discounted area’’ for the schools and libraries rate program, we request comment services. This proposal includes mechanism and ask whether it would be whether current guidelines from the additional recordkeeping because the necessary or desirable to use the same Universal Service Order and USAC current Commission rule requires each definition of ‘‘rural’’ for both the schools regarding the content of the applicants’ entity receiving supported services to and libraries program and rural health technology plans should be adopted as keep records related to receipt of care program. Similarly, we seek Commission rules. We also ask for discounted services similar to those that comment whether the definition of comments whether the Commission’s the entity maintains for other purchases Internet access in the schools context technology planning goals should be and does not specify the time period for should be changed to mirror the consistent with the requirements of the which such records must be maintained. definition of Internet access recently U.S. Department of Education and the Thus, the revised rule means that the adopted in the Rural Health Care Order. U.S. Institute for Museum and Library records need not be kept beyond the five 47. In light of the restrictions imposed Services. In addition, we seek comment year period. on receiving discounts for internal whether the Commission should adopt 53. We have sought comments connections, we seek comment asking rules to prevent individual schools and regarding the other proposed rules; whether any measures should be taken libraries from submitting applications however, new recordkeeping to evaluate service provider charges for without coordination with or requirements are not involved. capital investments for wide area authorization from the central 5. Steps Taken To Minimize Significant networks, a Priority One service. In that authorities, namely school districts and Economic Impact on Small Entities, and regard, we seek comment whether library systems. We solicit comment on Significant Alternatives Considered expenditures that subsidize whether USAC’s policy of accepting infrastructure investment, either on- surveys to determine National School 54. The RFA requires an agency to premises or off-premises, may properly Lunch eligibility should be codified. describe any significant alternatives that be viewed as Priority One services. We 49. Finally, we seek comment it has considered in reaching its also seek comment on funding for unlit whether our rules should be modified to proposed approach, which may include (dark) fiber under the E-rate program. In ensure a funding priority for applicants the following four alternatives (among addition, we ask whether we should that have not yet achieved internet others): (1) The establishment of adopt specific recovery rules for funds— connectivity in their classrooms or differing compliance and reporting entire or partial commitments—that are libraries. We also seek comment requirements or timetables that take into disbursed in violation of the statute or generally on whether any rules should account the resources available to small programmatic rules or procedures. In be adopted to ensure affordable rates for entities; (2) the clarification, that connection, we seek comment eligible services and ensure access to consolidation, or simplification of regarding measures to prevent waste, eligible services. compliance or reporting requirements fraud, and abuse associated with under the rule for small entities; (3) the improper disbursement of E-rate funds. 2. Legal Basis use of performance, rather than design, 48. We seek comment on various 50. The legal basis for the Second standards; and (4) an exemption from measures to abate waste, fraud and FNPRM is contained in sections 1 coverage of the rule, or part thereof, for abuse in the schools and libraries through 4, 201 through 205, 254, 303(r), small entities. universal service mechanism, including and 403 of the Communications Act of 55. In the Second FNPRM, we seek whether a rule should be adopted 1934, as amended, and § 1.411 of the comment regarding the adoption of requiring that all records related to the Commission’s rules. rules requiring addition recordkeeping receipt of or delivery of discounted for each entity receiving discounted services be maintained by beneficiaries 3. Description and Estimate of the services. Moreover, we seek comments and service providers for a period of five Number of Small Entities to Which asking for identification of any years after the completion of the Rules Will Apply recordkeeping measures that would discounted services. In addition, we 51. We have described in detail in the improve the Commission’s ability to solicit comment whether rules defining Final Regulatory Flexibility Analysis in enforce its rules governing waste, fraud, ‘‘cost-effective’’ service should be the companion Order in this and abuse in the schools and libraries adopted. Also, we seek comment proceeding, the categories of entities program. In that regard, we note the whether applicants should be required that may be directly affected by our findings by recent beneficiary audits

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conducted by KPMG, which indicate commenters must submit two additional mode. The diskette should be clearly that better documentation would copies for each additional docket or labeled with the commenter’s name, improve the ability to audit rulemaking number. proceeding (including the docket beneficiaries. Since abatement of waste, 60. Filings can be sent by hand or number, in this case, CC Docket No. 02– fraud, and abuse in the schools and messenger delivery, by commercial 6), type of pleading (comment or reply libraries program is the objective, overnight courier, or by first-class or comment), date of submission, and the excluding small entities from such a overnight U.S. Postal Service mail name of the electronic file on the requirement would contravene that (although we continue to experience diskette. The label should also include objective and present a loophole that delays in receiving U.S. Postal Service the following phrase ‘‘Disk Copy—Not could damage the integrity of the mail). an Original.’’ Each diskette should program. Decreasing the likelihood of 61. The Commission’s contractor, contain only one party’s pleading, waste, fraud, and abuse preserves Natek, Inc., will receive hand-delivered preferably in a single electronic file. In program funding for discounts to all or messenger-delivered paper filings for addition, commenters must send eligible schools and libraries. We invite the Commission’s Secretary at 236 diskette copies to the Commission’s comment on this recordkeeping Massachusetts Avenue, NE., Suite 110, copy contractor, Natek, Inc., Portals II, requirement and ask that those parties Washington, DC 20002. 445 12th Street, SW., Room CY–B402, who object to the proposed requirement —The filing hours at this location are 8 Washington, DC 20554. offer an alternative and explain the a.m. to 7 p.m. 64. Regardless of whether parties choose to file electronically or by paper, merits of their alternative. —All hand deliveries must be held parties should also file one copy of any together with rubber bands or 6. Federal Rules that may Duplicate, documents filed in this docket with the fasteners. Overlap, or Conflict With the Proposed Commission’s copy contractor, Qualex, —Any envelopes must be disposed of Rules International Inc., Portals II, 445 12th before entering the building. 56. None. Street, SW., Room CY–B402, —Commercial overnight mail (other Washington DC 20554. Comments and C. Comment Filing Procedures than U.S. Postal Service Express Mail reply comments will be available for and Priority Mail) must be sent to 57. We invite comment on the issues public inspection during regular 9300 East Hampton Drive, Capitol and questions set forth in the Second business hours in the FCC Reference FNPRM and Initial Regulatory Heights, MD 20743. Center, Room CY–A257, 445 12th Street, Flexibility Analysis contained herein. —U.S. Postal Service first-class mail, SW., Washington, DC 20554. In Pursuant to applicable procedures set Express Mail, and Priority Mail addition, the full text of this document forth in §§ 1.415 and 1.419 of the should be addressed to 445 12th is available for public inspection and Commission’s rules, interested parties Street, SW., Washington, DC 20554. copying during regular business hours may file comments on or before March —All filings must be addressed to the at the FCC Reference Information 11, 2004, and reply comments on or Commission’s Secretary, Office of the Center, Portals II, 445 12th Street, SW., before April 12, 2004. All filings should Secretary, Federal Communications Room CY–A257, Washington, DC 20554. refer to CC Docket No. 02–6. Comments Commission. This document may also be purchased may be filed using the Commission’s 62. Parties filing electronic media from the Commission’s duplicating Electronic Comment Filing System should be advised that the Commission contractor, Qualex International, Inc., (ECFS) or by filing paper copies. released a public notice on August 22, Portals II, 445 12th Street, SW., Room 58. Comments filed through the ECFS 2003 providing new guidance for CY–B402, Washington, DC 20554, can be sent as an electronic file via the mailing electronic media. In brief, telephone 202–863–2893, facsimile Internet to http://www.fcc.gov/cgb/ecfs/. electronic media should NOT be sent 202–863–2898, or via e-mail Generally, only one copy of an through USPS because of the eradiation [email protected]. electronic submission must be filed. If process USPS mail must undergo to 65. Comments and reply comments multiple docket or rulemaking numbers complete delivery. Hand or messenger must include a short and concise appear in the caption of this proceeding, delivered electronic media for the summary of the substantive arguments however, commenters must transmit Commission’s Secretary should be raised in the pleading. Comments and one electronic copy of the comments to addressed for delivery to 236 reply comments must also comply with each docket or rulemaking number Massachusetts Avenue, NE., Suite 110, § 1.49 and all other applicable sections referenced in the caption. In completing Washington, DC 20002, and other of the Commission’s rules. We direct all the transmittal screen, commenters messenger-delivered electronic media interested parties to include the name of should include their full name, U.S. should be addressed for delivery to 9300 the filing party and the date of the filing Postal Service mailing address, and the East Hampton Drive, Capitol Heights, on each page of their comments and applicable docket or rulemaking MD 20743. reply comments. All parties are number. Parties may also submit an 63. Parties who choose to file by encouraged to utilize a table of contents, electronic comment by Internet e-mail. paper should also submit their regardless of the length of their To receive filing instructions for e-mail comments on diskette to Sheryl Todd, submission. We also strongly encourage comments, commenters should send an Telecommunications Access Policy parties to track the organization set forth e-mail to [email protected], and should Division, Wireline Competition Bureau, in the FNPRM in order to facilitate our include the following words in the body Federal Communications Commission, internal review process. of the message, ‘‘get form .’’ A sample 445 12th Street, SW., Room 5–B540, form and directions will be sent in Washington, DC 20554. Such a D. Further Information reply. submission should be on a 3.5 inch 66. Alternative formats (computer 59. Parties who choose to file by diskette formatted in an IBM compatible diskette, large print, audio recording, paper must file an original and four format using Microsoft Word or and Braille) are available to persons copies of each filing. If more than one compatible software. The diskette with disabilities by contacting Brian docket or rulemaking number appears in should be accompanied by a cover letter Millin at (202) 418–7426 voice, (202) the caption of this proceeding, and should be submitted in ‘‘read only’’ 418–7365 TTY, or [email protected]. This

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Second FNPRM can also be downloaded ADDRESSES: The Commission permits parte contacts are prohibited in in Microsoft Word and ASCII formats at the electronic filing of all pleadings and Commission proceedings, such as this http://www.fcc.gov/wcb/ comments in proceedings involving one, which involve channel allotments. universal_service/schoolsandlibs.html. petitions for rule making (except in See 47 CFR 1.1204(b) for rules 67. For further information, contact broadcast allotment proceedings). See governing permissible ex parte contacts. Kathy Tofigh at (202) 418–1553, Karen Electronic Filing of Documents in Rule For information regarding proper Franklin at (202) 418–7706, or Jennifer Making Proceedings, GC Docket No. 97– filing procedures for comments, see 47 Schneider at (202) 418–0425 in the 113 (rel. April 6, 1998). Filings by paper CFR 1.415 and 1.420. Telecommunications Access Policy can be sent by hand or messenger List of Subjects in 47 CFR Part 73 Division, Wireline Competition Bureau. delivery, by commercial overnight courier, or by first-class or overnight Digital television broadcasting, IV. Ordering Clauses U.S. Postal Service mail. The Television. 68. Pursuant to the authority Commission’s contractor, Natek, Inc., For the reasons discussed in the contained in sections 1, 4(i), 4(j), 201– will receive hand-delivered or preamble, the Federal Communications 205, 214, 254, and 403 of the messenger-delivered paper filings for Commission proposes to amend 47 CFR Communications Act of 1934, as the Commission’s Secretary at 236 Part 73 as follows: amended, this Second Further Notice of Massachusetts Avenue, NE., Suite 110, PART 73—RADIO BROADCAST Proposed Rulemaking is adopted. Washington, DC 20002. The filing hours SERVICES 69. The Commission’s Consumer and at this location are 8 a.m. to 7 p.m. All Governmental Affairs Bureau, Reference hand deliveries must be held together 1. The authority citation for part 73 Information Center, shall send a copy of with rubber bands or fasteners. Any continues to read as follows: this Second Further Notice of Proposed envelopes must be disposed of before Authority: 47 U.S.C. 154, 303, 334 and 336. Rulemaking, including the Initial entering the building. Commercial Regulatory Flexibility Analysis, to the overnight mail (other than U.S. Postal § 73.622 [Amended] Chief Counsel for Advocacy of the Small Service Express Mail and Priority Mail) 2. Section 73.622(b), the Table of Business Administration. must be sent to 9300 East Hampton Digital Television Allotments under List of Subjects in 47 CFR Part 54 Drive, Capitol Heights, MD 20743. U.S. New Mexico is amended by adding DTV Postal Service first-class mail, Express Reporting and recordkeeping channel *31 at Roswell. Mail, and Priority Mail should be requirements, Telecommunications, addressed to 445 12th Street, SW., Federal Communications Commission. Telephone. Washington, DC 20554. All filings must Barbara A. Kreisman, Federal Communications Commission. be addressed to the Commission’s Chief, Video Division, Media Bureau. Marlene Dortch, Secretary, Office of the Secretary, [FR Doc. 04–2835 Filed 2–9–04; 8:45 am] Secretary. Federal Communications Commission, BILLING CODE 6712–01–P [FR Doc. 04–2734 Filed 2–9–04; 8:45 am] Washington, DC 20554. In addition to BILLING CODE 6712–01–U filing comments with the FCC, interested parties should serve the FEDERAL COMMUNICATIONS petitioner, or its counsel or consultant, COMMISSION FEDERAL COMMUNICATIONS as follows: 47 CFR Part 73 COMMISSION FOR FURTHER INFORMATION CONTACT: Pam Blumenthal, Media Bureau, (202) 418– [DA 04–94, MB Docket No. 04–11, RM– 47 CFR Part 73 1600. 10841] [DA 04–144, MB Docket No. 04–16, RM– SUPPLEMENTARY INFORMATION: This is a 10840] Digital Television Broadcast Service; synopsis of the Commission’s Notice of Colby, KS Digital Television Broadcast Service; Proposed Rule Making, MB Docket No. AGENCY: Federal Communications Roswell, NM 04–16, adopted January 22, 2004, and released January 30, 2004. The full text Commission. AGENCY: Federal Communications of this document is available for public ACTION: Proposed rule. Commission. inspection and copying during regular SUMMARY: The Commission requests ACTION: Proposed rule. business hours in the FCC Reference Information Center, Portals II, 445 12th comments on a petition filed by Smoky SUMMARY: The Commission requests Street, SW., Room CY–A257, Hills Public Television Corporation, comments on a petition filed by Eastern Washington, DC 20554. This document proposing the allotment of DTV channel New Mexico University proposing the may also be purchased from the 19 to Colby, as an educational channel. allotment and the reservation of DTV Commission’s duplicating contractor, DTV Channel *19 can be allotted to channel 31 for noncommercial Qualex International, Portals II, 445 Colby, Kansas, at reference coordinates educational use at Roswell, New 12th Street, SW., Room CY–B402, 39–23–45 N. and 101–03–37 W in Mexico. DTV Channel *31 can be Washington, DC 20554, telephone (202) compliance with §§ 73.625(a) and allotted to Roswell at reference 863–2893, facsimile (202) 863–2898, or 73.623(d) of the Commission’s Rules. coordinates 33–19–56 N. and 104–48–17 via-e-mail [email protected]. DATES: Comments must be filed on or W. Since the community of Roswell is Provisions of the Regulatory before March 15, 2004, and reply located within 275 kilometers of the Flexibility Act of 1980 do not apply to comments on or before March 30, 2004. U.S.-Mexican border, concurrence from this proceeding. ADDRESSES: The Commission permits the Mexican government must be Members of the public should note the electronic filing of all pleadings and obtained for this allotment. that from the time a Notice of Proposed comments in proceeding involving DATES: Comments must be filed on or Rule Making is issued until the matter petitions for rule making (except in before March, 22, 2004, and reply is no longer subject to Commission broadcast allotment proceedings). See comments on or before April 4, 2004. consideration or court review, all ex Electronic Filing of Documents in Rule

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Making Proceedings, GC Docket No. 97– For information regarding proper FOR FURTHER INFORMATION CONTACT: 113 (rel. April 6, 1998). Filings by paper filing procedures for comments, see 47 Sharon P. McDonald, Media Bureau, can be sent by hand or messenger CFR 1.415 and 1.420. (202) 418–2180. delivery, by commercial overnight List of Subjects in 47 CFR Part 73 SUPPLEMENTARY INFORMATION: This is a courier, or by first-class or overnight synopsis of the Commission’s Report U.S. Postal Service mail. The Digital television broadcasting, and Order, MB Docket No. 02–164, Commission’s contractor, Natek, Inc., Television. adopted January 14, 2004, and released will receive hand-delivered or For the reasons discussed in the January 20, 2004 . The full text of this messenger-delivered paper filings for preamble, the Federal Communications Commission decision is available for the Commission’s Secretary at 236 Commission proposes to amend 47 CFR inspection and copying during normal Massachusetts Avenue, NE., Suite 110, Part 73 as follows: business hours in the FCC Reference Washington, DC 20002. The filing hours Information Center (Room CY–A257), at this location are 8 a.m. to 7 p.m. All PART 73—RADIO BROADCAST 445 12th Street, SW., Washington, DC. hand deliveries must be held together SERVICES The complete text of this decision may with rubber bands or fasteners. Any 1. The authority citation for part 73 also be purchased from the envelopes must be disposed of before continues to read as follows: Commission’s copy contractors, Qualex entering the building. International, Portals II, 445 12th Street, Commercial overnight mail (other Authority: 47 U.S.C. 154, 303, 334 and 336. SW., Room CY–B402, Washington, DC than U.S. Postal Service Express Mail § 73.622 [Amended] 20554. and Priority Mail) must be sent to 9300 2. Section 73.622(b), the Table of Federal Communications Commission. East Hampton Drive, Capitol Heights, Digital Television Allotments under John A. Karousos, MD 20743. U.S. Postal Service first-class Kansas is amended by adding DTV mail, Express Mail, and Priority Mail Assistant Chief, Audio Division, Media channel *19 at Colby. Bureau. should be addressed to 445 12th Street, SW., Washington, DC 20554. All filings Federal Communications Commission. [FR Doc. 04–2834 Filed 2–9–04; 8:45 am] must be addressed to the Commission’s Barbara A. Kreisman, BILLING CODE 6712–01–P Secretary, Office of the Secretary, Chief, Video Division, Media Bureau. Federal Communications Commission, [FR Doc. 04–2832 Filed 2–9–04; 8:45 am] FEDERAL COMMUNICATIONS Washington, DC 20554. In addition to BILLING CODE 6712–01–P COMMISSION filing comments with the FCC, interested parties should serve the 47 CFR Part 73 petitioner, or its counsel or consultant, FEDERAL COMMUNICATIONS as follows: COMMISSION [DA 04–72; MB Docket No. 04–12; RM– 10834] FOR FURTHER INFORMATION CONTACT: Pam 47 CFR Part 73 Blumenthal, Media Bureau, (202) 418– Radio Broadcasting Services; 1600. Littleville and Russellville, AL [DA 04–73; MB Docket No. 02–164, RM– SUPPLEMENTARY INFORMATION: This is a 10476] AGENCY: Federal Communications synopsis of the Commission’s Notice of Commission. Radio Broadcasting Services; Proposed Rule Making, MB Docket No. ACTION: Proposed rule. 04–11, adopted January 16, 2004, and Cimarron, NM SUMMARY: released January 22, 2004. The full text AGENCY: Federal Communications This document requests of this document is available for public Commission. comments on a petition for rulemaking inspection and copying during regular filed by Clear Channel Broadcasting ACTION: Proposed rule; dismissal. business hours in the FCC Reference Licenses, Inc. requesting the reallotment Information Center, Portals II, 445 12th SUMMARY: Sierra Grande Broadcasting of Channel 278A from Russellville, Street, SW., Room CY–A257, filed a petition for rule making Alabama, to Littleville, Alabama, and Washington, DC 20554. This document proposing the allotment of Channel modification of the license for Station may also be purchased from the 236C2 at Cimarron, New Mexico, as the WMXV to specify operation at Commission’s duplicating contractor, community’s first local aural Littleville. Channel 278A can be allotted Qualex International, Portals II, 445 transmission service. See 67 FR 47502, to Littleville at coordinates 34–35–44 12th Street, SW., Room CY–B402, July 19, 2002. Petitioner subsequently and 87–40–47. In accordance with the Washington, DC 20554, telephone 202– filed an amendment requesting the provisions of § 1.420(i) of the 863–2893, facsimile 202–863–2898, or allotment of Channel 296C1 in lieu of Commission’s Rules, we shall not accept via-e-mail [email protected]. Channel 236C2 at Cimarron, New competing expressions of interest for the Provisions of the Regulatory Mexico. The new proposal to allot use of Channel 278A at Littleville. Flexibility Act of 1980 do not apply to Channel 296C1 at Cimarron conflicts DATES: Comments must be filed on or this proceeding. with a pending petition to allot Channel before March 8, 2004, and reply Members of the public should note 296A at Las Vegas, New Mexico, and comments on or before March 23, 2004. that from the time a Notice of Proposed will be considered in the context of that ADDRESSES: Federal Communications Rule Making is issued until the matter proceeding. A showing of continuing Commission, 445 Twelfth Street, SW., is no longer subject to Commission interest is required before a channel will Washington, DC 20554. In addition to consideration or court review, all ex be allotted. It is the Commission’s filing comments with the FCC, parte contacts are prohibited in policy to refrain from making an interested parties should serve the Commission proceedings, such as this allotment to a community absent an petitioner’s counsel, as follows: Marissa one, which involve channel allotments. expression of interest. Therefore, we G. Repp, Hogan & Hartson L.L.P., 555 See 47 CFR 1.1204(b) for rules will dismiss petitioner’s petition in the Thirteenth Street, NW., Washington, DC governing permissible ex parte contacts. instant proceeding. 20004–1109.

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FOR FURTHER INFORMATION CONTACT: Federal Communications Commission. Background Kathleen Scheuerle, Media Bureau, John A. Karousos, Section 4(b)(3)(A) of the Endangered (202) 418–2180. Assistant Chief, Audio Division, Media Species Act of 1973, as amended (Act) Bureau. SUPPLEMENTARY INFORMATION: This is a (16 U.S.C. 1531 et seq.), requires that the [FR Doc. 04–2833 Filed 2–9–04; 8:45 am] synopsis of the Commission’s Notice of Service make a finding on whether a Proposed Rule Making, MB Docket No. BILLING CODE 6712–01–P petition to list, delist, or reclassify a 04–12, adopted January 14, 2004, and species presents substantial scientific or released January 20, 2004. The full text commercial information indicating that DEPARTMENT OF THE INTERIOR of this Commission decision is available the petitioned action may be warranted. We are to base this finding on all for inspection and copying during Fish and Wildlife Service information available to us at the time normal business hours in the FCC’s we make the finding. To the maximum Reference Information Center at Portals 50 CFR Part 17 extent practicable, this finding is to be II, CY–A257, 445 Twelfth Street, SW, made within 90 days of the receipt of Endangered and Threatened Wildlife Washington, DC. This document may the petition, and the finding is to be and Plants; 90-day Finding for a also be purchased from the published promptly in the Federal Petition To List Cymopterus Commission’s duplicating contractors, Register. Our standard for substantial deserticola (Desert Cymopterus) as Qualex International, Portals II, 445 information within the Code of Federal Endangered 12th Street, SW, Room CY–B402, Regulations (CFR) with regard to a 90- Washington, DC 20554, telephone 202– AGENCY: Fish and Wildlife Service, day petition finding is ‘‘that amount of 863–2893, or via e-mail Interior. information that would lead a [email protected]. ACTION: Notice of 90-day petition reasonable person to believe that the Provisions of the Regulatory finding and initiation of status review. measure proposed in the petition may Flexibility Act of l980 do not apply to be warranted’’ (50 CFR 424.14(b)). If the this proceeding. SUMMARY: We, the U.S. Fish and finding is that substantial information Wildlife Service (Service), announce a was presented, we are required to Members of the public should note 90-day finding for a petition to list promptly commence a review of the that from the time a Notice of Proposed Cymopterus deserticola (desert status of the species, if one has not Rule Making is issued until the matter cymopterus) as endangered under the already been initiated under our is no longer subject to Commission Endangered Species Act of 1973, as internal candidate assessment process. consideration or court review, all ex amended. We find that the petition does Cymopterus deserticola became a parte contacts are prohibited in present substantial scientific or candidate for listing in 1975. In 1993, Commission proceedings, such as this commercial information indicating that the Service elevated the status of C. one, which involve channel allotments. listing this species may be warranted. deserticola from a ‘‘C2’’ candidate to a See 47 CFR 1.1204(b) for rules Therefore, with the publication of this ‘‘C1’’ candidate. In 1995, C. deserticola governing permissible ex parte contacts. notice, we are initiating a status review was returned to the ‘‘C2’’ category, For information regarding proper of the species, and will issue a 12- citing reduced threats due to the filing procedures for comments, see 47 month finding to determine if the development of the West Mojave Plan CFR 1.415 and 1.420. petitioned action is warranted. To help (BLM 2003). In 1996, the Service ensure the review is comprehensive, we discontinued the recognition of ‘‘C2’’ List of Subjects in 47 CFR Part 73 are soliciting information and data candidates and henceforth referred to regarding this species. former ‘‘C1’’ candidates as ‘‘candidates’’ Radio, Radio broadcasting. DATES: The finding announced in this (61 FR 7457). For the reasons discussed in the document was made on January 29, On April 15, 2002, the Service preamble, the Federal Communications 2004. To be considered in the 12-month received a petition, dated March 29, Commission proposes to amend 47 CFR finding for this petition, comments and 2002, from Ileene Anderson of the Part 73 as follows: information must be submitted to us by California Native Plant Society and April 12, 2004. Daniel Patterson of the Center for PART 73—RADIO BROADCAST Biological Diversity, requesting that the ADDRESSES: Data, information, written SERVICES Service list Cymopterus deserticola comments and materials, or questions (desert cymopterus) in the western concerning this petition and finding Mojave Desert, California, as 1. The authority citation for Part 73 must be submitted to the Field continues to read as follows: endangered pursuant to the Act, and to Supervisor, Ventura Fish and Wildlife concurrently designate critical habitat. Authority: 47 U.S.C. 154, 303, 334 and 336. Office, U.S. Fish and Wildlife Service, The petition requested endangered 2493 Portola Road, Suite B, Ventura, CA § 73.202 [Amended] status because the petitioners assert very 93003. The petition finding and few C. deserticola remain in the western 2. Section 73.202(b), the Table of FM supporting information are available for Mojave Desert, this species has suffered Allotments under Alabama, is amended public inspection, by appointment, declines in recent years, and habitat by adding Littleville, Channel 278A, during normal business hours at the destruction is ongoing and impending. and removing Russellville, Channel above address. In response to the petitioners’ 249A.1 FOR FURTHER INFORMATION CONTACT: requests to list Cymopterus deserticola, Field Supervisor, U.S. Fish and Wildlife we sent a letter to the petitioners on 1 In MM Docket No. 01–62, Station WKGL was Service, Ventura Fish and Wildlife June 12, 2002, explaining that we would ordered to specify operation on Channel 278A in Office, at the above ADDRESSES not be able to address their petition lieu of Channel 249A at Russelville, Alabama. See (telephone 805/644–1766; facsimile Ardmore, AL et al., 17 FCC Rcd 16332. Station until fiscal year 2003. The reason for WKGL was granted a license (BMLH– 805/644–3958). this delay was that court orders and 20030415ACF), which implemented this change. SUPPLEMENTARY INFORMATION: settlement agreements required nearly

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all of our listing funding for fiscal year disjunct by at least 28 mi (45 km) from occurred, or is known to occur, at 92 2002. At the end of fiscal year 2003, we the nearest known extant populations. populations on EAFB. were able to initiate work on the The extant range of the species The Harper Dry Lake basin contains 6 petition. includes the Rogers Dry Lake basin, the populations, which together support at Harper Dry Lake basin, the Cuddeback a maximum 200 Cymopterus deserticola Biology Dry Lake basin, and the Superior Dry plants (BLM 2001). The Cuddeback Dry Cymopterus deserticola is a member Lake basin. This extant range extends Lake basin supports four populations of of the carrot family (Apiaceae). C. approximately 50 mi (80 km) from east C. deserticola. In 2001, more than 40 deserticola varies from other members to west and 35 mi (56 km) from north plants were observed at these of the genus Cymopterus by having to south. However, the plant usually populations. At the Superior Dry Lake extremely dense, single-tiered umbels occurs in areas adjacent to these basin in 2001, Silverman and Cione (flower stems radiating from a central ephemeral (transitory) lakes. discovered a range extension to the east. point). Individual plants generally reach Survey information is more complete Forty plants in a single population were 6 inches (in) (15 centimeters (cm)) in for some areas than others. In addition, counted (BLM 2001). height when in flower. The leaves are survey results are not always Cymopterus deserticola grows on highly dissected (fernlike), grayish green comparable because of the variation in loose sandy soils in Joshua tree and hairless, and are arranged in a basal how individuals tallied populations or woodland, saltbush scrub, and rosette around the stem-root crown that colonies (concentrations of individuals) Mojavean desert scrub communities in is just below the soil surface. across the landscape. Moreover, surveys the western Mojave Desert between Cymopterus deserticola is unusual in only count the individuals visible above 2,000 and 3,000 feet (610 and 915 having herbaceous aboveground leaves ground; consequently, survey numbers meters) in elevation (Bagley 1998). The and inflorescences (flowering structure) represent only a subset of the total sandy soils that C. deserticola requires that die back at the end of the growing number of individuals that may be can be found in the following, alluvial season, leaving only the perennial present at that population. fans and basins, stabilized sand fields, The greatest number of individuals taproot to overwinter. The leaves and and occasionally sandy slopes of desert are located within the Rogers Dry Lake dry lake basins. This species typically inflorescences may only be visible in basin on Edwards Air Force Base grows in the cool, moist conditions of years when climatic conditions, (EAFB), where approximately 14,093 winter and early spring, and goes including sufficient rainfall, are present. plants were counted or estimated over dormant as the warmer weather In some years, individuals may produce 1,465 acres (ac) (593 hectares (ha)) progresses in April and May (Bagley leaves but not inflorescences. In years throughout the base in 67 survey areas 1998). when flowering does occur, the (Mitchell et al. 1995), including 8 inflorescences emerge between March previously documented populations Conservation Status and May. When climatic conditions are from 1988 (Moe 1988; CDFG 2001) and The petitioners provided substantial unfavorable, including drought, the 2 historic collections. Prior to extensive amounts of information relating to plant may persist solely as a dormant surveys conducted in 1995, Cymopterus threats to Cymopterus deserticola. taproot. Although many perennial deserticola had been reported from 29 Information on the status and threats to desert species survive periods of populations on EAFB (Mitchell et al. the species in relation to the five factors drought-induced dormancy, the lifespan 1995). The intensity of survey efforts for in section 4 of the Act are summarized of the perennial taproot of C. deserticola C. deserticola in 1995 and favorable below: is unknown. weather contributed to the relocation of With respect to factor A, the In 1915, Thomas Brandegee first 19 of the previously known 29 petitioners assert that the Rogers Dry described Cymopterus deserticola from populations, and the discovery of 57 Lake basin, which contains the largest material collected near Kramer Junction, new populations. Approximately 10,402 concentration of known extant species San Bernardino County, California. The plants were counted in all the 19 occurrences, is threatened by habitat historic distribution of C. deserticola populations in 1995, while fewer than alteration and destruction due to ranges from Apple Valley, San 1,700 plants had previously been military activities on EAFB. One Bernardino County, northward reported for these 19 populations. example is the cleanup of the approximately 55 miles (mi) (89 Within this watershed, there are 9 other groundwater contamination from the kilometers (km)) to the Cuddeback Lake populations outside of EAFB in the Air Force Research Laboratory basin in San Bernardino County, and Peerless Valley where C. deserticola has Propulsion Directorate (EAFB 1998) that westward approximately 45 mi (73 km) been observed. Less than 200 plants underlies one of the documented study to the Rogers and Buckhorn Lake basins have been cumulatively documented sites for Cymopterus deserticola as on Edwards Air Force Base (EAFB) in from these nine populations (Bureau of stated in the 1995 Mitchell et al. report. Kern and Los Angeles Counties Land Management (BLM) 2001). In all, The petitioners claim that utility (Mitchell et al. 1995; California 76 C. deserticola populations were construction has also adversely affected Department of Fish and Game (CDFG) observed within this basin in 1995, with this species and its habitat in the 2003). 14,362 plants counted. southern portion of the Harper Dry Lake The Apple Valley populations are In 2003, EAFB undertook efforts to basin and the northern portion of Rogers known only from historic collections develop an initial habitat model for Dry Lake in the BLM designated utility made in 1915, 1920, and 1941. Recent Cymopterus deserticola and two other corridor and adjacent sites (Bagley attempts to locate Cymopterus plant species of concern, Calochortus 1998). Types of projects in utility deserticola in areas of the historic Apple striatus (Alkali mariposa lily) and corridors include construction of Valley collections have been Eriophyllum mohavense (Barstow wooly transmission lines and pipelines. An unsuccessful, and it appears likely that sunflower). Six new populations of C. example is the Kern River Pipeline these populations have been lost to deserticola were found on base and just expansion project that potentially urban development and off-highway to the north of the base during field threatens six populations on private vehicle (OHV) use (Moe 1988). The verification of the habitat model (Wood lands west of Kramer Junction between Apple Valley populations are also 2003). Therefore, C. deserticola has Highway 58 and EAFB. The realignment

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and widening of State Highway 58 also (Gopherus agassizii), caterpillars (Order threat of naturally occurring events, potentially poses a threat to the species Lepidoptera), and beetles (Order causing extinction through mechanisms and its habitat. Coleoptera) (Bagley 1998). The operating either at the genetic level, the Other factors the petitioners claim are petitioners claim no specific disease population level, and/or the landscape adversely affecting Cymopterus threats have been reported for C. level. Isolation of small populations deserticola and its habitat include OHV deserticola. from one another can lead to loss of activity, oil and gas development, and In respect to factor D, the petitioners genetic variation due to genetic drift and the BLM’s Land Tenure Adjustment address the draft WMP (BLM 2003), increased inbreeding (Hamrick and Godt program. The BLM has assessed the which will function as a multi-species 1996). Genetic consequences of drift and habitat at the Superior Valley site as Habitat Conservation Plan for the desert loss of genetic variation include loss of being in ‘‘poor condition’’ due to tortoise (Gopherus agassizii) and other adaptability to change and inbreeding, adverse affects from OHV recreation listed and sensitive species within the which is the mating of individuals (BLM 1998). Oil and gas development planning area. The petitioners claim likely to share some of their genes due may have increased the potential for that Cymopterus deserticola has been to common ancestry. Inbreeding destroying habitat for this species in the dropped from the planning process depression is thought to reduce fitness Cuddeback Dry Lake basin and Rogers because the species cannot have a viable of individual plants; it may negatively Dry Lake. One population of C. conservation strategy without military affect components such as seed deserticola occurs on BLM lands participation (BLM 2002). According to availability, germination success, and available for Land Tenure Adjustment, the draft Environmental Impact Report flower and fruit production (Falk 1992). potentially removing another and Statement for the draft WMP (BLM At the landscape level, random natural population from public management 2003), C. deserticola is still a species events, such as storms or drought, could and making it available for private targeted for conservation measures, and destroy a significant percentage of development. has not been dropped. individuals or entire populations; a hot With regard to factor B, the petitioners The draft WMP (BLM 2003) requires fire could destroy a seedbank as well. state no commercial or recreation botanical surveys for projects proposed The restriction of colonies to small sites overutilization for the species is known within the Fremont-Kramer and increases their risk of extinction from at this time, but that, because of its Superior-Cronese Desert Wildlife such naturally occurring events. The rarity, collection for scientific or Management Areas (DWMAs) for those genetic characteristics of Cymopterus educational purposes may be a threat to areas of windblown sand on the east deserticola have not been investigated; the species. side of larger playas, including Harper therefore, the degree to which these With respect to factor C, the Dry Lake, Superior Dry Lake, and characteristics contribute to the petitioners assert that grazing poses Cuddeback Dry Lake in San Bernardino likelihood of C. deserticola being another threat to this species. Although County. If the plant is located, vulnerable to extinction for these the effects of livestock grazing on prescriptions call for avoiding all reasons is unknown. Cymopterus deserticola is not occurrences to the maximum extent documented in the literature, sheep practicable, and reporting the loss of Summary grazing has been documented to have plants. In Kern County, the draft WMP The information provided by the directly affected two populations. proposes the following measures: petitioners and information in our files Although according to Bagley (1998), establishing the North Edwards presents substantive information that grazing is not permitted on EAFB, one Conservation Area, requiring botanical Cymopterus deserticola may be of these two populations is located on surveys, and adjusting the boundary threatened by habitat alteration and the base. Individuals at this site on over time to reflect survey results. The destruction and livestock grazing EAFB were entirely eliminated as a draft WMP has undergone numerous throughout its range, both on EAFB and result of grazing by trespass sheep in revisions over the last decade and is still BLM lands. The draft WMP may contain 1994. On two other sites that occur on in draft form and the implementation of measures that contribute to the BLM lands in Harper Dry Lake outside conservation strategies for Cymopterus conservation of C. deserticola. However, of the grazing allotment, trespass of deserticola and its habitat remain a the WMP only addresses a small portion sheep has been chronic (BLM 1998). In proposal. of this species’ range, which is outside addition to direct predation (eating the The petitioners also state that the lack of EAFB. More than 90 percent of the plants), the ecological processes of the of any management or conservation known populations occur on EAFB and habitat are altered by livestock strategies by EAFB and ongoing projects conservation measures for the species trampling, which may disrupt water on EAFB is adversely affecting this were not included in the EAFB INRMP. holding capacities of the soil, promote species and leave the future survival of soil erosion from wind, and change the C. deserticola populations on EAFB Finding plant taxa composition found within the uncertain. Petitioners assert that, since We have reviewed the petition to list community to non-native weedy species the core population of this species is Cymoterus deserticola and the that outcompete native species. located on EAFB, without assured supporting documentation, information High levels of leaf predation on conservation measures in place, the in our files, and other readily available Cymopterus deserticola have been long-term survival of C. deserticola information. We find that the petition observed in two studies on EAFB in remains in question. did include substantial information areas not grazed by livestock (Mitchell With regard to factor E, the petitioners indicating that the listing of C. et al.1995; Charleton 1993). Predation is claim that the ‘‘extremely limited deserticola may be warranted. With the likely due to a variety of herbivores distribution and relatively small publication of this notice, we are such as black-tailed jackrabbits (Lepus numbers of individuals’’ of this species, initiating a status review of C. californicus), brush rabbits (Family make populations of Cymopterus deserticola to determine whether listing Leporidae), ground squirrels (Family deserticola vulnerable to extinction is warranted. Sciuridae), kangaroo rats (Family from stochastic events (e.g., drought and The petition also requests us to Heteromyidae), mice (Families disease). Species with few populations designate critical habitat for this Cricetidae and Muridae), desert tortoise and individuals are vulnerable to the species. If we determine in our 12-

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month finding that listing Cymopterus ecology, ongoing conservation measures for public inspection in their entirety. deserticola is warranted, we will for this species and its habitat, threats Comments and materials received will address the designation of critical to the species and its habitat and be available for public inspection, by habitat in the subsequent proposed information regarding the adequacy of appointment, during normal business listing rule or as funding allows. existing regulatory mechanisms. hours at the above address. Public Information Solicited If you wish to comment, you may References Cited submit your comments and materials A complete list of all references cited When we find that there is substantial concerning this finding to the Field herein is available on request from the information indicating that the Supervisor (see ADDRESSES section). Our Ventura Fish and Wildlife Office (see petitioned action may be warranted, we practice is to make comments, including ADDRESSES section). are required to promptly commence a names and home addresses of review of the status of the species. To respondents, available for public review Author ensure that the status review is during regular business hours. The primary author of this document complete and based on the best Respondents may request that we is Robert McMorran, Ventura Fish and available scientific and commercial withhold a respondent’s identity, as Wildlife Office, U.S. Fish and Wildlife information, we are soliciting allowable by law. If you wish us to Service (see ADDRESSES section). information on the Cymopterus withhold your name or address, you deserticola throughout the species’ must state this request prominently at Authority range. We request any additional the beginning of your comment. The authority for this action is the information, comments, and suggestions However, we will not consider Endangered Species Act of 1973, as from the public, governmental agencies, anonymous comments. To the extent amended (16 U.S.C. 1531 et seq.). the scientific community, industry, and consistent with applicable law, we will any other interested parties concerning make all submissions from Dated: January 29, 2004. the status of this species throughout its organizations or businesses, and from Steve Williams, range. We are seeking information individuals identifying themselves as Director, Fish and Wildlife Service. regarding historic and current representatives or officials of [FR Doc. 04–2596 Filed 2–9–04; 8:45 am] distribution, habitat, biology and organizations or businesses, available BILLING CODE 4310–55–P

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Notices Federal Register Vol. 69, No. 27

Tuesday, February 10, 2004

This section of the FEDERAL REGISTER ‘‘Non-Land Grant College or University appointed by the Secretary of contains documents other than rules or with Historic Commitment to Research Agriculture to a specific category on the proposed rules that are applicable to the in the Food and Agricultural Sciences,’’ Board, including: farming or ranching, public. Notices of hearings and investigations, David Wehner, Dean, College of food production and processing, forestry committee meetings, agency decisions and Agriculture, California Polytechnic State research, crop and animal science, land- rulings, delegations of authority, filing of petitions and applications and agency University, San Luis Obispo, CA; grant institutions, non-land grant statements of organization and functions are Category T. ‘‘Transportation of Food and college or university with a historic examples of documents appearing in this Agricultural Products (foreign and commitment to research in the food and section. domestic),’’ James Lugg, President, agricultural sciences, food retailing and TransFRESH Corporation, Salinas, CA; marketing, rural economic development, Category V. ‘‘Food and Fiber and natural resource and consumer DEPARTMENT OF AGRICULTURE Processors,’’ Gilbert Leveille, Vice interest groups, among many others. President, System Design, Cargill, Inc., Office of the Secretary Done at Washington, DC this 29th day of and President, Charles Valentine Riley January 2004. Memorial Foundation, Wayzata, MN Notice of Appointment of Members to Joseph J. Jen, (reappointment); Category AA. Under Secretary, Research, Education, and the National Agricultural Research, ‘‘International Development/Private Extension, Education, and Economics Economics. Sector Organizations,’’ Shirley Dunlap [FR Doc. 04–2763 Filed 2–9–04; 8:45 am] Advisory Board Bowser, Self-Employed Farmer/Chair of BILLING CODE 3410–22–P AGENCY: Research, Education, and Kellogg Foundation, Williamsport, OH Economics, USDA. (reappointment); and Category DD. ACTION: Appointment of members. ‘‘National Social Science Associations,’’ DEPARTMENT OF AGRICULTURE Cornelia Flora, Director, North Central SUMMARY: In accordance with the Regional Center for Rural Development, Cooperative State Research, Federal Advisory Committee Act, 5 Iowa State University, Ames, IA. Education, and Extension Service U.S.C. App 2, the United States DATES: Appointments by the Secretary Department of Agriculture announces of Agriculture are for a three-year term, Revisions to the Guidelines for State the appointments made by the Secretary effective October 1, 2003 until Plans of Work for the Agricultural of Agriculture to the 12 vacancies on the September 30, 2006. Research and Extension Formula Funds National Agricultural Research, ADDRESSES: National Agricultural Extension, Education, and Economics Research, Extension, Education, and AGENCY: Cooperative State Research, Advisory Board. The appointees, by Economics Advisory Board; Research, vacancy category, are as follows: Education, and Extension Service, Education, and Economics Advisory USDA. Category A. ‘‘National Farm Board Office, Room 344A, Jamie L. Organizations,’’ Alan Foutz, Owner/ Whitten Building, U.S. Department of ACTION: Final notice. Operator, Foutz Farms, Akron CO; Agriculture; STOP 2255; 1400 Category C. ‘‘Food Animal Commodity Independence Avenue, SW., SUMMARY: The Cooperative State Producers,’’ Carol Keiser, President, C- Washington, DC 20250–2255 Research, Education, and Extension BAR Cattle Co. Inc., and President, C- Service (CSREES) is implementing the ARC Enterprises, Inc., Champaign, IL; FOR FURTHER INFORMATION CONTACT: Revisions to the Guidelines for State Category E. ‘‘National Animal Deborah Hanfman, Executive Director, Plans of Work for the Agricultural Commodity Organizations,’’ Alois Kertz, National Agricultural Research, Research and Extension Formula Funds Principal, ANDHILL, LLC, and Extension, Education, and Economics (64 FR 19242–19248). These guidelines Managing Partner, KKC Tech, LLC, St. Advisory Board; telephone: (202) 720– prescribe the procedures to be followed Louis, MO; Category F. ‘‘National Crop 3684; fax: (202) 720–6199 or e-mail: by the eligible institutions receiving Commodity Organizations,’’ Gary Davis, [email protected] Federal agricultural research and Farmer/Veterinarian, Gar-Mar Farms SUPPLEMENTARY INFORMATION: Section extension formula funds under the and Greenbriar Veterinary Services, Inc., 802 of the Federal Agricultural Hatch Act of 1887, as amended (7 U.S.C. Delaware, OH; Category K. ‘‘National Improvement and Reform Act of 1996 361a et seq.); sections 3(b)(1) and (c) of Human Health Associations,’’ John authorized the creation of the National the Smith-Lever Act of 1914, as Cunningham, Deputy Provost and Agricultural Research, Extension, amended (7 U.S.C. 343 (b)(1) and (c)); Professor of Nutrition, University of Education, Economics Advisory Board. and sections 1444 and 1445 of the Massachusetts, Amherst, MA; Category The Board is composed of 31 members, National Agricultural Research, P. ‘‘Hispanic Serving Institutions,’’ each representing a specific category Extension, and Teaching Policy Act of Ricardo Chavez Rel, Special Assistant to related to agriculture. The Board was 1977, as amended (7 U.S.C. 3221 and the Secretary of Agriculture, New first appointed in September 1996 and 3222). The recipients of these funds are Mexico State University, Department of at the time one-third of the original commonly referred to as the 1862 land- Agriculture, Las Cruces, NM; Category members were appointed for a one, two, grant institutions and 1890 land-grant Q. ‘‘American Colleges of Veterinary and three-year term, respectively. Due to institutions, including Tuskegee Medicine,’’ Glen Hoffsis, Dean, College the staggered appointments, the terms University and West Virginia State of Veterinary Medicine, Ohio State for 12 of the 31 members expired College. CSREES is also revising and University, Columbus, OH; Category R. September 30, 2003. Each member is reinstating a previously approved

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information collection (OMB No. 0524– audit in the design of the next 5-year Thirteen comments were received. All 0036) associated with these Guidelines. plan of work. Time also is needed for 13 were from deans, directors, FOR FURTHER INFORMATION CONTACT: Mr. CSREES to consult with its partnering administrators, or their representatives Bart Hewitt; Program Analyst, Planning institutions—1862 and 1890 land-grant of research and extension programs at and Accountability, Office of the institutions—in any redesign of the the 1862 land-grant institutions. Eleven Administrator; Cooperative State plan-of-work reporting system or of the 13 commenters made comments Research, Education, and Extension extensive revision of the existing on the proposed guidelines. Twelve of Service; U.S. Department of Agriculture; Guidelines for the State Plans of Work. the 13 commenters made comments on Washington, DC 20250; at 202–720– This 2-year period will allow for the the proposed collection of information. 5623, 202–720–7714 (fax) or via consideration of the USDA OIG audit The most significant comments which electronic mail at findings and recommendations, required a change to the guidelines [email protected]. opportunity to consult with the 1862 centered around the accuracy of, and and 1890 land-grant institutions on any the amount of, the burden hours SUPPLEMENTARY INFORMATION: CSREES extensive revisions to the current required to complete the FY 2005–FY published a notice and request for Guidelines for State Plans of Work, and 2006 Plan of Work Update. Based on comment on the Proposed Revisions to the development of a viable electronic these comments, CSREES is making a the Guidelines for State Plans of Work option in compliance with GPEA. change to the guidelines to indicate that for the Agricultural Research and CSREES also is changing the due date it will only require a 5- to 10-page FY Extension Formula Funds in the Federal of the Annual Report of 2005–FY 2006 Plan of Work Update to Register on August 7, 2003 (68 FR Accomplishments and Results from allow the institutions to outline any 47012–47015). March 1 to April 1. On December 28, changes and additions made to the FY Background and Purpose 2000 (65 FR 82317), CSREES changed 2000–FY 2004 5-Year Plan of Work the original due date for the Annual currently in place. The CSREES The Cooperative State Research, Reports of Accomplishments and responses to specific comments are as Education, and Extension Service Results from December 31 to the follows. (CSREES) is implementing the following following March 1 after consultation revision to the Guidelines for State with the 1862 and 1890 land-grant Positive Comments Plans of Work for the Agricultural institutions. CSREES is now extending Comment: Six of the 11 comments Research and Extension Formula Funds the due date for the Annual Report of that focused on the guidelines were which implement the plan-of-work Accomplishments and Results to April positive comments. Four commenters reporting requirements enacted in the 1, 2004, for FY 2003; April 1, 2005, for supported the change in submitting the Agricultural Research, Extension, and FY 2004; April 1, 2006, for FY 2005; and Annual Report from March 1 to April 1 Education Reform Act of 1998 April 1, 2007, for FY 2006. of each year. Two commenters generally (AREERA), Pub. L. 105–185, by adding The Proposed Guidelines were approved of all the proposed changes to Part V, FY 2005–FY 2006 Plan of Work published in the Federal Register as a the guidelines as outlined in the Federal Update. The 1862 and 1890 land-grant notice with a 30-day comment period on Register. One commenter stated that institutions are required to submit a August 7, 2003, and these Final since the requirements for the proposed Plan of Work Update only for FY 2005 Guidelines reflect consideration by 2-year extension are not being changed and FY 2006, instead of submitting a CSREES of the comments received. from the current 5-year plan, the new 5-Year Plan of Work for FY 2005– The due date for submission of the FY proposal will ensure continuity and will FY 2009, as CSREES needs to 2005–FY 2006 Plan of Work Update for enable research and extension personnel incorporate the recommendations from the period covering October 1, 2004, to anticipate and prepare the reports in the USDA Office of Inspector General through September 2006, is April 1, a consistent manner. The commenter (OIG) Audit No. 13001–3–Te, CSREES 2004. further stated that the time frame is Implementation of the Agricultural consistent with their next strategic Research, Extension, and Education Public Comments and Guideline Changes in Response planning cycle for research and Reform Act of 1998 (AREERA). extension programs involving broad- Consequently, once the final audit In the Notice of the Proposed based stakeholder input and would not recommendations are made, CSREES Guidelines, CSREES invited comments impose a reporting burden. needs time to develop a viable on the Proposed Guidelines as well as CSREES Response: CSREES agrees electronic option for compliance with comments on (a) Whether the proposed and appreciates the positive feedback the Government Paperwork Elimination collection of information is necessary where appropriate. Act (GPEA). Currently, institutions are for the proper performance of the submitting their reports via e-mail in functions of the Agency, including Submitting a FY 2005–FY 2006 Plan of WordPerfect file format, Microsoft Word whether the information will have Work Update file format, or ASCII file format, and the practical utility; (b) the accuracy of the Comment: Four commenters stated institutions should continue to do so Agency’s estimate of the burden of the that amending the FY 2000–FY 2004 until a viable electronic option is proposed collection of information Plan of Work is an insufficient available. including the validity of the alternative for their institutions due to The objective of the USDA OIG Audit methodology and assumptions used; (c) programmatic, procedural, and is to determine whether CSREES ways to enhance the quality, utility, and administrative changes that have established effective controls to ensure clarity of the information to be occurred and that any resources land-grant institutions implemented collected; and (d) ways to minimize the invested should be used to build a new AREERA provisions in accordance with burden of collection of information on 5-year plan, rather than to update the the law and regulations. The audit those who are to respond, including the current plan. began on November 8, 2002, and the use of appropriate automated, CSREES Response: CSREES disagrees report is currently being drafted. electronic, mechanical, or other as it wants to involve the Land-Grant CSREES would like to consider the technological collection techniques or University system that receives the findings and recommendations of that other forms of information technology. Federal formula funds in any changes to

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the next 5-Year Plan of Work. The Whether the Proposed Collection of time required for submitting a 2-Year Agency also believes that the discussion Information is Necessary for the Proper Plan of Work Update of a representative with the system cannot begin until a Performance of the Functions of the sample of all four regions and an final report is issued on the Office of Agency, Including Whether the assumption that an amendment to the Inspector General Audit No. 13001–3– Information Will Have Practical Utility current 5-Year Plan of Work would take Te, CSREES Implementation of the Comment: One commenter assumes about 10 percent as much effort as a Agricultural Research, Extension, and the information is useful to the agency newly developed 5-Year Plan of Work upon which the original survey was Education Reform Act of 1998 for coordination of national initiatives based. The 10 percent estimated burden (AREERA). Also, the Agency believes and planning and reporting of these for a Plan of Work Update was approved that it needs time, once the final initiatives at national and state levels. in the original Plan of Work guidelines recommendations are made, to develop CSREES Response: CSREES agrees published in 1999. In fact, a viable electronic option for and appreciates positive feedback where representatives of CSREES compliance with the Government appropriate. administration discussed this issue of Paperwork Elimination Act (GPEA). Comment: One commenter states that perceived burden with the State CSREES believes it cannot be ready to extending the Plan of Work and asking Agricultural Experiment Station implement this system for the next 5- for accountability against the same is directors on September 24, 2003, in Year Plan of Work until the Summer of appropriate, but questions the merit Dearborn, Michigan, after most of these 2005. The Land-Grant University system review process as an unnecessary use of comments had been received by time and duplication of effort, given the that receives Federal formula funds CSREES. Once CSREES explained what could then be trained to use the new ongoing level of review most programs is expected in the FY 2005–FY 2006 electronic system with the FY 2007–FY are continually involved in with Plan of Work Update, the directors 2011 5-Year Plan of Work due in the stakeholders, clients, and external understood that the burden will be spring of 2006. department and college reviews. minimal. CSREES recognizes that for CSREES Comment: These same four CSREES Response: CSREES disagrees some states that have many changes to commenters plus one other commenter but recognizes the burden that this make in their 5-Year Plan of Work, it additional accountability requirement suggested that the states should be given may take more time than estimated, and places on the institutions. However, the an automatic 1-year renewal or for other states that have little or no merit review process is an integral part extension of their current plan, and that changes to make in the 5-Year Plan of of AREERA; it pertains to the Plan of a new 5-Year Plan of Work be filed by Work, it will take less time than Work and must be included in order to all states beginning with FY 2006. estimated. The intent of CSREES is to receive funds. Section 103(e)(1) of decrease burden to the plan-of-work CSREES Response: CSREES disagrees AREERA states that ‘‘1862 AND 1890 respondents, and to extend the current with this position as it needs the brief INSTITUTIONS.—Effective October 1, plan-of-work cycle to include FY 2005 updates to the 5-Year Plan of Work to 1999, to be eligible to obtain agricultural and FY 2006. To make what is expected insure that institutions are considering research or extension funds from the in the FY 2005–FY 2006 Plan of Work stakeholder input as required under Secretary for an activity, each 1862 Update more clear, CSREES is making a section 102(c) of AREERA and that Institution and 1890 Institution shall— change to the guidelines to indicate that program objectives have been revised (A) establish a process for merit review it will only require a 5-to 10-page FY and developed to address the critical of the activity; and (B) review the 2005–2006 Plan of Work Update which agricultural issues in the state. In activity in accordance with the will allow the institutions to outline any addition, CSREES needs to insure that process.’’ changes and additions made to the FY all the requirements of AREERA Comment: Another commenter 2000–FY 2004 5-Year Plan of Work sections 103(e), 105, 202, 204, and 225 assumes that well-crafted plans of work currently in place. Any detailed continue to be met by the institutions. provide a clear vision of goals and information that the institution wants to objectives of each state’s programs, and Due Date address can be done in the Annual therefore these documents are useful to Report. However, we also will allow the Comment: Only one commenter the agency. institutions the option to submit a thought that they were not in a position CSREES Response: CSREES agrees wholly new FY 2005–FY 2006 Plan of to submit the Plan of Work Update and appreciates positive feedback where Work Update if it feels that it is in their simultaneously with the Annual Report appropriate. best interest to do so. and suggested that the Plan of Work The Accuracy of the Agency’s Estimate Ways to Enhance the Quality, Utility, Update be submitted on July 1, 2004, of the Burden of the Proposed Collection and Clarity of the Information to be instead of April 1, 2004. of Information Collected CSREES Response: CSREES needs to Comment: Four commenters thought Comments received focused on receive the FY 2005–FY 2006 Plan of the estimate of time required was aggregation and a standardized system Work Update earlier than July 1 in order accurate or reasonable. Seven for reporting. to thoroughly review any changes an commenters thought the estimate of Comment: One commenter stated he institution may make to their original 5- time required was significantly looks forward to a more standardized Year Plan of Work and approve them underestimated. and aggregated system in the future. prior to October 1, 2004, in order to CSREES Response: CSREES agrees in Another commenter wants the Agency guarantee the timely release of first part with the seven commenters on the to work to clarify a list of outcomes/ quarter FY 2005 formula funds. On a estimate of time. CSREES agrees that the impacts that states could choose among case-by-case basis, CSREES has estimate of burden for an entirely new to report against so data can be extended the reporting due date for an 5-Year Plan of Work will take aggregated at the regional and national individual institution in the past and considerably more effort, and thus, level. will continue to consider a submission burden, than was estimated here. CSREES Response: CSREES agrees as extension in this same manner. However, CSREES based its estimate of it intends to have a more standardized

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system in the future and will consider next 5-Year Plan of Work which is due Guidelines for State Plans of Work for working to clarify a list of outcomes/ to begin with FY 2007. Agricultural Research and Extension impacts as it begins to develop the Formula Funds Ways to Minimize the Burden of guidelines for the next 5-Year Plan of Collection of Information on Those Who Table of Contents Work which will begin with the FY Are to Respond, Including the Use of 2007. Appropriate Automated, Electronic, V. Submission of the FY 2005–2006 Plan of Comment: One commenter suggested Mechanical, or Other Technological Work Update that the requirement to limit the A. General Collection Techniques or Other Forms of 1. Planning Option reporting to programs supported by Information Technology Federal dollars is the biggest hindrance 2. Period Covered to quality, causes an unnecessary Comment: Seven commenters 3. Projected Resources burden on fiscal officers, and limits the supported the Agency notion to develop 4. Submission and Due Date 5. Certification results for which USDA might take one standardized holistic electronic planning and reporting system for all its B. FY 2005–2006 Plan of Work Update credit. The commenter also suggested Evaluation by CSREES that an easy fix would be to allow states information needs, which the agency has named ‘‘One-Solution.’’ However, 1. Schedule to report about programs that fit, 2. Review Criteria regardless of funding source. one commenter stated that the current method of reporting works well for their CSREES Response: While CSREES V. Submission of the FY 2005–FY 2006 agrees with this in principle, AREERA State. CSREES Response: Although the Plan of Work Update only requires that programs funded with current free text format may work well formula funds be reported in the Plan of A. General for a few States, CSREES appreciates the Work and Annual Report of support of the agency notion to develop 1. Planning Option Accomplishments and Results. Thus, a standardized holistic electronic CSREES can only require that The FY 2005–FY 2006 Plan of Work planning and reporting system for all of institutions that receive Federal formula Update is a prospective plan that its information needs. CSREES is funds to report on programs that use extends coverage of the original 5-Year committed to developing a more Federal formula funds through the plan- Plan of Work (i.e., FY 2000–FY 2004) to sophisticated holistic electronic system of-work process. include FY 2005–FY 2006. CSREES to reduce reporting burden. CSREES Comment: Another requests, and will only require, this Plan commenter questions the necessity of Paperwork Reduction Act of Work Update be limited to 5–10 pages and outline the changes and reporting on the manner in which In accordance with the Office of additions made to the original FY 2000– research and extension activities are Management and Budget (OMB) FY 2004 5-year Plan of Work. However, funded other than through Federal regulations (5 CFR part 1320) that CSREES will also allow the institution formula funds. This commenter also implement the Paperwork Reduction the option to submit a wholly new FY asks if AREERA only requires plans of Act of 1995 (44 U.S.C. chapter 35), the 2005–2006 Plan of Work Update if they work for the Federal formula funds information collection and feel it is in their best interest to do so. distributed by CSREES, why are we recordkeeping requirements imposed by The FY 2005–2006 Plan of Work Update burdening them to account for other the implementation of these Final should be prepared for an institution’s funds. Guidelines will be submitted to OMB individual functions (i.e., research or Response: CSREES disagrees as this for approval. Those requirements will extension activities), for an individual information is required under section not become effective prior to OMB institution (including the planning of 202 of AREERA which amended both approval. The eligible institutions will research and extension activities), or for the Smith-Lever and Hatch Acts and be notified upon this approval. states as one of its ‘‘Requirements The public reporting burden for this state-wide activities (a 5-year research Related to the Plan of Work’’: ‘‘(4) The collection of information contained in and/or extension plan of work for all the manner in which research and these guidelines is estimated at 336.9 eligible institutions in a State), as they extension, including research and hours per response for the FY 2005–FY were submitted in the original 5-Year extension activities funded other than 2006 Plan of Work Update and 1,356.3 Plan of Work that was due on July 15, through formula funds, will cooperate to hours per response for the Annual 1999. Each FY 2005–FY 2006 Plan of address the critical issues in the State, Report of Accomplishments and Work Update must reflect the content of including the activities to be carried out Results. This includes the time for the program(s) funded by Federal separately, the activities to be carried reviewing instructions, searching agricultural research and extension out sequentially, and the activities to be existing data sources, gathering and formula funds and the required carried out jointly.’’ maintaining the data needed, and matching funds. This FY 2005–FY 2006 Comment: Another commenter stated completing and reviewing the collection Plan of Work Update must continue to that examples and materials posted on of information. These guidelines have describe not only how the program(s) the CSREES Web site are quite helpful, no additional impact on any existing address critical short-term, and that feedback regarding planning data collection burden. intermediate, and long-term agricultural and reporting is also helpful in moving Pursuant to the plan of work issues in a State, but how it relates to planning and reporting toward a more requirements enacted in the and is part of the five broad national outcomes-based effort. The commenter Agricultural Research, Extension, and goals as outlined above and originally further stated that electronic platforms Education Reform Act of 1998, the described in the previous 5-year plan of will further help users to assess Cooperative State Research, Education, work, thus expanding upon and component information more readily. and Extension Service hereby adds Part extending the existing plan with new or CSREES Response: CSREES agrees V, FY 2005–FY 2006 Plan of Work continuing efforts. and appreciates positive feedback where Update, to the Guidelines for State Plans The FY 2005–FY 2006 Plan of Work appropriate and will work on a more of Work for Agricultural Research and Update should continue to be based on sophisticated electronic platform for the Extension Formula Funds as follows: the five original national goals

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established in the FY 2000–FY 2004 5- with clear and detailed Independence Avenue SW., year Plan of Work as described above. recommendations for its modification. Washington, DC 20250. The submitting institution(s) will be Comments also may be submitted via 2. Period Covered notified by CSREES of its determination facsimile to (202) 205–1494 or by e-mail The FY 2005–FY 2006 Plan of Work within 90 days (review to be completed to [email protected]. Update will extend the current 5-Year in 60 days, communications to the The public may inspect comments Plan of Work that covered the period institutions allowing a 30-day response) received at the Office of the Deputy from October 1, 1999, through of receipt of the document. Adherence Chief, State and Private Forestry, Forest September 30, 2004, to include the to the Plan of Work schedule by the Service, USDA, 2nd Floor SW., Yates period from October 1, 2004, through recipient institution is critical to Building, 1400 Independence Avenue September 30, 2006. assuring the timely allocation of funds SW., Washington DC. Visitors are urged 3. Projected Resources by CSREES. The FY 2005–FY 2006 Plan to call ahead to (202) 205–1494 to of Work Updates accepted by CSREES facilitate entrance into the building. The resources that are allocated for will be in effect for the period beginning various planned programs in the FY FOR FURTHER INFORMATION CONTACT: Jim October 1, 2004, through September 30, 2005–2006 Plan of Work Update, in Shell, Fire and Aviation Management, 2006. CSREES will notify all institutions terms of human and fiscal measures, State and Private Forestry, (202) 205– of a need for a new 5-year plan of work should be included and projected to 1494. Individuals who use one year prior to the plan’s expiration include the sixth and seventh years. The telecommunication devices for the deaf on September 30, 2006. baseline for the institution’s or State’s (TDD) may call the Federal Relay initial plan (for the two years) should be 2. Review Criteria Service (FRS) at 1–800–877–8339 the Federal agricultural research and twenty-four hours a day, every day of CSREES will evaluate the FY 2005– extension formula funds for FY 1999 the year, including holidays. FY 2006 Plan of Work Update according and the required level (i.e., percentage) SUPPLEMENTARY INFORMATION: of matching funds for FY 2005 and FY to the criteria in these revised Background 2006. guidelines. Done in Washington, DC, this 30th day of The Cooperative Forestry Assistance 4. Submission and Due Date January, 2004. Act of 1978 requires the Forest Service The FY 2005–FY 2006 Plan of Work Colien Hefferan, to collect information about wildfire Update must be submitted by April 1, Administrator, Cooperative State Research, suppression efforts by State and local 2004, to the Planning and Education, and Extension Service. fire fighting agencies to ensure that Accountability Unit, Office of the [FR Doc. 04–2786 Filed 2–9–04; 8:45 am] Congress has adequate information to Administrator of the Cooperative State BILLING CODE 3410–22–P implement its oversight responsibilities Research, Education, and Extension and to provide accountability for Service; U.S. Department of Agriculture. expenditures and activities under the It is preferred that these FY 2005–FY DEPARTMENT OF AGRICULTURE Act. The Forest Service works 2006 Plan of Work Updates be cooperatively with State and local fire submitted electronically to Forest Service fighting agencies and provides [email protected] in either supplemental funding to these agencies WordPerfect file format, Microsoft Word Information Collection; Request for to support their fire suppression efforts file format, or ASCII file format. It also Comments; Annual Wildfire Summary through the Forest Service State and is requested that the FY 2003 Annual Report Private Forestry Cooperative Fire Report of Accomplishments and Results AGENCY: Forest Service, USDA. Program. State and local fire agencies be submitted with the FY 2005–FY 2006 are the first line of defense against fires ACTION: Plan of Work Update in order to Notice. that threaten non-Federal property and facilitate a more efficient and SUMMARY: In accordance with the resources and that might spread to comprehensive review for both CSREES Paperwork Reduction Act of 1995, the Federal lands. and the land-grant institutions. Forest Service announces its intention State Foresters use the form, FS– 5. Certification to reinstate, without change, a 3100–8, Annual Wildfire Summary Report, to compile information from The FY 2005–FY 2006 Plan of Work previously approved information collection, for which approval has their State and local fire agencies in Updates must be signed by the 1862 response to a request for this Extension Director, 1862 Research expired. The collected information enables the Forest Service to provide information from the Forest Service. Director, 1890 Extension Administrator, The Forest Service would be unable to and/or 1890 Research Director, timely, substantive information to Congress about the effectiveness of State assess the effectiveness of the State and depending on the planning option Private Forestry Cooperative Fire chosen. and local fire fighting agencies, when the agencies request annual funding for Program if the information provided on B. FY 2005–2006 Plan of Work Update the Forest Service State and Private form, FS–3100–8, were not collected. Evaluation by CSREES Forestry Cooperative Fire Program. This Description of Information Collection program supplements the funding of 1. Schedule The following describes the State and local fire fighting efforts. All FY 2005–FY 2006 Plan of Work information collection to be retained. Updates will be evaluated by CSREES in DATES: Comments must be received in Title: FS–3100–8, Annual Wildfire conjunction with the review of the FY writing on or before April 12, 2004. Summary Report. 2003 Annual Report of ADDRESSES: Comments concerning this OMB Number: 0596–0025. Accomplishments and Results. The FY notice should be addressed to Jim Shell, Date of Expiration: May 31, 2003. 2005–FY 2006 Plan of Work Update will Fire and Aviation Management, MAIL Type of Request: Reinstatement. either be accepted by CSREES without STOP 1107, State and Private Forestry, Abstract: Forest Service State and change or returned to the institution, Forest Service, USDA, 1400 Private Forestry Cooperative Fire

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Program managers will evaluate the a matter of public record and will be The project area is located in T. 2 N.– collected information to determine available for public inspection and T. 5 N., R 7 W.–R. 4 W. The scope of whether Cooperative Fire program funds copying. Comments will be summarized this proposal is limited to access and provided to the State and local fire and included in the request for Office of travel management actions to fighting agencies by the Forest Service Management and Budget approval. accomplish the purpose and need. have been used to improve their fire Dated: February 4, 2004. Public participation is important to this analysis. Part of the goal of public suppression capabilities. The Forest Robin L. Thompson, Service will share the results of the data involvement is to identify additional Acting Deputy Chief, State and Private issues and to refine the general, with Congress when requesting annual Forestry. tentative issues. A scoping notice funding for the Program. The collected [FR Doc. 04–2843 Filed 2–9–04; 8:45 am] information also will enable the Forest describing the proposal will be mailed BILLING CODE 3410–11–P Service to share with the public the to those who request information on importance and value of the State and these types of activities on the Private Forestry Cooperative Fire DEPARTMENT OF AGRICULTURE Beaverhead-Deerlodge National Forests. Program. Preliminary issues identified by the Forest Service employees will not Forest Service Forest Service include: collect the information directly, but will (1) Motorized and non-motorized request the information from State Whitetail-Pipestone Travel recreation—the existing transportation Foresters, who will collect the Management Project, Beaverhead- system does not provide for a mix of information from their own State fire Deerlodge National Forest, Jefferson quality recreational experiences for both fighting agencies, and from local fire and Silver Bow Counties, MT motorized and non-motorized users. fighting agencies, such as volunteer fire (2) Road and trail safety—safety AGENCY: Forest Service, USDA. departments. The information collected concerns exist along roads utilized by ACTION: Notice; intent to prepare an for the Annual Wildfire Summary both full-sized vehicles and off-highway environmental impact statement. Report will include the number of acres vehicles, and hazards on low standard protected; the number of fires to which SUMMARY: The Forest Service will roads and trails. The analysis will consider all the State or local fire fighting agencies prepare an environmental impact reasonably foreseeable activities. The responded within the fiscal year; the statement to document the analysis and sizes of the fires in acres; and the causes disclose the environmental impacts of a interdisciplinary team has not yet of the fires, such as lightening, campfire, proposed action to develop a travel and developed alternatives to the proposed or arson. Data gathered in this access management plan for the action. Alternatives will be developed information collection are not available Whitetail-Pipestone area. The project based on the key issues identified from other sources. area is located on National Forest through scoping. People may visit with Forest Service Estimate of Annual Burden: 30 System lands east of Interstate 15 from officials at any time during the analysis minutes. Butte to Boulder, southwest of Highway and prior to the decision. Two periods Type of Respondents: State Foresters. 69 to Hadley Park road, west and north Estimated Annual Number of of the Hadley Park Road over the Bull are specifically designated for Respondents: 50. Mountain range to the Whitetail Road, comments on the analysis: (1) During Estimated Annual Number of west of the Whitetail Road to Whitehall, the scoping process, and (2) during the Responses per Respondent: 1. and north of Montana Highway 2 from draft EIS period. During the scoping process, the Forest Estimated Total Annual Burden on Whitehall to Butte. Respondents: 25 hours. The decision to be made is to define Service seeks additional information and comments from individuals Comment Is Invited the appropriate road and trail systems and the type of uses on them. organization that may be interested in or Comment is invited on: (a) Whether affected by the proposed action, and DATES: Initial comments concerning the the proposed collection of information Federal, State and local agencies. The scope of the analysis should be received is necessary for the stated purposes and Forest Service invites written comments in writing no later than march 15, 2004. the proper performance of the functions and suggestions on this action, of the agency, including whether the ADDRESSES: The responsible official is particularly in terms of identification of information will have practical or Forest Supervisor Thomas K. Reilly, issues and alternative development. scientific utility; (b) the accuracy of the Beaverhead-Deerlodge National Forest, The draft EIS is anticipated to be agency’s estimate of the burden of the Dillon, Montana. Please send comments available for review in May 2004. The proposed collection of information, to Eric Tolf, 3 Whitetail Road, final EIS is planned for completion in including the validity of the Whitehall, MT 59759. Comments may December 2004. methodology and assumptions used; (c) be electronically submitted to The Environmental Protection Agency ways to enhance the quality, utility, and comments-northern-beaverhead- will publish the Notice of Availability of clarity of the information to be [email protected]. the draft Environmental Impact collected; and (d) ways to minimize the FOR FURTHER INFORMATION CONTACT: Eric Statement in the Federal Register. The burden of the collection of information Tolf, project leader, 3 Whitetail Road, Forest will also publish a Legal Notice on respondents, including the use of Whitehall, MT 59759, or phone (406) of its availability in the Montana automated, electronic, mechanical, or 287–3223, or by email to [email protected]. Standard Newspaper, Butte, Montana, A other technological collection SUPPLEMENTARY INFORMATION: The 45-day comment period on the draft techniques or other forms of information purpose of this action is to define a environmental impact statement will technology. transportation system (roads and trails) begin the day following the date of to provide a variety of motorized and publication of the Notice of Availability Use of Comments non-motorized recreation opportunities. in the Federal Register. All comments received in response to A condition of this transportation The Forest Service believes, at this this notice, including names and system is that it can be properly early stage, it is important to give addresses when provided, will become maintained. reviewers notice of several court rulings

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related to public participation in the DEPARTMENT OF AGRICULTURE will be two closed sessions during the environmental review process. First, meeting. The first closed session is reviewers of draft environmental impact Forest Service planned for approximately 9 to 11 a.m. statements must structure their on May 12. This session is reserved for National Tree-Marking Paint Committee individual paint manufacturers to participation in the environmental Meeting review of the proposal so that it is present products and information about meaningful and alerts an agency to the AGENCY: Forest Service, USDA. tree-marking paint for consideration in reviewer’s position and contentions. ACTION: Notice of meeting. future testing and use by the agency. Vermont Yankee Nuclear Power Corp. v. Paint manufacturers also may provide SUMMARY: comments on tree-marking paint NRDC, 435 U.S. 519,553 (1978). Also, The National Tree-Marking Paint Committee will meet in Hot specifications or other requirements. environmental objections that could be Springs, Arkansas on May 11–13, 2004. This portion of the meeting is open only raised at the draft environmental impact The purpose of the meeting is to discuss to paint manufacturers, the Committee, statement stage but that are not raised activities related to improvements in, and committee staff to ensure that trade until after completion of the final concerns about, and the handling and secrets will not be disclosed to other environmental impact statement may be use of tree-marking paint by personnel paint manufacturers or to the public. waived or dismissed by the courts. City of the Forest Service and the Paint manufacturers wishing to make of Angoon v. Hodel, 803 F.2d 1016, Department of the Interior’s Bureau of presentations to the Tree-Marking Paint 1022 (9th Cir. 1986) and Wisconsin Land Management. Committee during the closed session Heritages, Inc. v. Harris, 490 F. Supp. DATES: The meeting will be held May should contact the Chairman at the 1334, 1338 (E.D. Wis. 1980). Because of 11–13, 2004, from 8 a.m. to 5 p.m. telephone number listed under the FOR these court rulings, it is very important ADDRESSES: The meeting will be held at FURTHER INFORMATION CONTACT section of that those interested in this proposed the Clarion Resort, 4813 Central this notice. The second closed session is action participate by the close of the 45- Avenue, Hot Springs, Arkansas. Persons planned for approximately 2 to 4 p.m. day comment period so that substantive who wish to file written comments on May 13. This session is reserved for comments and objections are made before or after the meeting must send Federal Government employees only. available to the Forest Service at a time written comments to Bob Monk, Any person with special access needs when it can meaningfully consider them Chairman, National Tree-Marking Paint should contact the Chairman to make and respond to them in the final Committee, San Dimas Technology and those accommodations. Space for individuals who are not members of the environmental impact statement. Development Center, Forest Service, USDA, 444 East Bonita Avenue, San National Tree-Marking Paint Committee To assist the Forest Service in Dimas, California 91773, or is limited and will be available to the identifying and considering issues and electronically to [email protected]. public on a first-come, first-served basis. concerns on the proposed action, FOR FURTHER INFORMATION CONTACT: Bob Dated: February 3, 2004. comments on the draft environmental Monk, Project Leader, San Dimas Abigail R. Kimbell, impact statement should be as specific Technology and Development Center, Associate Deputy Chief, National Forest as possible. It is also helpful if Forest Service, USDA, (909) 599–1267, System. comments refer to specific pages or extension 267, or via e-mail to [FR Doc. 04–2771 Filed 2–9–04; 8:45 am] chapters of the draft statement. [email protected]. BILLING CODE 3410–11–P Comments may also address the SUPPLEMENTARY INFORMATION: adequacy of the draft environmental The National Tree-Marking Paint Committee impact statement or the merits of the DEPARTMENT OF AGRICULTURE comprises representatives from the alternatives formulated and discussed in Forest Service national headquarters, Forest Service the statement. Reviewers may wish to each of the nine Forest Service Regions, refer to the Council on Environmental the Forest Products Laboratory, the Notice of Meeting; Southwest Oregon Quality Regulations for implementing Forest Service San Dimas Technology Province Advisory Committee the procedural provisions of the and Development Center, and the National Environmental Policy Act at 40 Bureau of Land Management. The SUMMARY: The Southwest Oregon CFR 1503.3 in addressing these points. General Services Administration and Province Advisory Committee will meet on Wednesday, March 17, 2004. The The responsible official will make the the National Institute for Occupational meeting begins at 9 a.m. and ends at 5 decision on this proposal after Safety and Health are ad hoc members p.m.; the open public forum begins at considering comments and responses, and provide technical advice to the committee. 11:30 a.m. It will be held at the J. environmental consequences discussed Herbert Stone Nursery, 2606 Old Stage A field trip will be held on May 11 in the final EIS, applicable laws, Road, Central Point, Oregon in the regulations, and policies. The decision and is designed to supplement Employee Center. The tentative agenda and reasons for the decision will be information related to tree-marking include: (1) Biscuit Fire Recovery documented in the Record of Decision. paint. This trip is open to any member Project Draft Environmental Impact of the public participating in the public Statement update; (2) Port-Orford-cedar Dated: February 3, 2004. meeting on May 12–13. However, Thomas K. Reilly, Supplemental Environmental Impact transportation is provided only for Statement update; and (3) Province Forest Supervisor. committee members. Advisory Committee 2004 Work Plan The main session of the meeting, [FR Doc. 04–2775 Filed 2–9–04; 8:45 am] development. BILLING CODE 3410–11–M which is open to public attendance, will be held on May 12–13. FOR FURTHER INFORMATION CONTACT: Rogue River-Siskiyou National Forest Closed Sessions Public Affairs Officer Mary T. Marrs at While certain segments of this (541) 858–2211, e-mail meeting are open to the public, there [email protected], or USDA Forest

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Service, 333 West 8th Street, Medford, will be available for public inspection regulation in order to implement the OR, 97501. during normal business hours (7 CFR program. Dated: February 4, 2004. part 1). RUS encourages interested parties to M.J. Harvie, FOR FURTHER INFROMATION CONTACT: Gary review the Act in its entirety on the Fire and Aviation Staff Officer, Rogue River- Morgan, Assistant Administrator, Water USDA Web site at http://www.usda.gov/ Siskiyou National Forest. and Environmental Programs, Rural farmbill/. [FR Doc. 04–2776 Filed 2–9–04; 8:45 am] Utilities Service, United States Request for Comment BILLING CODE 3410–11–M Department of Agriculture, 1400 Independence Avenue, SW., stop 1548 room 5145–S, Washington, DC 20250– RUS is requesting comment and discussion on the following topics: DEPARTMENT OF AGRICULTURE 1548. Phone: 202–690–2670. Fax: 202– 720–0718. E-mail: 1. RUS is interested in comments Rural Utilities Service [email protected]. regarding grantees’ experience with SUPPLEMENTARY INFORMATION: individual household water systems and Financing for Household Water Well the importance of having a staff with Systems Background both technical and lending experience. AGENCY: Rural Utilities Service, USDA. On May 13, 2002, the Farm Security 2. In similar RD programs, there is ACTION: Notice of inquiry. and Rural Investment Act of 2002 (Farm either a requirement that the grantee Bill) was signed into law as Public Law provide matching funds or that the SUMMARY: The Water and Environmental 107–171. The CONACT was amended applicant receives additional priority for Program within the Rural Utilities by section 6012 of the Farm Bill, by providing larger matching funds. Service (RUS) is developing regulations adding a grant program to establish a Should there be a requirement to to implement section 306E of the lending program. For this program, the leverage funds? Also, should RUS give Consolidated Farm and Rural Secretary may make grants to private priority points to those who do leverage Development Act (CONACT). The nonprofit organizations for the purpose Agency seeks written comments about of providing loans to eligible funds? the prospective grant program to an individuals for the construction, 3. What percentage of financing entity that will establish a lending refurbishing, and servicing of individual should be allowed and what percentage program for the construction, household water well systems in rural of the project costs should the borrower refurbishing, and servicing of areas that are or will be owned by the cover? individually-owned household water eligible individuals. 4. Should administrative and well systems in rural areas that are or An ‘‘eligible individual’’ means an servicing fees be an eligible grant will be owned by the eligible individual who is a member of a purpose? If so, what should be the limit individuals. RUS believes it is beneficial household the members of which have on those fees? to have the public’s input before a combined income (for the most recent drafting regulations and this notice of 12-month period for which the 5. RUS is considering the use of the inquiry will allow the public’s opinion information is available) that is not Central Servicing Center for servicing to be considered in the drafting of those more than 100 percent of the median the loans, including processing loan regulations. nonmetropolitan household income for payments, reviewing financial DATES: Interested parties must submit the State or territory in which the statements, and other responsibilities written comments on or before March individual resides, according to the involved in loan servicing. 11, 2004. most recent decennial census of the 6. Several RD lending programs are ADDRESSES: You may submit comments United States. limited to applicants who cannot obtain by any of the following methods: The terms of a loan made with grant financing from commercial sources at • funds are as follows: (a) Shall have an E-mail: [email protected]. reasonable rates and terms. How should interest rate of 1 percent; (b) shall have Include in the subject line of the the homeowner show an inability to a term not to exceed 20 years; and (c) message ‘‘Water Well Systems.’’ The e- obtain financing from other sources? mail must identify, in the text of the shall not exceed $8,000 for each water message, the name of the individual well system. 7. What should be eligible and (and name of the entity if applicable) A recipient of a grant made under this ineligible loan purposes? who is submitting the comment. section may use grant funds to pay RUS invites interested parties • Mail: Addressed to Richard Annan, administrative expenses associated with including, but not limited to, financial Acting Director, Program Development providing the assistance described in and lending institutions, well drillers, and Regulatory Analysis, Rural Utilities the above paragraph. trade associations, consumer groups and Service, United States Department of The Secretary may give priority points individuals to provide RUS, any to an applicant that has substantial Agriculture, 1400 Independence information or analyses they believe to expertise and experience in promoting Avenue, SW., STOP 1522, Washington, be relevant to the issues discussed in DC 20250–1522. the safe and productive use of this Notice and to the implementation of • Hand Delivery/Courier: Addressed individually-owned household water to Richard Annan, Acting Director, well systems and ground water. the grant program. Program Development and Regulatory This program is authorized to be Dated: January 16, 2004. Analysis, Rural Utilities Service, United appropriated $10,000,000 for each of Hilda Gay Legg, States Department of Agriculture, 1400 fiscal years (FY) 2003 through 2007. Administrator, Rural Utilities Service. There was no funding appropriated in Independence Avenue, SW., Room [FR Doc. 04–2764 Filed 2–9–04; 8:45 am] 5168–S, Washington, DC 20250–1522 FY 2003. However, the appropriations RUS requires, in hard copy, a signed bill for FY 2004 includes $500,000 for BILLING CODE 3410–15–P original and 3 copies of all written the grant program; therefore RUS is comments (7 CFR 1700.4). Comments proceeding with the development of a

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DEPARTMENT OF COMMERCE * * * of foreign-trade zones in ports of amended (19 U.S.C. 81a–81u), the Foreign- entry of the United States, to expedite Trade Zones Board (the Board) adopts the Foreign-Trade Zones Board and encourage foreign commerce, and following Order: [Order No. 1318] for other purposes,’’ and authorizes the Foreign-Trade Zones Board (the Board) Whereas, the Foreign-Trade Zones Act provides for ‘‘* * * the establishment Expansion of Foreign-Trade Zone 191; to grant to qualified corporations the Palmdale, CA, Area privilege of establishing foreign-trade * * * of foreign-trade zones in ports of zones in or adjacent to U.S. Customs entry of the United States, to expedite Pursuant to its authority under the Foreign- ports of entry; and encourage foreign commerce, and Trade Zones Act of June 18, 1934, as Whereas, the Board’s regulations (15 for other purposes,’’ and authorizes the amended (19 U.S.C. 81a–81u), the Foreign- CFR Part 400) provide for the Foreign-Trade Zones Board (the Board) Trade Zones Board (the Board) adopts the establishment of special-purpose following Order: to grant to qualified corporations the subzones when existing zone facilities privilege of establishing foreign-trade Whereas, the City of Palmdale, cannot serve the specific use involved, zones in or adjacent to U.S. Customs California, grantee of Foreign-Trade and when the activity results in a ports of entry; Zone 191, submitted an application to significant public benefit and is in the Whereas, the Board’s regulations (15 the Board for authority to expand FTZ public interest; 191 to include a site at the Mojave Whereas, Georgia Foreign-Trade Zone, CFR part 400) provide for the Airport (91 acres) in Mojave, California Inc., grantee of Foreign-Trade Zone 26, establishment of special-purpose (Site 11), adjacent to the Los Angeles- has made application for authority to subzones when existing zone facilities Long Beach Customs port of entry (FTZ establish special-purpose subzone status cannot serve the specific use involved, Docket 20–2003; filed 4/16/03); at the automotive airbag inflator and when the activity results in a Whereas, notice inviting public manufacturing facilities of Inflation significant public benefit and is in the comment was given in the Federal Systems, Inc., located in LaGrange, public interest; Register (68 FR 19778, 4/22/03) and the Georgia (FTZ Docket 26–2003, filed 6– Whereas, the Moses Lake Public application has been processed 9–2003); Corporation, grantee of Foreign-Trade pursuant to the FTZ Act and the Board’s Whereas, notice inviting public Zone 203, has made application for regulations; and, comment was given in the Federal Whereas, the Board adopts the authority to establish special-purpose Register (68 FR 35856, 6–17–2003); subzone status at the automotive airbag findings and recommendations of the Whereas, the Board adopts the examiner’s report, and finds that the findings and recommendations of the inflator and propellant manufacturing requirements of the FTZ Act and examiner’s report, and finds that the plant of Inflation Systems, Inc., located Board’s regulations are satisfied, and requirements of the FTZ Act and in Moses Lake, Washington (FTZ Docket that the proposal is in the public Board’s regulations are satisfied, and 25–2003, filed 6–9–2003); interest; that approval of the application is in the Whereas, notice inviting public Now, therefore, the Board hereby public interest; comment was given in the Federal orders: Now, therefore, the Board hereby Register (68 FR 35857, 6–17–2003); The application to expand FTZ 191 is grants authority for subzone status at the Whereas, the Board adopts the approved, subject to the Act and the automotive airbag inflator findings and recommendations of the Board’s regulations, including Section manufacturing facilities of Inflation 400.28. Systems, Inc., located in LaGrange, examiner’s report, and finds that the requirements of the FTZ Act and Signed at Washington, DC, this 22nd day Georgia (Subzone 26I), at the locations of January 2004. described in the application, subject to Board’s regulations are satisfied, and James J. Jochum, the FTZ Act and the Board’s regulations, that approval of the application is in the public interest; Assistant Secretary of Commerce for Import including Section 400.28. Administration, Alternate Chairman, Foreign- Signed at Washington, DC, this 22nd day Now, therefore, the Board hereby Trade Zones Board. of January 2004. grants authority for subzone status at the Dennis Puccinelli, James J. Jochum, automotive airbag inflator and Executive Secretary. Assistant Secretary of Commerce for Import propellant manufacturing plant of [FR Doc. 04–2868 Filed 2–9–04; 8:45 am] Administration, Alternate Chairman, Foreign- Inflation Systems, Inc., located in Moses BILLING CODE 3510–DS–U Trade Zones Board. Lake, Washington (Subzone 203A), at Dennis Puccinelli, the location described in the Executive Secretary. application, subject to the FTZ Act and DEPARTMENT OF COMMERCE [FR Doc. 04–2867 Filed 2–9–04; 8:45 am] the Board’s regulations, including BILLING CODE 3510–DS–M Section 400.28. Foreign-Trade Zones Board Signed at Washington, DC, this 22nd day [Order No. 1317] of January 2004. DEPARTMENT OF COMMERCE Grant of Authority for Subzone Status; James J. Jochum, Inflation Systems, Inc. (Automotive Foreign-Trade Zones Board Assistant Secretary of Commerce for Import Administration, Alternate Chairman, Foreign- Airbag Inflators), LaGrange, GA [Order No. 1316] Trade Zones Board. Pursuant to its authority under the Foreign- Grant of Authority for Subzone Status; Dennis Puccinelli, Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81a–81u), the Foreign- Inflation Systems, Inc. (Automotive Executive Secretary. Trade Zones Board (the Board) adopts the Airbag Inflators and Propellant), Moses [FR Doc. 04–2866 Filed 2–9–04; 8:45 am] following Order: Lake, WA BILLING CODE 3510–DS–U Whereas, the Foreign-Trade Zones Act Pursuant to its authority under the Foreign- provides for ‘‘* * * the establishment Trade Zones Act of June 18, 1934, as

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DEPARTMENT OF COMMERCE antidumping duty order on brake rotors Ukraine (GOU) have signed an from the PRC (68 FR 27781) on May 21, Amendment to the Agreement International Trade Administration 2003 and the ninth new shipper review2 Suspending the Antidumping [A-570–846] of the antidumping duty order on brake Investigation on Cut-Length Plate from rotors from the PRC (68 FR 33675) on Ukraine. Brake Rotors from The People’s June 5, 2003. Pursuant to section Republic of China: Notice of Extension 351.214(j)(3) of its regulations, and with EFFECTIVE DATE: January 16, 2004. of Time Limit for Preliminary Results in the agreement of Laizhou City Luqi FOR FURTHER INFORMATION CONTACT: Antidumping Duty Administrative and Machinery Co., Ltd. (Luqi), the Patricia Tran or Robert James, AD/CVD New Shipper Reviews Department is conducting these reviews Enforcement, Group III, Import concurrently. On October 8, 2003, we AGENCY: Administration, International Trade Import Administration, extended the time limits for the International Trade Administration, preliminary results from December 31, Administration, U.S. Department of Department of Commerce. 2003, to February 2, 2003, the current Commerce, 14th Street and Constitution SUMMARY: The Department of Commerce deadline. This deadline was not fully Avenue, NW., Washington, DC 20230, (the Department) is further extending extended. telephone: (202) 482–1121 or (202) 482– the time limit for the preliminary results The Department finds that it is not 0649, respectively. of the sixth administrative and ninth practicable to complete the preliminary SUPPLEMENTARY INFORMATION: new shipper reviews of the antidumping results in the administrative review duty order on brake rotors from the within the above-specified time limit Background People’s Republic of China (PRC), because we must request additional which cover the period April 1, 2002, information and/or clarification of On November 19, 1997, the through March 31, 2003. submitted data from certain Department published in the Federal EFFECTIVE DATE: February 10, 2004. respondents. Given that the Department Register the text of an Agreement FOR FURTHER INFORMATION CONTACT: is conducting the administrative review between the Department and the GOU Brian Smith at (202) 482–1766, Terre concurrently with the new shipper suspending the antidumping Keaton at (202) 482–1280, or Margarita review, we determine it appropriate to investigation involving certain cut-to- Panayi at (202) 482–0049, Office 2, AD/ extend the deadline for both reviews. length carbon steel plate (62 FR 61766). CVD Enforcement Group I, Import Therefore, in accordance with Pursuant to section XII of the Administration, International Trade sections 751(a)(3)(A) and Agreement, the export limits on the Administration, U.S. Department of 751(a)(2)(B)(iv) of the Act, the volume of subject merchandise expired Commerce, 14th Street and Constitution Department is extending the time for on November 1, 2002. On December 20, Avenue, NW., Washington, DC, 20230. completion of the preliminary results of 2002 the Department and the GOU SUPPLEMENTARY INFORMATION: In these reviews until March 3, 2004. signed an amendment to extend the accordance with section 751(a)(3)(A) of Dated: February 2, 2004. export limit one year, expiring on the Tariff Act of 1930 (the Act), as Jeffrey May, November 1, 2003. On January 31, 2003 amended, the Department shall make a Deputy Assistant Secretary for Import the Department published in the preliminary determination in an Administration. Federal Register the text of the administrative review of an [FR Doc. 02–2858 Filed 2–9–04; 8:45 am] amendment (68 FR 5075). On November antidumping duty order within 245 BILLING CODE 3510–DS–S 24, 2003 the Department and the GOU days after the last day of the anniversary initialed another Amendment to provide month of the date of publication of the for the continuation of exports of cut-to- order. The Act further provides, DEPARTMENT OF COMMERCE however, that the Department may length plate from Ukraine to the United States until November 1, 2004. The extend that 245-day period to 365 days International Trade Administration if it determines it is not practicable to Department subsequently released the complete the review within the [A–823–808] Amendment to interested parties for comment. No interested party filed foregoing time period. Amendment to the Agreement Between Pursuant to 751(a)(2)(B)(iv) of the Act, comments and, therefore, the the United States Department of the Department shall make a Department and the GOU signed a final Commerce and the Government of preliminary determination in a new Amendment on January 16, 2004. The Ukraine Suspending the Antidumping shipper review within 180 days after the Investigation on Cut-to-Length Carbon text of the final Amendment follows this date on which the review is initiated. Steel Plate From Ukraine notice. However, if the case is extraordinarily Dated: February 2, 2004. complicated, it may extend the 180 day AGENCY: Import Administration, period for the preliminary results to 300 International Trade Administration, James J. Jochum, days. Department of Commerce. Assistant Secretary for Import The Department initiated the sixth ACTION: Notice of amendment to the Administration. 1 administrative review of the agreement between the United States [FR Doc. 04–2864 Filed 2–9–04; 8:45 am] Department of Commerce and the BILLING CODE 3510–DS–P 1 The administrative review respondents are China National Machinery Import & Export government of Ukraine Suspending the Company; Laizhou Hongda Auto Replacement Antidumping Investigation on Cut-to- Parts, Co. Ltd.; Qingdao Gren Co.; Yantai Winhere Length Carbon Steel Plate from Ukraine. Auto Part Manufacturing Co., Ltd.; Longkou Haimeng Machinery Co., Ltd.; Zibo Luzhou SUMMARY: The Department of Commerce Automobile Parts Co., Ltd.; Hongfa Machinery (Dalian) Co., Ltd.; Qingdao Meita Automotive (the Department) and the Government of Industry Co., Ltd.; Shandong Laizhou Huanri Group General; Laizhou Auto Brake Equipment Company, 2 The new shipper respondent is Laizhou City Ltd.; and Longkou TLC Machinery Co., Ltd. Luqi Machinery Co., Ltd.

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DEPARTMENT OF COMMERCE SUMMARY: On September 30, 2003, the 7306.20.10.30, 7306.20.10.90, Department of Commerce (the 7306.20.20.00, 7306.20.30.00, International Trade Administration Department) published in the Federal 7306.20.40.00, 7306.20.60.10, Register a notice announcing the 7306.20.60.50, 7306.20.80.10, and Amendment to the Antidumping initiation of an administrative review of 7306.20.80.50. Suspension Agreement on Certain Cut- the antidumping duty order on oil Although the HTSUS subheadings are to-Length Carbon Steel Plate Between country tubular goods (OCTG) from provided for convenience and customs the United States Department of Mexico. The period of review (POR) is purposes, our written description of the Commerce and the Government of August 1, 2002 to July 31, 2003. This scope of this proceeding is dispositive. Ukraine review has now been rescinded because The Department has determined that The United States Department of one party requesting the review couplings, coupling stock and drill pipe Commerce (the Department) and the withdrew its request, and the remaining are not within the scope of the Government of Ukraine hereby amend exporter named in the request for antidumping order on OCTG from Section XII of the Agreement review had no entries for consumption Mexico. See Letter to Interested Parties; Suspending the Antidumping of subject merchandise that are subject Final Affirmative Scope Decision, Investigation on Certain Cut-to-Length to review in the United States during August 27, 1998. See Continuation of Carbon Steel Plate from Ukraine (the the POR. Countervailing and Antidumping Duty Agreement), signed October 24, 1997, by EFFECTIVE DATE: February 10, 2004. Orders on Oil Country Tubular Goods adding the following language FOR FURTHER INFORMATION CONTACT: From Argentina, Italy, Japan, Korea and immediately after the second sentence Phyllis Hall or Abdelali Elouaradia, Mexico, and Partial Revocation of Those of Section XII of the Agreement, as Enforcement Group III, Office 8, Import Orders From Argentina and Mexico amended on December 20, 2002: Administration, International Trade With Respect to Drill Pipe, 66 FR 38630, In order to provide for the Administration, U.S. Department of July 25, 2001. continuation of exports of cut-to-length Commerce, 14th Street and Constitution Background plate from Ukraine to the United States Avenue, NW., Room 7866, Washington, following the expiration of the one-year DC 20230; telephone (202) 482–1398 or On August 29, 2003, Hylsa, S.A. de extension signed December 20, 2002, by (202) 482–1374 respectively. C.V. (Hylsa) requested that the the Department and the Government of Department conduct an administrative Ukraine, the export limits provided for Scope of Review review of Hylsa. We initiated the review in Section III of this Agreement shall Imports covered by this review are oil for Hylsa on September 30, 2003. See remain in force through November 1, country tubular goods, hollow steel Initiation of Antidumping and 2004. products of circular cross-section, Countervailing Duty Administrative If, after said date, the underlying including oil well casing, tubing, and Reviews and Requests for Revocation in proceeding remains suspended, the drill pipe, of iron (other than cast iron) part 68 FR 56262 (September 30, 2003). Government of Ukraine and the or steel (both carbon and alloy), whether On October 7, 2003, Hylsa withdrew its Department will enter into consultations seamless or welded, whether or not request and requested that the to agree upon export limits in order to conforming to American Petroleum Department terminate the review with permit future shipments under the Institute (API) or non-API respect to Hylsa. Additionally on Agreement. specifications, whether finished or September 2, 2003, United States Steel For the United States Department of unfinished (including green tubes and Corporation (petitioner), requested and Commerce. limited service OCTG products). This administrative review of Tubos de Dated: January 16, 2004. scope does not cover casing, tubing, or Acero de Mexico S.A. (TAMSA), a James J. Jochum, drill pipe containing 10.5 percent or Mexican producer and exporter of Assistant Secretary for Import more of chromium. The OCTG subject to OCTG, with respect to the antidumping Administration. this order are currently classified in the order published in the Federal Register. For the Ministry of Economy and for Harmonized Tariff Schedule of the See Antidumping Duty Order: Oil European Integration Issues of Ukraine. United States (HTSUS) under item Country Tubular Goods From Mexico, Mykhailo B. Reznik, numbers: 7304.29.10.10, 7304.29.10.20, 60 FR 41055 (August 11, 1995). We Ambassador of Ukraine to the United States. 7304.29.10.30, 7304.29.10.40, initiated the review for TAMSA on [FR Doc. 04–2865 Filed 2–9–04; 8:45 am] 7304.29.10.50, 7304.29.10.60, October 24, 2003. See Initiation of BILLING CODE 3510–DS–P 7304.29.10.80, 7304.29.20.10, Antidumping and Countervailing Duty 7304.29.20.20, 7304.29.20.30, Administrative Reviews and Requests 7304.29.20.40, 7304.29.20.50, for Revocation in part, 68 FR 60910 DEPARTMENT OF COMMERCE 7304.29.20.60, 7304.29.20.80, (October 24, 2003). 7304.29.30.10, 7304.29.30.20, SUPPLEMENTARY INFORMATION: On International Trade Administration 7304.29.30.30, 7304.29.30.40, November 5, 2003, the Department [A–201–817] 7304.29.30.50, 7304.29.30.60, issued an antidumping duty 7304.29.30.80, 7304.29.40.10, questionnaire to TAMSA. On November Oil Country Tubular Goods From 7304.29.40.20, 7304.29.40.30, 26, 2003, TAMSA and Siderca Mexico: Rescission of Antidumping 7304.29.40.40, 7304.29.40.50, Corporation (TAMSA’s U.S. affiliate) Duty Administrative Review 7304.29.40.60, 7304.29.40.80, claimed that they ‘‘did not directly or 7304.29.50.15, 7304.29.50.30, indirectly, enter for consumption, or AGENCY: Import Administration, International Trade Administration, 7304.29.50.45, 7304.29.50.60, sell, export or ship for entry for Department of Commerce. 7304.29.50.75, 7304.29.60.15, consumption in the United States 7304.29.60.30, 7304.29.60.45, subject merchandise during the period ACTION: Notice of rescission of 7304.29.60.60, 7304.29.60.75, of review.’’ Petitioners did not comment antidumping duty administrative 7305.20.20.00, 7305.20.40.00, on TAMSA’s no shipment claim. See review. 7305.20.60.00, 7305.20.80.00, Memo to file dated January 12, 2004.

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On January 7, 2004, the Department review and intent not to revoke the from Italy. See Notice of Preliminary forwarded a no-shipment inquiry to U.S. order in part, for the antidumping duty Results and Partial Rescission of Bureau of Customs and Border order on certain pasta from Italy. The Antidumping Duty Administrative Protection (CBP) for circulation to all review covers ten manufacturers/ Review and Intent Not to Revoke in Part: CBP ports. CBP did not indicate to the exporters of the subject merchandise: (1) For the Sixth Administrative Review of Department that there was any record of Pastificio Guido Ferrara S.r.l. the Antidumping Duty Order on Certain consumption entries during the POR of (‘‘Ferrara’’), (2) Pastificio Lucio Garofalo Pasta from Italy, 68 FR 47020 (August OCTG from Mexico exported by S.p.A. (‘‘Garofalo’’), (3) Pasta Lensi S.r.l. 7, 2003) (‘‘Preliminary Results’’). TAMSA. (‘‘Lensi’)1, (4) Industria Alimentare Although the Department initiated the As part of this investigation, the Colavita, S.p.A. (‘‘Indalco’’) and its review of twelve companies, we Department investigated proprietary affiliate Fusco S.r.l. (‘‘Fusco’’) rescinded the review of two of those information from CBP for all HTSUS (collectively ‘‘Indalco’’), (5) PAM S.p.A. companies. See Partial Rescission numbers covered by the scope of this (‘‘PAM’’), (6) Pastificio Fratelli Pagani section of the Preliminary Results for a review. After reviewing the customs S.p.A. (‘‘Pagani’’), (7) Pastificio Antonio more detailed explanation. The review information, the Department determines Pallante S.r.l. (‘‘Pallante’’) and its covers the remaining ten manufacturers/ that the merchandise entered during the affiliate Industrie Alimentari Molisane exporters. We invited parties to POR was exported from a third country S.r.l (‘‘IAM’’) (collectively ‘‘Pallante’’), comment on our Preliminary Results. or party without TAMSA’s knowledge (8) Rummo S.p.A. Molino e Pastificio Petitioners2 filed case briefs on and properly identified Mexico as the (‘‘Rummo’’), (9) Molino e Pastificio September 24, 2003, regarding Rummo, country of origin. See Memo to File Tomasello S.r.l. (‘‘Tomasello’’), and (10) Ferrara, Zaffiri, Garofalo, Indalco, and dated January 22, 2004. Pastificio Zaffiri S.r.l. (‘‘Zaffiri’’). The Pagani. On September 22 through The Department has not been able to period of review (‘‘POR’’) is July 1, September 24, 2003, PAM, Tomasello, identify any other entries for 2001, through June 30, 2002. Zaffiri, Lensi, Garofalo, and Rummo consumption from TAMSA during the As a result of our analysis of the filed case briefs. On October 1, 2003, POR. Since there were no entries for comments received, these final results petitioners, Ferrara, Indalco, Pagani, consumption during the POR of OCTG differ from the preliminary results. For Zaffiri, Garofalo, and Rummo submitted from TAMSA, and because Hylsa timely our final results, we have found that rebuttal briefs. On October 21, 2003, a withdrew its request for review, see 19 during the POR, Garofalo, Indalco, public hearing was held at the CFR 351.213(d)(1), we are rescinding PAM, Tomasello, and Zaffiri, sold Department of Commerce with respect this review in accordance with the subject merchandise at less than normal to PAM. On November 21, 2003, the Department’s practice. The cash deposit value (‘‘NV’’). We have also found that Department published the extension of rates for these firms will continue to be Ferrara, Pallante, Pagani, Lensi and final results of the antidumping the rates established in the most Rummo did not make sales of the administrative review of pasta from recently completed segment of this subject merchandise at less than NV Italy. See Certain Pasta from Italy: proceeding. (i.e., they had ‘‘zero’’ or de minimis Extension of Final Results of This notice is issued and published in dumping margins). We have also Antidumping Administrative Review, accordance with sections 777(i) of the determined not to revoke the 68 FR 65679 (November 21, 2003). Act and 19 CFR 351.213(d)(4). antidumping duty order with respect to Scope of Review Dated: February 3, 2004. subject merchandise produced and also James J. Jochum, exported by Pagani. The final results are Imports covered by this review are Assistant Secretary for Import listed in the section ‘‘Final Results of shipments of certain non-egg dry pasta Administration. Review’’ below. in packages of five pounds (2.27 [FR Doc.04–2859 Filed 2–9–04; 8:45am] EFFECTIVE DATE: February 10, 2004. kilograms) or less, whether or not enriched or fortified or containing milk BILLING CODE 3510–DS–P FOR FURTHER INFORMATION CONTACT: or other optional ingredients such as Alicia Kinsey or Mark Young, AD/CVD chopped vegetables, vegetable purees, Enforcement Office VI, Import milk, gluten, diastasis, vitamins, DEPARTMENT OF COMMERCE Administration, International Trade coloring and flavorings, and up to two Administration, U.S. Department of International Trade Administration percent egg white. The pasta covered by Commerce, Washington, D.C. 20230; this scope is typically sold in the retail [A-475–818] telephone: (202) 482–4793 or (202) 482– market, in fiberboard or cardboard 6397, respectively. Notice of Final Results of the Sixth cartons, or polyethylene or SUPPLEMENTARY INFORMATION: Administrative Review of the polypropylene bags of varying Antidumping Duty Order on Certain Background dimensions. Excluded from the scope of this Pasta from Italy and Determination Not On August 7, 2003, the Department to Revoke in Part review are refrigerated, frozen, or published the preliminary results of the canned pastas, as well as all forms of AGENCY: Import Administration, sixth administrative review of the egg pasta, with the exception of non-egg International Trade Administration, antidumping duty order on certain pasta dry pasta containing up to two percent Department of Commerce. egg white. Also excluded are imports of 1 ACTION: Notice of Final Results of The Department determined that Lensi is the successor-in-interest to Italian American Pasta organic pasta from Italy that are Antidumping Duty Administrative Company Italia S.r.l. (‘‘IAPC’’), and that Lensi accompanied by the appropriate Review and Determination Not to retains the antidumping and countervailing duty certificate issued by the Instituto Revoke in Part. deposit rates assigned to IAPC by the Department Mediterraneo Di Certificazione, by in the most recently completed antidumping and Bioagricoop Scrl, by QC&I International SUMMARY: On August 7, 2003, the countervailing duty administrative reviews. See Notice of Final Results of Antidumping and Department of Commerce published the Countervailing Duty Changed Circumstances 2 Petitioners are New World Pasta Company, preliminary results and partial Reviews: Certain Pasta from Italy, 68 FR 41553 (July Dakota Growers Pasta Company, Borden Foods rescission of the sixth administrative 14, 2003). Corporation and American Italian Pasta Company.

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Services, by Ecocert Italia, by Consorzio Determination of Circumvention of the Use of Adverse Facts Available per il Controllo dei Prodotti Biologici, Antidumping Duty Order, 63 FR 54672 As discussed in detail in the by Associazione Italiana per (October 13, 1998). Preliminary Results, we have l’Agricoltura Biologica, or by Codex (4) On October 26, 1998, the determined to use facts otherwise S.R.L. Department self-initiated a scope available for PAM, in arriving at the The merchandise subject to review is currently classifiable under item inquiry to determine whether a package final dumping margin; and as noted in 1902.19.20 of the Harmonized Tariff weighing over five pounds as a result of the Preliminary Results, we determine Schedule of the United States allowable industry tolerances is within that, in accordance with sections 776(a) (‘‘HTSUS’’). Although the HTSUS the scope of the antidumping and and (b) of the Act, the use of adverse subheading is provided for convenience countervailing duty orders. On May 24, facts available is appropriate for PAM, and customs purposes, the written 1999, we issued a final scope ruling who failed verification. The Department description of the merchandise subject finding that, effective October 26, 1998, received comments from PAM and to the order is dispositive. pasta in packages weighing or labeled petitioners. The comments are up to (and including) five pounds four addressed in the Decision Memo. As a Scope Rulings ounces is within the scope of the result of our analysis of the arguments The Department has issued the antidumping and countervailing duty presented in the briefs, the Department following scope rulings to date: orders. See Memorandum from John confirms its decision to use adverse (1) On August 25, 1997, the Brinkmann, Program Manager, Office of facts available to arrive at the final Department issued a scope ruling that AD/CVD Enforcement VI, to Richard dumping margin for PAM. multicolored pasta, imported in kitchen Moreland, Deputy Assistant Secretary, Use of Partial Facts Available display bottles of decorative glass that ‘‘Final Scope Ruling,’’ dated May 24, are sealed with cork or paraffin and 1999, which is available in the CRU. There were several errors in Indalco’s bound with raffia, is excluded from the reporting of its selling expenses, and scope of the antidumping and (5) On April 27, 2000, the Department Indalco did not bring these errors to the countervailing duty orders. See self-initiated an anti-circumvention Department’s attention until after Memorandum from Edward Easton, inquiry to determine whether Pagani’s Indalco’s submission of minor Senior Analyst, Office of AD/CVD Office importation of pasta in bulk and corrections at verification. V, to Richard Moreland, Deputy Assist subsequent repackaging in the United Consequently, in the Preliminary Secretary, ‘‘Scope Ruling Concerning States into packages of five pounds or Results, we applied partial facts Pasta from Italy,’’ dated August 25, less constitutes circumvention, with available to determine Indalco’s 1997, which is on file in the Central respect to the antidumping and dumping margin. See also Records Unit (‘‘CRU’’), room B-099 of countervailing duty orders on pasta Memorandum to Eric Greynolds, the main Commerce Department from Italy pursuant to section 781(a) of Program Manager, from Mark Young Building. the Act and 19 CFR 351.225(b). See and Tipten Troidl, Case Analysts, Re: (2) On July 30, 1998, the Department Certain Pasta from Italy: Notice of Verification of the Sales Response of issued a scope ruling, finding that Initiation of Anti-circumvention Inquiry Industria Alimentare Colavita, S.p.A. multipacks consisting of six one-pound of the Antidumping and Countervailing (‘‘INDALCO’’) and Fusco S.r.l. (‘‘Fusco’’) packages of pasta that are shrink- Duty Orders, 65 FR 26179 (May 5, 2000). in the 01/02 Administrative Review of wrapped into a single package are On September 19, 2003, we published the Antidumping Duty Order of Certain within the scope of the antidumping an affirmative finding on the anti- Pasta from Italy, which is available in and countervailing duty orders. See circumvention inquiry. See Anti- the CRU. We received no comments on Letter from Susan H. Kuhbach, Acting circumvention Inquiry of the this issue. Therefore, pursuant to Deputy Assistant Secretary for Import Antidumping and Countervailing Duty section 776(a)(2)(A) of the Act, we Administration, to Barbara P. Sidari, Orders on Certain Pasta from Italy: continue to apply partial facts otherwise Vice President, Joseph A. Sidari Affirmative Final Determinations of available to determine Indalco’s Company, Inc., dated July 30, 1998, Circumvention of Antidumping and dumping margin in the final results. which is available in the CRU. Countervailing Duty Orders, 68 FR Analysis of Comments Received (3) On October 23, 1997, the 54888 (September 19, 2003). petitioners filed an application All issues raised in the case and requesting that the Department initiate Intent Not to Revoke Order rebuttal brief by parties to this an anti-circumvention investigation of administrative review are addressed in Barilla, an Italian producer and exporter For the reasons outlined in the the Decision Memo, which is hereby of pasta. The Department initiated the ‘‘Issues and Decision Memorandum’’ adopted by this notice. A list of the investigation on December 8, 1997 (62 (‘‘Decision Memo’’) from Holly A. Kuga, issues which parties have raised, and to FR 65673). On October 5, 1998, the Acting Deputy Assistant Secretary for which we have responded in the Department issued its final Import Administration, to James J. Decision Memo, is attached to this determination that Barilla’s importation Jochum, Assistant Secretary for Import notice as an Appendix. In addition, a of pasta in bulk and subsequent Administration, dated February 3, 2004, complete version of the Decision Memo repackaging in the United States into which is hereby adopted by this notice, can be accessed directly on the Web at packages of five pounds or less we have determined not to revoke the http://ia.ita.doc.gov. The paper copy constitutes circumvention with respect antidumping duty order with respect to and electronic version of the Decision to the antidumping duty order on pasta subject merchandise produced and also Memo are identical in content. from Italy pursuant to section 781(a) of exported by Pagani because Pagani the Tariff Act of 1930, as amended (‘‘the failed to demonstrate that for three Final Results of Review Act’’), and 19 CFR 351.225(b). See Anti- consecutive years it sold the subject We determine that the following circumvention Inquiry of the merchandise to the United States in weighted-average margins exist for the Antidumping Duty Order on Certain commercial quantities in accordance period July 1, 2001, through June 30, Pasta from Italy: Affirmative Final with 19 CFR 351.222(e). 2002:

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Manufacturer/exporter Margin (percent) Antidumping Duty Order and Amended PAM S.p.A. Final Determination of Sales at Less Comment 9: Rescission of the Ferrara ...... 0.24 Than Fair Value: Certain Pasta from Administrative Review Garofalo ...... 2.55 Italy, 61 FR 38547 (July 24, 1996). These Lensi ...... 0.36 Comment 10: Department’s Application deposit requirements shall remain in of Adverse Facts Available (‘‘AFA’’) Indalco ...... 2.85 effect until publication of the final Pagani ...... 0.21 Comment 11: The Reasonableness of the Pallante ...... 0.12 results of the next administrative AFA Rate Applied by the Department review. PAM ...... 45.49 Pastificio Fratelli Pagani S.p.A. Rummo ...... 0.94 Notification Tomasello ...... 4.59 Comment 12: Revocation Zaffiri ...... 7.23 This notice also serves as a final All Others ...... 11.26 reminder to importers of their Rummo S.p.A. Molino e Pastificio responsibility under 19 CFR 351.402(f) Comment 13: Treatment of Rummo Assessment to file a certificate regarding the USA’s Customer’s Note Receivable as a Rebate The Department shall determine, and reimbursement of antidumping duties or Comment 14: Reimbursement of U.S. Customs and Border Protection countervailing duties prior to liquidation of the relevant entries Antidumping Duties (‘‘CBP’’) shall assess, antidumping Comment 15: Error in the Home Market duties on all appropriate entries. In during this review period. Failure to comply with this requirement may Credit Expense Calculation accordance with 19 CFR 351.212(b), we Comment 16: Inconsistencies in have calculated exporter/importer- result in the Secretary’s presumption that reimbursement of antidumping Rummo’s Reporting of Certain Sales of specific duty assessment rates by Subject Merchandise aggregating the dumping margins for the and/or countervailing duties occurred and the subsequent increase in Comment 17: Exclusion of Political examined U.S. sales for each importer Contributions from General & and dividing the amount by the total antidumping duties by the amount of antidumping and/or countervailing Administrative Expenses (‘‘G&A’’) entered value of the sales for that Expense Ratio importer. In situations in which the duties reimbursed. importer-specific assessment rate is This notice also serves as a reminder Molino e Pastificio Tomasello S.r.l. above de miminis, we will instruct CBP to parties subject to administrative Comment 18: Incorrect Denominator to assess antidumping duties on that protective order (‘‘APO’’) of their Used in Calculation of U.S. Credit importer’s entries of subject responsibility concerning the Expense merchandise. The Department will issue disposition of proprietary information Comment 19: Calculation of Packing appropriate assessment instructions disclosed under APO in accordance Costs for Home Market Net Prices directly to CBP within 15 days of with 19 CFR 351.305. Timely Comment 20: Calculation of DIRSEL3U publication of these final results of notification of return/destruction of for One U.S. Invoice review. APO materials or conversion to judicial Comment 21: Change in Wheat protective order is hereby requested. Inventory Cash Deposit Requirements Failure to comply with the regulations Comment 22: Pasta Scrap Production The following deposit requirements and the terms of an APO are Comment 23: Cost of Goods Sold will be effective upon publication of sanctionable violations. (‘‘COGS’’) used in the G&A and Interest this notice of final results of the We are issuing and publishing this Expense Ratio Calculation administrative review for all shipments determination and notice in accordance Comment 24: Other G&A and Interest of pasta from Italy entered, or with sections 751(a)(1) and 777(i)(1) of Adjustments withdrawn from warehouse, for the Act. Pastificio Lucio Garofalo S.p.A. consumption on or after the date of Dated: February 3, 2004. Comment 25: The Department Should publication of these final results, as James J. Jochum, provided by section 751(a)(1) of the Act: Collapse Garofalo and Amato Assistant Secretary for Import Comment 26: The Department Should (1) The cash deposit rate for the Administration. reviewed companies will be the rates Not Accept Garofalo’s Definition of a shown above, except where the margin Appendix I Third Wheat Code Comment 27: Matching of Wheat Codes is de minimis or zero we will instruct List of Comments and Issues in the Comment 28: Subtracting DISCREBH CBP not to collect cash deposits; (2) for Decision Memorandum from NETPRICOP previously reviewed or investigated List of Comments: Comment 29: Incorporation of Only companies not listed above, the cash Home Market Sales that Passed the Cost deposit rate will continue to be the Pasta Lensi S.r.l. Test company-specific rate published for the Comment 1: Clerical Error Comment 30: Revised Interest Amounts most recent period; (3) if the exporter is Should be Used in the Calculation of not a firm covered in this review, a prior Comment 2: Exclusion of Sales of Pasta Produced by Other Manufacturers Constructed Value (‘‘CV’’) review, or the original less than fair Comment 31: Conversion of Home value investigation, but the Industria Alimentare Colavita, S.p.A. Market Sales Data into Italian Lire rather manufacturer is, the cash deposit rate and Fusco S.r.l. than to Euros will be the rate established for the most Comment 32: Semolina Purchases recent period for the manufacturer of Comment 3: Clerical Error Comment 33: Failure to Include the merchandise; and (4) the cash Comment 4: Disallowed Credit Commingled Sales in Garofalo’s Margin deposit rate for all other manufacturers Comment 5: Credit Amortization Calculation or exporters will continue to be 11.26 Comment 6: Double Counted Comment 34: Use of Wrong Affiliated percent, the ‘‘All Others’’ rate Amortization Party Arm’s Length Test established in the less than fair value Comment 7: Offsetting Positive Margins Comment 35: Non-Use of Revised Total investigation. See Notice of Comment 8: Calculation of Entry Value Cost of Manufacturing (‘‘RTOTCOM’’)

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Pastificio Zaffiri S.r.l. Administrative Review section below. publication of notice of initiation of the Comment 36: Proper Matching of The Department is not rescinding its requested review.’’ Because the Zaffiri’s Sales at the Same Level of review of Dongguan Fay Candle Co., Petitioner has timely withdrawn its Trade (‘‘LOT’’) Ltd. (Fay Candle) and Qingdao Kingking request for review within the ninety-day Comment 37: Calculation of Imputed Applied Chemistry Co., Ltd. (Qingdao period, and because Petitioner was the Credit Expense Kingking), because each of these sole party to request a review for Comment 38: Treatment of Piazzista companies self-requested an twenty-one of the twenty-three Expenses administrative review. companies for which a review was Comment 39: Treatment of the U.S. EFFECTIVE DATE: February 10, 2004 requested, we are rescinding this administrative review, in part, for the Billing Adjustment FOR FURTHER INFORMATION CONTACT: Comment 40: Treatment of Free Pasta Javier Barrientos or Sally Gannon at period August 1, 2002 to July 31, 2003, Program in the United States (202) 482–2243 and (202) 482–0162, for the following companies: Amstar Comment 41: Currency Conversions in respectively, Import Administration, Business Co., Ltd.; AtHome America; Avon Products, Inc.; Candle World Computer Program International Trade Administration, Industrial Co.; Dalian Hanbo Lighting Comment 42: Purchased Pasta U.S. Department of Commerce, 14th Co., Ltd.; Generaluxe Factory; Comment 43: By-product Revenue Street and Constitution Avenue, N.W., Guangdong Xin Hui City Si Qian Art & Offset in the COGS Denominator of the Washington, DC 20230. Interest Expense and G&A Expense Craft Factory; Jiangsu Holly SUPPLEMENTARY INFORMATION: Ratios Corporation; Li & Fung Trading Ltd.; Comment 44: Packing Cost in the COGS Background Premier Candle Co. Ltd.; Shandong Jiaye Gen. Merch.; Shanghai Charming Wax Denominator of the G&A and Interest The Department published in the Expense Ratios Co., Ltd.; Simon Int’l Ltd.; Sincere Federal Register an antidumping duty Factory Company; Smartcord Int’l Co., Comment 45: Trade Show Revenue as order on petroleum wax candles from Offset to G&A Expense Ltd./Rich Talent Trading; Suzhou Ind’l the PRC on August 28, 1986 (51 FR Park Nam Kwong; Taizhou Int’l Trae Comment 46: Foreign Exchange Loss 30686). Pursuant to its Notice of Comment 47: Expenses on Invoice Corp.; Two’s Company Inc.; Universal Opportunity to Request an Payables and Loss on Sale of Assets Candle Co., Ltd.; Zen Continental Co., Administrative Review, 68 FR 45218 Comment 48: Packing Costs Inc.; and, Zhong Hang-Scanwell (August 1, 2003), and in accordance International/Scanwell Freight Express Pastificio Guido Ferrara S.r.l. with section 751(a)(1)(B) of the Act and (LAX), Inc. However, we will continue Comment 49: Offset to Ferrara’s section 351.213(b) of the Department’s the administrative review with respect Depreciation for Italian Subsidies regulations, the Department received a to Fay Candle and Qingdao Kingking, as Comment 50: Offset to Fixed Overhead timely request by the National Candle these companies individually submitted Relating to Ferrara’s Performance Bond Association (‘‘Petitioner’’) to conduct an a request for review. Claim administrative review of the The Department will issue Comment 51: Use of ‘‘Die Type’’ as a antidumping duty order on petroleum appropriate assessment instructions Product Matching Hierarchy wax candles from the PRC for twenty- directly to the U.S. Customs and Border [FR Doc. 04–2862 Filed 2–9–04; 8:45 am] three companies. Two of the twenty- Protection (Customs) within 15 days of three companies requested by the BILLING CODE 3510–DS–S the publication of this notice. The Petitioner (Fay Candle and Qingdao Department will direct Customs to Kingking) individually requested a assess antidumping duties for these DEPARTMENT OF COMMERCE review. As such, the Petitioner was the companies at the cash deposit rate in sole requestor for twenty-one effect on the date of entry for entries International Trade Administration companies. during the period August 1, 2002 to July On September 30, 2003, the [A-570–504] 31, 2003. Department published its Notice of Notification to Parties Petroleum Wax Candles from the Initiation of Antidumping and People’s Republic of China: Countervailing Duty Administrative This notice serves as a reminder to Rescission, in Part, of Antidumping Reviews, Requests for Revocation in Part importers of their responsibility under Duty Administrative Review and Deferral of Administrative Review, section 351.402(f) of the Department’s 68 FR 56262 (September 30, 2003) regulations to file a certificate regarding AGENCY: Import Administration, (Initiation Notice), initiating on all the reimbursement of antidumping International Trade Administration, twenty-three candle companies for duties prior to liquidation of the U.S. Department of Commerce. which an administrative review was relevant entries during this period of SUMMARY: The Department of Commerce requested. On December 24, 2003, the time. Failure to comply with this (‘‘the Department’’) is rescinding its Department received a timely requirement could result in the administrative review of twenty-one withdrawal from the Petitioner of its Secretary’s presumption that companies under the antidumping order request for an administrative review of reimbursement of antidumping duties on petroleum wax candles from the all twenty-three companies for which it occurred and subsequent assessment of People’s Republic of China (PRC) for the had requested a review. double antidumping duties. period August 1, 2002 through July 31, This notice also serves as a reminder 2003. This rescission, in part, is based Rescission, in Part, of Administrative to parties subject to administrative on the timely withdrawl of the request Review protective order (APO) of their for review by the only interested party Pursuant to section 351.213(d)(1) of responsibility concerning the that requested a review of these twenty- the Department’s regulations, the disposition of proprietary information one companies. A complete list of the Department may rescind an disclosed under APO in accordance companies for which the administrative administrative review, ‘‘if a party that with section 351.305(a)(3) of the review is being rescinded is provided in requested the review withdraws the Department’s regulations. Timely the Rescission, in Part, of request within 90 days of the date of written notification of the return or

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destruction of APO materials or Background 7219.32.0025, 7219.32.0035, conversion to judicial protective order is On August 7, 2003, the Department 7219.32.0036, 7219.32.0038, hereby requested. Failure to comply published in the Federal Register the 7219.32.0042, 7219.32.0044, with the regulations and terms of an preliminary results of the administrative 7219.33.0005, 7219.33.0020, APO is a sanctionable violation. review of the antidumping duty order 7219.33.0025, 7219.33.0035, 7219.33.0036, 7219.33.0038, This notice is issued and published in on stainless steel sheet and strip in coils 7219.33.0042, 7219.33.0044, accordance with sections 351.213(d)(4) from Mexico for the period July 1, 2001 7219.34.0005, 7219.34.0020, of the Department’s regulations and, to June 30, 2002. See Stainless Steel 7219.34.0025, 7219.34.0030, sections 751(a)(2)(C) and 777(i)(1) of the Sheet and Strip in Coils from Mexico; 7219.34.0035, 7219.35.0005, Tariff Act of 1930, as amended. Preliminary Results of Antidumping 7219.35.0015, 7219.35.0030, Dated: January 27, 2004. Duty Administrative Review, 68 FR 7219.35.0035, 7219.90.0010, James J. Jochum, 47043 (August 7, 2003). In response to 7219.90.0020, 7219.90.0025, the Department’s invitation to comment Assistant Secretary for Import 7219.90.0060, 7219.90.0080, Administration. on the preliminary results of this 7220.12.1000, 7220.12.5000, [FR Doc. 04–2860 Filed 2–9–04; 8:45 am] review, Mexinox (‘‘respondent’’) and 7220.20.1010, 7220.20.1015, BILLING CODE 3510–DS–S Allegheny Ludlum, AK Steel 7220.20.1060, 7220.20.1080, Corporation, J&L Specialty Steel, Inc., 7220.20.6005, 7220.20.6010, Butler-Armco Independent Union, 7220.20.6015, 7220.20.6060, DEPARTMENT OF COMMERCE Zanesville Armco Independent Union, 7220.20.6080, 7220.20.7005, and the United Steelworkers of International Trade Administration 7220.20.7010, 7220.20.7015, America, AFL-CIO/CLC (collectively, 7220.20.7060, 7220.20.7080, ‘‘petitioners’’) filed their case briefs on [A-201–822] 7220.20.8000, 7220.20.9030, September 8, 2003. Mexinox and 7220.20.9060, 7220.90.0010, Stainless Steel Sheet and Strip in Coils petitioners submitted their rebuttal 7220.90.0015, 7220.90.0060, and from Mexico; Final Results of briefs on September 15, 2003. On 7220.90.0080. Although the HTS Antidumping Duty Administrative October 14, 2003, we published in the subheadings are provided for Review Federal Register our notice of the convenience and customs purposes, the extension of time limits for this review. Department’s written description of the AGENCY: Import Administration, See Stainless Steel Sheet and Strip in merchandise under review is International Trade Administration, Coils from Mexico; Antidumping Duty dispositive. Department of Commerce. Administrative Review; Extension of Excluded from the review of this ACTION: Notice of final results of Time Limit, 68 FR 59162 (October 14, order are the following: (1) sheet and antidumping duty administrative review 2003). This extension established the strip that is not annealed or otherwise of stainless steel sheet and strip from deadline for this final as February 3, heat treated and pickled or otherwise Mexico. 2004. descaled, (2) sheet and strip that is cut Period of Review to length, (3) plate (i.e., flat-rolled SUMMARY: On August 7, 2003, the stainless steel products of a thickness of Department of Commerce (‘‘the The period of review (‘‘POR’’) is July 4.75 mm or more), (4) flat wire (i.e., Department’’) published the preliminary 1, 2001 to June 30, 2002. cold-rolled sections, with a prepared results of the administrative review of Scope of the Review edge, rectangular in shape, of a width of the antidumping duty order on stainless not more than 9.5 mm), and (5) razor steel sheet and strip in coils from For purposes of this administrative blade steel. Razor blade steel is a flat- Mexico (68 FR 47043). This review review, the products covered are certain rolled product of stainless steel, not covers one manufacturer/exporter, stainless steel sheet and strip in coils. further worked than cold-rolled (cold- ThyssenKrupp Mexinox S.A. de C.V. Stainless steel is an alloy steel reduced), in coils, of a width of not (‘‘Mexinox’’), of the subject merchandise containing, by weight, 1.2 percent or more than 23 mm and a thickness of to the United States during the period less of carbon and 10.5 percent or more 0.266 mm or less, containing, by weight, July 1, 2001 to June 30, 2002. Based on of chromium, with or without other 12.5 to 14.5 percent chromium, and our analysis of the comments received, elements. The subject sheet and strip is certified at the time of entry to be used we have made changes in the margin a flat-rolled product in coils that is in the manufacture of razor blades. See calculation. Therefore, the final results greater than 9.5 mm in width and less chapter 72 of the HTS, ‘‘Additional U.S. differ from the preliminary results. The than 4.75 mm in thickness, and that is Note’’ 1(d). final weighted-average dumping margin annealed or otherwise heat treated and Flapper valve steel is also excluded for the reviewed firm is listed below in pickled or otherwise descaled. The from the scope of the order. This the section entitled ‘‘Final Results of subject sheet and strip may also be product is defined as stainless steel strip Review.’’ further processed (e.g., cold-rolled, in coils containing, by weight, between polished, aluminized, coated, etc.) 0.37 and 0.43 percent carbon, between EFFECTIVE DATE: February 10, 2004. provided that it maintains the specific 1.15 and 1.35 percent molybdenum, and FOR FURTHER INFORMATION CONTACT: dimensions of sheet and strip following between 0.20 and 0.80 percent Deborah Scott or Robert James, AD/CVD such processing. The merchandise manganese. This steel also contains, by Enforcement, Group III, Import subject to this order is currently weight, phosphorus of 0.025 percent or Administration, International Trade classifiable in the Harmonized Tariff less, silicon of between 0.20 and 0.50 Administration, U.S. Department of Schedule of the United States (‘‘HTS’’) percent, and sulfur of 0.020 percent or Commerce, 14th Street and Constitution at subheadings: 7219.13.0031, less. The product is manufactured by Avenue, N.W., Washington, D.C. 20230, 7219.13.0051, 7219.13.0071, means of vacuum arc remelting, with telephone: (202) 482–2657 or (202) 482– 7219.1300.81, 7219.14.0030, inclusion controls for sulphide of no 0649, respectively. 7219.14.0065, 7219.14.0090, more than 0.04 percent and for oxide of SUPPLEMENTARY INFORMATION: 7219.32.0005, 7219.32.0020, no more than 0.05 percent. Flapper

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valve steel has a tensile strength of American Society of Testing and carbon of between 0.62 and 0.70 between 210 and 300 ksi, yield strength Materials (‘‘ASTM’’) specification B344 percent, silicon of between 0.20 and of between 170 and 270 ksi, plus or and containing, by weight, 36 percent 0.50 percent, manganese of between minus 8 ksi, and a hardness (Hv) of nickel, 18 percent chromium, and 46 0.45 and 0.80 percent, phosphorus of no between 460 and 590. Flapper valve percent iron, and is most notable for its more than 0.025 percent and sulfur of steel is most commonly used to produce resistance to high temperature no more than 0.020 percent. This steel specialty flapper valves in compressors. corrosion. It has a melting point of 1390 has a carbide density on average of 100 Also excluded is a product referred to degrees Celsius and displays a creep carbide particles per 100 square as suspension foil, a specialty steel rupture limit of 4 kilograms per square microns. An example of this product is product used in the manufacture of millimeter at 1000 degrees Celsius. This ‘‘GIN5’’ steel. The third specialty steel suspension assemblies for computer steel is most commonly used in the has a chemical composition similar to disk drives. Suspension foil is described production of heating ribbons for circuit AISI 420 F, with carbon of between 0.37 as 302/304 grade or 202 grade stainless breakers and industrial furnaces, and in and 0.43 percent, molybdenum of steel of a thickness between 14 and 127 rheostats for railway locomotives. The between 1.15 and 1.35 percent, but microns, with a thickness tolerance of product is currently available under lower manganese of between 0.20 and plus-or-minus 2.01 microns, and surface proprietary trade names such as ‘‘Gilphy 0.80 percent, phosphorus of no more glossiness of 200 to 700 percent Gs. 36.’’2 than 0.025 percent, silicon of between Suspension foil must be supplied in coil Certain martensitic precipitation- 0.20 and 0.50 percent, and sulfur of no widths of not more than 407 mm, and hardenable stainless steel is also more than 0.020 percent. This product with a mass of 225 kg or less. Roll marks excluded from the scope of this order. is supplied with a hardness of more may only be visible on one side, with This high-strength, ductile stainless than Hv 500 guaranteed after customer no scratches of measurable depth. The steel product is designated under the processing, and is supplied as, for material must exhibit residual stresses Unified Numbering System (‘‘UNS’’) as example, ‘‘GIN6.’’5 of 2 mm maximum deflection, and S45500-grade steel, and contains, by flatness of 1.6 mm over 685 mm length. weight, 11 to 13 percent chromium, and Analysis of Comments Received Certain stainless steel foil for 7 to 10 percent nickel. Carbon, All issues raised in the case and automotive catalytic converters is also manganese, silicon and molybdenum rebuttal briefs by parties to this excluded from the scope of this order. each comprise, by weight, 0.05 percent administrative review are addressed in This stainless steel strip in coils is a or less, with phosphorus and sulfur the ‘‘Issues and Decision Memorandum’’ specialty foil with a thickness of each comprising, by weight, 0.03 (‘‘Decision Memorandum’’) from Joseph between 20 and 110 microns used to percent or less. This steel has copper, A. Spetrini, Deputy Assistant Secretary, produce a metallic substrate with a niobium, and titanium added to achieve Group III, Import Administration, to honeycomb structure for use in aging, and will exhibit yield strengths as James J. Jochum, Assistant Secretary for automotive catalytic converters. The high as 1700 Mpa and ultimate tensile Import Administration, dated February steel contains, by weight, carbon of no strengths as high as 1750 Mpa after 3, 2004, which is hereby adopted by this more than 0.030 percent, silicon of no aging, with elongation percentages of 3 notice. A list of the issues which parties more than 1.0 percent, manganese of no percent or less in 50 mm. It is generally have raised and to which we have more than 1.0 percent, chromium of provided in thicknesses between 0.635 responded, all of which are in the between 19 and 22 percent, aluminum and 0.787 mm, and in widths of 25.4 Decision Memorandum, is attached to of no less than 5.0 percent, phosphorus mm. This product is most commonly this notice as an appendix. Parties can of no more than 0.045 percent, sulfur of used in the manufacture of television find a complete discussion of all issues no more than 0.03 percent, lanthanum tubes and is currently available under raised in this review and the of less than 0.002 or greater than 0.05 proprietary trade names such as corresponding recommendations in this percent, and total rare earth elements of ‘‘Durphynox 17.’’ 3 public memorandum, which is on file in more than 0.06 percent, with the Finally, three specialty stainless steels the Central Records Unit, room B-099, of balance iron. typically used in certain industrial the main Department building. In Permanent magnet iron-chromium- blades and surgical and medical addition, a complete version of the cobalt alloy stainless strip is also instruments are also excluded from the Decision Memorandum can be accessed excluded from the scope of this order. scope of this order. These include directly via the Internet at This ductile stainless steel strip stainless steel strip in coils used in the www.ia.ita.doc.gov. The paper copy and contains, by weight, 26 to 30 percent production of textile cutting tools (e.g., electronic version of the Decision chromium, and 7 to 10 percent cobalt, carpet knives).4 This steel is similar to Memorandum are identical in content. with the remainder of iron, in widths AISI grade 420 but containing, by 228.6 mm or less, and a thickness weight, 0.5 to 0.7 percent of Changes Since the Preliminary Results between 0.127 and 1.270 mm. It exhibits molybdenum. The steel also contains, Based on our analysis of the magnetic remanence between 9,000 and by weight, carbon of between 1.0 and comments received, we have made the 12,000 gauss, and a coercivity of 1.1 percent, sulfur of 0.020 percent or following changes to the margin between 50 and 300 oersteds. This less, and includes between 0.20 and calculation: product is most commonly used in 0.30 percent copper and between 0.20 • We have recalculated Mexinox’s electronic sensors and is currently and 0.50 percent cobalt. This steel is handling expenses (HANDLEH) using available under proprietary trade names sold under proprietary names such as the actual warehousing and freight such as ‘‘Arnokrome III.’’1 ‘‘GIN4 Mo.’’ The second excluded expenses incurred by Mexinox Trading. Certain electrical resistance alloy steel stainless steel strip in coils is similar to • We revised the denominator of the is also excluded from the scope of this AISI 420-J2 and contains, by weight, U.S. indirect selling expense ratio order. This product is defined as a non- (INDIRSU) by subtracting the value of magnetic stainless steel manufactured to 2 ‘‘Gilphy 36’’ is a trademark of Imphy, S.A. Mexinox USA’s raw material sales to 3 ‘‘Durphynox 17’’ is a trademark of Imphy, S.A. 1 ‘‘Arnokrome III’’ is a trademark of the Arnold 4 This list of uses is illustrative and provided for 5 ‘‘GIN4 Mo,’’ ‘‘GIN5’’ and ‘‘GIN6’’ are the Engineering Company. descriptive purposes only. proprietary grades of Hitachi Metals America, Ltd.

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Mexinox, and revised the numerator of Assessment Secretary’s presumption that the U.S. indirect selling expense ratio by The Department shall determine and reimbursement of the antidumping deducting an amount attributable to the Customs and Border Protection duties occurred and the subsequent expenses incurred in selling these raw (‘‘Customs’’) shall assess antidumping assessment of double antidumping materials. We also adjusted the duties on all appropriate entries. In duties. numerator of the U.S. indirect selling accordance with 19 C.F.R. This notice also serves as a reminder expense ratio to account for Mexinox’s §351.212(b)(1), we have calculated to parties subject to administrative historical bad debt experience. We then importer-specific ad valorem duty protective orders (‘‘APOs’’) of their used the revised numerator and assessment rates. Where the importer- responsibility concerning the denominator to calculate a revised U.S. specific assessment rate is above de disposition of proprietary information indirect selling expense ratio. minimis, we will instruct Customs to disclosed under APO in accordance • We recalculated the first component of assess duties on all entries of subject with 19 C.F.R. §351.305, that continues Mexinox’s direct selling expense ratio merchandise by that importer. The to govern business proprietary (DIRSELU) in order to allocate the Department will issue appropriate information in this segment of the expenses incurred during the POR to the assessment instructions directly to proceeding. Timely written notification relevant POR sales. Customs within 15 days of publication of the return or destruction of APO materials or conversion to judicial • We included in the denominator of the of these final results of review. We will protective order is hereby requested. assessment rate the entered value of direct Customs to assess the resulting Failure to comply with the regulations subject merchandise that entered for assessment rate against the entered and the terms of an APO is a consumption in the United States but Customs values for the subject merchandise on each of the importer’s sanctionable violation. was first sold to unaffiliated parties This determination is issued and outside the United States. entries under the relevant order during the POR. See 19 C.F.R. §351.212(a). published in accordance with sections • We removed the programming 751(a)(1) and 777(i)(1) of the Tariff Act. language which had adjusted the billing Cash Deposit Requirements Dated: February 3, 2004. adjustment (BILLADJU) reported for a The following cash deposit certain U.S. sale (U.S. surprise sale ι2). James J. Jochum, requirements will be effective upon • Assistant Secretary for Import We revised our calculation of the publication of these final results for all Administration. constructed export price profit rate to shipments of the subject merchandise include the indirect selling expenses entered, or withdrawn from warehouse, Appendix Issues in Decision incurred by Mexinox USA’s affiliated for consumption on or after the Memorandum reseller, Ken-Mac Metals, Inc. publication date of these final results of Adjustments to Normal Value and U.S. (KINDSU), in total U.S. selling administrative review, as provided by Price expenses. section 751(a)(1) of the Tariff Act: (1) Comment 1: Home Market and U.S. • We amended our calculation of cost of the cash deposit rate for the reviewed Post-Sale Price Adjustments production and constructed value to company will be the rate listed above; exclude the cost of products (2) if the exporter is not a firm covered Adjustments to Normal Value (CONNUMs) produced by non-Mexican in this review, a prior review, or the Comment 2: Level of Trade manufacturers. original less than fair value (‘‘LTFV’’) Comment 3: Whether the Home Market • We revised Mexinox’s general and investigation, but the manufacturer is, Sales Database is Complete administrative (‘‘G&A’’) expense ratio by the cash deposit rate will be the rate Comment 4: Indirect Selling Expenses excluding ‘‘stock strip devaluation,’’ established for the most recent period Incurred in the Home Market ‘‘finished product returns to WIP,’’ and for the manufacturer of the Comment 5: Treating Certain Home ‘‘finished product inventory merchandise; and (3) the cash deposit Market Adjustments as Commissions movements’’ from the cost of goods sold rate for all other manufacturers or Adjustments to United States Price denominator. We then applied the exporters will continue to be the ‘‘all revised G&A ratio to the cost of others’’ rate of 30.85 percent, which is Comment 6: U.S. Indirect Selling manufacture (‘‘COM’’) prior to making the ‘‘All Others’’ rate established in the Expenses the adjustments for major inputs. LTFV investigation. See Notice of Final Comment 7: U.S. Credit Expenses Determination of Sales at Less Than • We applied the financial expense ratio Comment 8: U.S. Inventory Carrying Fair Value: Stainless Steel Sheet and used in the preliminary results to the Costs Strip in Coils from Mexico, 64 FR 30790 COM prior to making the major input Comment 9: Duty Drawback (June 8, 1999). These deposit adjustments. Comment 10: U.S. Direct Selling requirements, when imposed, shall Expenses These changes are discussed in the remain in effect until publication of the Comment 11: Billing Adjustment for relevant sections of the Decision final results of the next administrative U.S. Surprise Sale ι2 Memorandum. review. Comment 12: CEP Profit Rate Final Results of Review Notification to Interested Parties Cost of Production We determine that the following This notice also serves as a final Comment 13: Weight-Averaging Costs of weighted-average percentage margin reminder to importers of their Subject and Non-Subject Merchandise exists for the period July 1, 2001 to June responsibility under 19 C.F.R. Comment 14: General and 30, 2002: §351.402(f)(2) to file a certificate Administrative Expenses regarding the reimbursement of Comment 15: Financial Expenses Manufacturer/Exporter Weighted Average antidumping duties prior to liquidation Comment 16: Major Inputs Margin (percentage) of the relevant entries during this Comment 17: Verification Findings from Mexinox ...... 7.43 review period. Failure to comply with Companion Reviews this requirement could result in the Comment 18: Offset to Production Costs

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Assessment Rates Constitution Avenue, NW., Washington, 7219.35.0015, 7219.35.0030, Comment 19: Assessment Rate DC 20230. 7219.35.0035, 7219.90.0010, Methodology SUPPLEMENTARY INFORMATION: 7219.90.0020, 7219.90.0025, 7219.90.0060, 7219.90.0080, Margin Calculations Background 7220.12.1000, 7220.12.5000, Comment 20: Treatment of Non- We published the Preliminary Results 7220.20.1010, 7220.20.1015, Dumped Sales on August 7, 2003. On September 5, 7220.20.1060, 7220.20.1080, 7220.20.6005, 7220.20.6010, [FR Doc. 04–2861 Filed 2–9–04; 8:45 am] 2003, October 29, 2003, and December 30, 2003, the Department issued 7220.20.6015, 7220.20.6060, BILLING CODE 3510–DS–S supplemental questionnaires to TKN; 7220.20.6080, 7220.20.7005, TKN responded on October 3, 2003, 7220.20.7010, 7220.20.7015, DEPARTMENT OF COMMERCE November 12, 2003, and January 12, 7220.20.7060, 7220.20.7080, 2004. Petitioners (Allegheny Ludlum 7220.20.8000, 7220.20.9030, International Trade Administration Corporation, AK Steel Corporation, J&L 7220.20.9060, 7220.90.0010, Specialty Steel, Inc., North American 7220.90.0015, 7220.90.0060, and [A–428–825] Stainless, United Steelworkers of 7220.90.0080. Although the HTS Stainless Steel Sheet and Strip in Coils America, AFL–CIO/CLC, Butler Armco subheadings are provided for convenience and customs purposes, the From Germany; Notice of Final Results Independent Union, Zanesville Armco Department’s written description of the of Antidumping Duty Administrative Independent Organization, Inc.) and merchandise under review is Review TKN filed case briefs on November 17, 2003; rebuttal briefs from both parties dispositive. AGENCY: Import Administration, were filed on November 24, 2003. TKN Excluded from the review of this International Trade Administration, requested a hearing, but later withdrew order are the following: (1) Sheet and Department of Commerce. its request, so the Department did not strip that is not annealed or otherwise heat treated and pickled or otherwise ACTION: Notice of final results of hold a hearing. descaled, (2) sheet and strip that is cut antidumping duty administrative Scope of the Review review. to length, (3) plate (i.e., flat-rolled For purposes of this administrative stainless steel products of a thickness of SUMMARY: On August 7, 2003, the review, the products covered are certain 4.75 mm or more), (4) flat wire (i.e., Department of Commerce (the stainless steel sheet and strip in coils. cold-rolled sections, with a prepared Department) published the preliminary Stainless steel is an alloy steel edge, rectangular in shape, of a width of results of administrative review of the containing, by weight, 1.2 percent or not more than 9.5 mm), and (5) razor antidumping duty order covering less of carbon and 10.5 percent or more blade steel. Razor blade steel is a flat- stainless steel sheet and strip in coils of chromium, with or without other rolled product of stainless steel, not from Germany. See Stainless Steel Sheet elements. The subject sheet and strip is further worked than cold-rolled (cold- and Strip in Coils from Germany; Notice a flat-rolled product in coils that is reduced), in coils, of a width of not of Preliminary Results of Antidumping greater than 9.5 mm in width and less more than 23 mm and a thickness of Duty Administrative Review, 68 FR than 4.75 mm in thickness, and that is 0.266 mm or less, containing, by weight, 47039 (August 7, 2003) (Preliminary annealed or otherwise heat treated and 12.5 to 14.5 percent chromium, and Results). This review covers pickled or otherwise descaled. The certified at the time of entry to be used ThyssenKrupp Nirosta GmbH and subject sheet and strip may also be in the manufacture of razor blades. See ThyssenKrupp VDM (collectively, further processed (e.g., cold-rolled, chapter 72 of the HTS, ‘‘Additional U.S. TKN). The merchandise covered by this polished, aluminized, coated, etc.) Note’’ 1(d). order is stainless steel sheet and strip in provided that it maintains the specific Flapper valve steel is also excluded coils as described in the ‘‘Scope of the dimensions of sheet and strip following from the scope of the order. This Review’’ section of the Federal Register such processing. The merchandise product is defined as stainless steel strip notice. The period of review (POR) is subject to this order is currently in coils containing, by weight, between 0.37 and 0.43 percent carbon, between July 1, 2001, through June 30, 2002. We classifiable in the Harmonized Tariff 1.15 and 1.35 percent molybdenum, and invited parties to comment on our Schedule of the United States (HTS) at between 0.20 and 0.80 percent Preliminary Results. Based on our subheadings: 7219.13.0031, manganese. This steel also contains, by analysis of the comments received, we 7219.13.0051, 7219.13.0071, weight, phosphorus of 0.025 percent or have made changes in the margin 7219.1300.81,1 7219.14.0030, less, silicon of between 0.20 and 0.50 calculations. Therefore, the final results 7219.14.0065, 7219.14.0090, percent, and sulfur of 0.020 percent or differ from the preliminary results. The 7219.32.0005, 7219.32.0020, less. The product is manufactured by final weighted-average dumping margin 7219.32.0025, 7219.32.0035, means of vacuum arc remelting, with for the reviewed firm is listed below in 7219.32.0036, 7219.32.0038, inclusion controls for sulphide of no the section entitled ‘‘Final Results of the 7219.32.0042, 7219.32.0044, more than 0.04 percent and for oxide of Review.’’ 7219.33.0005, 7219.33.0020, no more than 0.05 percent. Flapper EFFECTIVE DATE: February 10, 2004. 7219.33.0025, 7219.33.0035, valve steel has a tensile strength of FOR FURTHER INFORMATION CONTACT: 7219.33.0036, 7219.33.0038, between 210 and 300 ksi, yield strength Patricia Tran, Michael Heaney, or 7219.33.0042, 7219.33.0044, of between 170 and 270 ksi, plus or Robert James at (202) 482–1121, (202) 7219.34.0005, 7219.34.0020, minus 8 ksi, and a hardness (Hv) of 482–4475, or (202) 482–0649, 7219.34.0025, 7219.34.0030, between 460 and 590. Flapper valve respectively, Antidumping and 7219.34.0035, 7219.35.0005, steel is most commonly used to produce Countervailing Duty Enforcement Group specialty flapper valves in compressors. 1 Due to changes to the HTS numbers in 2001, III, Import Administration, International 7219.13.0030, 7219.13.0050, 7219.13.0070, and Also excluded is a product referred to Trade Administration, U.S. Department 7219.13.0080 are now 7219.13.0031, 7219.13.0051, as suspension foil, a specialty steel of Commerce, 14th Street and 7219.13.0071, and 7219.13.0081, respectively. product used in the manufacture of

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suspension assemblies for computer steel is most commonly used in the has a chemical composition similar to disk drives. Suspension foil is described production of heating ribbons for circuit AISI 420 F, with carbon of between 0.37 as 302/304 grade or 202 grade stainless breakers and industrial furnaces, and in and 0.43 percent, molybdenum of steel of a thickness between 14 and 127 rheostats for railway locomotives. The between 1.15 and 1.35 percent, but microns, with a thickness tolerance of product is currently available under lower manganese of between 0.20 and plus-or-minus 2.01 microns, and surface proprietary trade names such as ‘‘Gilphy 0.80 percent, phosphorus of no more glossiness of 200 to 700 percent Gs. 36.’’3 than 0.025 percent, silicon of between Suspension foil must be supplied in coil Certain martensitic precipitation- 0.20 and 0.50 percent, and sulfur of no widths of not more than 407 mm, and hardenable stainless steel is also more than 0.020 percent. This product with a mass of 225 kg or less. Roll marks excluded from the scope of this order. is supplied with a hardness of more may only be visible on one side, with This high-strength, ductile stainless than Hv 500 guaranteed after customer no scratches of measurable depth. The steel product is designated under the processing, and is supplied as, for material must exhibit residual stresses Unified Numbering System (UNS) as example, ‘‘GIN6.’’6 of 2 mm maximum deflection, and S45500-grade steel, and contains, by flatness of 1.6 mm over 685 mm length. weight, 11 to 13 percent chromium, and Analysis of Comments Received Certain stainless steel foil for 7 to 10 percent nickel. Carbon, All issues raised in the case and automotive catalytic converters is also manganese, silicon and molybdenum rebuttal briefs by parties to this excluded from the scope of this order. each comprise, by weight, 0.05 percent administrative review are addressed in This stainless steel strip in coils is a or less, with phosphorus and sulfur the ‘‘Issues and Decision Memorandum’’ specialty foil with a thickness of each comprising, by weight, 0.03 (Decision Memorandum) from Joseph A. between 20 and 110 microns used to percent or less. This steel has copper, Spetrini, Deputy Assistant Secretary for produce a metallic substrate with a niobium, and titanium added to achieve Import Administration to James J. honeycomb structure for use in aging, and will exhibit yield strengths as Jochum, Assistant Secretary for Import automotive catalytic converters. The high as 1700 Mpa and ultimate tensile Administration, dated February 3, 2004, steel contains, by weight, carbon of no strengths as high as 1750 Mpa after which is hereby adopted by this notice. more than 0.030 percent, silicon of no aging, with elongation percentages of 3 A list of the issues which parties have more than 1.0 percent, manganese of no percent or less in 50 mm. It is generally raised and to which we have responded, more than 1.0 percent, chromium of provided in thicknesses between 0.635 all of which are in the Decision between 19 and 22 percent, aluminum and 0.787 mm, and in widths of 25.4 Memorandum, is attached to this notice of no less than 5.0 percent, phosphorus mm. This product is most commonly as an appendix. Parties can find a of no more than 0.045 percent, sulfur of used in the manufacture of television complete discussion of all issues raised no more than 0.03 percent, lanthanum tubes and is currently available under in this review and the corresponding of less than 0.002 or greater than 0.05 proprietary trade names such as recommendations in this public 4 percent, and total rare earth elements of ‘‘Durphynox 17.’’ memorandum which is on file in room more than 0.06 percent, with the Finally, three specialty stainless steels B–099 of the main Department of balance iron. typically used in certain industrial Commerce building. In addition, a Permanent magnet iron-chromium- blades and surgical and medical complete version of the Decision cobalt alloy stainless strip is also instruments are also excluded from the Memorandum can be accessed directly excluded from the scope of this order. scope of this order. These include on the Internet at www.ia.ita.doc.gov. This ductile stainless steel strip stainless steel strip in coils used in the The paper copy and electronic version contains, by weight, 26 to 30 percent production of textile cutting tools (e.g., of the Decision Memorandum are chromium, and 7 to 10 percent cobalt, 5 carpet knives). This steel is similar to identical in content. with the remainder of iron, in widths AISI grade 420 but containing, by 228.6 mm or less, and a thickness weight, 0.5 to 0.7 percent of Changes Since the Preliminary Results between 0.127 and 1.270 mm. It exhibits molybdenum. The steel also contains, Based on our analysis of comments magnetic remanence between 9,000 and by weight, carbon of between 1.0 and received, we have made changes in the 12,000 gauss, and a coercivity of 1.1 percent, sulfur of 0.020 percent or margin calculations. The changes are between 50 and 300 oersteds. This less, and includes between 0.20 and listed below: product is most commonly used in 0.30 percent copper and between 0.20 • We included the entered quantity electronic sensors and is currently and 0.50 percent cobalt. This steel is and entered value of subject available under proprietary trade names sold under proprietary names such as merchandise entered for consumption such as ‘‘Arnokrome III.’’2 ‘‘GIN4 Mo.’’ The second excluded in the United States but sold to Certain electrical resistance alloy steel stainless steel strip in coils is similar to unaffiliated parties outside of the is also excluded from the scope of this AISI 420–J2 and contains, by weight, United States in the denominator of the order. This product is defined as a non- carbon of between 0.62 and 0.70 magnetic stainless steel manufactured to assessment rate. percent, silicon of between 0.20 and • American Society of Testing and 0.50 percent, manganese of between We have also corrected certain Materials (ASTM) specification B344 0.45 and 0.80 percent, phosphorus of no programming and clerical errors in our and containing, by weight, 36 percent more than 0.025 percent and sulfur of preliminary results, where applicable. nickel, 18 percent chromium, and 46 no more than 0.020 percent. This steel Any alleged programming errors with percent iron, and is most notable for its has a carbide density on average of 100 which we do not agree are discussed in resistance to high temperature carbide particles per 100 square the relevant sections of the Decision corrosion. It has a melting point of 1390 microns. An example of this product is Memorandum, accessible in B–099 of degrees Celsius and displays a creep ‘‘GIN5’’ steel. The third specialty steel the main Department of Commerce rupture limit of 4 kilograms per square building and on the Web at millimeter at 1000 degrees Celsius. This 3 ‘‘Gilphy 36’’ is a trademark of Imphy, S.A. www.ia.ita.doc.gov. 4 ‘‘Durphynox 17’’ is a trademark of Imphy, S.A. 2 Arnokrome III’’ is a trademark of the Arnold 5 This list of uses is illustrative and provided for 6 ‘‘GIN4 Mo,’’ ‘‘GIN5’’ and ‘‘GIN6’’ are the Engineering Company. descriptive purposes only. proprietary grades of Hitachi Metals America, Ltd.

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Final Results of the Review These deposit requirements shall SUMMARY: The Secretary of Commerce We determine the following remain in effect until publication of the has approved FIPS Publication 199, percentage weighted-average margin final results of the next administrative Standards for Security Categorization of exists for the period July 1, 2000 review. Federal Information and Information through June 30, 2001: This notice also serves as a final Systems, and has made it compulsory reminder to importers of their and binding on Federal agencies for the Weighted av- responsibility under 19 CFR 351.402(f) protection of: (i) All information within Manufacturer/Exporter erage margin to file a certificate regarding the the Federal government other than that (percentage) reimbursement of antidumping or information that has been determined countervailing duties prior to pursuant to Executive Order 12958, as TKN ...... 3.72 liquidation of the relevant entries amended by Executive Order 13292, or during this review period. Failure to any predecessor order, or by the Atomic Liquidation comply with this requirement could Energy Act of 1954, as amended, to The Department shall determine, and result in the Secretary’s presumption require protection against unauthorized U.S. Customs and Border Protection that reimbursement of antidumping or disclosure and is marked to indicate its (Customs) shall assess, antidumping countervailing duties occurred and the classified status; and (ii) all Federal duties on all appropriate entries. In subsequent assessment of doubled information systems other than those accordance with 19 CFR 351.212(b)(1), antidumping duties. information systems designated as we have calculated importer-specific This notice also serves as a reminder national security systems as defined in assessment rates. The Department will to parties subject to administrative the United States Code. issue appropriate assessment protective orders (APO) of their The Federal Information Security instructions directly to Customs within responsibility concerning the return or Management Act (FISMA) requires all 15 days of publication of these final destruction of proprietary information Federal agencies to develop, document, results of review. With respect to disclosed under APO in accordance and implement agency-wide constructed export price sales, we with 19 CFR 351.305. Timely written information security programs to divided the total dumping margins for notification of the return or destruction provide information security for the the reviewed sales by the total entered of APO materials or conversion to information and information systems value of those reviewed sales for each judicial protective order is hereby that support the operations and assets of importer. We will direct Customs to requested. Failure to comply with the the agency, including those provided or assess the resulting assessment rate regulations and terms of an APO is a managed by another agency, contractor, against the entered Customs values for violation which is subject to sanction. or other source. FIPS Publication 199 the subject merchandise on each of the We are issuing and publishing this addresses one of the requirements importer’s entries during the POR. determination and notice in accordance specified in the FISMA. It provides Cash Deposit Requirements with sections 751(a)(1) and 777(i) of the security categorization standards for Tariff Act. information and information systems. The following deposit requirements The purpose of security categorization will be effective upon publication of Dated: February 3, 2004. standards is to provide a common this notice of final results of James J. Jochum, framework and method for expressing administrative review for all shipments Assistant Secretary for Import security and to promote effective of stainless steel sheet and strip in coils Administration. management and oversight of from Germany entered, or withdrawn Appendix information security programs, from warehouse, for consumption on or including the coordination of after the date of publication, as provided Comments and Responses information security efforts throughout by section 751(a)(1) of the Tariff Act: (1) 1. Assessment Rate Methodology the civilian, national security, The cash deposit rate for the reviewed 2. Interest Expenses emergency preparedness, homeland company will be the rate shown above; 3. Packing Costs security, and law enforcement 4. Downstream Home Market Sales (2) for previously reviewed or communities; and consistent reporting investigated companies not listed above, 5. Treatment of Non-Dumped Sales 6. Other Revisions to Calculation to the Office of Management and Budget the cash deposit rate will continue to be (OMB) and Congress on the adequacy the company-specific rate published for [FR Doc. 04–2863 Filed 2–9–04; 8:45 am] and effectiveness of information the most recent period; (3) if the BILLING CODE 3510–DS–P security policies, procedures, and exporter is not a firm covered in this practices. review, a prior review, or the original less-than-fair-value (LTFV) DEPARTMENT OF COMMERCE DATES: This standard is effective investigation, but the manufacturer is, February 10, 2004. the cash deposit rate will be the rate National Institute of Standards and FOR FURTHER INFORMATION CONTACT: Dr. established for the most recent period Technology Ron Ross, (301) 975–5390, National for the manufacturer of the Institute of Standards and Technology, merchandise; and (4) the cash deposit [Docket No. 030429105–3270–02] 100 Bureau Drive, STOP 8930, rate for all other manufacturers or Gaithersburg, MD 20899–8930. exporters will continue to be 13.48 Announcing Approval of Federal A copy of FIPS Publication 199 is percent. This rate is the ‘‘All Others’’ Information Processing Standard available electronically from the NIST rate from the amended final (FIPS) Publication 199, Standards for Web site at: http://csrc.nist.gov/ determination in the LTFV Security Categorization of Federal publications/. investigations. See Stainless Steel Sheet Information and Information Systems SUPPLEMENTARY INFORMATION: A notice and Strip in Coils From Germany: AGENCY: National Institute of Standards was published in the Federal Register Amended Final Determination of and Technology (NIST), Commerce. (68 FR 26573) on May 16, 2003, Antidumping Duty Investigation, 67 FR announcing the proposed FIPS ACTION: Notice. 15178, 15179 (March 29, 2002). Publication 199 on Standards for

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Security Categorization of Federal defined in the FISMA). The levels of systems collected or maintained by or Information and Information Systems risk considered both impact of adverse on behalf of each agency based on the for public review and comment. The events and threats to systems, but were objectives of providing appropriate Federal Register notice solicited more heavily weighted toward impact. levels of information security according comments from the public, academic The categorization process involves to a range of risk levels. Other and research communities, matching the agency’s assessment of requirements of the FISMA, such as manufacturers, voluntary standards levels of potential risk to each security determination of the types of organizations, and Federal, state, and objective, considering the occurrence of information and information to be local government organizations. In events that could jeopardize the included in each category, will be addition to being published in the information and information systems of addressed in future NIST standards and Federal Register, the notice was posted the agency. guidelines. on the NIST Web pages; information As some of the comments pointed out, Comment: Some comments suggested was provided about the submission of risk assessment is part of a well-defined changes to Table 1 in the original draft, electronic comments. Comments and management process conducted by and asked for an explanation of the use responses were received from thirteen agencies to identify and evaluate risks of the table. Examples of impacts for private sector organizations, individuals and risk impacts, and to recommend each impact definition were requested. and groups of individuals, from risk-reducing measures that balance Response: FIPS Publication 199 was eighteen federal government costs and organizational requirements. revised to clarify the text and to provide organizations, and from one Canadian NIST agrees that the issues of examples of impacts for each definition government organization. determining levels of risk and of impact for each security objective. Many of the comments received conducting risk assessments are part of Comment: There are no provisions for recommended editorial changes, a structured management process. These the use of new technologies or updating expressed concerns about the discussion issues are covered comprehensively in of legacy systems. of risk, risk assessment, threats, and other NIST publications. Therefore, the Response: The provisions of FIPS security controls, and asked for focus of the categorization process Publication 199 are independent of the clarification about the requirements of should be on ‘‘level of impact’’ that technology used, and can be applied to the FISMA. None of the comments undesired events could have on electronic and non-electronic opposed the adoption of this Federal information and information systems. information. Information Processing Standard. Many The text of FIPS Publication 199 was Comment: An objective for privacy comments supported the concept of changed to describe three levels of should be added to the objectives of categorization of information and potential impact (low, moderate and confidentiality, integrity and information systems and commended high) on organizations or individuals if availability. The loss of privacy and the clear, well-written presentation of any of the security objectives of identity theft should be added to the the standard. All of the editorial and confidentiality, integrity and availability impact definitions. related comments were carefully of information and information systems Response: FIPS Publication 199 was reviewed, and changes were made to the were compromised. The security revised to clarify the issue of privacy by standard where appropriate. categories are to be used in conjunction specifying that loss of privacy and Specifically, certain terminology in FIPS with vulnerability and threat identify theft are examples of impacts 199 was modified to be consistent with information in assessing the risk to the on individuals. The objective of other NIST publications. All future agency. This change responds to the confidentiality, as defined in the FISMA publications will reflect consistent many comments received on this issue, (44 USC, Sec. 3542), encompasses terminology. and clarifies the text for agency users. privacy: Preserving authorized Following is an analysis of the Terms and definitions relating to risk restrictions on information access and comments dealing with technical and and risk assessments that had been disclosure, including means for implementation issues. included in the initial draft were protecting personal privacy and Comment: The major issue raised by removed from the final standard. proprietary information. a majority of the comments was concern Comment: Some comments expressed Comment: The definition of about perceived errors and confusion about the information availability should be modified. Other inconsistencies in the initial draft’s included in the initial draft about the security objectives (non-repudiation and discussion of risk, risk assessment, Federal Information Security authentication) should be added threats, and the determination of Management Act (FISMA) and its Response: The definition of security controls. Some of the comments requirements, particularly those availability is taken directly from the suggested that NIST consider using the requirements that are addressed by FIPS FISMA legislation and thus, cannot be term ‘‘level of impact’’ instead of ‘‘level Publication 199. modified. However, the security of risk’’ to apply to the categorization Response: NIST agrees that some of objectives mentioned in the public process. the original discussion in draft FIPS comment, namely nonrepudiation and Response: NIST recognizes that some Publication 199 could have been authenticity are specifically covered in of the initial discussion about risk, risk misinterpreted. Therefore, the text was FIPS Publication 199 under the assessment, threats and the revised to delete extraneous material definition of integrity. FISMA’s determination of security controls was and to clarify the purpose of FIPS definition of integrity includes the abbreviated and concise, and that the Publication 199. FIPS Publication 199 security objectives of nonrepudiation discussion could have been now clearly defines the impact levels to and authenticity so there is no need to misinterpreted. The original discussion be used in categorizing information and modify the definition of availability to described three potential levels of risk information systems, and indicates that include those objectives. Adding (low, moderate and high) for each of the standard addresses one of the tasks additional security objectives three security objectives assigned to NIST by the FISMA. That independently would make the simple (confidentiality, integrity and task is the development of standards to three by three matrix more complex for availability of information and be used by all Federal agencies to federal agencies during implementation information systems, which were categorize information and information and not add any appreciable value in

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helping to assess the potential impact of present definitive guidance on New Std 1165 SCADA Display loss of information systems supporting vulnerabilities, impact and risk For Further Information Contact: those agencies. management methodology. Andrea Johnson, Standards Department, Comment: An impact level of ‘‘none’’ Response: These issues are discussed e-mail: [email protected]. should be added to the levels of low, in current NIST publications, or will be moderate and high. addressed in future NIST publications. Committee on Marketing Response: A note was added that an E.O. 12866: This notice has been Std 2610 Design, Construction, impact level of ‘‘none’’ was appropriate determined to be not significant for the Operation, Maintenance, and only for confidentiality of some purposes of E.O. 12866. Inspection of Terminal and Tank information (such as public Dated: February 4, 2004. Facilities information). Impact levels of ‘‘none’’ Arden L. Bement, Jr., NEW API/IP RP 1540, Design are not appropriate for the security Director. Construction, Modification and objectives of availability and integrity Maintenance of Aircraft Fueling [FR Doc. 04–2885 Filed 2–9–04; 8:45 am] since all agency information and Facilities information systems should be BILLING CODE 3510–13–P New API/IP Std 1529 Aviation Fueling protected for availability and integrity. Hose Comment: The category of DEPARTMENT OF COMMERCE RP 1626 Recommended Practice for information designation should be Storing and Handling Ethanol and separate from the category of system National Institute of Standards and Gasoline-ethanol Blends at designation. Technology Distribution Terminals and Service Response: FIPS Publication 199 treats Stations. systems categorization separately from Announcement of the American For Further Information Contact: information categorization. Petroleum Institute’s Standards David Soffrin, Standards Department, e- Comment: The security objectives of Activities confidentiality, integrity, and mail: [email protected]. availability could be expanded. AGENCY: National Institute of Standards Committee on Refining Response: FIPS Publication 199 and Technology, Commerce. Corrosion & Materials: allows agencies to develop and use ACTION: Notice. additional security designators. RP 651 Cathodic Protection of Comment: Only two impact levels are SUMMARY: The American Petroleum Aboveground Petroleum Storage needed for non-national security Institute (API), with the assistance of Tanks information and systems. other interested parties, continues to RP 652 Lining of Aboveground Response: NIST believes that three develop standards, both national and Petroleum Storage Tanks levels of impact are needed for non- international, in several areas. This New RP 938–C Use of Duplex Stainless national security systems. Two levels of notice lists the standardization efforts Steels in the Oil Refining Industry impact do not provide sufficient currently being conducted by API Inspection: granularity to describe the range of committees. The publication of this Std 510 Pressure Vessel Inspection Code potential impacts on federal agency notice by the National Institute of RP 575 Inspection of Atmospheric and missions resulting from the loss of Standards and Technology (NIST) on Low Pressure Storage Tanks confidentiality, integrity, or availability behalf of API is being undertaken as a Pressure Vessel and Tanks: of information and information systems. public service. NIST does not Std 620 Design & Construction of Large, Three impact levels are necessary to necessarily endorse, approve, or Welded, Low-Pressure Storage Tanks recommend the standards referenced. adequately describe the potential impact Std 650 Welded Tanks for Oil Storage of loss to agency operations and assets ADDRESSES: American Petroleum Std 653 Tank Inspection, Repair, ranging from routine administrative Institute, 1220 L Street, NW., Alteration, and Reconstruction support systems at the low end to the Washington, DC 20005; telephone (202) Electrical Equipment: most critical systems that are a part of 682–8000, http://www.api.org. New Std 547 General Purpose Form- the nation’s critical information FOR FURTHER INFORMATION CONTACT: All wound Squirrel-cage Induction infrastructure at the high end. The contact individuals listed in the Motors larger than 250 HP moderate impact level provides another SUPPLEMENTARY INFORMATION section of Std 541 Form-Wound Squirrel-cage important category to address those this notice may be reached at the Induction Motors 500 HP and Larger systems that are deemed significantly American Petroleum Institute. Mechanical Equipment: more important than routine support SUPPLEMENTARY INFORMATION: systems, but not critical to the Std 672 Packaged, Integrally Geared operations of the U.S. government. Background Centrifugal Air Compressors for Three impact levels strike an adequate The American Petroleum Institute Petroleum, Chemical, and Gas balance between providing too many develops and publishes voluntary Industry Services categories and making the categorization standards for equipment, materials, Std 618 Reciprocating Compressors for process too complex and providing too operations, and processes for the Petroleum, Chemical, and Gas few categories which forces agencies to petroleum and natural gas industry. Industry Services either undervalue or overvalue the These standards are used by both Std 619 Rotary Type Positive potential impact of loss to their private industry and by governmental Displacement Compressors operations and assets. agencies. All interested persons should Std 677 General Purpose Gear Units Comment: FIPS Publication 199 could contact the appropriate source as listed Std 684 Tutorial on Rotor Dynamics and define what level of risk is to be for further information. Balancing associated with a security objective Std 686 Machinery Installation and required by law. More explicit Pipeline Committee Installation Design information is needed to categorize New Std 1163 ILI Systems Qualification Std 610, National Adoption of ISO systems. FIPS Publication 199 should New Std 1164 SCADA Security 13709, Centrifugal Pumps for

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Petroleum, Petrochemical and Natural RP 2219 Safe Operation of Vacuum For Further Information Contact: Gas Industries Trucks in Petroleum Service (possible Paula Watkins, Standards Department, Std 682, National Adoption of ISO reaffirmation) e-mail: [email protected]. 21049, Pumps-Shaft Sealing Systems RP 2220 Improving Owner and Meetings/Conferences: The Spring for Centrifugal and Rotary Pumps Contractor Safety Performance Committee on Petroleum Measurement Heat Transfer Equipment: None due RP 2221 Managers Guide to Meeting will take place at the Hyatt in 2004 Implementing a Contractor Safety and Regency Atlanta, Atlanta, Georgia, Health Program March 29–April 2, 2004. The Fall Piping: RP 2350 Overfill Protection for Committee on Petroleum Measurement Std 598 Valve Inspection and Testing Petroleum Storage Tanks Meeting will take place at the Wilshire Std 609 Butterfly Valves: Double For Further Information Contact: Grand Hotel, Los Angeles, California, Flanged, Lug- and Wafer-Type David Soffrin, Standards Department, e- September 20–24, 2004. Interested Std 594 Check Valves mail: [email protected]. parties may visit the API Web site at Std 600, National Adoption of ISO http://www.api.org/events for more 10434, Bolted Bonnet Steel Gate Committee on Petroleum Measurement information regarding participation in Valves Manual of Petroleum Measurement these meetings. Std 602, National Adoption of ISO Standards: Committee on Exploration and 15761, Compact Steel Gat Valves- New Chapter 2.2E Tank Calibration— Production Flanged, Threaded, Manual Methods (National Adoption Welding, and Extended Body Ends Production Equipment: of ISO 12917–1) Pressure Relieving Systems: Spec 6A, 19th new edition, National New Chapter 2.2F Tank Calibration— RP 521 Guide for Pressure-Relieving and Adoption of ISO 10423, Specification Calibration of Horizontal Cylindrical Depressuring Systems for Wellhead and Christmas Tree Tanks by the Internal Electro-optical Instrument & Control Systems: Equipment Distance-ranging Method (National Addendum, Spec 6D Specification for RP 552 Transmission Systems Adoption of ISO 12917–2) Pipeline Valves RP 554 Part 1 Process Instrumentation Chapter 4.1 Introduction to Proving Spec 6A718, 1st edition Specification of and Control Systems Nickel Base Alloy 718 (UNS N07718) Technical Data Book—Petroleum New Chapter 4.9.1 Introduction to for Oil and Gas Drilling and Refining: Determination of the Volume of Production Equipment Electronic Version of the Technical Data Displacement and Tank Provers Spec 14A, 11th edition, National Book—Petroleum Refining, Release New Chapter 4.9.2 Determination of the Adoption of ISO 10432, Specification 3.0 Volume of Displacement and Tank for Subsurface Safety Valve For Further Information Contact: Provers by the Waterdraw Method of Equipment David Soffrin, Standards Department, e- Calibration Oil Country Tubular Goods: mail: [email protected]. New Chapter 4.9.3 Determination of the Addendum, RP 5B1 Threading, Volume of Displacement and Tank Meetings/Conferences: The Spring Gauging, and Thread Inspection of Provers by the Master Meter Method Refining Meeting will be held at the Casing, Tubing and Line Pipe Threads Hyatt Regency Atlanta, Atlanta, Georgia, of Calibration Spec 5L, 43rd edition Specification for May 17–19, 2004. The Fall Refining New Chapter 4.9.4 Determination of the Line Pipe Meeting will be held at the Manchester Volume of Displacement and Tank OCTG Tonnage Reports Grand Hyatt, San Diego, California, Provers by the Gravimetric Method Line Pipe Tonnage Reports October 25–27, 2004. Interested parties New 12.1.3 Calculation Procedures for Offshore Structures, Drill Through may visit the API Web site at http:// Liquefied Petroleum Gases (New Equipment, and Subsea Production www.api.org/events for more document) Equipment: New Chapter 17.9 Vessel Experience information regarding participation in RP 2A–WSD, new edition Planning, Factors these meetings. Designing and Constructing Fixed New Chapter 17.10 Measurement of Offshore-Platforms-Working Stress Committee on Safety and Fire Refrigerated and Pressurized Cargo on Protection Design Marine Tank Vessels Spec 2C, new edition Specification for RP 2001 Fire Protection in Refineries New MPMS Technical Report: Offshore Cranes RP 2026 Safe Access/Egress Involving Multiphase Flowmeters Bulletin 2U, new edition Bulletin on Floating Roofs of Storage Tanks Chapter 6.2 3rd Edition Loading Rack Stability Design for Cylindrical Shells (possible reaffirmation) and Tank Truck Metering Systems for Bulletin 2V, new edition Bulletin on RP 2030 Application of Water Spray Non-LPG Products Design of Flat Plate Structures Systems for Fire Protection in the For Further Information Contact: Jon RP 2X, new edition Recommended Petroleum Industry (probable Noxon, Standards Department, e-mail: Practice for Ultrasonic and Magnetic reaffirmation) [email protected]. Examination of Offshore Structural RP 2207 Preparing Tank Bottoms for Hot Fabrication and Guidelines for API/ASTM/GPA Standards Work (possible reaffirmation) Qualification of Technicians RP 2214 Spark Ignition Properties of MPMS Ch. 10.6/ASTM D1796 Water & RP 17H, 1st edition, National Adoption Hand Tools (probable reaffirmation) Sediment in Fuel Oils by Centrifuge of ISO 13628–8, Recommended RP 2217A Guidelines for Work in Inert MPMS Ch. 11.2.4/GPA TP–27/ASTM Practice for Remotely Operated Confined Spaces in the Petroleum Temperature Correction for the Vehicle (ROVs) Interfaces on Subsea Industry Volume of NGL and LPG Tables 23E, Production Systems RP 2218 Fireproofing Practices in 24E, 53E, 54E, 59E, 60E RP 17M, 1st edition, National Adoption Petroleum and Petrochemical MPMS Ch. 11.2.5/GPA TP–15/ASTM of ISO 13628–9, Recommended Processing Plants (possible Simplified Vapor Pressure Correlation Practice for Remotely Operated Tool reaffirmation) for Commercial NGLs (ROT) Intervention Systems

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Drilling Operations and Equipment: Dated: February 4, 2004. Currently, as the Council prepares for RP 4G, new edition Recommended Arden L. Bement, Jr., actions related to the EFH EIS, the SSC, Practice for Use and Procedures for Director. in their role of ensuring Council inspections, Maintenance, and Repair [FR Doc. 04–2886 Filed 2–9–04; 8:45 am] decisions are informed by the best of Drilling and Well Servicing BILLING CODE 3510–13–P available science, will review the risk Structures assessment process and analytical tool. Spec 9A, new edition, National The SSC will report their findings at the Adoption of ISO 10425, Specification DEPARTMENT OF COMMERCE April 2004 Council meeting. for Wire Rope Entry to the Alaska Fisheries Science RP 10B, new edition, National Adoption National Oceanic and Atmospheric Center requires identification with a of ISO 10426–2, Recommended Administration photograph (such as a student ID, state Practice for Testing Well Cements [I.D. 020404E] drivers license, etc.) A security guard RP10X, new edition, National Adoption will review the identification and issue of ISO 10426–3, Recommended Pacific Fishery Management Council; a Visitor’s Badge valid for the date of the Practice for Deep Water Cementing Public Meeting meeting. Spec 13A, new edition, National Although non-emergency issues not Adoption of ISO 13500, Specification AGENCY: National Marine Fisheries contained in this notice may come for Drilling Fluid Materials Service (NMFS), National Oceanic and before the SSC groundfish RP 13I, new edition, National Adoption Atmospheric Administration (NOAA), subcommittee for discussion, those of ISO 10416, Recommended Practice Commerce. issues may not be the subject of formal for Standard Procedures for ACTION: Notice of public meeting. action during this meeting. SSC Laboratory Testing Drilling Fluids groundfish subcommittee action will be SUMMARY: The groundfish subcommittee RP 13B–2, new edition, National restricted to those issues specifically of the Pacific Fishery Management Adoption of ISO 10414–2, listed in this notice, and any issues Council’s (Council) Scientific and Recommended Practice for Standard arising after publication of this notice Statistical Committee (SSC) will hold a Procedures for Field Testing Oil-based that require emergency action under work session to review analytical Drilling Fluids section 305(c) of the Magnuson-Stevens portions of the Environmental Impact Spec 16A, new edition, National Fishery Conservation and Management Statement (EIS) for Groundfish Essential Adoption of ISO 13533, Specification Act, provided the public has been Fish Habitat (EFH). The work session is for Drill-through Equipment notified of the subcommittee’s intent to open to the public. Spec 16C, new edition Specification for take final action to address the Choke and Kill Systems DATES: The SSC groundfish emergency. Spec 16D, new edition Specification for subcommittee will meet from 9 a.m. Control Systems for Drilling Well until 5 p.m. on Monday, February 23, Special Accommodations Control Equipment 2004. The meeting will continue on The meeting is physically accessible Spec 16F, new edition Specification for Tuesday, February 24, 2004 from 9 a.m. to people with disabilities. Requests for Marine Drilling Riser Equipment until business for the day is completed. sign language interpretation or other RP 56/58/60 combine as adopt back of ADDRESSES: The groundfish auxiliary aids should be directed to Ms. 13503–2 Recommended Practice for subcommittee work session will be held Carolyn Porter at 503–820–2280 at least Frac Sands, Proppants, and Gravel at NMFS Alaska Fisheries Science 5 days prior to the meeting date. Packing Materials Center, Traynor Seminar Room, 7600 Dated: February 4, 2004. For Further Information Contact: Sand Point Way N.E., Building 4, Tracey Thompson, Mike Spanhel, Standards Department, e- Seattle, WA 98115; telephone: 206–526– mail: [email protected]. 4000. Acting Director, Office of Sustainable Meetings/Conferences: The 2003 Council address: Pacific Fishery Fisheries, National Marine Fisheries Service. Summer Standardization Conference on Management Council, 7700 NE [FR Doc. E4–219 Filed 2–9–04; 8:45 am] Oilfield Equipment & Materials will take Ambassador Place, Suite 200, Portland, BILLING CODE 3510–22–S place at the Hyatt Regency Dallas, OR 97220–1384. Dallas, Texas, June 14–18, 2004. FOR FURTHER INFORMATION CONTACT: Mr. DEPARTMENT OF COMMERCE Interested parties may visit the API Web Dan Waldeck, Staff Officer: 503–820– site at http://www.api.org/events for 2280. more information regarding National Oceanic and Atmospheric participation in this meeting. SUPPLEMENTARY INFORMATION: NMFS, in Administration cooperation with the Council, is Executive Committee on Drilling and developing an EIS for EFH under the [I.D. 012904B] Production Operations Pacific Coast Groundfish Fishery Western Pacific Fishery Management RP59, RP on Well Control Management Plan. As a precursor to the Council; Public Meeting RP75, RP on Safety and Environmental EFH EIS, a risk assessment is being Management Program developed. A significant output of the AGENCY: National Marine Fisheries New RP76, RP on Contractor Safety for risk assessment is an analytical tool Service (NMFS), National Oceanic and Oil and Gas Drilling and Production composed of geo-referenced Bayesian Atmospheric Administration (NOAA), Operations Network models designed to assist the Commerce. For Further Information Contact: Tim Council in developing (and comparing ACTION: Notice of public meeting. Sampson, Upstream Department, e-mail: the consequences of) management [email protected]. alternatives related to the EFH EIS. SUMMARY: The 85th meeting of the For additional information on the Through a series of public meetings, the Western Pacific Fishery Council’s overall API standards program, contact: Council’s Ad Hoc Technical Review Scientific and Statistical Committee David Miller, Standards Department, e- Committee has facilitated development (SSC) will convene February 24–26, mail: [email protected]. of the risk assessment process. 2004, in Honolulu, HI.

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DATES: The SSC meeting will be held on A. Update on MULTIFAN C-L Lobster sign language interpretation or other February 24–26, 2004. The meeting will Model auxiliary aids should be directed to be held from 9 a.m. to 5 p.m. on B. Public comment Kitty M. Simonds, 808–522–8220 February 24, 2004, and from 8:30 a.m. C. Discussion and recommendations (voice) or 808–522–8226 (fax), at least 5 to 5 p.m. on February 25–26, 2004. 8. Precious Corals days prior to the meeting date. ADDRESSES: The 83rd SSC meeting will A. New Precious Coral Beds in NWHI Dated: February 5, 2004. B. Public comment be held at the Council office conference Tracey Thompson, C. Discussion and recommendations room, 1164 Bishop St., Suite 1400, Acting Director, Office of Sustainable Honolulu, HI; telephone: 808–522–8220. Wednesday, February 25, 2004, 8:30 Fisheries, National Marine Fisheries Service. Council address: Western Pacific a.m. [FR Doc. E4–238 Filed 2–9–04; 8:45 am] Fishery Management Council, 1164 BILLING CODE 3510–22–S Bishop St., Suite 1400, Honolulu, HI 9. Pelagic Fisheries 96813. A. American Samoa and Hawaii Longline Fisheries FOR FURTHER INFORMATION CONTACT: 1. Quarterly Reports DEPARTMENT OF COMMERCE Kitty M. Simonds, Executive Director; 2. Southern albacore Catch Per Unit Technology Administration telephone: 808–522–8220. Effort in 2003 SUPPLEMENTARY INFORMATION: The SSC B. Turtle management Technology Administration will discuss and may make 1. Council’s Regulatory Amendment Performance Review Board recommendations to the Council on the and Draft Supplemental Environmental Membership agenda items below. The order in which Impact Statement. agenda items will be addressed can 2. Post-hooking mortality workshop The Technology Administration change. 3. Risk assessment seminar Performance Review Board (TA PRB) C. Methods of analyzing observer data reviews performance appraisals, Tuesday, February 24, 2004, 9 a.m. D. Seabird conservation agreements, and recommended actions 1. Introductions 1. Update on Hawaiian archipelago pertaining to employees in the Senior 2. Approval of Draft Agenda and albatross nesting populations Executive Service and reviews Assignment of Rapporteurs 2. Consideration of side-setting as a performance-related pay increases for 3. Approval of the Minutes of the 84th seabird mitigation option for Hawaii- ST–3104 employees. The Board makes Meeting based longliners recommendations to the appropriate 4. Ecosystem and Habitat E. Marlin Management appointing authority concerning such A. Ecosystem-based management on a F. Private Fish Aggregating Devices matters so as to ensure the fair and Archipelagic basis G. Shark management equitable treatment of these individuals. B. Draft Report on the Coral Reef Fish H. International Meetings This notice lists the membership of Stock Assessment Workshop 1. Bellagio Conference: Conservation the TA PRB and supersedes the list C. Development of Northwestern and Sustainable Multilateral published in Federal Register Hawaiian Islands Sanctuary Management of Sea Turtles in the Document 01–29675, Vol. 66, No. 230, Alternatives: Criteria and Rationale Pacific Ocean page 59575, dated llllllll . D. Review of the Council draft Marine 2. 4th meeting of the Interim Belinda L. Collins (C), Deputy Director Protected Area Policy Scientific Committee for Tuna and for Technology Services, National E. National Bycatch Implementation Tuna-like species in the North Pacific Institute of Standards & Technology, Plan 3. Inter-American Tropical Tuna Gaithersburg, MD 20899, F. Public comment Commission 4th Bycatch Working Appointment Expires: 12/31/05. G. Discussion and recommendations Group 5. Bottomfish 4. Asia-Region Seabird Bycatch Stephen Freiman (C), Deputy Director, A. New Zealand Deep-slope fishery Workshop Materials Science & Engineering workshop 5. Western Pacific Sea-turtle Database Laboratory, National Institute of B. Status of Seamount groundfish Meeting Standards & Technology, moratorium 6. 2nd Meeting of the Parties to the Gaithersburg, MD 20899, C. Summary of Opakapaka tagging Memorandum of Understanding on the Appointment Expires: 12/31/04. study in Main Hawaiian Islands in the Conservation and Management of Cita Furlani (C), Chief Information late 1980s Marine Turtles and their Habitats of the Officer, National Institute of D. Report on Hawaii Undersea Indian Ocean and South-East Asia Standards & Technology, Research Laboratory bottomfish survey I. Public comment Gaithersburg, MD 20899, E. Report on stock assessment J. Discussion and recommendations Appointment Expires: 12/31/05. workshop Daniel Hurley (C), Director of F. Public comment Thursday, February 26, 2004, 8:30 a.m. Communication and Information, G. Discussion and recommendations 10. Other Business Infrastructure Assurance Program, 6. Protected Species A. Guam voluntary community National Telecommunications and A. Council Sea Turtle Conservation monitoring program options Information Administration, Program B. Pacific Islands Region and Council Washington, DC 20230, Appointment B. Hawaii Exclusive Economic Zone streamline strategic plan Expires: 12/31/05. (EEZ) Marine Mammal Surveys C. 86th SSC meeting Deirdre Jones, Director of Systems C. Northwestern Hawaiian Islands 11. Summary of SSC Engineering Center, Office of Science (NWHI) Ecosystem modeling Recommendations to the Council and Technology, National Weather D. Public comment Service, National Oceanic and E. Discussion and recommendations Special Accommodations Atmospheric Administration, Silver 7. Crustaceans Fisheries (NWHI This meeting is physically accessible Spring, MD 20910, Appointment lobsters) to people with disabilities. Requests for Expires: 12/31/05.

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Karen Laney Cummings, Director, Lois W. Paul, Grants Management (2) As part of the basis for Technology Competitiveness, Office Specialist; Room 9712–A, 1201 New determining the financial management of Technology Policy, Technology York Avenue, NW, Washington, DC, areas in which a potential grantee, Administration, Washington, DC 20525. should it receive an award from the 20230, Appointment Expires: 12/31/ (2) By hand delivery or by courier to Corporation, may warrant technical 05. the Corporation’s mailroom at Room assistance. William F. Koch (C), Deputy Director, 6010 at the mail address given in II. Current Action Chemical Science & Technology paragraph (1) above, between 9 a.m. and Laboratory, National Institute of 4 p.m. Monday through Friday, except The Corporation is seeking public Standards & Technology, Federal holidays. comment for approval of the Financial Gaithersburg, MD 20899, (3) By fax to: (202) 565–2850, Management Survey which will be used Appointment Expires: 12/31/04. Attention Ms. Lois W. Paul, Grants by Corporation Grants Management Dated: January 28, 2004. Management Specialist. Specialists to assess the capacity of (4) Electronically through the potential grantees to manage Federal Benjamin H. Wu, Corporation’s e-mail address system: funds. This assessment involves a Deputy Under Secretary of Commerce for [email protected]. review of the potential grantee’s Technology, Technology Administration, Department of Commerce. FOR FURTHER INFORMATION CONTACT: Lois responses to general questions about its organizational type, financial systems, [FR Doc. 04–2830 Filed 2–9–04; 8:45 am] W. Paul, (202) 606–5000, ext. 200 or by e-mail at [email protected]. how it manages funds, and the internal BILLING CODE 3510–18–M controls it has in place to segregate and SUPPLEMENTARY INFORMATION: report on Federal funds it might receive. The Corporation is particularly The public affected will be grant interested in comments which: CORPORATION FOR NATIONAL AND applicants that have not previously • Evaluate whether the proposed COMMUNITY SERVICE received Federal funds through an collection of information is necessary award from the Corporation, or current Proposed Information Collection; for the proper performance of the grantees that are re-competing for Comment Request functions of the Corporation, including funding at the beginning of a new 3-year whether the information will have AGENCY: Corporation for National and grant cycle and have been identified as practical utility; not meeting the exemption critical of Community Service. • Evaluate the accuracy of the the Corporation’s pre-award review ACTION: Notice. agency’s estimate of the burden of the policy. proposed collection of information, SUMMARY: The Corporation for National Should the entity become a grantee of including the validity of the and Community Service (hereinafter the the Corporation, the information ‘‘Corporation’’), as part of its continuing methodology and assumptions used; • Enhance the quality, utility and gathered will be maintained in the new effort to reduce paperwork and clarity of the information to be grantee’s official file and become part of respondent burden, conducts a pre- collected; and, the basis for determining specific areas clearance consultation program to • Minimize the burden of the of its financial management and systems provide the general public and Federal collection of information on those who that may benefit from technical agencies with an opportunity to are to respond, including through the assistance from the Corporation, its staff comment on proposed and/or use of appropriate automated, and Training and Technical Assistance continuing collections of information in electronic, mechanical, or other (T/TA) providers. accordance with the Paperwork technological collection techniques or Type of Review: New information Reduction Act of 1995 (PRA95) (44 other forms of information technology, collection. U.S.C. 3506(c)(2)(A)). This program e.g., permitting electronic submissions Agency: Corporation for National and helps to ensure that requested data can of responses. Community Service. be provided in the desired format, Title: Financial Management Survey reporting burden (time and financial I. Background Form. resources) is minimized, collection The Corporation developed the OMB Number: None. instruments are clearly understood, and Financial Management Survey in Agency Number: None. the impact of collection requirement on fulfillment of its pre-award policy Affected Public: First-time grant respondents can be properly assessed. (CFO–029, effective 1/17/02) that applicants or current grantees Currently, the Corporation is provides reasonable assurance that recompeting for funding. soliciting comments concerning the federal grant funds will be expended in Total Respondents: 25–30 annually. Financial Management Survey Form. ways that meet program objectives, the Frequency: One (1) time. Copies of the information collection award terms and conditions; and Average Time Per Response: 5 request can be obtained by contacting applicable federal statutes, regulations minutes. the office listed below in the ADDRESSES 1 and guidelines. The Financial Estimated Total Burden Hours: 2 ⁄2 section of this notice. Management Survey will standardize hours. DATES: Written comments must be the pre-award process and will ensure Total Burden Cost (capital/startup): submitted to the office listed in the uniform consideration of the capacity of $648.90. ADDRESSES section by April 12, 2004. potential grantees of the Corporation to Total Burden Cost (operating/ ADDRESSES: You may submit comments, manage federal funds. maintenance): None. identified by the title of the information The Financial Management Survey Comments submitted in response to collection activity, by any of the will be used for the following purposes: this notice will be summarized and/or following methods: (1) As a pre-award assessment tool of included in the request for Office of (1) By mail sent to: Corporation for the capacity of a potential grantee to Management and Budget approval of the National and Community Service, Office manage federal funds in excess of information collection request; they will of Grants Management; Attention Ms. $100,000; and also become a matter of public record.

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Dated: February 4, 2004. Authority (LRA) recipients of no-cost on Thursday, April 1, 2004, at the Peg Rosenberry, Economic Development Conveyances Institute for Defense Analyses (IDA), Director, Office of Grants Management. (EDCs) are in compliance with the and on Friday, April 2, 2004 in the [FR Doc. 04–2798 Filed 2–9–04; 8:45 am] requirement that the LRA reinvest Pentagon, Washington, DC. BILLING CODE 6050–$$–P proceeds from the use of EDC property The mission of the Committee is to for seven years. advise the Under Secretary of Defense Affected Public: State, Local or Tribal (Acquisition, Technology and Logistics) Governments; and Not-for-Profit on technology security, DEPARTMENT OF DEFENSE Institutions. counterproliferation, chemical and Annual Burden Hours: 3,160. Office of the Secretary biological defense, transformation of the Number of Respondents: 79. nuclear weapons stockpile, and other Extension of a Currently Approved Responses Per Respondent: 1. matters related to the Defense Threat Average Burden Per Response: 40 Collection; Comment Request Reduction Agency’s mission. hours. In accordance with Section 10(d) of Frequency: Annual. AGENCY: Office of the Secretary of the Federal Advisory Committee Act, Defense. SUPPLEMENTARY INFORMATION: Public Law 92–463, as amended (5 ACTION: Notice. Summary of Information Collection U.S.C. Appendix II), it has been determined that this Committee meeting Respondents are LRAs that have In compliance with Section concerns matters listed in 5 U.S.C. 3506(c)(2)(A) of the Paperwork executed no-cost EDC agreements with a Military Department that transferred 552b(c)(1), and that accordingly the Reduction Act of 1995, the Office of the meeting will be closed to the public. Deputy Under Secretary of Defense property from a closed military DATES: Thursday, April 1, 2004, (8 a.m. (Installations and Environment), Office installation. As provided by Section to 4 p.m) and Friday, April 2, 2004, (8 of Economic Adjustment announces the 2821(a)(3)(B)(i) of the National Defense a.m. to 9:30 a.m.) proposed extension of a public Authorization Act for Fiscal Year 2000 information collection and seeks public (Pub. L. 106–65), such agreements ADDRESSES: Institute for Defense comment on the provisions thereof. require that the LRA reinvest the Analyses, Board Room, 4850 Mark Comments are invited on: (a) Whether proceeds from any sale, lease or Center Drive, Alexandria, Virginia and the proposed collection of information equivalent use of EDC property (or any the USD (AT&L) Conference Room is necessary for the proper performance portion thereof) during at least the first (3D1019), the Pentagon, Washington, of the functions of the agency, including seven years after the date of the initial DC. transfer of the property to support the whether the information shall have FOR FURTHER INFORMATION CONTACT: economic redevelopment of, or related practical utility; (b) the accuracy of the Contact Lieutenant Colonel Don Culp, agency’s estimate of the burden of the to, the installation. The Secretary of Defense may recoup from the LRA such USAF, Defense Threat Reduction proposed information collection; (b) the Agency/AST, 8725 John J. Kingman accuracy of the agency’s estimate of the portion of these proceeds not used to support the economic redevelopment of, Road MS 6201, Fort Belvoir, VA 22060– burden of the proposed information 6201, Phone: (703) 767–5717. collection; (c) ways to enhance the or related to, the installation. LRA’s are Dated: February 4, 2004. quality, utility, and clarity of the subject to this same seven-year information to be collected; and (d) reinvestment requirement if their EDC L.M. Bynum, agreement is modified to reduce the ways to minimize the burden of the Alternate OSD Federal Register Liaison debt owed to the Federal Government. information collection on respondents, Officer, Department of Defense. Military Departments monitor LRA including through the use of automated [FR Doc. 04–2753 Filed 2–9–04; 8:45 am] compliance with this provision by collection techniques or other forms of BILLING CODE 5001–06–M requiring an annual financial statement information technology. certified by an independent Certified DATES: Consideration will be given to all Public Accountant. No specific form is DEPARTMENT OF DEFENSE comments received by April 12, 2004. required. ADDRESSES: Written comments and Dated: February 4, 2004. Department of the Army recommendations on the proposed L.M. Bynum, information collection should be sent to Proposed Collection; Comment Alternate OSD Federal Register Liaison Request the Director, Office of Economic Officer, Department of Defense. Adjustment, 400 Army Navy Drive, [FR Doc. 04–2754 Filed 2–9–04; 8:45 am] AGENCY: Department of the Army, DoD. Suite 200, Arlington, VA 22202–4704. BILLING CODE 5001–06–M ACTION: Notice. FOR FURTHER INFORMATION CONTACT: To request more information on this SUMMARY: In compliance with section proposed information collection or to DEPARTMENT OF DEFENSE 3506(c)(2)(A) of the Paperwork obtain a copy of the proposal, please Reduction Act of 1995, the Department write to the above address, or call the Office of the Secretary of the Army announces a proposed Director, Office of Economic public information collection and seeks Adjustment at (703) 604–6020. Threat Reduction Advisory Committee public comment on the provisions Title and OMB Number: Revitalizing AGENCY: Department of Defense, Office thereof. Comments are invited on: (a) Base Closure Communities, Economic of the Under Secretary of Defense Whether the proposed collection of Development Conveyance Annual (Acquisition, Technology and Logistics). information is necessary for the proper Financial Statement; OMB Number ACTION: Notice of advisory committee performance of the functions of the 0790–0004. meeting. agency, including whether the Needs and Uses: The information information shall have practical utility; collection requirement is necessary to SUMMARY: Threat Reduction Advisory (b) the accuracy of the agency’s estimate verify that Local Redevelopment Committee will meet in closed session of the burden of the proposed

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information collection; (c) ways to Alaska. Without the information Government as represented by the enhance the quality, utility, and clarity furnished on the ENG Form 3926 at Secretary of the Army. of the information to be collected; and least 50,000,000 tons of petroleum FOR FURTHER INFORMATION CONTACT: Mr. (d) ways to minimize the burden of the products would go unreported each Robert Rosenkrans at U.S. Army Soldier information collection on respondents, year. and Biological Chemical Command, including through the use of automated Luz D. Ortiz, Kansas Street, Natick, MA 01760, collection techniques or other forms of Phone: (508) 233–4928 or E-mail: Army Federal Register Liaison Officer. information technology. [email protected]. [FR Doc. 04–2849 Filed 2–9–04; 8:45 am] DATES: Consideration will be given to all BILLING CODE 3710–08–M SUPPLEMENTARY INFORMATION: Any comments received by April 12, 2004. licenses granted shall comply with 35 ADDRESSES: Written comments and U.S.C. 209 and 37 CFR part 404. recommendations on the proposed DEPARTMENT OF DEFENSE information collection should be sent to Luz D. Ortiz, Department of the Army, U.S. Army Department of the Army Army Federal Register Liaison Officer. Corps of Engineers, Institute for Water [FR Doc. 04–2851 Filed 2–9–04; 8:45 am] Resources, Corps of Engineers, Availability of Non-Exclusive, BILLING CODE 3710–08–M Waterborne Commerce Statistics Center, Exclusive License or Partially P.O. Box 61280, New Orleans, LA Exclusive Licensing of U.S. Patent 70161–1280, ATTN: CEWRC–NDC–C Camouflage Pattern for Sheet Material DEPARTMENT OF DEFENSE (Doug Blakemore). Consideration will be [US D485,992 S] given to all comments received within Department of the Army AGENCY: Department of the Army, DoD. 60 days of the date of publication of this ACTION: Notice. Performance Review Board notice. Membership for the U.S. Army Aviation FOR FURTHER INFORMATION CONTACT: To SUMMARY: In accordance with 37 CFR and Missile Command request more information on this 404.6, announcement is made of the AGENCY: Department of the Army, DoD. proposed information collection or to availability for licensing of U.S. Patent obtain a copy of the proposal and No. US D485,992 S entitled ACTION: Notice. associated collection instruments, ‘‘Camouflage Pattern for Sheet Material’’ SUMMARY: Notice is given of the names please write to the above address, or call issued February 3, 2004. This patent has Department of the Army Reports of members of a Performance Review been assigned to the United States Board for the Department of the Army. Clearance Officer at (703) 325–8433. Government as represented by the EFFECTIVE DATES: February 3, 2004. Title, Associated Form, and OMB Secretary of the Army. Number: Record of Arrivals and FOR FURTHER INFORMATION CONTACT: Departures of Vessels at Marine FOR FURTHER INFORMATION CONTACT: Mr. Marilyn Ervin, U.S. Army Senior Terminals, ENG Form 3926, OMB Robert Rosenkrans at U.S. Army Soldier Executive Service Office, Assistant Control Number 0710–0005. and Biological Chemical Command, Secretary of the Army, Manpower & Needs and Uses: The Corps of Kansas Street, Natick, MA 01760, Reserve Affairs, 111 Army Pentagon, Engineers uses ENG Form 3926 in Phone; (508) 233–4928 or E-mail: Washington, DC 20310–0111. [email protected]. conjunction with ENG Form 3925, SUPPLEMENTARY INFORMATION: Section 3925B, and 3925P as the basic source of SUPPLEMENTARY INFORMATION: Any 4314(c)(1) through (5) of Title 5, U.S.C., input to conduct the Waterborne licenses granted shall comply with 35 requires each agency to establish, in Commerce Statistics data collection U.S.C. 209 and 37 CFR part 404. accordance with regulations, one or program. The annual publications more Senior Executive Service Luz D. Ortiz, ‘‘Waterborne Commerce of the United performance review boards. The boards States, Parts 1–5’’ are the results of this Army Federal Register Liaison Officer. shall review and evaluate the initial program. [FR Doc. 04–2850 Filed 2–9–04; 8:45 am] appraisal of senior executives’ Affected Public: Business Or Other BILLING CODE 3710–08–M performance by supervisors and make For-Profit. recommendations to the appointing Annual burden Hours: 2,500. authority or rating official relative to the DEPARTMENT OF DEFENSE Number of Respondents: 400. performance of these executives. Responses per Respondent: 5,400. Department of the Army The members of the Performance Average Burden per Response: 5 Review Board for the U.S. Army minutes. Availability of Non-Exclusive, Aviation and Missile Command, U.S. Frequency: Monthly. Exclusive License or Partially Army Materiel Command are: SUPPLEMENTARY INFORMATION: The Corps Exclusive Licensing of U.S. Patent 1. Major General John Doesburg, of Engineers uses ENG Form 3926 as a Camouflage Pattern for Sheet Material Commanding General, U.S. Army quality control instrument by comparing [US D485,685 S] Research, Development and Engineering the data collected on the Corps Vessel (RDE) Command, Aberdeen Proving Operation Report with that collected on AGENCY: Department of the Army, DoD. Ground, MD. 3926. The information is voluntarily ACTION: Notice. 2. Mr. Jerry Chapin, Deputy to the submitted by the respondents to assist Commander, U.S. Army Tank- the Waterborne Commerce Statistics SUMMARY: In accordance with 37 CFR automotive & Armaments Command, Center in the identification of vessel 404.6, announcement is made of the Warren, MI. operators who fail to report significant availability for licensing of U.S. Patent 3. Dr. James Chang, Director, Army vessel moves and tonnage. This No. US D485,685 S entitled Research Office, Research Triangle Park, information is invaluable in ‘‘Camouflage Pattern for Sheet Material’’ NC. documenting the movement of issued January 27, 2004. This patent has 4. Mr. Michael A. Parker, Deputy to petroleum products out of Valdez, been assigned to the United States the Commander, U.S. Army Soldier &

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Biological Chemical Command, requests to OMB. Each proposed should be directed to Kathy Axt at her Aberdeen Proving Ground, MD. information collection, grouped by e-mail address [email protected]. 5. Ms. Barbara A. Leiby, Deputy Chief office, contains the following: (1) Type Individuals who use a of Staff for Resource Management, of review requested, e.g. new, revision, telecommunications device for the deaf Headquarters, U.S. Army Materiel extension, existing or reinstatement; (2) (TDD) may call the Federal Information Command, Fort Belvoir, VA. title; (3) summary of the collection; (4) Relay Service (FIRS) at 1–800–877– 6. Ms. Sue L Baker, Principal Deputy description of the need for, and 8339. for G–3 Operations, Headquarters, U.S. proposed use of, the information; (5) [FR Doc. 04–2755 Filed 2–9–04; 8:45 am] Army Materiel Command, Fort Belvoir, respondents and frequency of VA. collection; and (6) reporting and/or BILLING CODE 4000–01–P 7. Ms. Grace M. Bochenek, Vice recordkeeping burden. OMB invites President for Research, Tank- public comment. DEPARTMENT OF ENERGY Automotive Research, Development and Dated: February 4, 2004. Engineering Center, Warren, MI. Angela C. Arrington, Environmental Management Site- Luz D. Ortiz, Leader, Regulatory Information Management Specific Advisory Board, Fernald Group, Office of the Chief Information Officer. Army Federal Register Liaison Officer. AGENCY: Department of Energy. [FR Doc. 04–2847 Filed 2–9–04; 8:45 am] Office of the Chief Financial Officer ACTION: Notice of open meeting. BILLING CODE 3710–08–M Type of Review: Extension. Title: Streamlined Clearance Process SUMMARY: This notice announces a for Discretionary Grant Information meeting of the Environmental DEPARTMENT OF EDUCATION Collections. Management Site-Specific Advisory Frequency: Annually. Board (EM SSAB), Fernald. The Federal Submission for OMB Review; Affected Public: Individuals or Advisory Committee Act (Pub. L. 92– Comment Request household; businesses or other for- 463, 86 Stat. 770) requires that public profit; not-for-profit institutions; State, notice of these meetings be announced AGENCY: Department of Education. local, or tribal gov’t, SEAs or LEAs. in the Federal Register. SUMMARY: The Leader, Regulatory Reporting and Recordkeeping Hour DATES: Wednesday, February 18, 2004; 6 Information Management Group, Office Burden: Responses: 1.—Burden Hours: p.m.–9 p.m. of the Chief Information Officer invites 1. ADDRESSES: comments on the submission for OMB Abstract: The information collection Fernald Closure Project review as required by the Paperwork plan provides the U.S. Department of Site, 7400 Willey Road, Trailer 214, Reduction Act of 1995. Education with the option of submitting Hamilton, OH 45013–9402. DATES: Interested persons are invited to its discretionary grant information FOR FURTHER INFORMATION CONTACT: submit comments on or before March collections through a streamlined Doug Sarno, The Perspectives Group, 11, 2004. Paperwork Reduction Act clearance Inc., 1055 North Fairfax Street, Suite 204, Alexandria, VA 22314, at (703) ADDRESSES: Written comments should process which do not fit under the Generic Application (1890–0009). This 837–1197, or e-mail; be addressed to the Office of [email protected]. Information and Regulatory Affairs, streamlined clearance process will begin Attention: Melanie Kadlic, Desk Officer, when the Department submits the SUPPLEMENTARY INFORMATION: Department of Education, Office of information collection to the OMB and, Purpose of the Board: The purpose of Management and Budget, 725 17th at the same time, publishes a 30-day the Board is to make recommendations Street, NW., Room 10235, New public comment period notice in the to DOE in the areas of environmental Executive Office Building, Washington, Federal Register. OMB will then have restoration, waste management, and DC 20503 or should be electronically 60 days after the start of the public related activities. comment period to reach a decision on mailed to the Internet address Tentative Agenda [email protected]. the information collection. Requests for copies of the submission 6 p.m.—Call to Order SUPPLEMENTARY INFORMATION: Section for OMB review; comment request may 6–6:30 p.m.—Chair’s Remarks, Ex 3506 of the Paperwork Reduction Act of be accessed from http:// Officio Announcements and 1995 (44 U.S.C. chapter 35) requires that edicsweb.ed.gov, by selecting the Updates the Office of Management and Budget ‘‘Browse Pending Collections’’ link and 6:30–8:15 p.m.—Discuss Groundwater (OMB) provide interested Federal by clicking on link number 2421. When Treatment Alternatives agencies and the public an early you access the information collection, —Review Options Presented in opportunity to comment on information click on ‘‘Download Attachments’’ to January collection requests. OMB may amend or view. Written requests for information —Evaluate and Compare Options waive the requirement for public should be addressed to Vivian Reese, —Discuss Other Potential Alternatives consultation to the extent that public Department of Education, 400 Maryland 8:15–8:45 p.m.—Update on Stewardship participation in the approval process Avenue, SW., Room 4050, Regional Issues would defeat the purpose of the Office Building 3, Washington, DC —Request for Recommendation on information collection, violate State or 20202–4651 or to the e-mail address Artifacts and Photographic Federal law, or substantially interfere [email protected]. Requests may also Resources with any agency’s ability to perform its be electronically mailed to the Internet —Use of Existing Buildings for statutory obligations. The Leader, address [email protected] or faxed to Education Facility Regulatory Information Management 202–708–9346. Please specify the —8:45–9 p.m.—Public Comment Group, Office of the Chief Information complete title of the information —9 p.m. Adjourn Officer, publishes that notice containing collection when making your request. Public Participation: The meeting is proposed information collection Comments regarding burden and/or open to the public. Written statements requests prior to submission of these the collection activity requirements may be filed with the Board chair either

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before or after the meeting. Individuals technical information. The conference DEPARTMENT OF ENERGY who wish to make oral statements has been scheduled for February 18, pertaining to agenda items should 2004, at 10 a.m. in Hearing Room No. Federal Energy Regulatory contact the Board chair at the address or 4 at the offices of the Federal Energy Commission telephone number listed below. Regulatory Commission, 888 First Requests must be received five days Street, NE., Washington, DC 20426. [Docket No. RP04–119–001] prior to the meeting and reasonable All parties to this proceeding may provision will be made to include the Dominion Transmission, Inc.; Notice of attend. presentation in the agenda. The Deputy Compliance Filing Designated Federal Officer, Gary For further information, please Stegner, Public Affairs Office, Ohio contact Heidi Gruner at February 3, 2004. Field Office, U.S. Department of Energy, [email protected]. Take notice that on January 28, 2004, is empowered to conduct the meeting in Dominion Transmission, Inc. (DTI) a fashion that will facilitate the orderly Magalie R. Salas, tendered for filing as part of its FERC conduct of business. Each individual Secretary. Gas Tariff, Third Revised Volume No. 1, wishing to make public comment will [FR Doc. E4–223 Filed 2–9–04; 8:45 am] Substitute Original Sheet No. 1504, be provided a maximum of five minutes BILLING CODE 6717–01–P to present their comments. This Federal effective January 22, 2004. Register notice is being published less DTI states that the purpose of this than 15 days prior to the meeting date DEPARTMENT OF ENERGY filing is to comply with the due to programmatic issues that had to Commission’s Order issued in the be resolved prior to the meeting date. Federal Energy Regulatory captioned docket on January 22, 2004, Minutes: The minutes of this meeting Commission which accepted, subject to conditions, will be available for public review and tariff sheets filed by DTI on December copying at the Freedom of Information [Docket Nos. RP04–65–000 and RP04–99– 23, 2003 authorizing the sale of excess Public Reading Room, 1E–190, Forrestal 000] gas that it has obtained through system Building, 1000 Independence Avenue, operations and wishes to remove from SW., Washington, DC, 20585, between 9 Indicated Shippers v. ANR Pipeline its system for operational purposes. a.m. and 4 p.m., Monday–Friday, except Company and Indicated Shippers v. Any person desiring to protest said Federal holidays. Minutes will also be Tennessee Gas Pipeline Company; filing should file a protest with the available by writing to the Fernald Notice of Technical Conference Citizens’ Advisory Board, Phoenix Federal Energy Regulatory Commission, Environmental Corporation, MS–76, February 3, 2004. 888 First Street NE., Washington, DC Post Office Box 538704, Cincinnati, OH 20426, in accordance with section Take notice that on February 24, 2004, 43253–8704, or by calling the Advisory 385.211 of the Commission’s Rules and a conference will be held to discuss gas Board at (513) 648–6478. Regulations. All such protests must be quality standards on ANR Pipeline filed in accordance with section 154.210 Issued at Washington, DC on February 5, Company (ANR) and Tennessee Gas 2004. of the Commission’s Regulations. Pipeline Company (Tennessee). The Rachel Samuel, Protests will be considered by the conference will be held at the offices of Deputy Advisory Committee Management Commission in determining the the Federal Energy Regulatory Officer. appropriate action to be taken, but will Commission, 888 First Street, NE., [FR Doc. 04–2804 Filed 2–9–04; 8:45 am] not serve to make protestants parties to Washington, DC 20426 in a room to be BILLING CODE 6450–01–P the proceedings. This filing is available designated at a later date. The first for review at the Commission in the session will be from 8:30 a.m. to 12:30 Public Reference Room or may be p.m. on the ANR system. The second DEPARTMENT OF ENERGY viewed on the Commission’s Web site at session will be from 1:30 p.m. to 5:30 http://www.ferc.gov using the eLibrary Federal Energy Regulatory p.m. on the Tennessee system. Commission link. Enter the docket number excluding The technical conference is intended the last three digits in the docket [Docket No. EL02–126–000] to assist the pipelines and their number field to access the document. customers to establish gas quality For assistance, please contact FERC City of Corona, California v. Southern standards on the pipelines’ systems. California Edison Company; Notice of Online Support at Technical Conference Questions about the conference [email protected] or toll- should be directed to: Keith Pierce, free at (866) 208–3676, or TTY, contact February 3, 2004. Office of Markets, Tariffs, and Rates, 888 (202) 502–8659. The Commission In an order issued on January 28, First Street NE., Washington, DC 20426, strongly encourages electronic filings. 2004,1 the Commission directed that a (202) 502–8525, [email protected]. See, 18 CFR 385.2001(a)(1)(iii) and the technical conference be held to discuss instructions on the Commission’s Web the technical information needed for the Magalie R. Salas, site under the e-Filing link. Commission to establish the terms and Secretary. conditions under which Southern [FR Doc. E4–234 Filed 2–9–04; 8:45 am] Magalie R. Salas, California Edison Company’s system BILLING CODE 6717–01–P Secretary. will be physically interconnected with [FR Doc. E4–227 Filed 2–9–04; 8:45 am] the City of Corona, California. BILLING CODE 6717–01–P The Commission Staff will convene a technical conference to discuss this

1 City of Corona, California.

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DEPARTMENT OF ENERGY DEPARTMENT OF ENERGY DEPARTMENT OF ENERGY

Federal Energy Regulatory Federal Energy Regulatory Federal Energy Regulatory Commission Commission Commission

[Docket No. RP04–109–001] [Docket No. RP99–518–055] [Docket No. RP02–361–022]

Eastern Shore Natural Gas Company; Gas Transmission Northwest Gulfstream Natural Gas System, L.L.C.; Notice of Compliance Filing Corporation; Notice of Negotiated Notice of Negotiated Rates Rates February 3, 2004. February 3, 2004. February 3, 2004. Take notice that on January 30, 2004, Take notice that on January 29, 2004, Take notice that on January 30, 2004, Eastern Shore Natural Gas Company Gulfstream Natural Gas System, L.L.C. Gas Transmission Northwest (Eastern Shore) tendered for filing as (Gulfstream) tendered for filing as part Corporation (GTN) tendered for filing to of its FERC Gas Tariff, Original Volume part of its FERC Gas Tariff, Second be part of its FERC Gas Tariff, Third No. 1, Fifth Revised Sheet No. 8 and Revised Volume No. 1, the following Revised Volume No. 1–A, Fifth Revised Original Sheet No. 8S, reflecting an revised tariff sheets proposed to be Sheet No. 15. effective January 16, 2004 : effective date of February 1, 2004. GTN states that this sheet is being Third Revised Tariff Sheet No. 217 filed to reflect the continuation of a Gulfstream states that this filing is Third Revised Tariff Sheet No. 221 negotiated rate agreement pursuant to being made to implement a negotiated evergreen provisions contained in the rate transaction under Rate Schedule Eastern Shore states that the purpose agreement. GTN requests that the FTS pursuant to Section 31 of the of this filing is to comply with the Commission accept the proposed tariff General Terms and Conditions of Commission’s Order issued on January sheet to become effective February 1, Gulfstream’s FERC Gas Tariff. 15, 2004 in this proceeding. The 2004. Gulfstream states that copies of its Commission directed Eastern Shore to GTN further states that a copy of this filing have been mailed to all affected make certain clarifications regarding its filing has been served on GTN’s customers and interested state tariff language within fifteen days of its jurisdictional customers and interested commissions. order. state regulatory agencies. Any person desiring to be heard or to Any person desiring to protest said Any person desiring to be heard or to protest said filing should file a motion filing should file a protest with the protest said filing should file a motion to intervene or a protest with the Federal Energy Regulatory Commission, to intervene or a protest with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, in accordance with section 888 First Street NE., Washington, DC 20426, in accordance with sections 385.211 of the Commission’s Rules and 20426, in accordance with sections 385.214 or 385.211 of the Commission’s Regulations. All such protests must be 385.214 or 385.211 of the Commission’s Rules and Regulations. All such motions filed in accordance with section 154.210 Rules and Regulations. All such motions or protests must be filed in accordance of the Commission’s Regulations. or protests must be filed in accordance with section 154.210 of the Protests will be considered by the with section 154.210 of the Commission’s Regulations. Protests will Commission in determining the Commission’s Regulations. Protests will be considered by the Commission in appropriate action to be taken, but will be considered by the Commission in determining the appropriate action to be not serve to make protestants parties to determining the appropriate action to be taken, but will not serve to make the proceedings. This filing is available taken, but will not serve to make protestants parties to the proceedings. for review at the Commission in the protestants parties to the proceedings. Any person wishing to become a party Public Reference Room or may be Any person wishing to become a party must file a motion to intervene. This must file a motion to intervene. This viewed on the Commission’s Web site at filing is available for review at the filing is available for review at the http://www.ferc.gov using the eLibrary Commission in the Public Reference Commission in the Public Reference link. Enter the docket number excluding Room or may be viewed on the Room or may be viewed on the Commission’s Web site at http:// the last three digits in the docket Commission’s Web site at http:// www.ferc.gov using the eLibrary. Enter number field to access the document. www.ferc.gov using the eLibrary. Enter For assistance, please contact FERC the docket number excluding the last the docket number excluding the last Online Support at three digits in the docket number field three digits in the docket number field [email protected] or toll- to access the document. For assistance, to access the document. For assistance, free at (866) 208–3676, or TTY, contact please contact FERC Online Support at please contact FERC Online Support at (202) 502–8659. The Commission [email protected] or toll- [email protected] or toll- strongly encourages electronic filings. free at (866) 208–3676, or TTY, contact free at (866) 208–3676, or TTY, contact See, 18 CFR 385.2001(a)(1)(iii) and the (202) 502–8659. The Commission (202) 502–8659. The Commission instructions on the Commission’s web strongly encourages electronic filings. strongly encourages electronic filings. site under the e-Filing link. See, 18 CFR 385.2001(a)(1)(iii) and the See, 18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission’s Web instructions on the Commission’s Web Magalie R. Salas, site under the e-Filing link. site under the eFiling link. Secretary. Magalie R. Salas, [FR Doc. E4–226 Filed 2–9–04; 8:45 am] Magalie R. Salas, Secretary. Secretary. BILLING CODE 6717–01–P [FR Doc. E4–222 Filed 2–9–04; 8:45 am] [FR Doc. E4–225 Filed 2–9–04; 8:45 am] BILLING CODE 6717–01–P BILLING CODE 6717–01–P

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DEPARTMENT OF ENERGY DEPARTMENT OF ENERGY instructions on the Commission’s web site under the e-Filing link. Federal Energy Regulatory Federal Energy Regulatory Magalie R. Salas, Commission Commission Secretary. [Docket No. RP96–272–051] [FR Doc. E4–228 Filed 2–9–04; 8:45 am] [Docket No. RP04–145–000] Northern Natural Gas Company; Notice BILLING CODE 6717–01–P of Negotiated Rates Northwest Pipeline Corporation; Notice of Proposed Changes In FERC Gas DEPARTMENT OF ENERGY February 3, 2004. Tariff And Filing of Non-Conforming Take notice that on January 29, 2004, Service Agreements Northern Natural Gas Company Federal Energy Regulatory Commission (Northern) tendered for filing to become February 3, 2004. part of its FERC Gas Tariff, Fifth Revised [Docket No. RP04–147–000] Take notice that on January 28, 2004, Volume No. 1, 32 Revised Sheet No. 66 Northwest Pipeline Corporation and Sheet No. 66A, proposed to be Panhandle Eastern Pipe Line (Northwest) tendered for filing and effective on February 1, 2004. Company, LLC; Notice of Proposed Northern states that the above sheets acceptance two Rate Schedule TF–1 Changes in FERC Gas Tariff are being filed to implement a specific non-conforming service agreements. February 3, 2004. negotiated rate transaction with Spirit Northwest is also requesting as part of Take notice that on January 30, 2004, Lake Ethanol, LLC. in accordance with its FERC Gas Tariff, Third Revised Panhandle Eastern Pipe Line Company, the Commission’s Policy Statement on Volume No. 1, First Revised Sheet No. LLC (Panhandle) tendered for filing as Alternatives to Traditional Cost-of- 371, to be effective February 28, 2004. part of its FERC Gas Tariff, Second Service Ratemaking for Natural Gas Northwest states that the purpose of Revised Volume No. 1, the following this filing is to submit two Rate Pipelines. Northern further states that in revised tariff sheets to become effective Schedule TF–1 service agreements addition, this filing deletes certain March 1, 2004: transactions that have terminated. containing receiving party provisions Northern states that copies of the that do not conform to the Rate First Revised Sheet No. 226 filing have been mailed to each of its Schedule TF–1 form of service First Revised Sheet No. 227 customers and interested State agreement contained in Northwest’s First Revised Sheet No. 228 Commissions. tariff, and to add these agreements to the Panhandle states that this filing is Any person desiring to be heard or to list of non-conforming service being made to remove the five year protest said filing should file a motion agreements in Northwest’s tariff. matching cap from the right of first refusal (ROFR) provisions in section 7.2 to intervene or a protest with the Northwest states that a copy of this of the General Terms and Conditions of Federal Energy Regulatory Commission, filing has been served upon Northwest’s Panhandle’s tariff and to clarify its 888 First Street, NE., Washington, DC customers and interested state rights to allow a shipper and Panhandle 20426, in accordance with sections regulatory commissions. 385.214 or 385.211 of the Commission’s to agree to a ROFR when an agreement Rules and Regulations. All such motions Any person desiring to be heard or to might not otherwise be eligible for such or protests must be filed in accordance protest said filing should file a motion rights. with section 154.210 of the to intervene or a protest with the Panhandle further states that copies of Commission’s Regulations. Protests will Federal Energy Regulatory Commission, this filing are being served on all be considered by the Commission in 888 First Street, NE., Washington, DC affected customers and applicable state determining the appropriate action to be 20426, in accordance with sections regulatory agencies. taken, but will not serve to make 385.214 or 385.211 of the Commission’s Any person desiring to be heard or to protestants parties to the proceedings. Rules and Regulations. All such motions protest said filing should file a motion Any person wishing to become a party or protests must be filed in accordance to intervene or a protest with the must file a motion to intervene. This with section 154.210 of the Federal Energy Regulatory Commission, filing is available for review at the Commission’s Regulations. Protests will 888 First Street, NE., Washington, DC Commission in the Public Reference be considered by the Commission in 20426, in accordance with sections Room or may be viewed on the determining the appropriate action to be 385.214 or 385.211 of the Commission’s Commission’s Web site at http:// taken, but will not serve to make rules and regulations. All such motions www.ferc.gov using the eLibrary. Enter protestants parties to the proceedings. or protests must be filed in accordance the docket number excluding the last Any person wishing to become a party with section 154.210 of the three digits in the docket number field must file a motion to intervene. This Commission’s regulations. Protests will to access the document. For assistance, filing is available for review at the be considered by the Commission in please contact FERC Online Support at Commission in the Public Reference determining the appropriate action to be [email protected] or toll- Room or may be viewed on the taken, but will not serve to make free at (866) 208–3676, or TTY, contact Commission’s Web site at http:// protestants parties to the proceedings. (202) 502–8659. The Commission www.ferc.gov using the eLibrary. Enter Any person wishing to become a party strongly encourages electronic filings. the docket number excluding the last must file a motion to intervene. This See, 18 CFR 385.2001(a)(1)(iii) and the three digits in the docket number field filing is available for review at the instructions on the Commission’s Web to access the document. For assistance, Commission in the Public Reference site under the e-Filing link. please contact FERC Online Support at Room or may be viewed on the [email protected] or toll- Commission’s Web site at http:// Magalie R. Salas, free at (866) 208–3676, or TTY, contact www.ferc.gov using the eLibrary. Enter Secretary. (202) 502–8659. The Commission the docket number excluding the last [FR Doc. E4–235 Filed 2–9–04; 8:45 am] strongly encourages electronic filings. three digits in the docket number field BILLING CODE 6717–01–P See, 18 CFR 385.2001(a)(1)(iii) and the to access the document. For assistance,

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please contact FERC Online Support at to access the document. For assistance, Boulevard, Suite 1510, Long Beach, CA [email protected] or toll- please contact FERC Online Support at 90802; Telephone: (562) 495–9885. free at (866) 208–3676, or TTY, contact [email protected] or toll- In June 2003, SES requested the use (202) 502–8659. The Commission free at (866) 208–3676, or TTY, contact of the National Environmental Policy strongly encourages electronic filings. (202) 502–8659. The Commission Act (NEPA) Pre-filing Process offered by See 18 CFR 385.2001(a)(1)(iii) and the strongly encourages electronic filings. Commission Staff to begin the instructions on the Commission’s Web See 18 CFR 385.2001(a)(1)(iii) and the environmental review of SES’s intention site under the e-Filing link. instructions on the Commission’s Web to request authority to site, construct site under the e-Filing link. and operate its LNG import terminal. Magalie R. Salas, The purpose of the NEPA Pre-filing Secretary. Magalie R. Salas, Process is to encourage the early [FR Doc. E4–230 Filed 2–9–04; 8:45 am] Secretary. involvement of interested stakeholders, BILLING CODE 6717–01–P [FR Doc. E4–233 Filed 02–09–04; 8:45 am] facilitate interagency cooperation, and BILLING CODE 6717–01–P identify and resolve issues before an application was filed with the DEPARTMENT OF ENERGY Commissions. On July 11, 2003, the DEPARTMENT OF ENERGY Federal Energy Regulatory Commission Staff granted SES’s request, Commission Federal Energy Regulatory and at the same time announced that the Commission Port of Long Beach will be the lead [Docket No. RP04–151–000] agency for review of the project pursuant to the California Panhandle Eastern Pipe Line [Docket No. CP04–58–000] Environmental Quality Act, and that the Company, Notice of Proposed two agencies will produce a joint Sound Energy Solutions; Notice Of Changes In FERC Gas Tariff Environmental Impact Statement/ Application February 3, 2004. Environmental Impact Report and Take notice that on January 30, 2004, February 2, 2004. Application Summary Report (ASR) 1 Panhandle Eastern Pipe Line Company, Take notice that on January 26, 2004, (EIS/EIR/ASR). LLC (Panhandle) tendered for filing as Sound Energy Solutions (SES); 301 East Then on September 22, 2003, the part of its FERC Gas Tariff, Second Ocean Boulevard, Suite 1510, Long Commission and the Port of Long Beach Revised Volume No. 1, the revised tariff Beach, California 90802, filed an issued a Notice of Intent to Prepare a sheets listed in Appendix A attached to application pursuant to Section 3(a) of Joint Environmental Impact Statement the filing, to become effective March 1, the Natural Gas Act and part 153 of the and Notice of Preparation of Joint 2004. Commission’s regulations, seeking Environmental Impact Report. That Panhandle states that this filing is authorization to site, construct and notice announced the opening of the being made to add an additional operate a liquefied natural gas (LNG) scoping process that was used by the discount category to the forms of service terminal located in the Port of Long Commission Staff and the Port of Long agreement for transportation and storage Beach, Los Angeles County, California Beach to gather input from the public services. Panhandle proposes to offer its for the purpose of importing LNG into and interested agencies on the project to shippers a fluctuating index-based or the United States. SES also requests help determine which issues need to be formula rate for discounted transactions. approval of the Long Beach terminal as evaluated in the EIS/EIR/ASR. Please Panhandle further states that copies of the place of entry for the imported LNG note that the initial EIS/EIR/ASR this filing are being served on all under Section 3. SES requests that the scoping period closed on October 30, affected customers and applicable state Commission issue a final order on their 2003. Later, on November 10, 2003, the regulatory agencies. application by October 20, 2004. SES Port of Long Beach issued a Any person desiring to be heard or to states that this proposed regulatory supplemental scoping notice and protest said filing should file a motion schedule will enable it to commence received additional comments through to intervene or a protest with the construction activities in the fourth December 12, 2003 on project Federal Energy Regulatory Commission, quarter of 2004, and meet an in-service information that was not initially 888 First Street, NE., Washington, DC date in 2008. available. Now, as of the filing of SES’s 20426, in accordance with sections This application is on file with the application on January 26, 2004, the 385.214 or 385.211 of the Commission’s Commission and open to public NEPA Pre-filing Process for SES’s rules and regulations. All such motions inspection. It is available for review at project is also closed. or protests must be filed in accordance the Commission in the Public Reference SES says that its proposed LNG with section 154.210 of the Room or may be viewed on the import terminal is designed to import Commission’s regulations. Protests will Commission’s Web site at http:// LNG from Asia and elsewhere abroad to be considered by the Commission in www.ferc.gov using the ‘‘eLibrary’’ link. the United States for sale in California’s determining the appropriate action to be Enter the docket number excluding the non-core natural gas markets, and to taken, but will not serve to make last three digits in the docket number provide liquid vehicle fuel to customers protestants parties to the proceedings. field to access the document. For in the Los Angeles Basin. SES’s LNG Any person wishing to become a party assistance, please contact FERC Online import terminal will receive LNG from must file a motion to intervene. This Support at ocean-going tankers, temporarily store it filing is available for review at the [email protected] or toll in its liquid state, and then vaporize the Commission in the Public Reference free at (866) 208–3676, or for TTY, LNG for transport via a new natural gas Room or may be viewed on the contact (202) 502–8659. Any initial pipeline to be constructed, owned, and Commission’s Web site at http:// questions regarding these applications 1 The NEPA pre-filing docket at the Commission www.ferc.gov using the eLibrary. Enter should be directed to Ms. Tetsuko was PF03–06–000, and the related Port of Long the docket number excluding the last Egawa, Assistant Director, Development, Beach proceeding is designated POLB Application three digits in the docket number field Sound Energy Solutions, 301 East Ocean No. HDP 03–079.

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operated by a third party. This 2.3 mile Commission’s Rules of Practice and additional comments on or before the pipeline will connect with the Southern Procedure (18 CFR 385.214 or 385.211) below listed comment date. California Gas Company’s existing and the Regulations under the NGA (18 Environmental commenters will not be pipeline system at its Salt Work’s CFR 157.10). A person obtaining party required to serve copies of filed Station, Line 765. The vaporized LNG status will be placed on the service list documents on all other parties. will be sent out from SES’s LNG import maintained by the Secretary of the However, environmental commenters terminal at an average rate of 700,000 Commission and will receive copies of are also not parties to the proceeding Mcf per day, with a peak capacity of all documents filed by the applicant and and will not receive copies of all 1,000,000 Mcf per day, or 1 Bcf per day. by all other parties. A party must submit documents filed by other parties or non- Some of the LNG will not be 14 copies of this filing and all environmental documents issued by the vaporized, but will be sold as liquid subsequent filings made with the Commission. They will not have the vehicle fuel for LNG vehicles in the Port Commission and must mail a copy of all right to seek court review of any final of Long Beach and other vehicle fleets filing to the applicant and to every other order by Commission in this in the Los Angeles Basin. The LNG party in the proceeding. Only parties to proceeding. liquid fuel will be delivered from SES’s the proceeding can ask for court review Motions to intervene, protests and LNG import terminal by truck to LNG of Commission orders in the proceeding. comments may be filed electronically fueling station(s) or directly to vehicles The parties listed in Appendix A of via the internet in lieu of paper; see, 18 via a mobile fueling vehicle. this notice ‘‘filed’’ motions to intervene CFR 385.2001(a)(1)(iii) and the In order to import the LNG supplies in the NEPA Pre-filing Process, Docket instructions on the Commission’s web for sale to natural gas and vehicle fuel No. PF03–06–000. The filing of those site under the ‘‘e-Filing’’ link. The markets, SES requests Commission motions was inappropriate in the NEPA Commission strongly encourages authorization to construct, install, and Pre-filing Process and were not electronic filings. Electronic filing operate the following facilities : requested in the September 22, 2003, eliminates the burden of filing original • An LNG ship berth with LNG NEPA Notice of Intent. In spite of the and 14 copies of paper filings with the unloading arms; foregoing and in this instance, the Commission, but does not change the • Two full containment LNG Commission will carry-over the motions Commission’s requirement of service of receiving tanks, each with a gross liquid to intervene ‘‘filed’’ in Docket No. filings on other parties to the volume of 160,000 cubic meters PF03–06–000 into the proceeding proceeding, see, 18 CFR 385.2010. (1,006,000 barrels), the regasified herein, Sound Energy Solutions, Docket Comment Date: February 23, 2004. equivalent of 3.5 Bcf; No. CP04–58–000. Thus, those parties • Various LNG pumping equipment; need not refile their motions to Magalie R. Salas, • Three direct-fired shell and tube intervene at this time, but may file Secretary. vaporizers each sized for 350,000 Mcf additional comments on or before the Appendix A per day; below listed comment date. • Three boil-off gas compressors and However, other persons do not have Filing Date Party associated condensing system; to intervene in order to have comments • Natural gas liquids recovery system, considered. The second way to 12/10/2003 ...... CAlifornians for Re- including storage facilities; participate is by filing with the newable Energy, Inc. • LNG trailer truck loading facility, Secretary of the Commission, as soon as 11/20/2003 ...... Kern River Gas Trans- with a dedicated LNG vehicle fuel possible, an original and two copies of mission Company storage tank with a capacity of 3,800 comments in support of or in opposition 11/10/2003 ...... Union Oil Company of cubic meters (23,901 barrels) of vehicle to this project. The Commission will California 10/29/2003 ...... California Public Utili- quality LNG; consider these comments in • ties Commission Various metering, odorizing determining the appropriate action to be 10/24/2003 ...... ConocoPhillips Com- utilities, buildings, and service taken, but the filing of a comment alone pany facilities; and, will not serve to make the filer a party 10/8/2003 ...... BHP Billiton LNG Inter- • Associated hazard detection, to the proceeding. The Commission’s national Inc. control and prevention systems, rules require that persons filing 10/8/2003 ...... Freeport LNG Develop- cryogenic piping and insulation, comments in opposition to this project ment, L.P. electrical and instrumentation systems. provide copies of their protests only to Note: Shell NA LNG, LLC filed a All components will be constructed in the party or parties directly involved in Motion to Intervene on 9/26/2003, but accordance with governing Federal and the protest. withdrew its motion on 10/3/2003. State regulations, including 33 CFR part Persons may also wish to comment [FR Doc. E4–236 Filed 2–9–04; 8:45 am] 127 for marine facilities, 49 CFR part further only on the environmental BILLING CODE 6717–01–P 193, and National Fire Protection review of this project. Environmental Association Standard 59A for LNG commenters will be placed on the facilities and the codes and standards Commission’s environmental mailing DEPARTMENT OF ENERGY referenced therein. list, will receive copies of There are two ways to become environmental documents issued by the Federal Energy Regulatory involved in the Commission’s review of Commission, and will be notified of Commission this project. First, any person wishing to meetings associated with the obtain legal status by becoming a party Commission’s environmental review [Docket No. RP04–148-000] to the proceedings for this project process. Those persons, organizations, Southern LNG Inc.; Notice of Proposed should, on or before the comment date and agencies who submitted comments Changes to FERC Gas Tariff listed below, file with the Federal during the NEPA Pre-filing Process in Energy Regulatory Commission, 888 Docket No. PF03–06–000 are already on February 3, 2004. First Street NE., Washington, DC 20426, the Commission Staff’s environmental Take notice that on January 30, 2004, a motion to intervene in accordance mailing list for the proceeding in this Southern LNG Inc. (SLNG) tendered for with the requirements of the docket, CP04–58–000 and may file filing as part of its FERC Gas Tariff,

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Original Volume No. 1, Eighth Revised proposed to become effective March 1, billing period November 1, 2002, Sheet No. 5 and Eighth Revised Sheet 2004. through October 31, 2003, in accordance No. 6, to be effective March 1, 2004. Southwest states that the purpose of with its tariff. Texas Gas states that there SLNG states that the revised sheets this filing, made in accordance with the is no rate impact to customers as a result track maintenance costs associated with provisions of section 154.204 of the of this filing. the turning basin and berths for ships Commission’s regulations, is to update Texas Gas states that the filing has calling on the LNG import terminal on Southwest’s tariff by removing or been served upon Texas Gas’ Elba Island, Georgia. SLNG states that revising provisions that have expired, to jurisdictional customers and interested the Commission approved the tracker as update certain provisions and to make state commissions. part of a settlement in Docket No. RP02– minor modifications and corrections. Any person desiring to be heard or to 129. Southwest further states that copies of protest said filing should file a motion Any person desiring to be heard or to this filing are being served on all to intervene or a protest with the protest said filing should file a motion affected customers and applicable State Federal Energy Regulatory Commission, to intervene or a protest with the regulatory agencies. 888 First Street, NE., Washington, DC Federal Energy Regulatory Commission, Any person desiring to be heard or to 20426, in accordance with sections 888 First Street, NE., Washington, DC protest said filing should file a motion 385.214 or 385.211 of the Commission’s 20426, in accordance with sections to intervene or a protest with the rules and regulations. All such motions 385.214 or 385.211 of the Commission’s Federal Energy Regulatory Commission, or protests must be filed on or before the rules and regulations. All such motions 888 First Street, NE., Washington, DC date as indicated below . Protests will or protests must be filed in accordance 20426, in accordance with sections be considered by the Commission in with section 154.210 of the 385.214 or 385.211 of the Commission’s determining the appropriate action to be Commission’s regulations. Protests will rules and regulations. All such motions taken, but will not serve to make be considered by the Commission in or protests must be filed in accordance protestants parties to the proceedings. determining the appropriate action to be with section 154.210 of the Any person wishing to become a party taken, but will not serve to make Commission’s regulations. Protests will must file a motion to intervene. This protestants parties to the proceedings. be considered by the Commission in filing is available for review at the Any person wishing to become a party determining the appropriate action to be Commission in the Public Reference must file a motion to intervene. This taken, but will not serve to make Room or may be viewed on the filing is available for review at the protestants parties to the proceedings. Commission’s Web site at http:// Commission in the Public Reference Any person wishing to become a party www.ferc.gov using the eLibrary. Enter Room or may be viewed on the must file a motion to intervene. This the docket number excluding the last Commission’s Web site at http:// filing is available for review at the three digits in the docket number field www.ferc.gov using the eLibrary. Enter Commission in the Public Reference to access the document. For assistance, the docket number excluding the last Room or may be viewed on the please contact FERC Online Support at three digits in the docket number field Commission’s Web site at http:// [email protected] or toll- to access the document. For assistance, www.ferc.gov using the eLibrary. Enter free at (866) 208–3676, or TTY, contact please contact FERC Online Support at the docket number excluding the last (202) 502–8659. The Commission [email protected] or toll- three digits in the docket number field strongly encourages electronic filings. free at (866) 208–3676, or TTY, contact to access the document. For assistance, See 18 CFR 385.2001(a)(1)(iii) and the (202) 502–8659. The Commission please contact FERC Online Support at instructions on the Commission’s Web strongly encourages electronic filings. [email protected] or toll- site under the e-Filing link. See 18 CFR 385.2001(a)(1)(iii) and the free at (866) 208–3676, or TTY, contact Comment Date: February 10, 2004. (202) 502–8659. The Commission instructions on the Commission’s Web Magalie R. Salas, site under the e-Filing link. strongly encourages electronic filings. See 18 CFR 385.2001(a)(1)(iii) and the Secretary. Magalie R. Salas, instructions on the Commission’s Web [FR Doc. E4–232 Filed 2–9–04; 8:45 am] Secretary. site under the e-Filing link. BILLING CODE 6717–01–P [FR Doc. E4–231 Filed 2–9–04; 8:45 am] Magalie R. Salas, BILLING CODE 6717–01–P Secretary. DEPARTMENT OF ENERGY [FR Doc. E4–229 Filed 02–9–04; 8:45 am] Federal Energy Regulatory DEPARTMENT OF ENERGY BILLING CODE 6717–01–P Commission Federal Energy Regulatory [Docket No. EL00–79–001, et al.] Commission DEPARTMENT OF ENERGY West Texas Utilities Company, et al.; [Docket No. RP04–146–000] Federal Energy Regulatory Electric Rate and Corporate Filings Commission February 3, 2004. Southwest Gas Storage Company; [Docket No. RP04–149–000] Notice of Proposed Changes in FERC The following filings have been made Gas Tariff Texas Gas Transmission, LLC; Notice with the Commission. The filings are of Annual Cash-Out Report listed in ascending order within each February 3, 2004. docket classification. Take notice that on January 30, 2004, February 3, 2004. 1. West Texas Utilities Company Southwest Gas Storage Company Take notice that on January 30, 2004, (Southwest) tendered for filing as part of Texas Gas Transmission, LLC (Texas [Docket No. EL00–79–001] its FERC Gas Tariff, First Revised Gas) tendered for filing a report, which Take notice that on January 26, 2003, Volume No. 1, the revised tariff sheets compares its cash-out revenues with its West Texas Utilities Company tendered listed on Appendix A to the filing, cash-out costs incurred for the annual for filing a refund report in compliance

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with the Commission’s Order, dated commissions within the region and in 9. Los Esteros Critical Energy Facility, December 24, 2003, in Docket No. addition, the filing has been LLC ER01–2658–000, et al., 105 FERC electronically posted on the Midwest [Docket No. ER04–323–001] ¶61,368. ISO’s Web site at www.midwestiso.org Take notice that on January 28, 2004, Comment Date: February 17, 2004. under the heading ‘‘Filings to FERC’’ for Los Esteros Critical Energy Facility, LLC other interested parties in this matter. 2. Wisconsin Electric Power Company (Los Esteros) filed substitute rate The Midwest ISO will provide hard schedule sheets to the December 22, [Docket No. ER98–855–003] copies to any interested parties upon 2003, filing in Docket No. ER04–323– Take notice that on January 29, 2004, request. 000, setting forth revisions to the Wisconsin Electric Power Company Comment Date: February 18, 2004. Reliability Must-Run Agreement (Wisconsin Electric) tendered for filing 5. Central Mississippi Generating between Los Esteros and the California its triennial market-power update and Company, LLC Independent System Operator an amendment to its Market Rate Power [Docket No. ER04–180–001] Corporation for calendar year 2004. Sales and Resale Transmission Tariff to Comment Date: February 18, 2004. include Market Behavior Rules pursuant Take notice that on January 28, 2004, to the Commission’s November 17, Central Mississippi Generating 10. Creed Energy Center, LLC 2003, Order Adopting Market Behavior Company, LLC submitted a filing to [Docket No. ER04–324–001] comply with the Director’s Letter Order Rules in Docket Nos. EL01–118–000 and Take notice that on January 28, 2004, issued in Docket No. ER04–180–000 on EL01–118–001. Creed Energy Center, LLC (Creed) filed Comment Date: February 19, 2004. December 30, 2003, to incorporate the substitute rate schedule sheets to the Market Behavior Rules adopted by the 3. Indeck-Olean Limited Partnership December 22, 2003, filing in Docket No. Commission in the November 17, 2003, ER04–324–000, setting forth revisions to [Docket No. ER99–2915–001] order in Docket Nos. EL01–118–000 and the Reliability Must-Run Agreement 001. Take notice that on January 29, 2004, between Creed and the California Comment Date: February 18, 2004. Indeck-Olean Limited Partnership Independent System Operator (Indeck-Olean) tendered for filing: (1) 6. Midwest Generation EME, LLC Corporation for calendar year 2004. An updated market power analysis in Comment Date: February 18, 2004. compliance with the Federal Energy [Docket No. ER04–190–001] Regulatory Commission’s Order Take notice that on January 29, 2004, 11. Goose Haven Energy Center, LLC authorizing Indeck-Olean to engage in Midwest Generation EME, LLC tendered [Docket No. ER04–325–001] wholesale sales of electric power at for filing certain corrections to its FERC Take notice that on January 28, 2004, market based rates in Docket No. ER99– Electric Tariff, Original Volume No. 3 Goose Haven Energy Center, LLC (Goose 2915–000; and (2) an amendment to its for the provision of Reactive Power and Haven) filed substitute rate schedule market-based rate tariff to adopt the Voltage Control from Generation sheets to the December 22, 2003, filing Commission’s new Market Behavior Sources Service which was accepted by in Docket No. ER04–325–000, setting Rules issued in Docket Nos. EL01–118– the Commission in Docket No. ER04– forth revisions to the Reliability Must- 000 and EL01–118–001 on November 190–000, 106 FERC ¶61, 011. Run Agreement between Goose Haven 17, 2003. Comment Date: February 19, 2004. and the California Independent System Comment Date: February 19, 2004. 7. Kentucky Utilities Company Operator Corporation for calendar year 2004. 4. Midwest Independent Transmission [Docket No. ER04–203–001] System Operator, Inc. Comment Date: February 18, 2004. Take notice that on January 29, 2004, [Docket No. ER04–106–001] Kentucky Utilities Company (KU) 12. Avista Corporation Take notice that on January 28, 2004, pursuant to section 205 of the Federal [Docket No. ER04–477–000] the Midwest Independent Transmission Power Act, 16 U.S.C. 824 (2000) and Take notice that on January 28, 2004, System Operator, Inc. (Midwest ISO) section 35.11 of the Federal Energy Avista Corporation, tendered for filing submitted for filing proposed revisions Regulatory Commission’s regulations, with the Federal Energy Regulatory to Attachment P (List of Grandfathered 18 CFR 35.11, filed a Supplement to its Commission pursuant to 18 CFR 35.13, Agreements) of the Midwest ISO Open November 18, 2003, filing of the the following unexecuted Service Access Transmission Tariff (OATT) in Amendment to the Contract for Electric Agreements under Avista Corporation’s compliance with the Commission’s Service by and between Kentucky FERC Electric Tariff Original Volume December 29, 2003, Order, 105 FERC Utilities Company and the City of No. 10: ¶61,387 (2003). The Midwest ISO has Providence. Comment Date: February 19, 2004. Bonneville Power Administration, Rate requested an effective date of October Schedule No. 307 31, 2003, which is the same effective 8. Gilroy Energy Center, LLC Public Utility District No. 1 of Douglas date as that requested by the Midwest County, Rate Schedule No. 308 ISO in its initial filing in these [Docket No. ER04–321–001] Public Utility District No. 2 of Grant County, proceedings. Take notice that on January 28, 2004, Rate Schedule No. 309 The Midwest ISO has also requested Gilroy Energy Center, LLC (Gilroy) filed Sierra Pacific Power Company, Rate waiver of the service requirements set substitute rate schedule sheets to the Schedule No. 310 forth in 18 CFR 385.2010. The Midwest December 22, 2003, filing in Docket No. Powerex, Rate Schedule No. 311. ISO states it has electronically served a ER04–321–000, setting forth revisions to Avista Corporation requests waiver of copy of this filing, with attachments, the Amended and Restated Reliability the prior notice requirements and upon all Midwest ISO Members, Must-Run Agreement between Gilroy requests an effective date of January 1, Member representatives of Transmission and the California Independent System 2004. Owners and Non-Transmission Owners, Operator Corporation for calendar year Avista states that copies of this filing the Midwest ISO Advisory Committee 2004. have been served upon Bonneville participants, as well as all State Comment Date: February 18, 2004. Power Administration, PUD No. 1 of

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Douglas County, PUD No. 2 of Grant Electric Company and Kentucky Any person wishing to become a party County, Sierra Pacific Power Company Utilities, the Midwest ISO and must file a motion to intervene. All such and Powerex. Louisville Gas & Electric Company. motions or protests should be filed on Comment Date: February 18, 2004. Midwest ISO states that a copy of this or before the comment date, and, to the filing was served on all parties. extent applicable, must be served on the 13. Avista Corporation Comment Date: February 19, 2004. applicant and on any other person [Docket No. ER04–479–000] designated on the official service list. 17. Consumers Energy Company Take notice that on January 28, 2004, This filing is available for review at the Avista Corporation (Avista), tendered [Docket No. ER04–492–000] Commission or may be viewed on the for filing a Notice of Cancellation of Take notice that on January 29, 2004, Commission’s Web site at http:// Avista Electric Tariff Original Volume Consumers Energy Company www.ferc.gov, using the ‘‘FERRIS’’ link. No. 10, Rate Schedule FERC No. 3 (Consumers) tendered for filing Original Enter the docket number excluding the between Avista and Puget Sound Sheet Nos. 25 and 26 as part of its First last three digits in the docket number Energy, Inc. Avista requests that the Revised Rate Schedule No. 116, to add filed to access the document. For Commission grant all waivers necessary the Midwest Independent Transmission assistance, call (202) 502–8222 or TTY, to allow the cancellation to become System Operator, Inc., as a customer. (202) 502–8659. Protests and effective on January 1, 2004. Comment Date: February 19, 2004. interventions may be filed electronically Avista states that copies of the filing via the Internet in lieu of paper; see 18 18. Indeck-Oswego Limited Partnership have been served on Puget Sound CFR 385.2001(a)(1)(iii) and the Energy, Inc. [Docket No. ER04–493–000] instructions on the Commission’s Web Comment Date: February 18, 2004. Take notice that on January 29, 2004, site under the ‘‘e-Filing’’ link. The Commission strongly encourages 14. Midwest Independent Transmission Indeck-Oswego Limited Partnership electronic filings. System Operator, Inc. tendered for filing a revised market- based rate tariff in order to participate Magalie R. Salas, [Docket No. ER04–480–000] in other organized markets besides the Secretary. Take notice that on January 28, 2004, New York Independent System the Midwest Independent Transmission Operator’s market. [FR Doc. E4–221 Filed 2–9–04;8:45 am] System Operator, Inc. (Midwest ISO) Comment Date: February 19, 2004. BILLING CODE 6717–01–P pursuant to section 205 of the Federal 19. Caithness VG Wind, LLC Power Act and section 35.12 of the DEPARTMENT OF ENERGY Commission’s regulations, 18 CFR [Docket No. ER04–494–000] 35.12, submitted for filing an Take notice that on January 29, 2004, Federal Energy Regulatory Interconnection and Operating Caithness VG Wind, LLC tendered for Commission Agreement among Hoosier Energy Rural filing a notice of succession and revised Electric Cooperative, Inc., as rate schedules in the above-referenced [Docket Nos. PL04–2–000 and EL03–236– Transmission Owner, the Midwest ISO docket. 000] and Project Developers, Hoosier Energy Comment Date: February 19, 2004. Compensation for Generating Units Rural Electric Cooperative, Inc. and 20. Idaho Power Company Subject to Local Market Power Wabash Valley Power Association, Inc. Mitigation in Bid-Based Markets, PJM [Docket No. ER04–495–000] Midwest ISO states that a copy of this Interconnection, L.L.C.; Notice of filing was served on all parties. Take notice that on January 29, 2004, Technical Conferences Comment Date: February 18, 2004. Idaho Power Company tendered for 15. American Transmission Company filing Service Agreement No. 174 under February 3, 2004. LLC its Open Access Transmission Tariff. As previously announced in notices Comment Date: February 19, 2004. issued January 12 and 28, 2004, [Docket No. ER04–487–000] conferences will be held on February 4 21. Caithness 251 Wind, LLC Take notice that on January 28, 2004, and 5, 2004, to discuss issues related to American Transmission Company LLC [Docket No. ER04–496–000] local market power mitigation and the (ATCLLC) tendered for filing a Take notice that on January 29, 2004, methods of compensating must-run Distribution-Transmission Caithness 251 Wind, LLC tendered for generators in organized markets.1 The Interconnection Agreement between filing a notice of succession and revised conferences will begin at 9 a.m. at the ATCLLC and Gladstone Power & Light. rate schedules in the above-referenced offices of the Federal Energy Regulatory ATCLLC requests an effective date of docket. Commission, 888 First Street NE., December 31, 2003. Comment Date: February 19, 2004. Washington, DC 20426. The Comment Date: February 18, 2004. Commissioners may attend all or part of Standard Paragraph 16. Midwest Independent Transmission the conferences. System Operator, Inc. Any person desiring to intervene or to The February 4, 2004 technical protest this filing should file with the conference will include perspectives [Docket No. ER04–491–000] Federal Energy Regulatory Commission, from key industry experts and market Take notice that on January 29, 2004, 888 First Street, NE., Washington, DC participants on local market power pursuant to section 205 of the Federal 20426, in accordance with rules 211 and mitigation and Reliability Must-Run Power Act and section 35.12 of the 214 of the Commission’s rules of (RMR) issues. A notice issued on Commission’s regulations, 18 CFR 35.12 practice and procedure (18 CFR 385.211 (2002), the Midwest Independent and 385.214). Protests will be 1 In an Order issued December 19, 2003, the Transmission System Operator, Inc. considered by the Commission in Commission directed staff to convene a two-part technical conference on compensation of must run (Midwest ISO) submitted for filing an determining the appropriate action to be generating units. Compensation for Generating Interconnection and Operating taken, but will not serve to make Units Subject to Local Market Power Mitigation in Agreement among Louisville Gas & protestants parties to the proceeding. Bid-Based Markets, 105 FERC ¶61,312 (2003).

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January 28, 2004, presented a list of Robert Rapp—KeySpan Energy Kathan, Office of Markets, Tariffs, and speakers for February 4, 2004. A revised Jonathan Falk—NERA, representing Rates, 888 First Street NE., Washington, list of speakers for February 4, 2004 PPL DC 20426, (202) 502–6404, follows. Steve Corneli—NRG Power Marketing [email protected]. Inc Agenda for the February 4, 2004 Bob Ethier—ISO–NE Market Monitor Magalie R. Salas, Conference Gunnar Jorgensen—Northeast Secretary. Morning Session #1 (9–9:20 a.m.) Utilities/Select Energy [FR Doc. E4–224 Filed 2–9–04; 8:45 am] BILLING CODE 6717–01–P Presentation on capital commitment/ Afternoon Session #2 (3:15–4:45 p.m.) investment decision-making Howard Newman—Warburg Pincus Frank Napolitano—Lehman Brothers Danielle Jassaud—Public Utility Inc. Commission of Texas ENVIRONMENTAL PROTECTION Jonathan Baliff—Credit Suisse First John Meyer—Reliant Resources, Inc. AGENCY Boston Corporation Judi Mosley—Pacific Gas & Electric Michael Thomas—Calpine Company [FRL–7617–4] Corporation Keith Casey—CAISO Morning Session #2 (9:30 a.m.–12:15 Ron McNamara—MISO Notice of Approval of Federal p.m.) Steve Beuning—Xcel Energy Operating Permits to Clearwater Forest Transcripts of the conference will be Industries (CFI); Three Rivers Timber, William Hogan—Harvard University immediately available from Ace Inc. (Three Rivers); Empire Lumber Michael Schnitzer—The NorthBridge Reporting Company (202–347–3700 or Company, dba Kamiah Mills (Empire Group, representing Exelon Corp. 1–800–336–6646), for a fee. They will be Lumber); Northwest Pipeline Roy Shanker—Consultant to available for the public on the Corporation, Pocatello Compressor generators and financial market Commission’s e-Library two weeks after Station (Northwest Pipeline); Colville participants the conference. The Capitol Connection Tribal Enterprise Corporation, dba David Patton—Potomac Economics, offers the opportunity for remote Colville Indian Power & Veneer (CIPV) MISO Market Monitor listening and viewing of the conference. Joe Bowring—PJM Market Monitor AGENCY: It is available for a fee, live over the Environmental Protection Roy Thilly—Wisconsin Public Power Internet, via C-Band Satellite. Persons Agency (EPA). Inc. interested in receiving the broadcast, or ACTION: Notice. Abram Klein—Edison Mission who need information on making Marketing & Trading SUMMARY: This is notice that five federal arrangements should contact David Part 71 Tribal Operating permits have Mssrs. Napolitano, Baliff, and Thomas Reininger or Julia Morelli at the Capitol been issued from EPA Region 10. will participate in the Question and Connection (703–993–3100) as soon as Answer session. possible or visit the Capitol Connection FOR FURTHER INFORMATION CONTACT: If you have any questions or would like a Lunch Break (12:15–1:30 p.m.) Web site at http:// www.capitolconnection.gmu.edu and copy of any of the permits listed above, Afternoon Session #1 (1:30–3 p.m.) click on ‘‘FERC’’. please contact Lucita Valiere, at U.S. John Anderson—John Hancock Questions about the February 4 Environmental Protection Agency, Financial Services conference should be directed to: Office of Air Quality (OAQ–107), 1200 Jonathan Baliff—Credit Suisse First Michael Coleman, Office of Markets, Sixth Avenue, Seattle, Washington Boston Corporation Tariffs, and Rates, 888 First Street NE., 98101, (206) 553–8087. Mark Reeder—New York Public Washington, DC 20426, (202) 502–8236, SUPPLEMENTARY INFORMATION: Notice is Service Commission [email protected]. hereby given that EPA Region 10 has Steve Wemple—Con Edison and EEI Questions about the February 5 PJM issued Federal operating permits to the Alliance of Energy Suppliers conference should be directed to: David applicants listed below:

Issuance Effective Name Permit No. Location Reservation date date

CFI ...... R10T5–ID–00–01. Kooskia, ID ...... Nez Perce ...... 2/15/01 4/30/01 Empire Lumber ...... R10T5–ID–00–02. Kamiah, ID ...... Nez Perce ...... 8/8/01 8/8/01 Three Rivers ...... R10T5–ID–00–03. Kamiah, ID ...... Nez Perce ...... 8/23/02 10/7/02 Northwest Pipeline ...... R10T5–ID–02–01. Pocatello, ID ...... Fort Hall ...... 10/17/02 12/2/02 CIPV ...... R10T5–WA–03–01. Omak, WA...... Colville ...... 6/10/03 6/10/03

These permits grant approval to the The Federal operating permits issued a timely application for permit renewal facilities identified in the permits to by EPA to the facilities identified above must be submitted to EPA prior to operate the air emission sources incorporate all applicable air quality permit expiration in order to continue identified in the permits in accordance requirements and require monitoring to operation of the permitted source. with the terms and conditions of the ensure compliance with these The provisions of 40 CFR part 71 respective permits. This notice is requirements. Submittal of periodic govern issuance of these permits. EPA published in accordance with 40 CFR reports of all required monitoring, as received public comments on the CFI, 71.11(l)(7), which requires notice of any well as submittal of an annual Three Rivers, and Northwest Pipeline final agency action regarding a Federal compliance certification, are also permits. In accordance with the operating permit to be published in the required. The Federal operating permits requirements of 40 CFR 71.11(j), EPA Federal Register. have a term not to exceed five years, and responded to all comments received on

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these permits. EPA received no Appropriations Act, 2004, Public Law allowable costs when a recipient comments on the permits for Empire 108–199, which President Bush signed satisfies all of the elements required to Lumber and CIPV. Pursuant to 40 CFR into law on January 23, 2004, qualify as a bona fide prospective 71.11(i), EPA provided copies of the temporarily expands the number of purchaser under CERCLA section final permits to the applicant and each brownfields sites that are eligible for 101(40) notwithstanding the fact that person who submitted written funding under EPA’s brownfields the property was acquired prior to the comments on a permit or requested assessment, revolving loan fund, and enactment of the Small Business notice of the final permit decision. No cleanup grants awarded under section Liability Relief and Brownfields one requested review of any of the final 104(k) of the Comprehensive Revitalization Act of 2001, Public Law permits by the Environmental Appeals Environmental Response, 107–118, on January 11, 2002.’’ Board within 30 days of receipt of the Compensation, and Liability Act of 1980 The entities that otherwise meet all of final permits in accordance with 40 CFR (CERCLA), as amended. EPA’s Fiscal the requirements to be eligible for 71.11(l). Thus, pursuant to 40 CFR Year 2004 appropriations may be used brownfield funding and that are affected 71.11(i) and (l), the permits became final by recipients of brownfields grants and by this provision may apply for grants on the dates indicated in the chart loans for eligible and allowable costs at (including Revolving Loan Fund above. A petition to the Environmental brownfields sites as long as the recipient capitalization grants) to address Appeals Board under 40 CFR 71.11(l) is, of a brownfield grant or loan satisfies all hazardous waste contamination at under 42 U.S.C. 307(b), a prerequisite to of the elements required to qualify as a eligible brownfield sites. However, seeking judicial review of the final bona fide prospective purchaser under applicants who submitted proposals by agency action. See 40 CFR 71.11(l)(4). CERCLA section 101(40) the December 4, 2003, deadline for 40 CFR 71.11(l)(7) requires notice of any notwithstanding the fact that the brownfields assessment, revolving loan final agency action regarding a Federal property was acquired prior to the fund, and cleanup grants and who operating permit to be published in the enactment of the Small Business otherwise satisfied all of the Federal Register. This notice satisfies Liability Relief and Brownfields requirements to be eligible to receive that requirement. Revitalization Act of 2001, Pub. L. 107– brownfields funding, as well as satisfied 118, on January 11, 2002. EPA is all of the elements required to qualify as Dated: January 21, 2004. a bona fide prospective purchaser, and L. John Iani, reopening the Fiscal Year 2004 brownfields grant competition to allow were determined by EPA to be Regional Administrator, Region 10. entities who are affected by the above- prohibited from using brownfield funds [FR Doc. 04–2816 Filed 2–9–04; 8:45 am] referenced change to submit (or at the proposed site(s) because the BILLING CODE 6560–50–P resubmit) proposals for brownfields applicant acquired the brownfield site funding. prior to the January 11, 2002, enactment To qualify for participation in the date, may choose to resubmit their ENVIRONMENTAL PROTECTION reopened competition, applicants must proposal(s) to EPA for consideration. AGENCY have specific brownfields sites This change only has the affect of [FRL–7620–4] identified, and these sites must now be allowing EPA to award Brownfield eligible for EPA funding in Fiscal Year grants to certain applicants that were Comprehensive Environmental 2004 due to the above-referenced previously prohibited from receiving Response, Compensation and Liability provision of the Consolidated grants under section 104(k)(4)(B)(i)(IV) Act (CERCLA), Section 104(k); Appropriations Act, 2004. There is an and does not result in a change to the ‘‘Announcement of Proposal Deadline additional change to the guidelines that CERCLA definition of bona fide for a Reopening of the Competition for is posted at www.epa.gov/brownfields. prospective purchaser or to any EPA the 2004 National Brownfields The change is summarized below. The enforcement authorities or policy. Please note that applicants with sites Assessment, Revolving Loan Fund, deadline for proposals to be received by contaminated solely by petroleum are and Cleanup Grants’’ EPA’s contractor is 6 p.m. EST on not eligible to participate in the March 9, 2004. AGENCY: Environmental Protection reopened competition. Agency. FOR FURTHER INFORMATION CONTACT: The To be considered in this competition, ACTION: Notice reopening of Fiscal Year U.S. EPA’s Office of Solid Waste and every proposal must identify specific 2004 Brownfields grant competition, of Emergency Response, Office of brownfield sites, meet the threshold the availability of amended Brownfields Brownfields Cleanup and requirements described in the Proposal grant application guidelines and Redevelopment, (202) 566–2777. Guidelines for Brownfields Assessment, deadline for submissions of proposals. SUPPLEMENTARY INFORMATION: The Revolving Loan Fund, and Cleanup following correction has been made to Grants (including the requirements for SUMMARY: The Environmental Protection the guidelines that are posted at community notification and a letter Agency (EPA) is reopening the www.epa.gov/brownfields: from state or tribal environmental competition for Fiscal Year 2004 On page 5 of the Proposal Guidelines officials) and address the ranking factors brownfields grants to accept for Brownfields Assessment, Revolving in the Proposal Guidelines for applications for funding for certain Loan Fund, and Cleanup Grants, the Brownfields Assessment, Revolving brownfield sites that were not eligible first bullet under Additional Uses/ Loan Fund, and Cleanup Grants. An under the Proposal Guidelines for Restrictions of Grant Funds is revised to original proposal and/or a request for Brownfields Assessment, Revolving implement the language in the reconsideration of a proposal that was Loan Fund, and Cleanup Grants (‘‘The Consolidated Appropriation Act, 2004. submitted by the December 4, 2003, October 2003 Proposal Guidelines’’), This language now reads: deadline must be received by 6 p.m. published in the Federal Register at 68 ‘‘Funds appropriated to EPA under EST on or before March 9, 2004, by FR 59611, on October 16, 2003, and the Consolidated Appropriation Act, Environmental Management Support, subsequent corrections published in the 2004, to carry out CERCLA 104(k) may Inc. (EMS), Attention: Don West, 8601 Federal Register at 68 FR 64623, on be used by recipients of brownfields Georgia Avenue, Suite 500, Silver November 14, 2003. The Consolidated grants and loans for eligible and Spring, MD 20910, phone 301–589–

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5318. Applicants must also send a copy independently. Please contact the associations, intertribal consortia, and to the EPA Regional Brownfields appropriate Headquarters or Regional national non-profit, non-governmental Coordinator at the addresses shown in Office Wetland Grant Coordinator for organizations (hereafter referred to as Appendix 1 of the October 2003 that offices’ deadline or to confirm a applicants or recipients) an opportunity Proposal Guidelines. EPA strongly deadline. (See Section VII for Agency to carry out projects to develop and encourages applicants to send their Contact information.) Deadlines will refine comprehensive wetland proposals by express courier or hand also be posted on the EPA Web site at programs. WPDGs provide eligible delivery to the address above to avoid http://www.epa.gov/owow/wetlands/ applicants an opportunity to conduct potential delays in regular U.S. Postal grantguidelines/. projects that promote the coordination Service mail delivery. Proposals ADDRESSES: Application proposals must and acceleration of research, received by EMS at the address above be submitted to the appropriate EPA investigations, experiments, training, after 6 p.m. EST March 9, 2004, will not Headquarters or Regional Office and demonstrations, surveys, and studies be considered. postmarked or emailed by the relating to the causes, effects, extent, prevention, reduction, and elimination Dated: February 4, 2004. appropriate Headquarters or Regional Office deadline. Application proposals of water pollution. Linda Garczynski, While WPDGs can continue to be Director, Office of Brownfields Cleanup and may be submitted electronically, by mail, or by hand delivery/courier. used by recipients to build and refine Redevelopment, Office of Solid Waste and any element of a comprehensive Emergency Response. Applicants interested in being put on a mailing list to obtain more details wetland program, emphasis through the [FR Doc. 04–2819 Filed 2–9–04; 8:45 am] competition process will be given to BILLING CODE 6560–50–P should contact the appropriate Headquarters or Regional Office funding projects that address these three Wetland Grant Coordinator (see Section areas as identified by EPA: (1) VII for Agency Contact information). Developing a comprehensive monitoring ENVIRONMENTAL PROTECTION and assessment program; (2) improving FOR FURTHER INFORMATION CONTACT: AGENCY the effectiveness of compensatory Connie Cahanap, Office of Wetlands, [FRL–OW–7620–6] mitigation; and (3) refining the Oceans, and Watersheds, Wetlands protection of vulnerable wetlands and Wetland Program Development Grant Division (MC 4502T), U.S. aquatic resources. States, Tribes, local Guidelines Environmental Protection Agency, 1200 governments (S/T/LGs), interstate Pennsylvania Avenue, NW., associations, intertribal consortia are AGENCY: Environmental Protection Washington, DC 20460, telephone: (202) eligible to apply. In order to provide Agency (EPA). 566–1382, fax: (202) 566–1349, e-mail: greater assistance to S/T/LGs, non- ACTION: Solicitation of applications. [email protected]. profit, non-governmental organizations SUPPLEMENTARY INFORMATION: which undertake activities that advance SUMMARY: Wetland Program Federal Agency Name: US Development Grants (WPDGs) provide wetland programs on a national basis Environmental Protection Agency, eligible applicants an opportunity to are eligible to apply for WPDG funding. Office of Water, Office of Wetlands, Local/regional chapters/affiliations of a conduct projects that promote the Oceans, and Watersheds, Wetlands nonprofit organization are not eligible coordination and acceleration of Division. for WPDGs. research, investigations, experiments, Funding Opportunity Title: Wetland Interest in the grant program has training, demonstrations, surveys, and Program Development Grants. continued to grow over the years and studies relating to the causes, effects, Announcement Type: Notice. Congress has appropriated $15 million extent, prevention, reduction, and Catalog of Domestic Assistance annually to support the wetland grant elimination of water pollution. While Number: 66.461. program. Since the Wetland Grant WPDGs submitted for this competition Development Program started in FY90, Overview can continue to be used by recipients to grant funds are awarded on a build and refine any element of a The goals of the Environmental competitive basis to support comprehensive wetland program, Protection Agency’s (EPA’s) wetland development of State and Tribal emphasis for the competition will be program include increasing the quantity wetland programs. given to funding projects that address and quality of wetlands in the U.S. by The statutory authority for WPDGs is the three areas identified by EPA: (1) conserving and restoring wetland section 104(b)(3) of the Clean Water Act Developing a comprehensive monitoring acreage and improving wetland health. (CWA). Section 104(b)(3) of the CWA and assessment program; (2) improving In pursuing these goals, EPA seeks to restricts the use of these grants to the effectiveness of compensatory build the capacity of all levels of developing and refining wetland mitigation; and (3) refining the government to develop and implement management programs by conducting or protection of vulnerable wetlands and effective, comprehensive programs for promoting the coordination and aquatic resources. States, Tribes, local wetland protection and management. acceleration of research, investigations, governments (S/T/LGs), interstate The six program areas central to experiments, training, demonstrations, associations, intertribal consortia, and achieving these goals are: regulation, surveys, and studies relating to the national non-profit, non-governmental monitoring and assessment, restoration, causes, effects, extent, prevention, organizations are eligible to apply for wetland water quality and watershed reduction, and elimination of water the competition. This document management, public-private pollution. These competed grants may describes the grant selection and award partnerships, and coordination among not be used for the operational support process for eligible applicants interested agencies with wetland or wetland- of wetland programs unless it is in applying for WPDGs under the related programs. included in a Performance Partnership competitive process. The Wetland Program Development Grant (PPG). States and Tribes may not DATES: The deadline for receipt of Grants (WPDGs), initiated in FY90, use WPDG funds for implementation of proposals is set by EPA Headquarters provide States, Tribes, local a wetlands program. However, funds and each EPA Regional Office, governments (S/T/LGs), interstate available for WPDG grants may be

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combined in a PPG which may, in A. Developing a Comprehensive will assist S/T/LGs in developing certain circumstances, provide the Monitoring and Assessment Program comprehensive wetland monitoring and authorization to undertake This solicitation seeks proposals that assessment programs. Proposals also implementation activities. For further support the development of a should describe how methods under information, see the final rules on comprehensive S/T/LG wetland development will improve decision- Environmental Program Grants for State, monitoring and assessment program. making across various surface water Interstate, and local government State and Tribal adoption of an ambient management programs. For example, EPA encourages the submissions of agencies at 40 CFR part 35, subpart A wetland monitoring and assessment proposals for work that will and Tribes at 40 CFR part 35, subpart B. program is the primary goal of this demonstrate how information about All projects funded through this solicitation (i.e., projects that build S/T/ ambient wetland condition can be used program must contribute to the overall LG capacity to determine the causes, by local authorities when making development and improvement of S/T/ effects, and extent of pollution to decisions affecting land and water use, LG wetland programs. Grant applicants wetland resources and develop including their adoption of stormwater must demonstrate that their proposed pollution prevention, reduction, and and smart growth management project integrates with S/T/LG wetland elimination strategies). More strategies. Provisional reporting of programs. information related to wetland This document describes the grant ambient wetland condition, relative to monitoring and assessment can be reference conditions, in Clean Water Act selection and award process for eligible found at http://www.epa.gov/owow/ applicants interested in applying for section 305(b) reports is a logical first wetlands/facts/monitor.pdf and http:// step toward meeting that particular WPDGs under the competitive process. www.epa.gov/owow/wetlands/facts/ EPA Regions and Headquarters may objective. When preparing proposals, devgrants.pdf. care should be given to ensure that any supplement this notice with additional Project proposals may address information pertaining specifically to data collected under the grant is of a development, testing, and known and documented quality. each Regional/Headquarters demonstration of methods and programs competition. These guidelines stay in Accordingly, applicants may host to monitor and assess wetlands. For technical training workshops, establish effect until new ones are published for example, proposed work may include the competitive process. regional or State interagency wetland the use of biological and monitoring and assessment workgroups, I. Funding Opportunity Description hydrogeomorphic (HGM) assessment develop volunteer monitoring programs, procedures and surveys to test the and improve wetland inventories (e.g., The types of projects that award accuracy of (a) rapid wetland use of hydrogeomorphic (HGM) wetland recipients can undertake to develop and assessment methods or (b) other types of classification system). Examples of case refine their comprehensive wetland assessment methods that use studies illustrating wetland monitoring programs are diverse. In the past, award geographical information systems (GIS) and assessment methods can be found at recipients have pursued a wide range of to describe wetland condition or trends http://www.epa.gov/owow/wetlands/ activities, such as developing in wetland extent. Also, EPA encourages bawwg/case.html and http:// management tools for wetland the submission of proposals for work www.epa.gov/region01/eco/wetland/ resources, advancing scientific and that will demonstrate the use of wetland index.html. Many of the case studies technical tools for protecting wetland assessment methods for: listed on those Web sites were funded health, improving availability of data 1. Assessing the ecological by WPDGs. and information about wetlands, consequences of a given regulatory Additionally, recipients of grants for developing and disseminating local action or group of actions; wetland monitoring projects will be wetland ordinances that complement 2. Improving the evaluation and required to submit all data from Federal and State management, and ranking of potential wetland sites for monitoring activities to STORET (short training wetland managers and the restoration or acquisition at various for STOrage and RETrieval). STORET public about wetland and watershed levels; provides an accessible, nationwide values. 3. Evaluating the ecological central repository of water information For the WPDG competitive process, effectiveness of wetland restoration of known quality. Grantee submission of the wetland program has identified projects, including compensatory monitoring data into STORET or three areas for improving S/T/LGs mitigation; monitoring data made available in the ability to protect and restore their 4. Developing design or performance Advisory Council for Water Information wetlands: (1) Developing a standards for wetland restoration, (ACWI) Core Monitoring Data Element comprehensive wetland monitoring and including compensatory mitigation; Standard (or Data Exchange Template) assessment program; (2) improving the 5. Evaluating the cumulative effect of will facilitate exchange of monitoring effectiveness of compensatory wetland loss and restoration in terms of data between EPA and its partners. mitigation; and (3) refining the change in the ambient condition of Information on STORET is at http:// protection of vulnerable wetlands and wetlands and other waterbodies within www.epa.gov/storet and information on aquatic resources. Regions are a watershed; the standard is at http://www.epa.gov/ encouraged to target at least two-thirds 6. Gathering information to refine edr. of their competitive WPDG funds to water quality standards or related projects that focus on one or more of the administrative code to bring added B. Improving the Effectiveness of program priorities. In this competitive protection to wetlands, including Compensatory Mitigation grant program, EPA will emphasize isolated wetlands; and/or S/T/LGs should consider projects that funding diverse levels of government 7. Gathering information to develop improve the capacity to ensure and various entities involved in management strategies to control the ecologically effective compensatory innovative wetland and watershed spread and adverse effects of non- mitigation for unavoidable impacts. For issues. Applicants are encouraged to indigenous, invasive wetland species. example, WPDGs can be used to develop WPDG applications that Proposals should address how work develop mitigation performance address these program areas. to accomplish the particular objective(s) standards. They also can be used to

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develop and verify assessment methods so and encouraged to incorporate reserves the right to reject all proposals and/or tracking (reporting) systems that wetland issues into ongoing watershed and make no awards. document: plans. Efforts can include, but are not III. Eligibility Information 1. The technical adequacy of limited to, information dissemination, compensatory mitigation project plans data exchange, studying S/T/LG A. Eligible Applicants for Competitive (e.g., plan review standards); regulatory improvement opportunities, Process 2. The ecological suitability of and surveying opportunities for land States, Tribes, local government proposed compensatory mitigation acquisition, conservation easements, project sites (e.g., develop site review agencies, interstate agencies, intertribal and tax incentive provisions. Funds consortia, and national, nonprofit, non- standards that have a watershed received through the WPDG competition context); governmental organizations are eligible. cannot be used to fund activities to Typical wetland or wetland related 3. The compliance of mitigation implement a wetlands program, or fund projects at various stages of agencies include, but are not limited to, the purchase of land or conservation wetland regulatory agencies, water implementation; and easements. 4. The adequacy of compensatory quality agencies (section 401 water mitigation for managing cumulative D. Other Program Areas quality certification), planning offices, wetland impacts under the Federal wild and scenic rivers agencies, WPDGs that are awarded may be used departments of transportation, fish and CWA section 404/401 program. by recipients to also develop and refine The National Wetlands Mitigation wildlife or natural resources agencies, all elements of a comprehensive Action Plan, released in December 2002 agriculture departments, forestry wetland program. The Regions may also by EPA and the U.S. Army Corps, agencies, coastal zone management supplement the above program areas describes seventeen action items that agencies, park and recreation agencies, with Regional efforts that they want to the Federal agencies will complete by non-point source or storm water emphasize, while still targeting two- 2005 in order to improve the ecological agencies, city or county and other S/T/ thirds of the WPDG funds toward the performance and results of LG agencies that conduct wetland- three program priority areas described compensatory mitigation. The tasks related activities. previously in this notice. identified in the Plan convey the major In order to be eligible for WPDG areas of interest regarding mitigation II. Award Information funds, Tribes must be Federally that are being supported by the Federal recognized, although ‘‘Treatment as a EPA’s Wetlands Division intends to agencies. Proposed projects that support State’’ status is not a requirement. continue to award $15 million of WPDG such endeavors at the S/T/LG level are Intertribal consortia that meet the funds through a competitive process to encouraged. A copy of the Plan and requirements of 40 CFR part 35.504 are eligible applicants through assistance related documents can be found at http:/ eligible for direct funding. agreements. Most of the WPDG funds for /www.epa.gov/owow/wetlands/ Interstate agency and intertribal the competition are allocated to EPA guidance/index.html#mitigation. consortia projects must be broad in Background information describing Regional Offices, based on the number scope and encompass more than one concepts and methods for improving the of States and Territories within the State, Tribe, or local government. effectiveness of compensatory Region, to fund S/T/LGs, interstate In order to provide greater assistance mitigation can be found in a National agencies, and intertribal consortia. to S/T/LGs, non-profit, non- Academy of Science publication Headquarters reserves a portion of the governmental organizations which entitled ‘‘Compensating for Wetland WPDG funds for national non-profit, undertake activities that advance Losses Under the Clean Water Act.’’ The non-governmental organizations, wetland programs on a national basis document can be found at http:// interstate agencies, and intertribal are eligible for WPDG funding. www.nap.edu/books/0309074320/html/. consortia under the competitive process. Activities must help S/T/LGs develop Wetland program grant funds can Funding decisions for the competition and refine wetland programs. For only be used for research, are made by EPA Regional and example, projects can involve advancing investigations, experiments, training, Headquarters Offices and are based on wetland science, providing training on demonstrations, surveys, and studies to the quality of the proposals received how various S/T/LG wetland programs support (or to improve or develop) and adherence to the selection criteria. across the nation protect, manage and mitigation programs; they cannot be EPA typically receives requests for restore their wetland resources, and used for specific mitigation activities funding far in excess of available funds. about initiatives to improve S/T/LG (e.g., implementation of individual Therefore EPA cannot provide grant wetland programs. Local/regional mitigation projects, mitigation banks, or funds to all applicants. chapters/affiliations of nonprofit in-lieu-fee mitigation programs). The number of applicants that will be organizations are not eligible for WPDGs requested to submit a complete and applications will only be accepted C. Refining the Protection of Vulernable application and the number of from the national headquarters level of Wetlands and Aquatic Resources applications recommended for award nonprofit, non-governmental While wetlands provide important depend on the quality of the proposals organizations. National nonprofit ecological functions on a watershed received and the relative amount of organizations are only eligible to submit scale, some are better protected than funding requests. The quality of the their proposals to the Headquarters others. For example, isolated wetlands proposals will be evaluated according to Wetland Grant Coordinator for this and waters may be particularly at risk as the criteria and selection process noted competition. (See Section VII for may wetlands subject to damage from below. Total funding available for award Agency Contact information.) activities other than the discharge of by EPA depends each year on the dredged or fill material. S/T/LGs Wetlands Program’s yearly fiscal B. Cost Sharing/Match Requirements wishing to develop comprehensive appropriation. (Previous grant awards S/T/LGs, interstate agencies, and wetland protection programs to protect ranged from $11,000 to $496,000.) The intertribal consortia must provide a such vulnerable waters from a variety of terms of the period of performance will minimum of 25% of each award’s total potential impacts are encouraged to do be determined at time of award. EPA project costs in accordance with 40 CFR

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31.24, 35.385, and 35.615. We Funds for a WPDG may be included work plan component; (5) outcomes and encourage States, Tribes and local in a PPG. Under this competition, State expected environmental results; (6) governments to provide a larger share of proposals must first be selected under performance measures and evaluation the project’s cost whenever possible the competitive grant process and, in process; (7) roles and responsibilities of (i.e., in excess of the required 25% of accordance with 40 CFR 35.138, the the recipient in carrying out the work total project costs). Non-profit, non- work plan commitments that would plan commitments; and (8) contact governmental organizations must also have been included in the WPDG work information for the Program Manager, provide a minimum of 25% of each plan must be included in the PPG work Grant Project Lead Manager, and award’s total project costs. plan. Similarly, Tribal proposals must Account Manager. Grant applicants will Forty CFR 35.536(c) (the first be selected under this competitive be required to provide a Dun and Environmental Program Grants for grant process, and in accordance with Bradstreet (D&B) Data Universal Tribes Regulation), states that ‘‘the 40 CFR 35.535. States and Tribes may Numbering System (DUNS) number required cost share shall be five percent not use WPDG funds for when applying for Federal grants or of the allowable cost of the work plan implementation of a wetlands program. cooperative agreements. Organizations budget for that program’’ if the Tribal However, funds available for WPDG can receive a DUNS number in one day, applicant puts the funds into a PPG. grants may be combined in a PPG which at no cost, by calling the dedicated toll- Tribal applicants can submit budgets may, in certain circumstances, provide free DUNS Number request line at 1– with a 5% match if the Tribe is going the authorization to undertake 866–705–5711 or by visiting to put the funds into a PPG. The implementation activities. For further www.dnb.com. following term and condition will be information, see the final rules on C. Submission Dates and Times included in the assistance agreement Environmental Program Grants for State, awarded to the Tribe: If the Wetland Interstate, and local government Submission deadlines are set by EPA Program Grant Funds are not or could Agencies at 40 CFR part 35, subpart A Headquarters and Regional Offices. not be included in a PPG, then the Tribe and Tribes at 40 CFR part 35, subpart B. Please contact the appropriate must provide a 25% match. The rules are also available on EPA’s Headquarters or Regional Office Wetland Grant Coordinator for The match requirement can be met Web site at: http://www.epa.gov/ information and/or to confirm with contributions from entities other fedrgstr/EPA-TOX/2001/Day-09/ competition deadlines (see Section VII than the award recipient. Other Federal t218.htm (State) and at http:// for Agency Contact information). money cannot be used as the match for www.epa.gov/fedrgstr/EPA-GENERAL/ Deadlines will also be posted at http:/ this grant program unless authorized by 2001January/Day-16/g219.htm (Tribal). /www.epa.gov/owow/wetlands/ the statute governing the award of the IV. Application and Submission grantguidelines/. Application proposals other Federal funds. However, Indian Information must be submitted to the appropriate Tribes can use funds provided under the EPA office and postmarked or emailed Indian Self-Determination and A. Request for Application Packages by the appropriate Regional or Education Act (25 U.S.C. 450 et seq.) to Grant application forms are available Headquarters deadline. Applicants provide the required matching funds to at http://www.epa.gov/ogd/AppKit/ interested in being put on a mailing list the extent authorized by that Act and index.htm/ and by mail upon request by to obtain more details should contact implementing regulations. calling the Grants Administration the appropriate Headquarters or Matching funds are considered grant Division at (202) 564–5305. If you have Regional Wetland Grant Coordinator funds. They may be used for the questions, contact your Headquarters or (see Section VII for Agency Contact reasonable and necessary expenses of Regional Office Wetland Grant information). carrying out the work plan. Any Coordinator (see Section VII for Agency restrictions on the use of grant funds Contact information) or visit our website D. Intergovernmental Review (i.e., prohibition of land acquisition at http://www.epa.gov/owow/wetlands/ Applicants requested to submit a full with grant funds) also apply to the use grantguidelines/. application may be required to comply of matching funds. B. Content and Form of Application with Intergovernmental Review C. Local and Tribal Funding Targets Submission Requirements (40 CFR part 29). Each Regional Office will support the Headquarters and Regional Offices E. Funding Restrictions local government initiative and Tribal may ask applicants to submit pre- Based on policy, regulation, and on efforts by targeting at least 15% of their application proposals. For specific experience gained from previous years Regional allocation to local government Regional/Headquarters information, we offer the following comments/ and Tribal applications. contact your Headquarters or Regional restrictions on funding eligibility. Office Wetland Grant Coordinator (see • Universities that are agencies of D. Performance Partnership Grants Section VII for Agency Contact State government are eligible to receive A Performance Partnership Grant information). As provided in 40 CFR grant funds from the Regional Offices (PPG) is a multi-program grant made to 35.107 and 35.507, for States, Tribes, through this competition. Universities a State, Tribe, interstate agency, or local governments, interstate agencies, must provide documentation acceptable intertribal consortium from funds and national non-profit organizations, to the EPA Regional Office to appropriated for many of EPA’s work plans must include: (1) A demonstrate that they function as a environmental program grants. Local summary of key objectives, work plan State agency. Universities that are not governments are not eligible for PPGs. commitments and final products; (2) a chartered as a part of State government PPGs are voluntary and provide detailed description of project tasks and are not eligible for direct funding from recipients the option to combine funds an explanation of how the project will EPA Regional Offices. Also, any award from two or more environmental contribute to developing or improving a recipients may award such entities program grants into one or more PPGs. S/T/LG’s wetland program; (3) a time- contracts in accordance with 40 CFR PPGs can provide administrative and/or line and reporting schedule; (4) a budget 31.36, and subgrants in accordance with programmatic flexibility. and estimated funding amounts for each 40 CFR 31.37. The State, Tribe, local

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agency, or national non-profit • Grant funds cannot be used to fund local governments are handled through organization should not simply pass an honorarium under this competition. EPA Regional Offices, while through funding to an organization that • Any field work or research-type applications from national non-profit, is not eligible to receive funding activities are limited to activities that non-governmental organizations are directly. Land grant schools do not have a direct, demonstrated link to handled through EPA Headquarters. automatically qualify for direct funding program development or refinement Applications from interstate agencies as an agency of a State because of their included in the application. and intertribal consortia can be status as a land grant school. • Purchase/lease of vehicles submitted to either a Regional Office or • Under the WPDG competitive (including boats, motor homes) and Headquarters, however, the same process, funds cannot be used for land office furniture is not eligible for proposals from interstate and intertribal acquisition or purchase of easements. funding under this program. agencies cannot be submitted to more • However, it may support the Grant funds cannot be used to pay than one office. Headquarters and coordination or acceleration of research, for travel by Federal agency staff. Regional Office staff will review the investigations, experiments, training, V. Application Review Information applications received in their respective demonstrations, surveys, and study offices and select the most competitive efforts directed at identifying areas for A. Selection Criteria projects for funding on the basis of the acquisition, which would help address For the traditional competitive WPDG selection criteria. Both the quality and water pollution problems including funding, proposals will be evaluated quantity of the applications will play a wetlands protection and restoration. using the following general categories of significant role in the selection of grants • This competitive grant program criteria: for funding. • Program Area Emphasis—priority cannot fund payment of taxes for VI. Award Administration Information in the selection process will be given to landowners who have a wetland on for Competitive Process their property. projects which support the development • While contractual efforts can be a of a S/T/LG’s monitoring and A. Award Notices part of these grants, each WPDG assessment program, improvement of All applicants will be notified by the recipient must be significantly involved the effectiveness of compensatory appropriate EPA Office (Region/ in the administration of the grant. EPA mitigation, or protection of vulnerable Headquarters) on whether or not the recommends that recipients use no more wetlands and aquatic resources. applicant has been selected for funding. • Clarity of Work Plan—clearly than 50% of the grant funds to contract The notification is not an authorization with non-governmental entities. written and detailed proposals. • Potential Environmental Results— to begin performance. A notice signed However, if the applicant wants to by the Grants Administration Division is exceed this limit, the applicant may likelihood of positive environmental results in the short- and long-term. the authorizing document to the submit a written justification for greater • applicant to begin performance. involvement by non-governmental Transferability of Results and/or Methods to other S/T/LGs. B. Administrative and National Policy contractors as part of the grant • application package. EPA will evaluate Involvement/Commitment of the Requirements the need for greater contractual applicant—significant financial and personnel contribution and involvement The general award and administration participation and may approve the process for all WPDGs is governed by request if there is adequate justification of partners. • Incorporation of project into broad regulations at 40 CFR part 30 (‘‘Grants to exceed the 50% limit. If the agency wetland goals (e.g., Government and Agreements with Institutions of contractual work is being done by Performance Results Act (GPRA) Goals, Higher Education, Hospitals, and Other another S/T/LG agency, interstate EPA Strategic Plan, or Core Elements of Non-Profit Organizations’’), 40 CFR part agency, or intertribal consortia, these a Comprehensive Wetland Program.) 31 (‘‘Uniform Administrative entities should be clearly indicated in Please contact the Wetlands Helpline at Requirements for Grants and the grant application. Cooperative Agreements to State and • (800) 832–7828) for more information. Inventory or mapping for the sole • Data Management—capability to Local Governments’’) and 40 CFR part purpose of locating wetlands is not report monitoring data to STORET. 35, subpart A (‘‘Environmental Program eligible for funding under this • Success of Previous Projects—for Grants for State, Interstate, and Local competition. A description of how applicants who have received prior EPA Government Agencies’’) and subpart B mapping or inventory projects will funding. (‘‘Environmental Program Grants for directly develop or improve the eligible Proposals are evaluated by the quality Tribes’’). applicant’s wetland protection programs of the submission related to the above C. Reporting must be included in the grant criteria. The last criterion is applied application for these types of projects to only to prior grant recipients. The last WPDGs are currently covered under be considered for funding under this criterion does not add value in the the following EPA grant regulations: 40 grant program. rating process for prior wetland grant CFR part 30 (non-profit organizations); • Under the competition, each grant recipients to give an automatic 40 CFR part 31 (States, Tribes, interstate must be completed with the initial advantage over new applicants. The last agencies, intertribal consortia and local award of funds. Recipients should not criterion, does, in cases of inadequate governments) and 40 CFR part 35, anticipate additional funding beyond and inappropriate prior grant subpart A (States, interstate agencies the initial award of funds for a specific performance, lower an applicant’s and local governments) and subpart B project. Eligible applicants should ranking; it allows consideration of poor (Tribes and intertribal consortia). These request the entire amount of money past performance in the evaluation of regulations specify basic grant reporting needed to complete the project in the current grant proposals. requirements, including performance original grant application. Each grant and financial reports (see 40 CFR 30.51, should produce a final, discrete B. Review and Selection Process 30.52, 31.40, 31.41, 35.115, and 35.515.) product. Funding and project periods For the competitive process, WPDG In negotiating these grants, EPA will can be for more than one year. applications from States, Tribes, and work closely with recipients to

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incorporate appropriate performance Region 9—AZ, CA, HI, NV, AS, GU training each year (e.g., National EPA, measures and reporting requirements Cheryl McGovern, U.S. EPA Region 9, State, Tribal, Local wetland meeting or into each grant agreement consistent 75 Hawthorne Street, San Francisco, CA wetland monitoring workshops.) with 40 CFR 30.51, 31.40, 35.115, and 94105. Phone: 415–972–3415. Applicants should account for travel 35.515. These regulations provide some [email protected]. plans and costs in the work plans and flexibility in determining the the project budget. EPA’s Wetlands appropriate content and frequency of Region 10—AK, ID, OR, WA Program does not anticipate providing performance reports. At a minimum, David Kulman, U.S. EPA Region 10, travel for State, Tribal or local however, the reporting schedule must 1200 Sixth Avenue, Seattle, WA 98101. government staff to attend meetings require the recipient to report at least Phone: 206–553–6219. other than through this grant program. annually. [email protected]. Dated: January 22, 2004. VII. Agency Contacts VIII. Other Information Diane Regas, Headquarters and Regional Wetland Director, Office of Wetlands, Oceans, and A. Quality Assurance/Quality Control Watersheds. Grant Coordinators (QA/QC) [FR Doc. 04–2818 Filed 2–9–04; 8:45 am] Headquarters QA/QC and peer review are BILLING CODE 6560–50–P Connie Cahanap, U.S. EPA Wetlands sometimes applicable to these grants Division, 1200 Pennsylvania Avenue, (see 40 CFR 30.54 and 40 CFR 31.45.) NW., MC 4502T, Washington, DC QA/QC requirements apply to the ENVIRONMENTAL PROTECTION 20460. Phone: 202–566–1382. collection of environmental data. AGENCY [email protected]. Environmental data are any measurements or information that [FRL–7620–5] Region 1—CT, ME, MA, NH, RI, VT describe environmental processes, Jeanne Cosgrove. U.S. EPA Region 1, location, or conditions; ecological or Region III Water Protection Division; 1 Congress Street, MC CSP, Suite 100, health effects and consequences; or the Revision to Delaware’s NPDES Boston, MA 02114. Phone: 617–918– performance of environmental Program; State of Delaware’s 1669. [email protected]. technology. Environmental data include Submittal of a Substantial Program information collected directly from Revision to Its Authorized National Region 2—NJ, NY, PR, VI measurements, produced from models, Pollutant Discharge Elimination Kathleen Drake, U.S. EPA Region 2, and compiled from other sources such System (NPDES) Program 290 Broadway, NY, NY 10007. Phone: as databases or literature. Applicants 212–637–3817. [email protected]. should allow sufficient time and AGENCY: Environmental Protection Agency (EPA). Region 3—DE, MD, PA, VA, WV, DC resources for this process. EPA can assist applicants determine whether ACTION: Notice of revision, public Alva Brunner, U.S. EPA Region 3, QA/QC is required for the proposed comment period, and opportunity to 1650 Arch Street, MC 3EA30, project. If QA/QC is required for the request a public hearing. Philadelphia, PA 19103. Phone: 215– project, the applicant is encouraged to 814–2715. [email protected]. work with the appropriate EPA quality SUMMARY: The State of Delaware has Region 4—AL, FL, GA, KY, MS, NC, SC, staff to determine the appropriate QA/ submitted to EPA for review and TN QC practices for the project. If the approval revisions to the regulations applicant has an EPA-approved quality implementing the State’s National Sharon Ward, U.S. EPA Region 4, 61 Pollutant Discharge Elimination System Forsyth Street, SW., Atlanta, GA 30303. assurance project plan and it covers the project in the application, then they (NPDES) program, which was approved Phone: 404–562–9269. by EPA pursuant to section 402 of the [email protected]. need only reference the plan in their application. Contact the appropriate Clean Water Act (CWA). The State has Region 5—IL, IN, MI, MN, OH, WI Headquarters or Regional Office made significant revisions to sections 1 Wetland Grant Coordinator (See Section through 8 and sections 10 through 14 of Cathy Garra, U.S. EPA Region 5, 77 its Department of Natural Resources and West Jackson Blvd., MC WW16J, VII for Agency Contact information) for referral to an EPA quality staff. Environmental Control’s (DNREC) Chicago, IL 60604. Phone: 312–886– March 15, 1974 Regulations Governing 0241. [email protected]. B. Public Participation the Control of Water Pollution, and EPA Region 6—AR, LA, NM, OK, TX EPA regulations require public has determined that the DNREC’s Tyrone Hoskins, U.S. EPA Region 6, participation in various Clean Water Act Revision constitutes a substantial 1445 Ross Avenue, MC 6WQ–AT, programs including grants (40 CFR part revision to Delaware’s authorized Dallas, TX 75202. Phone: 214–665– 25). Each applicant for EPA financial NPDES program. Accordingly, EPA 7375. [email protected]. assistance shall include tasks for public requests public comment and is participation in their project’s work providing notice of an opportunity to Region 7—IA, KS, MO, NE plan submitted in the grant application request a public hearing on the Jason Daniels, U.S. EPA Region 7, 901 (40 CFR 25.11.) The project work plan submitted regulations. EPA seeks public North Fifth Street, Kansas City, KS should reflect how public participation comments on whether to approve or 66101. Phone: 913–551–7443. will be provided for, assisted, and disapprove the revisions to Delaware’s [email protected]. accomplished. authorized NPDES program, and a public hearing will be held if there is Region 8—CO, MT, ND, SD, UT, WY C. Annual Wetlands Meeting/Training significant public interest based on the Brent Truskowski, U.S. EPA Region 8, EPA encourages S/T/LGs to include requests received. Copies of the 999 18th Street, Suite 300, Denver, CO travel plans for wetland personnel to Delaware Regulation Revisions are 80202. Phone: 303–312–6235. attend at least one national wetland available for public inspection as [email protected]. meeting in support of the project or for indicated in the ADDRESSES section.

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DATES: Comments and/or requests for ‘‘if there is significant public interest Dated: February 4, 2004. public hearing must be received before based on requests received.’’ Thomas Voltaggio, March 26, 2004. The Delaware Regulation Revision Acting Regional Administrator, Region III. ADDRESSES: Comments should be includes amendments to sections 1 [FR Doc. 04–2817 Filed 2–9–04; 8:45 am] addressed to Evelyn MacKnight, U.S. through 8 and sections 10 through 14 of BILLING CODE 6560–50–P EPA, Region III, 3WP11, 1650 Arch the DNREC’s Regulations Governing the Street, Philadelphia, Pennsylvania, Control of Water Pollution. The majority 19103. of the amendments focus on DNREC’s FEDERAL COMMUNICATIONS issuance and administration of NPDES FOR FURTHER INFORMATION CONTACT: COMMISSION Evelyn MacKnight, (215) 814–5717, at permits in the State of Delaware. In the above address. Those who are deaf addition, DNREC updated its or hearing-impaired may use the Relay regulations for the construction and [CC Docket No. 99–294; FCC 03–331] Service at 1–800–654–5984 and request operation of wastewater/pollution Federal-State Joint Conference on that the call be relayed. control facilities and adopted Advanced Telecommunications SUPPLEMENTARY INFORMATION: Section regulations that formalize a periodic Services 402 of the Federal Clean Water Act assessment of municipal treatment plant (CWA) created the NPDES program performance and infrastructure needs. AGENCY: Federal Communications under which the Administrator of EPA Regulations were also adopted to Commission. address administrative procedures for may issue permits for the discharge of ACTION: Notice. pollutants into the waters of the United evaluating and issuing a State States under conditions required by the certification that an activity will be SUMMARY: This document increases the CWA. Section 402(b) allows States to conducted in such a manner that won’t size of the Federal-State Joint assume NPDES program responsibilities violate the applicable surface water Conference on Advanced upon approval by EPA. On April 1, quality criteria or standards, as required Telecommunications Services (‘‘Joint 1974, Delaware was authorized by EPA by Federal law. Delaware also included Conference’’) to include representatives to administer the NPDES program; the a number of water quality-based from up to seven state commissions, in State also received the authority to requirements, including the order to enhance its effectiveness and administer the General Permits program determination of Total Maximum Daily ensure a diversity of viewpoint. It also on October 23, 1992. Loads (TMDLs), allowances for intake fills vacancies created by the addition of EPA has issued a regulation at 40 CFR credits, and consideration for erosion two state seats, as well as recent part 123 that establishes the and corrosion from facilities’ piping. departures from the Joint Conference. requirements for NPDES State Programs. At the close of the public comment These measures will allow greater Section 123.62 establishes procedures period (including, if necessary, the federal-state cooperation, which is for revision of authorized NPDES State public hearing), the EPA Regional critical to facilitating the widespread Programs. Pursuant to § 123.62(a), a Administrator, with the concurrence of deployment of, and access to, advanced State may initiate a program revision the Associate General Counsel for Water services. and must keep EPA informed of proposed modifications to its regulatory and the Director of the Office of FOR FURTHER INFORMATION CONTACT: Jane authority. On July 28, 2003, the State of Compliance and Enforcement, will Phillips, Intergovernmental Affairs, Delaware submitted its regulation decide whether to approve or Consumer & Governmental Affairs revisions for formal review by EPA. disapprove the Delaware Regulation Bureau, (202) 418–1761. Pursuant to § 123.62(b)(1), a State Revision as a revision to the Delaware SUPPLEMENTARY INFORMATION: This is a program submittal is complete NPDES program. The decision to summary of the Commission’s Order, whenever the State submits such approve or disapprove will be based FCC 03–331, adopted December 19, documents as EPA determines are upon satisfying or meeting the 2003, and released December 23, 2003. necessary under the circumstances. In requirements of the CWA and 40 CFR The complete text of the Order is this instance, EPA determined that the part 123. The Delaware Regulation available on the Commission’s Internet State submittal was complete on Revision may be reviewed by the public site, at www.fcc.gov and is also available November 19, 2003, with the from 8 a.m. to 4 p.m. at the EPA office for inspection and copying during submission of a statement from the in Philadelphia, Monday to Friday normal business hours in the FCC State’s Attorney General’s office which (excluding holidays), at the address Reference Information Center, Courtyard certified that the regulations were duly appearing earlier in this notice. Copies Level, 445 12th Street, SW, CY–A257, adopted pursuant to State law. Section of the submittal may be obtained for a Washington, DC. The text may also be 123.62(b)(2) requires EPA to issue fee by contacting Evelyn MacKnight as purchased from the Commission’s copy public notice by publication in the indicated in the ADDRESSES section. contractor, Qualex International, Portals Federal Register and in newspapers All comments or objections received II, 445 12th Street, SW, Room CY–B402, having Statewide coverage, and to by March 26, 2004, will be considered Washington, DC 20554 (telephone 202– provide a period of public comment of 863–2893). To request materials in by EPA before taking final action on the at least 30 days whenever the Agency accessible formats for people with program revision. determines that a program revision is disabilities (Braille, large print, substantial. EPA has determined that Please bring the foregoing to the electronic files, audio format), send an the Delaware Regulation Revision, attention of persons whom you know e-mail to [email protected] or call the which is described below, constitutes a are interested in this matter. All written Consumer & Governmental Affairs substantial revision to Delaware’s comments and questions on this matter Bureau at (202) 418–0531 (voice), (202) NPDES program. Section 123.62(b)(2) should be addressed to Evelyn 418–7365 (TTY). This Order can also be also requires EPA to hold a public MacKnight at the above address or downloaded in text and ASCII formats hearing regarding the proposed revision telephone number. at http://www.fcc.gov/jointconference/.

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Synopsis The Order requires that a copy of all Maine Public Utilities Commission, and The Joint Conference was convened in filings in CC Docket 99–294 be served Deborah Tate, Chairman of the 1999 as part of the Commission’s on each of the following members of the Tennessee Regulatory Authority, are ongoing efforts to ensure that advanced Joint Conference at the following appointed to the Federal-State Joint addresses: Conference on Advanced services are deployed as rapidly as • possible to all Americans. It serves as a The Honorable Michael K. Powell, Telecommunications Services. forum for an ongoing dialogue between FCC Chairman, Federal Pursuant to section 410(b) of the the Commission, state regulators, and Communications Commission, 445 12th Communications Act of 1934, as local and regional entities regarding the Street, SW, Washington, DC 20554. amended, 47 U.S.C. 410(b), the • The Honorable Kevin J. Martin, deployment of advanced Honorable Bob Rowe, Chairman of the Commissioner, Chair, Federal State Joint telecommunications capabilities, and is Montana Public Service Commission, Conference on Advanced comprised of commissioners from state formerly a non-voting member, is Telecommunications Services, Federal public utilities commissions and from appointed as a full member to the Communications Commission, 445 12th the Federal Communications Federal-State Joint Conference on Street, SW, Washington, DC 20554. Commission. Advanced Telecommunications • The Honorable Kathleen Q. The Joint Conference is responsible Services. Abernathy, Commissioner, Federal for monitoring and collecting data Communications Commission, 445 12th Federal Communications Commission. regarding the practices of carriers as Street, SW, Washington, DC 20554. Marlene H. Dortch, they deploy advanced services • The Honorable Michael J. Copps, Secretary. throughout the nation. It has also held Commissioner, Federal [FR Doc. 04–2831 Filed 2–9–04; 8:45 am] a series of field hearings across the Communications Commission, 445 12th BILLING CODE 6712–01–P country and has conducted Broadband Street, SW, Washington, DC 20554. Summits to examine how best to • The Honorable Jonathan S. accelerate the deployment of affordable Adelstein, Commissioner, Federal advanced services to rural and other Communications Commission, 445 12th FEDERAL RESERVE SYSTEM under-served telecommunications users. Street, SW, Washington, DC 20554. Through these and other activities, the • The Honorable G. Nanette Formations of, Acquisitions by, and Joint Conference has worked Thompson, Commissioner, Regulatory Mergers of Bank Holding Companies cooperatively to promote the Commission of Alaska, 701 West Eight The companies listed in this notice widespread deployment of advanced Avenue, Suite 300, Anchorage, Alaska have applied to the Board for approval, services. 99501–3469. pursuant to the Bank Holding Company To help the Joint Conference achieve • The Honorable Irma Muse Dixon, Act of 1956 (12 U.S.C. 1841 et seq.) its broad mandate, and pursuant to Commissioner, Louisiana Public Service (BHC Act), Regulation Y (12 CFR Part section 410(b) of the Communications Commission, Office of the 225), and all other applicable statutes Act of 1934, 47 U.S.C. 410(b), the Order Commissioner, District 3—New Orleans, and regulations to become a bank appoints Commissioner Susan P. 1600 Canal Street, Suite 1400, New holding company and/or to acquire the Kennedy of the California Public Orleans, Louisiana 70112. Utilities Commission, Thomas L. Welch, • The Honorable Jo Anne Sanford, assets or the ownership of, control of, or Chairman of the Maine Public Utilities Chair, North Carolina Utilities the power to vote shares of a bank or Commission, and Deborah Tate, Commission, 430 North Salisbury bank holding company and all of the Chairman of the Tennessee Regulatory Street, Dobbs Building, Raleigh, NC banks and nonbanking companies Authority, to serve on the Federal-State 27603–5918. owned by the bank holding company, Joint Conference on Advanced • The Honorable Bob Rowe, including the companies listed below. Telecommunications Services. The Chairman, Montana Public Service The applications listed below, as well Order also appoints Bob Rowe, Commission, 1701 Prospect Avenue, PO as other related filings required by the Chairman of the Montana Public Service Box 20261, Helena, MT 59620–2601. Board, are available for immediate Commission, formerly a non-voting • The Honorable Susan P. Kennedy, inspection at the Federal Reserve Bank member, to serve as a full member of the Commissioner, California Public indicated. The application also will be Federal-State Joint Conference on Utilities Commission, 505 Van Ness available for inspection at the offices of Advanced Telecommunications Ave., San Francisco, CA 94102. the Board of Governors. Interested Services. • The Honorable Thomas L. Welch, persons may express their views in The number of members on the Joint Chairman, Maine Public Utilities writing on the standards enumerated in Conference has been increased in order Commission, 242 State Street, 18 State the BHC Act (12 U.S.C. 1842(c)). If the to augment diversity in Joint Conference House Station, Augusta, ME 04333– proposal also involves the acquisition of membership and thereby widen the 0018. a nonbanking company, the review also range of viewpoints and expertise. This • The Honorable Deborah T. Tate, includes whether the acquisition of the is critical to informed decision-making Chairman, Tennessee Regulatory nonbanking company complies with the as federal and state regulators join forces Authority, 460 James Robertson standards in section 4 of the BHC Act to encourage the deployment of Parkway, Nashville, Tennessee 37243. (12 U.S.C. 1843). Unless otherwise advanced telecommunications services. noted, nonbanking activities will be Increasing the size of the Joint Ordering Clauses conducted throughout the United States. Conference is also consistent with the Pursuant to section 410(b) of the Additional information on all bank approach the Commission has taken Communications Act of 1934, as holding companies may be obtained with other joint boards, where the amended, 47 U.S.C. 410(b), the from the National Information Center complexity and magnitude of the Honorable Susan P. Kennedy, website at www.ffiec.gov/nic/. board’s charter warranted a relatively Commissioner of the California Public Unless otherwise noted, comments large membership in order to address Utilities Commission, the Honorable regarding each of these applications the broad range of issues presented. Thomas L. Welch, Chairman of the must be received at the Reserve Bank

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indicated or the offices of the Board of its Policy Statement on Payments identifying or contact information. Governors not later than March 5, 2004. System Risk (PSR policy). First, the Public comments may also be viewed A. Federal Reserve Bank of Dallas Board intends to modify the daylight electronically or in paper in Room MP– (W. Arthur Tribble, Vice President) 2200 overdraft measurement rules (‘‘posting 500 of the Board’s Martin Building (20th North Pearl Street, Dallas, Texas 75201– rules’’) for interest and redemption and C Streets, NW.) between 9 a.m. and 2272: payments on securities issued by 5 p.m. on weekdays. 1. Tradition Bancshares, Inc., entities for which the Reserve Banks act FOR FURTHER INFORMATION CONTACT: Paul Houston, Texas; to acquire up to 100 as fiscal agents but whose securities are Bettge, Associate Director (202/452– percent of the voting shares of Katy not obligations of, or guaranteed by, the 3174), Stacy Coleman, Manager (202/ Bank, N.A., Katy, Texas. United States—that is, securities issued 452–2934), or Connie Horsley, Senior Board of Governors of the Federal Reserve by government-sponsored enterprises Financial Services Analyst (202/452– System, February 4, 2004. (GSEs) and certain international 5239), Division of Reserve Bank Robert deV. Frierson, organizations. The planned Operations and Payment Systems; for Deputy Secretary of the Board. modification would revise the Board’s the hearing impaired only: PSR policy to specify that the Reserve [FR Doc. 04–2772 Filed 2–9–04; 8:45 am] Telecommunications Device for the Banks will release interest and Deaf, Dorothea Thompson (202/452– BILLING CODE 6210–01–S  redemption payments on the Fedwire - 3544). eligible securities issued by a GSE or SUPPLEMENTARY INFORMATION: FEDERAL RESERVE SYSTEM international organization only when the issuer’s Federal Reserve account I. Background contains funds equal to or in excess of Federal Open Market Committee; A. Foundation of the PSR Policy Domestic Policy Directive of December the amount of the interest and 9, 2003 redemption payments to be made.1 The In 1985, the Board adopted a policy Board requests comment on how best to to reduce the risks that payment systems In accordance with § 271.25 of its implement this policy change in order present to the Federal Reserve Banks, to rules regarding availability of to promote a smooth market adjustment. the banking system, and to other sectors information (12 CFR part 271), there is Second, the Board intends to align the of the economy (50 FR 21120, May 22, set forth below the domestic policy PSR policy’s treatment of the general 1985). An integral component of this directive issued by the Federal Open corporate account activity (activity other PSR policy is managing the Federal Market Committee at its meeting held than interest and redemption payments) Reserve’s direct credit risk by on December 9, 2003.1 of GSEs and certain international controlling institutions’ use of Federal The Federal Open Market Committee organizations with the treatment of Reserve intraday credit, commonly seeks monetary and financial conditions account activity of other account referred to as ‘‘daylight credit’’ or that will foster price stability and holders that do not have regular access ‘‘daylight overdrafts.’’ A daylight promote sustainable growth in output. to the Federal Reserve’s discount overdraft occurs when an account To further its long–run objectives, the window. Such treatment includes holder’s Federal Reserve account is in a Committee in the immediate future strongly discouraging daylight negative position during the business seeks conditions in reserve markets overdrafts and applying a penalty fee to day. The PSR policy requires all consistent with maintaining the federal daylight overdrafts that nonetheless depository institutions incurring funds rate at an average of around 1 result from these entities’ general daylight overdrafts in their Federal percent. corporate payment activity. Reserve accounts to establish a By order of the Federal Open Market DATES: Comments must be received by maximum limit, or net debit cap, on Committee, February 3, 2004. April 16, 2004. those overdrafts. In addition, a Reserve Vincent R. Reinhart, ADDRESSES: Comments should refer to Bank may apply other risk controls to an Secretary, Federal Open Market Committee. Docket No. OP–1182 and may be mailed account holder’s payment activity if the account holder incurs daylight [FR Doc. E4–239 Field 2–9–04; 8:45 am] to Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve overdrafts in violation of the PSR policy BILLING CODE 6210–01–S System, 20th Street and Constitution or if the Reserve Bank believes that the Avenue, NW., Washington, DC 20551. account holder poses credit risk in FEDERAL RESERVE SYSTEM Please consider submitting your excess of what the Reserve Bank comments through the Board’s Web site determines to be prudent. Under these [Docket No. OP–1182] at www.federalreserve.gov/generalinfo/ circumstances, a Reserve Bank may foia/ProposedRegs.cfm, by e-mail to place real-time controls on the account Policy Statement on Payments System [email protected], or holder’s payment activity, so as to reject Risk by fax to the Office of the Secretary at requested payments, or require the AGENCY: Board of Governors of the 202/452–3819 or 202/452–3102. Rules account holder to pledge collateral to Federal Reserve System. proposed by the Board and other federal cover its daylight overdrafts as a means ACTION: Notice and request for comment. agencies may also be viewed and of deterring further the use of Federal commented on at www.regulations.gov. Reserve daylight credit.2 SUMMARY: The Board is giving notice All public comments are available Under the PSR policy, an institution’s that it intends to adopt two changes to from the Board’s Web site at eligibility to access daylight credit is www.federalreserve.gov/generalinfo/ 1 Copies of the Minutes of the Federal Open foia/ProposedRegs.cfm as submitted, 2 The Reserve Banks have the ability to monitor Market Committee meeting on December 9, 2003, except as necessary for technical an entity’s account for certain payment types in real which includes the domestic policy directive issued reasons. Accordingly, your comments time and reject those payments that would create, at the meeting, are available upon request to the or increase, a daylight overdraft in the entity’s Board of Governors of the Federal Reserve System, will not be edited to remove any account. These payment types include Fedwire Washington, DC 20551. The minutes are published funds transfers, National Settlement Service in the Federal Reserve Bulletin and in the Board’s 1 Fedwire is a registered servicemark of the transactions, and certain automated clearing house annual report. Federal Reserve Banks. transactions.

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contingent upon whether the institution B. Introduction of Daylight Overdraft holders a strong incentive to avoid is eligible for regular access to the Fees incurring any, including inadvertent, Federal Reserve’s discount window and Since the PSR policy was first daylight overdrafts. The Board’s policy whether it is in sound financial adopted in 1985, the Board has explicitly addressed the account holders condition. By statute, regular access to modified and expanded it several times. that would be subject to the penalty fee, the discount window generally is Notably, in 1992, the Board approved a which included Edge and agreement available to institutions that are subject policy to charge institutions a fee for corporations, limited purpose trust to reserve requirements.3 If such an their use of Federal Reserve daylight companies, and bankers’ banks that do institution fails to cover a daylight credit, beginning in April 1994 (57 FR not waive their exemption from reserve overdraft by the close of the business 47084, October 14, 1992). The Board’s requirements. At the time, however, the day, it either obtains a discount window goal in adopting this policy was to Board did not explicitly address loan or incurs an overnight overdraft. induce behavior that would reduce risk whether certain aspects of the policy The Federal Reserve strongly and increase efficiency in the payment would be applied to GSEs and discourages institutions from incurring system. At that time, the Board also international organizations for which 6, 7 overnight overdrafts by charging a modified how it posted different types the Reserve Banks act as fiscal agents. penalty rate, equal to the federal funds of transactions to institutions’ Federal In 1994, the Board issued an rate plus four percentage points, on the Reserve accounts to reflect more closely interpretation of the PSR policy that amount of the overnight overdraft. the time that transactions were stated GSEs should not incur daylight The Federal Reserve has long been processed (57 FR 47093, October 14, overdrafts in their accounts and would not be allowed to adopt positive net concerned that an institution that does 1992).5 The Board’s objectives in debit caps because they do not have not have regular access to the discount designing these posting rules included regular access to the discount window window may nevertheless incur a minimizing intraday float, facilitating (59 FR 25060, May 13, 1994). In its daylight overdraft, which could, in turn, depository institutions’ monitoring and interpretation, the Board granted a become an overnight overdraft. To control of their account balances during temporary exemption from fees on address the risks arising from such the day, and reflecting the legal rights daylight overdrafts resulting from the overdrafts and to avoid the extension of and obligations of parties to payments. Reserve Banks’ release of interest and overnight credit to institutions that lack The Board’s objective of minimizing redemption payments on Fedwire- regular access to the discount window, intraday float is especially important in eligible securities issued by GSEs prior the PSR policy does not permit such light of the daylight overdraft fee, which gives intraday credit an explicit value. to the issuers’ full funding of such institutions to adopt a positive net debit payments.8 The Board granted this cap and strongly discourages them from After the Board approved its policy of charging fees for daylight overdrafts and temporary exemption because it was incurring any daylight overdrafts. The uncertain of the effect that daylight Board’s policy is consistent with its revised posting rules, it adopted a penalty fee (the regular daylight overdraft fees would have on securities Congress’s intent in the Federal Reserve markets and did not want to introduce Act to allow depository institutions overdraft fee, currently 36 basis points, plus 100 basis points) for daylight too much change at one time. The Board access to Federal Reserve overnight indicated that it would revisit the credit as a quid pro quo for being overdrafts incurred by certain institutions that, by statute, do not have temporary exemption after market subject to reserve requirements and to participants adjusted to the effects of impose additional conditions on the regular discount window access (59 FR 8977, February 24, 1994). Because of daylight overdraft fees. In addition, the Federal Reserve’s provision of overnight Board applied the regular daylight credit to other entities.4 concerns that a daylight overdraft could become an overnight overdraft, the overdraft fee to the daylight overdrafts Board determined that such account 3 Before the passage of the Monetary Control Act 6 holders should not be permitted the In their role as fiscal agents, the Reserve Banks of 1980, only banks that were members of the maintain securities issued by GSEs and Federal Reserve System enjoyed regular access to same access to intraday credit as international organizations on the Fedwire the discount window. The Monetary Control Act depository institutions and should be Securities Service and make interest and extended reserve requirements to nonmember prohibited from incurring daylight redemption payments to depository institutions on institutions and provided that any institution overdrafts. Recognizing, however, that each issuer’s behalf, in addition to providing other holding deposits subject to reserve requirements payment services generally related to these fiscal (transaction accounts and nonpersonal time these account holders may, nonetheless, agency services. deposits) would have the same access to the incur daylight overdrafts, the Board 7 These entities include the following GSEs: the discount window as member institutions (12 U.S.C. believed a penalty fee should be applied Federal National Mortgage Association (Fannie 461(b)(7)). to these account holders’ daylight Mae), the Federal Home Loan Mortgage Corporation 4 Section 13(3) of the Federal Reserve Act (Freddie Mac), entities of the Federal Home Loan empowers the Board, by the affirmative vote of not overdrafts to provide such account Bank System (FHLBS), the Farm Credit System, the less than five members (or, in certain cases, all Federal Agricultural Mortgage Corporation (Farmer available members), to authorize any Federal 5 Prior to the 1992 posting rule modification, Mac), and the Student Loan Marketing Association Reserve Bank to lend to individuals, partnerships, Fedwire funds and securities transfers were posted (Sallie Mae). They also include the following and corporations under ‘‘unusual and exigent to institutions’ Federal Reserve accounts as they international organizations: the International Bank circumstances’’ (12 U.S.C. 343 and 248(r)). Section were processed during the business day (as they for Reconstruction and Development (World Bank), 13(13) allows any Federal Reserve Bank to lend to still are today). The net of all automated clearing the Inter-American Development Bank, the Asian any individual, partnership, or corporation when house transactions was posted as if the transactions Development Bank, and the African Development secured by U.S. government securities, subject to occurred at the opening of business, regardless of Bank. The Student Loan Marketing Association such limitations, restrictions, and regulations as the whether the net was a debit or credit balance. All Reorganization Act of 1996 requires Sallie Mae to Board may prescribe (12 U.S.C. 347c). The Board’s other, or ‘‘non-wire,’’ activity was netted for a be completely privatized by 2008; however, Sallie Regulation A applies the ‘‘unusual and exigent business day, and if the net balance was a credit, Mae plans to complete privatization by September circumstances’’ requirement to discount window the credit amount was added to the opening 2006. Upon privatization, Sallie Mae will no longer loans to any entity without regular discount balance. If the net balance was a debit, the debit be considered a GSE, and the Reserve Banks will window access, regardless of the type of collateral amount was deducted from the closing balance. no longer add new issuances of Sallie Mae pledged. Regulation A also requires the Federal Under this method, an institution could use all of securities to the Fedwire Securities Service. Reserve Banks to consult with the Board before its non-wire net credits to offset any Fedwire funds 8 The term ‘‘interest and redemption payments’’ lending to those entities. Lending under these or securities debits during the day but postpone the refers to payments of principal and interest on provisions has been extremely rare, and such loans need to cover non-wire net debits until the close of securities maintained on the Fedwire Securities have not been extended since the 1930s. the day. Service.

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arising from the GSEs’ general corporate II. Discussion of Planned Policy Reserve’s statutory mission nor funding activity, but did not apply the Changes appropriate risk management policy for penalty fee that applies to other the central bank. Furthermore, this A. Modification of Posting Rules for institutions that lack regular discount practice is inconsistent with that of Interest and Redemption Payments window access.9 The Board stated it private issuing and paying agents for was not, however, ruling out the future In the course of the Board’s their customers’ securities. In general, application of the penalty fee. assessment of its 1994 interpretation of these issuing and paying agents do not In March 1995, the Board decided to the PSR policy, the Board found that the allow payments to be made for a raise the rate charged on daylight dollar volume of interest and securities issuer before the issuer has overdrafts to 36 basis points (60 FR redemption payments on Fedwire- fully funded its payments. The Board, 12559, March 7, 1995). At the time, the eligible securities issued by GSEs and therefore, intends to revise its policy to Board stated that it would evaluate international organizations that are specify that the Reserve Banks will further fee increases in a few years. credited to the receiving depository release interest and redemption When the Board began its evaluation of institutions’ Federal Reserve accounts payments on Fedwire-eligible securities the effectiveness of the daylight prior to such payments being fully issued by a GSE or an international overdraft fee in 2000, it recognized that funded by the issuer has grown organization only when the issuer’s significant changes had occurred in the significantly over the past ten years. In Federal Reserve account contains funds banking, payments, and regulatory large part this increase owes to the rapid equal to or in excess of the amount of environment since the fee was growth in Fedwire-eligible securities the issuer’s interest and redemption introduced and, as a result, decided to issued by GSEs. In addition, for some payments to be made. broaden its review to include all aspects issuers, the lag between the time the Under the revised policy, a cut-off of the Federal Reserve’s daylight credit Reserve Banks credit depository hour by which the issuers must fund policies. Based on its review, the Board institutions’ accounts for the interest their respective interest and redemption determined that the PSR policy appears and redemption payments and the time payments would be established on the to be generally effective in controlling the issuer covers the payments extends, Fedwire Securities Service in order to at times, until shortly before the close of avoid disruptions to end-of-day risk to the Federal Reserve and creating 11 incentives for depository institutions to the Fedwire Funds Service. processing for this and related systems. The Board’s current daylight overdraft manage their intraday credit exposures The latest this cut-off hour could be is measurement rules specify that U.S. (66 FR 64419, December 13, 2001).10 4 p.m. ET in order to allow the Reserve Treasury and government agency During its review, the Board also Banks to close other elements of the interest and redemption payments are determined that market participants Fedwire Securities and Funds Services posted, that is, debited from the issuers’ 13 14 appear to have adjusted to daylight on time. In the event that an issuer accounts and credited to the receivers’ did not fund its interest and redemption overdraft fees, which prompted an accounts, by 9:15 a.m. Eastern Time assessment of the temporary exemption payments by the established cut-off (ET) and that original issues of hour, its payments would not be granted to GSEs under the Board’s 1994 securities are posted on a flow basis, as interpretation of the PSR policy. In processed on that day. Requests by an they are issued, but no earlier than 9:15 issuer for extensions of the 4 p.m. ET conducting this assessment, the Board a.m. ET.12 These posting rules were evaluated the treatment of interest and funding deadline would not be granted. designed primarily to grant depository The planned posting rule redemption payments on Fedwire- institutions the benefit of receiving modification is intended to address the eligible securities issued by GSEs and interest and redemption payments on intraday credit that results from the certain international organizations as U.S. Treasury or government agency current manner in which the Reserve well as the treatment of other payment securities prior to debits being made to Banks process and post interest and services these entities use for their their accounts for the purchase of new redemption payments on securities general corporate payment activity. As a issues. issued by GSEs and international result of this evaluation, the Board plans For operational ease, the Reserve organizations to the receiving to implement two modifications to its Banks have applied the same posting depository institutions’ Federal Reserve PSR policy as described below. rules to interest and redemption accounts prior to such payments being payments on Fedwire-eligible securities fully funded by the issuer. The Board 9 To facilitate measurement of overdrafts arising from the different activity, the Board required the issued by GSEs and international recognizes that the removal of Federal GSEs and Reserve Banks to establish separate GSE organizations. However, the practice of accounts for principal and interest activity (P&I releasing such payments before they are 13 Participants on the Fedwire Securities Service account) and for general corporate payment activity fully funded by the issuer is neither can reposition securities held in their own accounts (general account). necessary to achieve the Federal against payment until 4:30 p.m. ET (repositioning 10 Through its analysis, the Board identified securities without payment is permitted until 7 growing liquidity pressures among certain p.m. ET). Because interest and redemption payments system participants and, as a result, 11 Fedwire Funds messages other than settlement payments on Fedwire-eligible securities are revised the policy to modify the net debit cap payment orders may be sent until 6 p.m. ET processed through the Fedwire Securities Service as calculation for U.S. branches and agencies of (settlement payment orders may be sent until 6:30 funds-only transactions, they cannot be processed foreign banks, to modify the time electronic check p.m. ET). Under the Reserve Banks’ Operating after 4:30 p.m. ET. A cut-off hour of 4 p.m. ET for presentments are posted to depository institutions’ Circular 6, a settlement payment order is a payment issuers to fund these interest and redemption Federal Reserve accounts for purposes of measuring order in which the originator and the beneficiary payments would provide the Reserve Banks a 30- daylight overdrafts, and to allow certain depository are each either (i) a bank subject to reserve minute window in which to complete the requisite institutions to pledge collateral to the Federal requirements (whether or not it actually maintains processing for funds-related transactions in order to Reserve in order to access additional daylight reserves), or (ii) a participant in a net settlement close the Fedwire Securities Service on time. overdraft capacity above their net debit caps, arrangement approved by a Reserve Bank as an 14 The 4 p.m. ET cut-off hour would apply subject to Reserve Bank approval. These changes to eligible originator or beneficiary of a settlement specifically to the interest and redemption on the policy were intended to benefit the few payment order sent during the settlement period. Fedwire-eligible securities issued by GSEs and financially healthy institutions that had been 12 While transactions for various payment types international organizations and would be constrained by their net debit caps by increasing are processed throughout the business day, daylight independent of any other established operating their daylight overdraft capacity and to remove a overdrafts in an entity’s Federal Reserve account are hours of the Fedwire Securities Service as potential impediment to the use of electronic check calculated on an ex post basis according to the published in the Reserve Banks’ Operating Circular presentment. daylight overdraft posting rules. 7.

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Reserve intraday credit that is currently payment activity, that is, payment ± Fedwire funds transfers extended between the time the Reserve activity unrelated to interest and ± Fedwire book-entry securities Banks disburse interest and redemption redemption payments. While most of transfers payments and the time the Reserve these entities only infrequently incur + Fedwire book-entry interest and Banks receive funding for such daylight overdrafts as a result of their redemption payments on securities payments may require alternate sources general corporate payment activity, a that are not obligations of, or of private funding. This is similar to the few of these entities incur such daylight guaranteed by, the United States 34 hour-by-hour funding that depository overdrafts on an almost daily basis. ± Net settlement entries. institutions arrange in the ordinary The Board has determined that GSEs Post by 9:15 a.m. Eastern Time: course of business for other types of and international organizations for + U.S. Treasury and government agency transactions. When depository which the Reserve Banks act as fiscal book-entry interest and redemption institutions have difficulty with agents should not be permitted the same payments 5 intraday funding sources, they may be access to intraday credit as depository Post Beginning at 9:15 a.m. Eastern required to obtain alternative financing institutions because, by statute, they do Time: in the money and capital markets to not have regular access to the discount ¥ Original issues of Treasury facilitate their intraday operations. The window. Therefore, to provide uniform securities.6 Board is confident that payment treatment of account holders that do not Section I.E. under the heading practices and markets will adjust to the have regular access to the discount ‘‘Special situations,’’ would be amended planned policy changes, and, in an window, the Board intends to apply the as follows with changes identified in effort to promote a smooth market penalty fee to daylight overdrafts that italics: adjustment and minimize market result from GSEs’ and international E. Special Situations participants’ adjustment costs, the organizations’ general corporate Board requests comment on whether to payment activity. The Board plans to Under the Board’s policy, certain implement the policy change through implement the penalty fee concurrent account holders warrant special full implementation on a specified date with the posting rule change for interest treatment primarily because of their or through a phased approach. and redemption payments, either upon charter types. As mentioned previously, If implementing the planned policy full implementation of that policy an institution must have regular access change without a phase-in period would change or at the start of a phased to the discount window and be in sound better promote a smooth market implementation. This planned policy financial condition in order to adopt a adjustment, the Reserve Banks would, change would supersede the Board’s net debit cap greater than zero. Account beginning in July 2006, release interest 1994 temporary exemption pertaining to holders that do not have regular access and redemption payments on Fedwire- government-sponsored enterprises. As a eligible securities issued by a GSE or an result, the Board would rescind its 1994 3 The Reserve Banks act as fiscal agents for certain entities, such as government-sponsored international organization only when interpretation upon implementation of enterprises (GSEs) and international organizations, the issuer’s Federal Reserve account the planned policy change. whose securities are Fedwire-eligible but are not contains funds equal to or in excess of obligations of, or guaranteed by, the United States. III. Paperwork Reduction Act the amount of the issuer’s interest and These entities include the following GSEs: the In accordance with the Paperwork Federal National Mortgage Association (Fannie redemption payments to be made. Mae), the Federal Home Loan Mortgage Corporation Alternatively, if market participants Reduction Act of 1995 (44 U.S.C. ch. (Freddie Mac), entities of the Federal Home Loan believe that a phased approach would 3506; 5 CFR 1320 Appendix A.1), the Bank System (FHLBS), the Farm Credit System, the better facilitate implementation of the Board has reviewed the policy statement Federal Agricultural Mortgage Corporation (Farmer under the authority delegated to the Mac), and the Student Loan Marketing Association planned change, the Board requests (Sallie Mae). These entities also include the comment on the specific structure and Board by the Office of Management and following international organizations: the objectives of any suggested phased Budget. No collections of information International Bank for Reconstruction and approach and the rationale for why such pursuant to the Paperwork Reduction Development (World Bank), the Inter-American an approach is considered preferable to Act are contained in the policy Development Bank, the Asian Development Bank, and the African Development Bank. The Student one of full implementation in terms of statement. Loan Marketing Association Reorganization Act of promoting a smooth market IV. Federal Reserve Policy Statement 1996 requires Sallie Mae to be completely adjustment.15 privatized by 2008; however, Sallie Mae plans to on Payments System Risk complete privatization by September 2006. Upon B. Uniform Policy Treatment of Account The Board plans to amend the privatization, Sallie Mae will no longer be Holders That Lack Regular Access to the ‘‘Federal Reserve Policy Statement on considered a GSE, and the Reserve Banks will no longer add new issuances of Sallie Mae securities Discount Window Payments System Risk.’’ Section I.A., to the Fedwire Securities Services. As part of the Board’s assessment of under the heading ‘‘Daylight overdraft 4 The Reserve Banks will post these transactions, its 1994 interpretation of the PSR definition and measurement’’ would be as directed by the issuer, provided that the issuer’s amended as follows with changes Federal Reserve account contains funds equal to or policy, the Board also evaluated the in excess of the amount of the interest and treatment of other payment services identified in italics: redemption payments to be made. If a Reserve used by GSEs and international Procedures for Measuring Daylight Banks does not receive funding from an issuer for the issuer’s interest and redemption payments by organizations for their general corporate 2 Overdrafts the established cut-off hour of 4 p.m. ET, the issuer’s payments will not be processed on that day. 15 Under any phased approach, each issuer would Opening Balance (Previous Day’s 5 be required to fund the amount of its interest and Closing Balance) For purposes of this policy, government agencies redemption payments to be made on a given day are those entities (other than the U.S. Treasury) for by the close of business, as is the case today. Post Throughout Business Day: which the Reserve Banks act as fiscal agents and Regardless of the approach the Board ultimately whose securities are obligations of, or guaranteed adopts, at full implementation, each issuer would 2 This schedule of posting rules does not affect by, the United States. be required to fund the amount of its interest and the overdraft restrictions and overdraft- 6 Original issues of government agency GSE, or redemption payments to be made on a given day measurement provisions for nonbank banks international organization securities are delivered by the established cut-off hour before the Reserve established by the Competitive Equality Banking as book-entry securities transfers and will be posted Bank would release the issuer’s interest and Act of 1987 and the Board’s Regulation Y (12 CFR when the securities are delivered to the purchasing redemption payments. 225.52). institutions.

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to the discount window include Edge calculated differently for these account Technical Assistance Support for the and agreement corporations, bankers’ holders than for depository institutions, Rapid Strengthening of Blood banks that are not subject to reserve overnight overdrafts at Edge and Transfusion Services in Selected requirements, limited-purpose trust agreement corporations, bankers’ banks Countries in Africa and the Caribbean companies, government-sponsored that are not subject to reserve Under the President’s Emergency Plan enterprises (GSEs), and international requirements, limited-purpose trust for AIDS Relief was published in the organizations. Depository institutions companies, GSEs, and international Federal Register on December 1, 2003, that have been assigned a zero cap by organizations are priced the same as volume 68, number 230, pages 67181– their Reserve Banks are also subject to overnight overdrafts at depository 67186. The notice is amended as special considerations under this policy institutions that have regular access to follows: based on the risks they pose. In the discount window. On page 67183, in the first column developing its policy for these account A new heading ‘‘Government- under ‘‘III.1. Eligible applicants,’’ please holders, the Board has sought to balance sponsored enterprises and international include a fifth bullet allowing ‘‘For the goal of reducing and managing risk organizations’’ and text would be added profit organizations’’ to apply. in the payments system, including risk to read as follows in Section I.E.4.: On page 67185, in the first column to the Federal Reserve, with that of 4. Government-sponsored enterprises under ‘‘IV.5. Funding restrictions,’’ minimizing the adverse effects on the and international organizations please incorporate the following as an payments operations of these account The Reserve Banks act as fiscal agents additional restriction: holders. for certain GSEs and international In accordance with CFR 45 74.81, no HHS Regular access to the Federal Reserve organizations in accordance with funds may be paid as profit to any recipient discount window generally is available federal statutes. These entities generally even if the recipient is a commercial to institutions that are subject to reserve have Federal Reserve accounts and organization. Profit is any amount in excess requirements. If an account holder that issue securities over the Fedwire of allowable direct and indirect costs. is not subject to reserve requirements Securities Service. The securities of Dated: February 4, 2004. and thus does not have regular these account holders are not Sandra R. Manning, discount-window access were to incur a obligations of, or guaranteed by, the daylight overdraft, the Federal Reserve Director, Procurement and Grants Office, United States. Furthermore, these Centers for Disease Control and Prevention. might end up extending overnight credit account holders are not subject to [FR Doc. 04–2778 Filed 2–9–04; 8:45 am] to that account holder if the daylight reserve requirements, do not have BILLING CODE 4163–18–P overdraft were not covered by the end regular discount-window access, and of the business day. Such a credit should refrain from incurring daylight extension would be contrary to the quid overdrafts and post collateral to cover DEPARTMENT OF HEALTH AND pro quo of reserves for regular discount- any daylight overdrafts they do incur. HUMAN SERVICES window access as reflected in the GSEs and international organizations Federal Reserve Act and in Board are subject to the same daylight- Food and Drug Administration regulations. Thus, account holders that overdraft penalty rate as other entities [FDA 225–03–8002] do not have regular access to the that do not maintain reserves and do discount window should not incur not have regular discount-window daylight overdrafts in their Federal Memorandum of Understanding access. Between the Food and Drug Reserve accounts. Section I.E.4., under the heading Certain account holders are subject to Administration and Virginia ‘‘Problem institutions,’’ would be Polytechnic Institute and State a daylight-overdraft penalty fee levied renumbered as ‘‘I.E.5.’’ against the average daily daylight University overdraft incurred by the account By order of the Board of Governors of the Federal Reserve System, February 4, 2004. AGENCY: Food and Drug Administration, holder. These include Edge and HHS. agreement corporations, bankers’ banks Jennifer J. Johnson, ACTION: Notice. that are not subject to reserve Secretary of the Board. requirements, limited-purpose trust [FR Doc. 04–2797 Filed 2–9–04; 8:45 am] SUMMARY: The Food and Drug companies, GSEs, and international BILLING CODE 6210–01–P Administration (FDA) is providing organizations. The annual rate used to notice of a memorandum of determine the daylight-overdraft penalty understanding (MOU) between FDA and fee is equal to the annual rate applicable DEPARTMENT OF HEALTH AND the Virginia Polytechnic Institute and to the daylight overdrafts of other HUMAN SERVICES State University to establish terms of depository institutions (36 basis points) collaboration to support shared interests plus 100 basis points multiplied by the Centers for Disease Control and that can proceed through a variety of fraction of a 24-hour day during which Prevention programs, such as sabbaticals, Fedwire is scheduled to operate [Program Announcement 04078] postdoctoral fellowships, and student (currently 18/24). The daily daylight internships. overdraft penalty rate is calculated by Providing Technical Assistance dividing the annual penalty rate by 360. DATES: The agreement became effective Support for the Rapid Strengthening of March 13, 2003. The daylight-overdraft penalty rate Blood Transfusion Services in FOR FURTHER INFORMATION CONTACT: applies to the account holder’s average Selected Countries in Africa and the Peter Pitts, Office of External Relations daily daylight overdraft in its Federal Caribbean Under the President’s (HF–10), Food and Drug Reserve account. The daylight-overdraft Emergency Plan for AIDS Relief; Administration, 5600 Fishers Lane, penalty rate is charged in lieu of, not in Amendment addition to, the rate used to calculate Rockville, MD 20857, 301–827–3330. daylight overdraft fees for depository A notice announcing the availability SUPPLEMENTARY INFORMATION: In institutions described in section I.B. of fiscal year (FY) 2004 funds for accordance with 21 CFR 20.108(c), While daylight overdraft fees are cooperative agreements for Providing which states that all written agreements

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and MOUs between FDA and others Dated: February 2, 2004. shall be published in the Federal Jeffrey Shuren, Register, the agency is publishing notice Assistant Commissioner for Policy. of this MOU. BILLING CODE 4160–01–S

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[FR Doc. 04–2738 Filed 2–9–04; 8:45 am] BILLING CODE 4160–01–C

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DEPARTMENT OF HEALTH AND Regarding prescription human drugs: under-treated conditions. The guidances HUMAN SERVICES Lesley R. Frank, Center for Drug are discussed in more detail in section Evaluation and Research (HFD–42), II of this document. Food and Drug Administration Food and Drug Administration, This notice is also announcing the [Docket No. 2004D–0042] 5600 Fishers Lane, Rockville, MD withdrawal of the draft guidance for 20857, 301–827–2831. industry entitled ‘‘Using FDA-Approved Draft Guidances for Industry on Regarding prescription human Patient Labeling in Consumer-Directed Improving Information About Medical biological products: Glenn N. Byrd, Print Advertisements,’’ which was Products and Health Conditions; Center for Biologics Evaluation and issued by FDA on April 23, 2001 (66 FR Withdrawal; Availability Research (HFM–600), Food and 20468), and which is being superseded Drug Administration, 1401 by the Brief Summary Guidance. AGENCY: Food and Drug Administration, Rockville Pike, Rockville, MD HHS. 20852–1448, 301–827–3028. II. The Draft Guidances ACTION: Notice. Regarding medical device products: A. The Brief Summary Guidance Deborah Wolf, Center for Devices SUMMARY: The Food and Drug and Radiological Health (HFZ–300), FDA has responsibility under the Administration (FDA) is announcing the 2098 Gaither Road, Rockville, MD Federal Food, Drug, and Cosmetic Act availability of three draft guidances for 20850, 301–594–4589. (the act) for regulating advertising for prescription drugs. Section 502(n) of the industry designed to improve SUPPLEMENTARY INFORMATION: information provided to consumers and act (21 U.S.C. 352(n)), requires that an health care practitioners by medical I. Background advertisement for a prescription drug product firms about medical products FDA is announcing the availability of contain information about the risks of and health conditions. The three three draft guidances designed to using the advertised product. This guidances are entitled: ‘‘Brief Summary: improve information provided to requirement is further defined in the Disclosing Risk Information in consumers and health care practitioners prescription drug advertising Consumer-Directed Print by medical product firms about medical regulations in part 202 (21 CFR part Advertisements’’ (Brief Summary products and health conditions. The 202), and is known as the ‘‘brief Guidance), ‘‘Help-Seeking and Other guidances were prepared in part based summary’’ requirement. Currently, it is Disease Awareness Communications by on discussions and presentations at an commonplace for manufacturers to or on Behalf of Drug and Device Firms’’ open public meeting on consumer- comply with the brief summary (Disease Awareness Guidance), and directed advertising that FDA held in requirement by presenting verbatim and ‘‘Consumer-Directed Broadcast September 2003, http://www.fda.gov/ in small type the entire risk-related Advertising of Restricted Devices ’’ cder/ddmac/DTCmeeting2003.html. The sections of the FDA-approved (Device Broadcast Advertising three guidances are entitled ‘‘Brief professional labeling. Guidance). FDA is also announcing the Summary: Disclosing Risk Information The agency believes that a print withdrawal of the draft guidance for in Consumer-Directed Print advertisement that discloses the most industry entitled ‘‘Using FDA-Approved Advertisements’’ (Brief Summary serious and the most common risks of Patient Labeling in Consumer-Directed Guidance), ‘‘Help-Seeking and Other a product is a better way of Print Advertisements.’’ Disease Awareness Communications by communicating risk information to DATES: Written comments on the draft or on Behalf of Drug and Device Firms’’ patients than the current lengthy and guidances may be submitted by May 10, (Disease Awareness Guidance), and technical brief summary. Accordingly, 2004. General comments on agency ‘‘Consumer-Directed Broadcast the Brief Summary Guidance describes guidance documents are welcome at any Advertising of Restricted Devices ’’ how sponsors can use FDA-approved time. (Device Broadcast Advertising patient labeling or Highlights of the Guidance). The draft guidances are FDA-approved professional labeling to ADDRESSES: Submit written requests for intended to provide clear advice to provide risk information in consumer- single copies of the draft guidances to medical product firms on the rules directed print advertisements for the Division of Drug Information (HFD– applicable to certain communications to prescription drugs. 240), Center for Drug Evaluation and consumers and health care practitioners. The guidance also encourages the use Research, Food and Drug One of the principal objectives of the of consumer-friendly language in Administration, 5600 Fishers Lane, three guidances is to encourage advertisements that use highlights of Rockville, MD 20857; or to the Office of prescription drug firms to present risk FDA-approved professional labeling (or, Communication, Training, and information in their consumer-directed before the proposed rule revising the Manufacturers Assistance (HFM–40), advertisements using language that is format and content requirements of Center for Biologics Evaluation and understandable by a lay user. Another professional labeling become effective, Research, Food and Drug purpose of the guidances is to encourage the risk information that would appear Administration, 1401 Rockville Pike, drug and medical device firms to in Highlights) to present risk Rockville, MD 20852–1448. Send one disseminate truthful, nonmisleading, information. At the same time, FDA is self-addressed adhesive label to assist scientifically accurate information on making clear that it remains permissible that office in processing your requests. medical products and health conditions under section 502(n) of the act to Submit written comments on the draft to consumers and health care present the entire risk-related sections guidances to the Division of Dockets practitioners. The agency believes that, of FDA-approved professional labeling Management (HFA–305), Food and Drug given clear guidelines, firms will be verbatim in a consumer-directed print Administration, 5630 Fishers Lane, rm. more likely to provide such information, advertisement for prescription drugs. 1061, Rockville, MD 20852. See the and that this increased information flow SUPPLEMENTARY INFORMATION section for will encourage consumers to seek, and B. The Disease Awareness Guidance electronic access to the draft guidance health care practitioners to provide, FDA has authority under the act to document. appropriate diagnosis and treatment, regulate the ‘‘labeling’’ and FOR FURTHER INFORMATION CONTACT: particularly of under-diagnosed and ‘‘advertising’’ of prescription drugs and

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restricted devices. Ordinarily, these minor revisions recognizing the Management (see ADDRESSES). Two categories include promotional differences in statutory provisions copies of any comments are to be messages disseminated by or on behalf relating to prescription drugs and submitted, except that individuals may of a drug or device firm recommending restricted devices. submit one copy. Comments are to be use of a drug or device or containing identified with the docket number III. Good Guidance Practices some claim of safety or effectiveness for found in brackets in the heading of this a drug or device. One of the principal These draft guidances are being document. Comments should identify requirements for labeling and issued consistent with FDA’s good clearly which guidance they are advertising is the disclosure of risk guidance practices (GGPs) regulations commenting on. The draft guidances information (either the full FDA- (21 CFR 10.115). They represent the and received comments are available for approved professional labeling or the agency’s current thinking on certain public examination in the Division of brief summary). The labeling and issues relating to certain types of Dockets Management between 9 a.m. advertising rules do not apply to certain communications about medical and 4 p.m., Monday through Friday. other forms of communication by or on products and health conditions. They behalf of drug and device firms. One of do not create or confer any rights for or V. Electronic Access these categories is disease awareness on any person and do not operate to Persons with access to the Internet communications. bind FDA or the public. Alternative may obtain the documents at http:// The Disease Awareness Guidance is approaches may be used if such www.fda.gov/cder/guidance/index.htm, intended to eliminate any confusion as approaches satisfy the requirements of http://www.fda.gov/cber/guidelines, or to what principles FDA will apply in the applicable statutes and regulations. http://www.fda.gov/ohrms/dockets/ determining whether communications default.htm. by or on behalf of drug and device firms IV. Comments Dated: February 4, 2004. qualify as ‘‘labeling’’or ‘‘advertising,’’ or FDA specifically requests comments as disease awareness communications. on the following issues: Jeffrey Shuren, FDA believes that firms are already 1. The Device Broadcast Advertising Assistant Commissioner for Policy. engaged in a substantial amount of Guidance, like its CDER counterpart [FR Doc. 04–2728 Filed 2–5–04; 9:36 am] disease awareness communication issued in 1999, does not address the BILLING CODE 4160–01–S aimed at consumers (so-called ‘‘help- meaning of ‘‘major statement’’ in seeking’’ communications). §202.1(e)(1) (21 CFR 202.1(e)(1)). Manufacturers may, however, be less Should FDA issue guidance on this DEPARTMENT OF HEALTH AND familiar with disease awareness issue? If the agency should, what should HUMAN SERVICES communications directed at health care the guidance provide? Food and Drug Administration professionals. Accordingly, this draft 2. The Brief Summary Guidance guidance contains examples of materials contemplates that firms will disclose [Docket No. 2004D–0277] currently distributed to health care risk information in their consumer- practitioners by government entities and directed print advertisements for Draft Guidance for Industry on Time educational organizations about health prescription drugs in ways that focus on and Extent Applications; Availability conditions to help demonstrate to drug the most serious and the most common AGENCY: Food and Drug Administration, risks, and explains that this includes all and device firms the kinds of disease HHS. awareness materials they might also warnings, all contraindications, and disseminate. FDA believes that this will certain precautions and adverse events. ACTION: Notice. encourage firms to distribute disease Does the draft guidance provide SUMMARY: The Food and Drug awareness information not only to sufficiently concrete advice on this Administration (FDA) is announcing the patients, but also to health care point? If it does not, how should the availability of a draft guidance for practitioners, thereby encouraging more guidance be revised? industry entitled ‘‘Time and Extent In the guidance documents widespread diagnosis and treatment of Applications.’’ This guidance is being themselves, FDA requests comments on under-diagnosed and under-treated written to assist those persons interested the following issues: health conditions. in adding a new condition to the over- The draft guidance also addresses the 1. In the Brief Summary Guidance, the-counter (OTC) drug monograph important issue of when disease FDA requests comments, suggestions, or system. A time and extent application awareness communications become results of research to help the agency (TEA) can be submitted for FDA to subject to FDA regulation as ‘‘labeling’’ assess ways in which risk information determine whether a condition is or ‘‘advertising’’ by virtue of their can be presented to consumers (e.g., in eligible to be considered for inclusion in presentation in combination with so- a text box with accompanying brief an OTC drug monograph. This guidance called ‘‘reminder’’ advertisements or summary-type disclosure, or in the main is designed to clarify issues concerning labeling or product-claim body of the advertisement without such the TEA in an effort to facilitate the advertisements or labeling. accompanying disclosure). 2. In the Disease Awareness application process. C. The Device Broadcast Advertising Guidance, FDA requests comments on DATES: Submit written or electronic Guidance whether data exist that help establish comments on the draft guidance by In 1999, FDA issued final guidance to specific criteria for defining ‘‘close April 12, 2004. General comments on industry on a manner in which physical or temporal proximity’’ to use agency guidance documents are consumer-directed broadcast in evaluating whether bookend-type welcome at any time. advertisements for prescription drugs communications are within FDA’s ADDRESSES: Submit written requests for could satisfy statutory and regulatory ‘‘labeling’’ or ‘‘advertising’’ authority single copies of the draft guidance to the requirements for the presentation of risk under the act. Division of Drug Information (HFD– information. The Device Broadcast Interested persons may submit written 240), Center for Drug Evaluation and Advertising Guidance adopts the same or electronic comments on the draft Research, Food and Drug approach for restricted devices, with guidances to the Division of Dockets Administration, 5600 Fishers Lane,

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Rockville, MD 20857. Send one self- 23, 2002 (67 FR 3060), FDA published DEPARTMENT OF HEALTH AND addressed adhesive label to assist that a final rule that amended the OTC drug HUMAN SERVICES office in processing your requests. review procedures in part 330 and Submit written comments on the draft included additional criteria and Indian Health Service guidance to the Division of Dockets procedures for classifying OTC drugs as Availability of Funds for Loan Management (HFA–305), Food and Drug GRAS/E and not misbranded. The final Administration, 5630 Fishers Lane, rm. Repayment Program for Repayment of rule provided procedures for conditions Health Professions Educational Loans 1061, Rockville, MD 20852. Submit that previously required an NDA for electronic comments to http:// those conditions to become eligible for AGENCY: Indian Health Services, HHS. www.fda.gov/dockets/ecomments. See inclusion in the OTC drug monograph ACTION: Notice. the SUPPLEMENTARY INFORMATION section system. This final rule stated that an for electronic access to the draft applicant must first submit a TEA to SUMMARY: The Administration’s budget guidance document. show marketing ‘‘to a material extent’’ request for Fiscal Year (FY) 2004 FOR FURTHER INFORMATION CONTACT: and ‘‘for a material time.’’ Once FDA includes $11,923,500 for the Indian Matthew R. Holman, Center for Drug has determined eligibility, safety and Health Service (IHS) Loan Repayment Evaluation and Research (HFD–560), Program (LRP) for health professions effectiveness data would be submitted Food and Drug Administration, 5600 educational loans (undergraduate and and evaluated. This two-step process Fishers Lane, Rockville, MD 20857, graduate) in return for full-time clinical allows applicants to demonstrate that (301) 827–2222. service in Indian health programs. It is eligibility criteria are met before SUPPLEMENTARY INFORMATION: anticipated that $11,846,474 will be expending resources to prepare safety available to support approximately 276 I. Background and effectiveness data. competing awards averaging $43,000 FDA is announcing the availability of This draft guidance is being issued per award for a two year contract. a draft guidance for industry entitled consistent with FDA’s good guidance This program announcement is ‘‘Time and Extent Applications.’’ The practices (GGPs) regulation (21 CFR subject to the appropriation of funds. OTC drug monograph system was 10.115). The draft guidance, when this notice is being published early to established to evaluate the safety and finalized, will represent the agency’s coincide with the recruitment activity of effectiveness of all OTC drug products current thinking on time and extent the IHS, which competes with other for the following reasons: (1) Marketed applications. It does not create or confer Government and private health in the United States before May 11, any rights for or on any person and does management organizations to employ 1972, that were not covered by new not operate to bind FDA or the public. qualified health professionals. Funds drug applications (NDAs), and (2) An alternative approach may be used if must be expended by September 30 of covered by ‘‘safety’’ NDAs that were such approach satisfies the the fiscal year. This program is marketed in the United States before requirements of the applicable statutes authorized by section 108 of the Indian Health Care Improvement Act (IHCIA) enactment of the 1962 drug and regulations. amendments to the Federal Food, Drug, as amended, 25 U.S.C. 1601 et seq. The and Cosmetic Act (the act). In 1972, II. Comments IHS invites potential applicants to FDA began its OTC drug review of the request an application for participation following procedures: (1) To evaluate Interested persons may submit to the in the LRP. OTC drugs by categories or classes (e.g., Division of Dockets Management (see DATES: Applications for the FY 2004 antacids, skin protectants), rather than ADDRESSES) written or electronic LRP will be accepted and evaluated on a product-by-product basis, and (2) comments on the draft guidance. Two monthly beginning March 12, 2004, and to develop ‘‘conditions’’ under which copies of mailed comments are to be will continue to be accepted each month classes of OTC drugs are generally submitted, except that individuals may thereafter until all funds are exhausted. recognized as safe and effective (GRAS/ submit one copy. Comments are to be Subsequently monthly deadline dates E) and not misbranded. identified with the docket number are scheduled for Friday of the second FDA publishes these conditions in the found in brackets in the heading of this full week of each month. Notice of Federal Register in the form of OTC document. The draft guidance and awards will be mailed on the last drug monographs, which consist received comments are available for working day of each month. primarily of active ingredients, labeling, public examination in the Division of Loan Repayment Awards will be and other general requirements. Final Dockets Management between 9 a.m. made only to those individuals serving monographs for OTC drugs that are and 4 p.m., Monday through Friday. at facilities which have a site score of 70 GRAS/E and not misbranded are or above during the first and second codified in part 330 (21 CFR part 330). III. Electronic Access quarters and the first month of the third Manufacturers seeking to market an Persons with access to the Internet quarter of FY 2004, if funding is OTC drug covered by an OTC drug available. may obtain the document at either http:/ monograph need not obtain FDA Applicants selected for participation /www.fda.gov/cder/guidance/index.htm approval before marketing. in the FY 2004 program cycle will be Previously, interested persons had to or http://www.fda.gov/ohrms/dockets/ expected to begin their service period prepare and submit an NDA if they default.htm. no later than September 30, 2004. wanted to introduce into the United Dated: January 29, 2004. Applications shall be considered as States an OTC drug condition that had William K. Hubbard, meeting the deadline if the are either: been marketed solely in a foreign Associate Commissioner for Policy and 1. Received on or before the deadline country. Companies also had to submit Planning. date; or an NDA if their OTC drug products were 2. Sent on or before the deadline date. [FR Doc. 04–2729 Filed 2–9–04; 8:45 am] initially marketed in the United States (Applicants should request a legibly after the OTC drug review began in BILLING CODE 4160–01–S dated U.S. Postal Service postmark or 1972. In the Federal Register of January obtain a legibly dated receipt from a

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commerical carrier or U.S. Postal (A) the term ‘‘Indian health program’’ (j) Physician Assistant. Service. Private metered postmarks are means any health program or facility (k) Advanced Practice Nurses: Nurse not acceptable as proof of timely funded, in whole or in part, by the Practitioner, Certified Nurse Midwife, mailing.) Service for the benefit of Indians and Registered Nurse Anesthetist (Priority Applications received after the administered— consideration will be given to monthly closing date will be held for (i) Directly by the Service; Registered Nurse Anesthetists). consideration in the next monthly (ii) By and Indian tribe or tribal or (l) Podiatry: D.P.M. funding cycle. Applicants who do not Indian organization pursuant to a (m) Physical Therapy: M.S. and D.P.T. receive funding by September 30, 2004, contract under— (n) Diagnostic Radiology Technology: will be notified in writing. (I) The Indian Self-Determination Act: Certificate, Associate, and B.S. Form to be Used for Application: or (o) Medical Technology: B.S. Applications must be submitted on the (II) section 23 fo the Act of April 30, (p) Public Health Nutritionist/ form entitled ‘‘Application for the 1908, (25 U.S.C. 47), popularly known Registered Dietitian. Indian Health Service Loan Repayment as the Buy Indian Act; or (q) Engineering (Civil and Program,’’ identified with the Office of (iii) By an urban Indian organization Environmental): B.S. (Engineers must Management and Budget approval pursuant to Title V of this act. provide environmental engineering number of OMB #0917–0014 (expires Applicants may sign contractual services to be eligible). 12/31/05). agreements with the Secretary for 2 (r) Environmental Health (Sanitarian): ADDRESSES: Application materials may years. the IHS will repay all, or a B.S. be obtained by calling or writing to the portion of the applicant’s health (s) Health Records: R.H.I.T. and address below. In addition, completed profession educational loans R.H.I.A. applications should be returned to: IHS (undergraduate and graduate) for tuition (t) Respiratory Therapy. Loan Repayment Program, 801 expenses and reasonable educational (u) Ultrasonograph. Thompson Avenue, Suite 120, and living expenses in amounts up to Interested individuals are reminded Rockville, Maryland 20852, PH: 301/ $20,000 per year for each year of that the list of eligible health and allied 443–3396 [between 8 a.m. and 5 p.m. contracted service. Payments will be health professions is effective for (EST) Monday through Friday, except made annually to the participant for the applicants for FY 2004. These priorities Federal holidays]. purpose fo repaying his/her outstanding will remain in effect until superseded. health profession educational loans. All health professionals will receive FOR FURTHER INFORMATION CONTACT: up to $20,000 per year for the length of Please address inquiries to Ms. Payment of health profession education loans will be made to the participant their contract. In addition to the loan Jacqueline K. Santiago, Chief, IHS Loan repayments, participants are provided Repayment Program, 801 Thompson within 120 days, from the date the contract becomes effective. tax assistance payments in an amount Avenue, Suite 120, Rockville, Maryland not less than 20 percent and not more 20852, PH: 301/443–3396 [between 8 The Secretary must approve the contract before the disbursement of loan than 39 percent of the participant’s total a.m. and 5 p.m. (EST) Monday through amount of loan repayments made for the Friday, except Federal holidays]. repayments can be made to the participant. Participants will be taxable year involved. The loan SUPPLEMENTARY INFORMATION: Section required to fulfill their contract service repayments and the tax assistance 108 of the IHCIA, as amended by Public agreements through full-time clinical payments are taxable income and will Laws 100–713 adn 102–573, authorizes practice at an Indian health program site be reported to the Internal Revenue the IHS LRP and provides in pertinent determined by the Secretary. Loan Service (IRS). The tax assistance part as follows: repayment sites are characterized by payment will be paid to the IRS directly The Secretary, acting through the Service, physical, cultural, and professional on the participant’s behalf. LRP award shall establish a program to be known as the isolation, and have histories of frequent recipients should be aware that the IRS Indian Health Service Loan Repayment staff turnover. All Indian health may place them in a higher tax bracket Program (hereinafter referred to as the ‘‘Loan than they would otherwise have been Repayment Program’’) in order to assure an program sites are annually prioritized adequate supply of trained health within the Agency by discipline, based prior to their award. professionals necessary to maintain on need or vacancy. Pursuant to section 108(b), to be accrediation of, and provide health care Section 108 of the IHCIA, as amended eligible to participate in the LRP, an services to Indians though, Indian health by Public Laws 100–713 and 102–573, individual must: programs. authorizes the IHS to determine specific (1)(A) be enrolled— Section 4(n) of the IHCIA, as amended health professions for which Indian (i) in a course of study or program in by the Indian Health Care Improvement Health Loan Repayment contracts will an accredited institution, as determined Technical Corrections act of 1996, Pub. be awarded. The list of priority health by the Secretary, within any State and L. 104–313, provides that: professions that follow are based upon be scheduled to complete such course of the needs of the IHS as well as upon the study in the same year such individual ‘‘Health Profession’’ means allopathic applies to participate in such program; medicine, family medicine, internal needs of the American Indians and medicine, pediatrics, geriatric medicine, Alaska Natives. or obstetrics and gynecology, podiatric (a) Medicine: Allopathic and (ii) in an approved graduate training medicine, nursing, public health nursing, Osteopathic. program in a health profession; or dentistry, psychiatry, osteopathy, optometry, (b) Nurse: Associate and B.S. Degree. (B) have a degree in a health pharmacy, psychology, public health, social (c) Clinical Psychology: Ph.D. only. profession and a license to practice; and work, marriage and family therapy, (d) Social Work: Masters level only. (2)(A) be eligible for, or hold an chiropractic medicine, environmental health (e) Chemical Dependency Counseling: appointment as a Commissioned Officer and engineering, and allied health Baccalaureate and Masters level. in the Regular or Reserve Corps of the profession, or any other health profession. (f) Dentistry. Public Health Service (PHS); or For the purposes of this program, the (g) Dental Hygiene. (B) be eligible for selection for civilian term ‘‘Indian health program’’ is defined (h) Pharmacy: B.S., Pharm.D. service in the Regular or Reserve Corps in section 108(a)(2)(A), as follows: (i) Optometry. of the (PHS); or

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(C) meet the professional standards practice nurses 6 percent, podiatrists 4 only those sites located in that Area. for civil service employment in the IHS; percent, physical therapists 2 percent, Those sites will retain their relative or other professions 4 percent. This ranking from the national site-ranking (D) be employed in an Indian health requirement does not apply if the list. For example, the Albuquerque Area program without service obligation; and number of applicants from these groups, Office identifies supplemental monies (3) submit to the Secretary an respectively, is not sufficient to meet the for dentists. Only the dental positions application for a contract to the Loan requirement. within the Albuquerque Area will be Repayment Program. Applicants whose applications were funded with the supplemental monies All applicants must sign and submit complete by September 30, 2000, and consistent with the national ranking and to the Secretary, a written contract who want to compete in the FY 2004 site index within that Area. agreeing to accept repayment of award cycle, will receive a site score Should an IHS Service Unit educational loans and to serve for the equal to either their FY 2000, FY 2001, contribute to the LRP, those funds will applicable period of obligated service in FY 2002, FY 2003 or the FY 2004 score, be used for only those sites located in a priority site as determined by the whichever is higher. that Service Unit. Those sites will retain Secretary, and submit a signed affidavit The following factors are equal in their relative ranking from the national attesting to the fact that they have been weight when applied, and are applied site-ranking list. For example, Chinle informed of the relative merits of the when all other criteria are equal and a Service Unit identifies supplemental U.S. PHS Commissioned Corps and the selection must be made between monies for pharmacists. The Chinle Civil Service as employment options. applicants. Service Unit consists of two facilities, Once the applicant is approved for One or all of the following factors may namely the Chinle Comprehensive participation in the LRP, the applicant be applicable to an applicant, and the Health Care Facility and the Tsaile PHS will receive confirmation of his/her loan applicant who has the most of these Indian Health Center. The national repayment award and the duty site at factors, all other criteria being equal, ranking will be used for the Chinle which he/she will serve his/her loan would be selected. Comprehensive Health Care Facility repayment obligation. (a) An applicant’s length of current (Score = 44) and the Tsaile PHS Indian The IHS has identified the positions employment in the IHS, Tribal, or urban Health Center (Score = 46). With a score in each Indian health program for which program. of 46, the Tsaile PHS Indian Health there is a need or vacancy and ranked (b) Availability for service earlier than Center would receive priority over the those positions in order of priority by other applicants (first come, first Chinle Comprehensive Health Care developing discipline-specific served). Facility. prioritized lists of sites. Ranking criteria (c) Date the individual’s application This program is not subject to review for these sites include the following: was received. under Executive Order 12372. (a) Historically critical shortages Any individual who enters this The Catalog of Federal Domestic caused by frequent staff turnover; program and satisfactorily completes his Assistance number is 93.164. (b) Current unmatched vacancies in a or her obligated period of service may Health Profession Discipline; apply to extend his/her contract on a Dated: February 3, 2004. (c) Projected vacancies in a Health year-by-year basis, as determined by the Charles W. Grim, Profession Discipline; IHS. Participants extending their Assistant Surgeon General, Director, Indian (d) Ensuring that the staffing needs of contracts will receive up to the Health Service. Indian health programs administered by maximum amount of $20,000 per year [FR Doc. 04–2727 Filed 2–9–04; 8:45 am] an Indian Tribe or Tribal or health plus an additional 20 percent for BILLING CODE 4160–16–M organization receive consideration on an Federal Withholding. Participants who equal basis with programs that are were awarded loan repayment contracts administered directly by the Service; prior to FY 2000 will be awarded DEPARTMENT OF HEALTH AND and extensions up to the amount of $30,000 HUMAN SERVICES (e) Giving priority to vacancies in a year and 31 percent in tax subsidy if National Institutes of Health Indian health programs that have a need funds are available, and will not exceed for health professionals to provide the total of the individual’s outstanding Government-Owned Inventions; health care services as a result of eligible health profession educational Availability for Licensing individuals having breached LRP loans. contracts entered into under this Any individual who owes an AGENCY: National Institutes of Health, section. obligation for health professional Public Health Service, DHHS. (f) Consistent with this priority service to the Federal government, a ACTION: Notice. ranking, in determining applications to State, or other entity is not eligible for be approved and contracts to accept, the the LRP unless the obligation will be SUMMARY: The inventions listed below IHS will give priority to applications completely satisfied before they begin are owned by an agency of the U.S. made by Americana Indians and Alaska service under this program. Government and are available for Natives and to individuals recruited The IHS Area Offices and Service licensing in the U.S. in accordance with through the efforts of Indian Tribes or Units are authorized to provide 35 U.S.C. 207 to achieve expeditious Tribal or Indian organizations. additional funding to make awards to commercialization of results of (g) Funds appropriated for the LRP in applicants in the LRP, but must be in federally-funded research and FY 2004 will be distributed among the compliance with any limits in the development. Foreign patent health professions as follows: appropriation and section 108 of the applications are filed on selected allopathic/osteopathic practitioners will Indian Health Care Improvement Act inventions to extend market coverage receive 27 percent, registered nurses 20 not to exceed the amount authorized in for companies and may also be available percent, mental health professionals 10 the IHS appropriation (up to for licensing. percent, dentists 12 percent, $27,000,000 for FY 2004.) ADDRESSES: Licensing information and pharmacists 10 percents, optometrists 5 Should an IHS Area Office contribute copies of the U.S. patents listed below percent, physician assistants/advanced to the LRP, those funds will be used for may be obtained by contacting Susan S.

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Rucker, J.D., at the Office of Technology Promotion of Homologous DNA Pairing DEPARTMENT OF HEALTH AND Transfer, National Institutes of Health, by RecA-derived Peptides HUMAN SERVICES 6011 Executive Boulevard, Suite 325, Rockville, Maryland 20852–3804; Oleg Voloshin, Lijiang Wang, Rafael National Institutes of Health telephone: 301–435–4478; fax: 301– D. Camerini-Otero (NIDDK); U.S. Patent 402–0220; email: 5,731,411 issued 24 Mar 1998 (DHHS National Institute of Diabetes and [email protected]. Reference No. E–139–1995/0–US–01). Digestive and Kidney Diseases; Notice of Meetings Met Proto-Oncogene and a Method for These inventions are available for Predicting Breast Cancer Progression license separately or together. Foreign Pursuant to section 10(d) of the patent protection is not available for any Federal Advisory Committee Act, as Ilan Tsarfaty, James H. Resau, Iafa of these inventions. amended (5 U.S.C. Appendix 2), notice Keydar, Donna Faletto, George F. Vande is hereby given of the following The inventions described in these Woude (NCI); U.S. Patent 6,673,559 meetings. issued 06 Jan 2004 (DHHS Reference patents are generally applicable to the The meetings will be open to the No. E–046–1991/3–US–01). process of homologous DNA public as indicated below, with The invention described and claimed recombination. The inventions may be attendance limited to space available. in this patent is generally applicable to used in conjunction with each other, to Individuals who plan to attend and assessing the prognosis of cancer. In efficiently carry out the process of need special assistance, such as sign particular, the invention is useful in homologous recombination, or they may language interpretation or other assessing the whether or not breast be used separately. reasonable accommodations, should cancer is likely undergo metastasis. The The inventions may be exploited notify the Contact Person listed below met proto-oncogene is located on the generally in processes associated with in advance of the meetings. long arm of chromosome 7 at 7q31. Its therapeutic purposes such as gene The meetings will be closed to the activity has been linked to the invasive/ inactivation, correction of gene public in accordance with the metastatic phenotype of several cancers provisions set forth in sections in addition to breast cancer, e.g. mutations and the control of gene expression. For example, these 552b(c)(4) and 552b(c)(6), title 5 U.S.C., prostate, stomach. as amended. The grant applications and inventions may be used to inhibit the According to this invention the the discussions could disclose transcription of a DNA sequence such as likelihood of metastasis of breast cancer confidential trade secrets or commercial that encoding an oncogene or a virus. In is assessed by measuring the amount of property such as patentable material, (a) protein produced by the met proto- addition, these inventions may be and personal information concerning oncogene, (b) levels of the met proto- exploited in research applications such individuals associated with the grant oncogene itself, or (c) levels of mRNA as sequence-specific mapping, cloning, applications, the disclosure of which produced by the met proto-oncogene in and manipulation of complex genomes would constitute a clearly unwarranted breast tumor tissue and comparing it including the generation of transgenic invasion of personal privacy. with the amount present in normal animals. ductal tissue of the breast. The Name of Committee: National Institute of Specific examples of the use of these Diabetes and Digestive and Kidney Diseases methodology of this invention may be inventions include (a) protecting a DNA Initial Review Group, Diabetes, carried out, for example, using sequence from modification by an Endocrinology and Metabolic Diseases B antibody-based assays (ELISA or enzyme such as methylase or cleavage Subcommittee. Western Blot), PCR, or Northern Blots. Date: March 22–24, 2004. This work has been published at by a restriction enzyme, (b) effecting Open: March 22, 2004, 7 p.m. to 7:30 p.m. Tsarfaty, et al., Science 257(5074): site-specific cleavage by introducing a Agenda: To review procedures and discuss 1258–61 (Aug 28 1992), Tsarfaty, et al., chemical cleavage moiety to the policies. Anal Quant Cytol Histol 21(5): 397–408 oligonucleotide, (c) cloning a genomic Place: Double Tree Rockville, 1750 DNA fragment containing a Rockville Pike, Rockville, MD 20852. (Oct 1999) and Hay, et al., J Cell Closed: March 22, 2004, 7:30 p.m. to 10 Biochem Suppl 39(): 184–93 (2002). predetermined sequence, (d) identifying p.m. Foreign patent protection is not a genetic mutation, e.g., point Agenda: To review and evaluate grant available for any of these inventions. mutations, insertions and deletions, and applications. (e) increasing the stringency thereby Place: Double Tree Rockville, 1750 Method of Targeting DNA improving the specificity of DNA-DNA, Rockville Pike, Rockville, MD 20852. Rafael D. Camerini-Otero, Margaret DNA-RNA or RNA-RNA interactions at Closed: March 23, 2004, 8 p.m. to 5 p.m. Agenda: To review and evaluate grant McIntosh, Carol S. Camerini-Otero and high temperatures. Lance J. Ferrin (NIDDK); U.S. Patent applications. This work has been published at Place: Double Tree Rockville, 1750 5,460,941 issued 24 Oct 1995 (DHHS Rockville Pike, Rockville, MD 20852. Reference No. E–006–1991/1–US–02). Hsieh et al., Genes & Dev. 4(11): 1951– 63 (Nov 1990); Angov et al., J. Bacteriol. Closed: March 24, 2004, 8:00 a.m. to 3 p.m. Cloning of the RecA Gene From Agenda: To review and evaluate grant 176(5): 1405–12 (Mar 1994); Voloshin et applications. Thermus Acquatics YT–1 al., Science 272(5263): 868–72 (May 10, Place: Double Tree Rockville, 1750 Rafael D. Camerini-Otero and Evelina 1996); and Ferrin LJ, Genet. Eng. (NY) Rockville Pike, Rockville, MD 20852. Angov (NIDDK); U.S. Patent 5,510,473 17: 21–30 (1995). Contact Person: John F. Connaughton, PhD, Scientific Review Administrator, Review issued 23 Apr 1996 (DHHS Reference Dated: February 2, 2004. No. E–196–1993/0–US–01). Branch, DEA, NIDDK, National Institutes of Steven M. Ferguson, Health, Room 757, 6707 Democracy Rec-A Assisted Cloning of DNA Director, Division of Technology Development Boulevard, Bethesda, MD 20892. (301) 594– 7797; [email protected]. Lance J. Ferrin, Rafael D. Camerini- and Transfer, Office of Technology Transfer, National Institutes of Health. Name of Committee: National Institute of Otero (NIDDK); U.S. Patent 5,707,811 Diabetes and Digestive and Kidney Diseases issued 13 Jan 1998 (DHHS Reference [FR Doc. 04–2765 Filed 2–9–04; 8:45 am] Initial Review Group, Digestive Diseases and No. E–166–1995/0–US–02). BILLING CODE 4140–01–P Nutrition C Subcommittee.

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Date: March 22–24, 2004. DEPARTMENT OF HEALTH AND amended (5 U.S.C. Appendix 2), notice Open: March 22, 2004, 7 p.m. to 7:30 p.m. HUMAN SERVICES is hereby given of the following Agenda: To review procedures and discuss meeting. policies. National Institutes of Health The meeting will be closed to the Place: Double Tree Rockville, 1750 public in accordance with the Rockville Pike, Rockville, MD 20852. National Institutes of Allergy and provisions set forth in sections Closed: March 22, 2004, 7:30 p.m. to 10 Infectious Diseases; Notice of Closed 552b(c)(4) and 552(b)(c)(6), title 5 p.m. Meeting U.S.C., as amended. The grant Agenda: To review and evaluate grant Pursuant to section 10(d) of the applications and the discussions could applications. Federal Advisory Committee Act, as disclose confidential trade secrets or Place: Double Tree Rockville, 1750 amended (5 U.S.C. Appendix 2), notice commercial property such as patentable Rockville Pike, Rockville, MD 20852. is hereby given of the following material, and personal information Closed: March 23, 2004, 8 a.m. to 5 p.m. meeting. concerning individuals associated with Agenda: To review and evaluate grant The meeting will be closed to the the grant applications, the disclosure of applications. public in accordance with the which would constitute a clearly Place: Double Tree Rockville, 1750 provisions set forth in sections unwarranted invasion of personal Rockville Pike, Rockville, MD 20852. 552b(c)(4) and 552b(c)(6), title 5 U.S.C., privacy. Closed: March 24, 2004, 8 a.m. to 5 p.m. as amended. The grant applications and Agenda: To review and evaluate grant Name of Committee: National Institute of Allergy and Infectious Diseases Special applications. the discussions could disclose confidential trade secrets or commercial Emphasis Panel, Comprehensive Place: Double Tree Rockville, 1750 International Program of Research on AIDS Rockville Pike, Rockville, MD 20852. property such as patentable material, and personal information concerning (CIPRA). Contact Person: Carolyn Miles, PhD, Date: February 26, 2004. Scientific Review Administrator, Review individuals associated with the grant Time: 1 p.m. to 4 p.m. Branch, DEA, NIDDK, National Institutes of applications, the disclosure of which Agenda: To review and evaluate grant Health, Room 755, 6707 Democracy would constitute a clearly unwarranted applications. Boulevard, Bethesda, MD 20892. (301) 594– invasion of personal privacy. Place: National Institutes of Health/NIAID, 7791; [email protected]. Name of Committee: Microbiology, 6700B Rockledge Drive, 3125, Bethesda, MD Infectious Diseases and AIDS Initial Review 20895 (Telephone Conference Call). Name of Committee: National Institute of Group, Microbiology and Infectious Diseases Contact Person: Eugene R. Baizman, PhD, Diabetes and Digestive and Kidney Diseases Research Committee. Scientific Review Administrator, NIH/NIAID/ Initial Review Group, Kidney, Urologic and Date: February 25–27, 2004. DEA, Scientific Review Program, Room 3125, Hematologic Diseases D Subcommittee. Time: 8 a.m. to 3 p.m. 6700B Rockledge Drive, Bethesda, MD Date: March 23–24, 2004. Agenda: To review and evaluate grant 20892–7616, 301 496–2550, [email protected]. Open: March 23, 2004, 8 a.m.to 8:30 a.m. applications. (Catalogue of Federal Domestic Assistance Agenda: To review procedures and discuss Place: Bethesda Marriott, 5151 Pooks Hill Program Nos. 93.855, Allergy, Immunology, policies. Road, Bethesda, MD 20814. and Transplantation Research; 93.856, Place: Double Tree Rockville, 1750 Contact Person: Gary S. Madonna, PhD, Microbiology and Infectious Diseases Scientific Review Administrator, Scientific Research, National Institutes of Health, HHS) Rockville Pike, Rockville, MD 20852. Review Program, Division of Extramural Closed: March 23, 2004, 8:30 a.m. to 5 p.m. Activities, NIAID, NIH, Room 2149, 6700–B Dated: February 4, 2004. Agenda: To review and evaluate grant Rockledge Drive, MSC 7616, Bethesda, MD LaVerne Y. Stringfield, applications. 20892–7616, Bethesda, MD 20892–7616. Director, Office of Federal Advisory Place: Double Tree Rockville, 1750 301–496–3528; [email protected]. Committee Policy. Rockville Pike, Rockville, MD 20852. This notice is being published less [FR Doc. 04–2768 Filed 2–9–04; 8:45 am] Closed: March 24, 2004, 8 a.m. to 5 p.m. than 15 days prior to the meeting due BILLING CODE 4140–01–M Agenda: To review and evaluate grant to the timing limitations imposed by the applications. review and funding cycle. Place: Double Tree Rockville, 1750 (Catalogue of Federal Domestic Assistance DEPARTMENT OF HEALTH AND Rockville Pike, Rockville, MD 20852. Program Nos. 93.855, Allergy, Immunology, HUMAN SERVICES Contact Person: Neal A. Musto, PhD, and Transplantation Research; 93.856, Scientific Review Administrator, Review Microbiology and Infectious Diseases National Institutes of Health Branch, DEA NIDDK, National Institutes of Research, National Institutes of Health, HHS.) Dated: February 4, 2004. Center for Scientific Review; Notice of Health, Room 751, 6707 Democracy Closed Meetings Boulevard, Bethesda, MD 20892. (301) 594– LaVerne Y. Stringfield, 7798; [email protected]. Director, Office of Federal Advisory Pursuant to section 10(d) of the Committee Policy. Federal Advisory Committee Act, as (Catalogue of Federal Domestic Assistance [FR Doc. 04–2767 Filed 2–9–04; 8:45 am] amended (5 U.S.C. Appendix 2), notice Program Nos. 93.847, Diabetes, BILLING CODE 4140–01–M is hereby given of the following Endocrinology and Metabolic Research; meetings. 93.848, Digestive Diseases and Nutrition The meetings will be closed to the Research; 93.849, Kidney Diseases, Urology DEPARTMENT OF HEALTH AND public in accordance with the and Hematology Research, National Institutes HUMAN SERVICES provisions set forth in sections of Health, HHS.) 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Dated: February 4, 2004. National Institutes of Health as amended. The grant applications and LaVerne Y. Stringfield, National Institute of Allergy and the discussions could disclose Director, Office of Federal Advisory confidential trade secrets or commercial Committee Policy. Infectious Diseases; Notice of Closed Meeting property such as patentable material, [FR Doc. 04–2766 Filed 2–9–04; 8:45 am] and personal information concerning BILLING CODE 4140–01–M Pursuant to section 10(d) of the individuals associated with the grant Federal Advisory Committee Act, as applications, the disclosure of which

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would constitute a clearly unwarranted Time: 8:30 a.m. to 6 p.m. Name of Committee: Center for Scientific invasion of personal privacy. Agenda: To review and evaluate grant Review Special Emphasis Panel, Innovative applications. Research Topics in Virology. Name of Committee: Center for Scientific Place: Holiday Inn Georgetown, 2101 Date: March 1–2, 2004. Review Special Emphasis Panel; ZRG1 SRBN Wisconsin Avenue, NW., Washington, DC Time: 8 a.m. to 5 p.m. J 02M:Member Conflict:Diagnostic Radiology. 20007. Agenda: To review and evaluate grant Date: February 13, 2004. Contact Person: Calbert A. Laing, PhD, applications. Time: 1:30 p.m. to 2 p.m. Scientific Review Administrator, Center for Place: Admiral Fell Inn, 888 South Agenda: To review and evaluate grant Broadway, Baltimore, MD 21231. applications. Scientific Review, National Institutes of Health, 6701 Rockledge Drive, Room 4210, Contact Person: Joseph D. Mosca, PhD, Place: Catamaran Resort Hotel, 3999 Scientific Review Administrator, Center for Mission Boulevard, San Diego, CA 92109. MSC 7812, Bethesda, MD 20892, 301–435– 1221, [email protected]. Scientific Review, National Institutes of Contact Person: Behrouz Shabestari, PhD, Health, 6701 Rockledge Drive, Room 5158, Name of Committee: Center for Scientific Scientific Review Administrator, Center for MSC 7808, Bethesda, MD 20892, 301–435– Review Special Emphasis Panel, Cell Scientific Review, National Institutes of 2344; [email protected]. Health, 6701 Rockledge Drive, Room 5106, Development and Function 2 Special MSC 7854, Bethesda, MD 20892, 301–435– Emphasis Panel ZRG1 90S. Name of Committee: Center for Scientific 2409, [email protected]. Date: February 26–27, 2004. Review Special Emphasis Panel, ZRG1 SSS 8 This notice is being published less than 15 Time: 1 p.m. to 5 p.m. 10B: Small Business: Bioengineering and days prior to the meeting due to the timing Agenda: To review and evaluate grant Physiology. limitations imposed by the review and applications. Date: March 1–2, 2004. funding cycle. Place: Latham Hotel, 3000 M Street, NW., Time: 8 a.m. to 4:30 p.m. Agenda: To review and evaluate grant Name of Committee: Integrative, Washington, DC 20007. applications. Functional and Cognitive Neuroscience Contact Person: Ramesh K. Nayak, PhD, Place: Embassy Suites at the Chevy Chase Integrated Review Group, Cognitive Scientific Review Administrator, Center for Pavilion, 4300 Military Road, NW., Neuroscience Study Section. Scientific Review, National Institutes of Washington, DC 20015. Date: February 19–20, 2004. Health, 6701 Rockledge Drive, Room 5146, Contact Person: Pushpa Tandon, PhD, Time: 8 a.m. to 6 p.m. MSC 7840, Bethesda, MD 20892, 301–435– Scientific Review Administrator, Center for Agenda: To review and evaluate grant 1026. Scientific Review, National Institutes of applications. Name of Committee: Center for Scientific Health, 6701 Rockledge Drive, Room 5104, Place: Holiday Inn Select Bethesda, 8120 Review Special Emphasis Panel, NIH High MSC 7854, Bethesda, MD 20892, 301–435– Wisconsin Ave, Bethesda, MD 20814. End Shared Instrumentation Review Panel. 2397; [email protected]. Contact Person: Michael A. Steinmetz, Date: February 27, 2004. Name of Committee: Center for Scientific PhD, Scientific Review Administrator, Center Time: 8:30 a.m. to 2 p.m. Review Special Emphasis Panel School for Scientific Review, National Institutes of Agenda: To review and evaluate grant Readiness. Health, 6701 Rockledge Drive, Room 5172, applications. MSC 7844, Bethesda, MD 20892, 301–435– Date: March 1, 2004. Place: Churchill Hotel, 1914 Connecticut Time: 8:30 a.m. to 6 p.m. 1247, [email protected]. Avenue, NW., Washington, DC 20009. This notice is being published less than 15 Agenda: To review and evaluate grant Contact Person: David R. Jollie, PhD, days prior to the meeting due to the timing applications. Scientific Review Administrator, Center for limitations imposed by the review and Place: Embassy Suites at the Chevy Chase Scientific Review, National Institutes of funding cycle. Pavallion, 4300 Military Road, NW., Health, 6701 Rockledge Drive, Room 4156, Name of Committee: Center for Scientific Washington, DC 20015. MSC 7806, Bethesda, MD 20892, 301–435– Contact Person: Victoria S. Levin, MSW, Review Special Emphasis Panel, Gene 1722, [email protected]. Therapy and Inborn Errors Study Section. Scientific Review Administrator, Center for Date: February 25, 2004. Name of Committee: Center for Scientific Scientific Review, National Institutes of Time: 8 a.m. to 4 p.m. Review Special Emphasis Panel, Genetics Health, 6701 Rockledge Drive, Room 3172, Agenda: To review and evaluate grant Multi-Site Application. MSC 7848, Bethesda, MD 20892, 301–435– applications. Date: February 27, 2004. 0912, [email protected]. Place: Holiday Inn Select Bethesda, 8120 Time: 8:30 a.m. to 5 p.m. Name of Committee: Center for Scientific Wisconsin Ave, Bethesda, MD 20814. Agenda: To review and evaluate grant Review Special Emphasis Panel, Contact Person: Barbara Whitmarsh, PhD, applications. Psychopathology and Adult Disorders. Scientific Review Administrator, Center for Place: Hyatt Regency Bethesda, One Date: March 1–2, 2004. Scientific Review, National Institutes of Bethesda Metro Center, 7400 Wisconsin Time: 9 a.m. to 5 p.m. Health, 6701 Rockledge Drive, Room 2205, Avenue, Bethesda, MD 20814. Agenda: To review and evaluate grant Bethesda, MD 20892, 301–435–4511, Contact Person: Yvette M. Davis, MPH, applications. [email protected]. Scientific Review Administrator, Center for Place: St. Gregory Hotel, 2033 M Street, Name of Committee: Biology of Scientific Review, National Institutes of NW., Washington, DC 20036. Development and Aging Integrated Review Health, 6701 Rockledge Drive, Room 3152, Contact Person: Dana Plude, PhD, Group, Development—2 Study Section. MSC 7770, Bethesda, MD 20892, 301–435– Scientific Review Administrator, Center for Date: February 26–27, 2004. 0906. Scientific Review, National Institutes of Time: 8 a.m. to 5 p.m. Name of Committee: Center for Scientific Health, 6701 Rockledge Drive, Room 3192, Agenda: To review and evaluate grant Review Special Emphasis Panel, Exploratory MSC 7848, Bethesda, MD 20892, 301–435– applications. Mind—Body Research Projects. 2309, [email protected]. Place: The River Inn, 924 Twenty-Fifth Date: February 27, 2004. Name of Committee: Center for Scientific Street, NW., Washington, DC 20037. Time: 8:30 a.m. to 6 p.m. Review Special Emphasis Panel, AIDS and Contact Person: Sherry L. Dupere, PhD, Agenda: To review and evaluate grant Related Research (SBIR). Scientific Review Administrator, Center for applications. Date: March 2, 2004. Scientific Review, National Institutes of Place: Savoy Suites, 2505 Wisconsin Time: 8 a.m. to 5 p.m. Health, 6701 Rockledge Drive, Room 5136, Avenue, NW., Washington, DC 20007. Agenda: To review and evaluate grant MSC 7843, Bethesda, MD 20892, 301–435– Contact Person: Maribeth Campoux, PhD, applications. 1021, [email protected]. Scientific Review Administrator, Center for Place: Hyatt Regency Suites, 285 North Name of Committee: Center for Scientific Scientific Review, National Institutes of Palm Canyon Dr, Palm Springs, CA 92262. Review Special Emphasis Panel, Bacterial, Health, 6701 Rockledge Drive, Room 3146, Contact Person: Kenneth A. Roebuck, Phd, Fungal, Parasitic, and Viral Vaccines. MSC 7759, Bethesda, MD 20892, 301–594– PhD, Scientific Review Administrator, Center Date: February 26–27, 2004. 3163, [email protected]. for Scientific Review, National Institutes of

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Health, 6701 Rockledge Drive, Room 5214, Place: Hyatt Regency Suites, 285 North Place: Churchill Hotel, 1914 Connecticut MSC 7852, Bethesda, MD 20892, 301–435– Palm Canyon Dr, Palm Springs, CA 92262. Avenue, NW., Washington, DC 20009. 1166, [email protected]. Contact Person: Kenneth A. Roebuck, PhD, Contact Person: Sherry L. Stuesse, PhD, Name of Committee: Center for Scientific Scientific Review Administrator, Center for Scientific Review Administrator, Center for Review Special Emphasis Panel, Cardiac Scientific Review, National Institutes of Scientific Review, National Institutes of Deformation Health, 6701 Rockledge Drive, Room 5214, Health, 6701 Rockledge Drive, Room 5188, Date: March 2, 2004. MSC 7852, Bethesda, MD 20892, 301–435– MSC 7846, Bethesda, MD 20892, 301–435– Time: 1 p.m. to 2 p.m. 1166, [email protected]. 1785, [email protected]. Agenda: To review and evaluate grant Name of Committee: Musculoskeletal, Oral Name of Committee: Center for Scientific applications. and Skin Sciences Integrated Review Group; Review Special Emphasis Panel, ZRG1 ASG Place: National Institutes of Health, 6701 Musculoskeletal Rehabilitation Sciences 01 Q: Aging Systems and Geriatrics: Quorum. Rockledge Drive, Bethesda, MD 20892 Study Section. Date: March 4–5, 2004. (Telephone Conference Call). Date: March 4–5, 2004. Time: 8:30 a.m. to 5 p.m. Contact Person: Joyce C. Gibson, DSC, Time: 8 a.m. to 5 p.m. Agenda: To review and evaluate grant Scientific Review Administrator, Center for Agenda: To review and evaluate grant applications. Scientific Review, National Institutes of applications. Place: Residence Inn Bethesda, 7335 Health, 6701 Rockledge Drive, Room 4130, Place: One Washington Circle Hotel, One Wisconsin Avenue, Bethesda, MD 20814. MSC 7814, Bethesda, MD 20892, 301–435– Washington Circle, Washington, DC 20037. Contact Person: Charles G. Hollingsworth, 4522, [email protected]. Contact Person: Jo Pelham, BA, Scientific DRPH, Scientific Review Administrator, Name of Committee: Center for Scientific Review Administrator, Center for Scientific Center for Scientific Review, National Review Special Emphasis Panel, ZRG1 SSSW Review, National Institutes of Health, 6701 Institutes of Health, 6701 Rockledge Drive, 50R:PA02–125 & PAR03–119; Bioengineering Rockledge Drive, Room 4102, MSC 7814, Room 5179, MSC 7840, Bethesda, MD 20892, Nanotechnology Initiative & BISTI. Bethesda, MD 20892, 301–435–1786. 301–435–2406, [email protected]. Date: March 2, 2004. Name of Committee: Cardiovascular Name of Committee: Infectious Diseases Time: 4:30 p.m. to 5 p.m. Sciences Integrated Review Group, Electrical and Microbiology Integrated Review Group, Agenda: To review and evaluate grant Signaling, Ion Transport, and Arrhythmias Bacteriology and Mycology Subcommittee 2. applications. Study Section. Date: March 4–5, 2004. Place: Embassy Suites at the Chevy Chase Date: March 4–5, 2004. Time: 8:30 a.m. to 5 p.m. Pavilion, 4300 Military Road, NW., Time: 8 a.m. to 5 p.m. Agenda: To review and evaluate grant Washington, DC 20015. Agenda: To review and evaluate grant applications. Contact Person: Pushpa Tandon, PhD, applications. Place: Capitol Hill Suites, 200 C Street, SE., Scientific Review Administrator, Center for Place: Holiday Inn Select Bethesda, 8120 Washington, DC 20003. Scientific Review, National Institutes of Wisconsin Ave., Bethesda, MD 20814. Contact Person: Melody Mills, PhD, Health, 6701 Rockledge Drive, Room 5104, Contact Person: Rajiv Kumar, PhD, Scientific Review Administrator, Center for MSC 7854, Bethesda, MD 20892, 301–435– Scientific Review Administrator, Center for Scientific Review, National Institutes of 2397, [email protected]. Scientific Review, National Institutes of Health, 6701 Rockledge Drive, Room 3204, Health, 6701 Rockledge Drive, Room 4122, Name of Committee: Center for Scientific MSC 7808, Bethesda, MD 20892, 301–435– MSC 7802, Bethesda, MD 20892, 301–435– Review Special Emphasis Panel, Gene and 0903. Drug Delivery. 1212. Name of Committee: Health of the Date: March 3–5, 2004. Name of Committee: Center for Scientific Population Integrated Review Group, Health Time: 7:30 a.m. to 3 p.m. Review Special Emphasis Panel, Biodefense. Agenda: To review and evaluate grant Date: March 4–5, 2004. Services Organization and Delivery Study applications. Time: 8 a.m. to 3 p.m. Section. Place: Four Points by Sheraton Bethesda, Agenda: To review and evaluate grant Date: March 4–5, 2004. 8400 Wisconsin Avenue, Bethesda, MD applications. Time: 8:30 a.m. to 5 p.m. 20814. Place: Holiday Inn Central, 1501 Rhode Agenda: To review and evaluate grant Contact Person: Zakir Bengali, PhD, Island Ave., NW., Washington, DC 20005. applications. Scientific Review Administrator, Center for Contact Person: Fouad A. El-Zaatari, PhD, Place: Melrose Hotel, 2430 Pennsylvania Scientific Review, National Institutes of PhD, PhD, Scientific Review Administrator, Ave., NW., Washington, DC 20037. Health, 6701 Rockledge Drive, Room 5150, Center for Scientific Review, National Contact Person: Charles N. Rafferty, PhD, MSC 7842, Bethesda, MD 20892, 301–435– Institutes of Health, 6701 Rockledge Drive, Scientific Review Administrator, Center for 1742, [email protected]. Room 3206, MSC 7808, Bethesda, MD 20892, Scientific Review, National Institutes of Health, 6701 Rockledge Drive, Room 3172, Name of Committee: AIDS and Related 301–435–1149, [email protected]. MSC 7816, Bethesda, MD 20892, 301–435– Research Integrated Review Group, AIDS Name of Committee: Center for Scientific 3562, [email protected]. Immunology and Pathogenesis Study Review Special Emphasis Panel, ZRG–1 F05 Section. (20) L Fellowships: Cell Development. Name of Committee: Center for Scientific Date: March 3–4, 2004. Date: March 4–5, 2004. Review Special Emphasis Panel, ZRG1 NNB Time: 8 a.m. to 5 p.m. Time: 8 a.m. to 5 p.m. (01) Neuroendocrinology, Neuroimmunology, Agenda: To review and evaluate grant Agenda: To review and evaluate grant and Behavior. applications. applications. Date: March 4–5, 2004. Place: Hyatt Regency Suites, 285 North Place: The River Inn, 924 Twenty-Fifth Time: 9 a.m. to 5 p.m. Palm Canyon Drive, Palm Springs, CA 92262. Street, NW., Washington, DC 20037. Agenda: To review and evaluate grant Contact Person: Abraham P. Bautista, MS, Contact Person: Richard D. Rodewald, applications. MSC, PhD, Scientific Review Administrator, PhD, Scientific Review Administrator, Center Place: Hyatt Regency Bethesda, One Center for Scientific Review, National for Scientific Review, National Institutes of Bethesda Metro Center, 7400 Wisconsin Institutes of Health, 6701 Rockledge Drive, Health, 6701 Rockledge Drive, Room 5142, Avenue, Bethesda, MD 20814. Room 5102, MSC 7852, Bethesda, MD 20892, MSC 7840, Bethesda, MD 20892, 301–435– Contact Person: Richard Marcus, PhD, 301–435–1506, [email protected]. 1024, [email protected]. Scientific Review Administrator, Center for Name of Committee: AIDS and Related Name of Committee: Center for Scientific Scientific Review, National Institutes of Research Integrated Review Group; AIDS Review Special Emphasis Panel, Health, 6701 Rockledge Drive, Room 5168, Molecular and Cellular Biology Study Developmental Brain Disorders Study MSC 7844, Bethesda, MD 20892, 301–435– Section. Section (DBD). 1245, [email protected]. Date: March 3–4, 2004. Date: March 4–5, 2004. Name of Committee: Center for Scientific Time: 8 a.m. to 5 p.m. Time: 8:30 a.m. to 5 p.m. Review Special Emphasis Panel, R15 Grant Agenda: To review and evaluate grant Agenda: To review and evaluate grant Applications Review. applications. applications. Date: March 5, 2004.

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Time: 8 a.m. to 3 p.m. Date: March 5, 2004. attention of the Desk Officer for the Agenda: To review and evaluate grant Time: 2 p.m. to 6 p.m. Coast Guard. Caution: Because of recent applications. Agenda: To review and evaluate grant delays in the delivery of mail, your Place: Four Points By Sheraton, 8400 applications. comments may reach the Facility more Wisconsin Avenue, Ambassador 1, Bethesda, Place: Melrose Hotel, 2430 Pennsylvania MD 20814. Ave., NW., Washington, DC 20037. quickly if you choose one of the means Contact Person: Zakir Bengali, PhD, Contact Person: Gertrude K. McFarland, described below. Scientific Review Administrator, Center for RN, FAAN, DNSC, Scientific Review (2)(a) By delivery to room PL–401 at Scientific Review, National Institutes of Administrator, Center for Scientific Review, the address given in paragraph (1)(a) Health, 6701 Rockledge Drive, Room 5150, National Institutes of Health, 6701 Rockledge above, between 9 a.m. and 5 p.m., MSC 7842, Bethesda, MD 20892, 301–435– Drive, Room 3156, MSC 7770, Bethesda, MD Monday through Friday, except Federal 1742. 20892, 301–435–1784, [email protected]. holidays. The telephone number is (202) Name of Committee: Center for Scientific (Catalogue of Federal Domestic Assistance 366–9329. (b) By delivery to OIRA, at Review Special Emphasis Panel, ZRG1 HOP Program Nos. 93.306, Comparative Medicine; the address given in paragraph (1)(b) D (02)M: Member Conflict: Cancer 93.333, Clinical Research, 93.306, 93.333, above, to the attention of the Desk Epidemiology. 93.337, 93.393–93.396, 93.837–93.844, Date: March 5, 2004. Officer for the Coast Guard. 93.846–93.878, 93.892, 93.893, National (3) By fax to (a) the Facility at (202) Time: 8 a.m. to 5 p.m. Institutes of Health, HHS) Agenda: To review and evaluate grant 493–2251 and (b) OIRA at (202) 395– applications. Dated: February 4, 2004. 5806, or e-mail to OIRA at Place: Holiday Inn Chevy Chase, 5520 LaVerne Y. Stringfield, [email protected] attention: Wisconsin Avenue, Chevy Chase, MD 20815. Director, Office of Federal Advisory Desk Officer for the Coast Guard. Contact Person: Ann Hardy, DRPH, Committee Policy. (4)(a) Electronically through the Web Scientific Review Administrator, Center for Scientific Review, National Institutes of [FR Doc. 04–2769 Filed 2–9–04; 8:45 am] Site for the Docket Management System Health, 6701 Rockledge Drive, Room 3158, BILLING CODE 4140–01–M at http://dms.dot.gov. (b) OIRA does not MSC 7770, Bethesda, MD 20892, 301–435– have a website on which you can post 0695, [email protected]. your comments. Name of Committee: Center for Scientific DEPARTMENT OF HOMELAND The Facility maintains the public Review Special Emphasis Panel, SSPS R03, SECURITY docket for this notice. Comments and R21 and F Applications. material received from the public, as Date: March 5, 2004. Coast Guard well as documents mentioned in this Time: 9 a.m. to 5 p.m. notice as being available in the docket, Agenda: To review and evaluate grant [USCG–2003–16251] applications. will become part of this docket and will Place: Bethesda Marriott Suites, 6711 Information Collection Under Review be available for inspection or copying at Democracy Boulevard, Bethesda, MD 20817. by the Office of Management and room PL–401 (Plaza level), 400 Seventh Contact Person: Valerie Durrant, PhD, Budget (OMB): 1625–0086, The Great Street SW., Washington, DC, between 9 Scientific Review Administrator, Center for Lakes Pilotage a.m. and 5 p.m., Monday through Scientific Review, National Institutes of Friday, except Federal holidays. You Health, 6701 Rockledge Drive, Room 3148, AGENCY: Coast Guard, DHS. may also find this docket on the Internet MSC 7770, Bethesda, MD 20892, 301–435– 3554, [email protected]. ACTION: Request for comments. at http://dms.dot.gov. Copies of the complete ICR are Name of Committee: Center for Scientific SUMMARY: Review Special Emphasis Panel, Myocardial In compliance with the available for inspection and copying in Electrophysiology. Paperwork Reduction Act of 1995, this public dockets. They are available in Date: March 5, 2004. request for comments announces that docket USCG 2003–16251 Docket Time: 9:30 a.m. to 10:30 a.m. the Coast Guard has forwarded one Management Facility between 10 a.m. Agenda: To review and evaluate grant Information Collection Report (ICR), and 5 p.m., Monday through Friday, applications. The Great Lakes Pilotage Rate except Federal holidays; for inspection Place: Holiday Inn Select Bethesda, 8120 Methodology to the Office of and printing on the internet at http:// Wisconsin Ave., Bethesda, MD 20814. Information and Regulatory Affairs dms.dot.gov; and for inspection from the Contact Person: Joyce C. Gibson, DSC, Scientific Review Administrator, Center for (OIRA) of the OMB for review and Commandant (CG–611), U.S. Coast Scientific Review, National Institutes of comment. Our ICR describes the Guard, room 6106, 2100 Second Street Health, 6701 Rockledge Drive, Room 4130, information we seek to collect from the SW., Washington, DC, between 10 a.m. MSC 7814, Bethesda, MD 20892, 301–435– public. Review and comment by OIRA and 4 p.m., Monday through Friday, 4522, [email protected]. ensures that we impose only paperwork except Federal holidays. Name of Committee: Center for Scientific burdens commensurate with our FOR FURTHER INFORMATION CONTACT: Review Special Emphasis Panel, Research on performance of duties. Bernice Parker-Jones, Office of Ethical Issues. DATES: Please submit comments on or Information Management, (202) 267– Date: March 5, 2004. before March 11, 2004. 2328, for questions on this document; Time: 10:30 a.m. to 5 p.m. Agenda: To review and evaluate grant ADDRESSES: To make sure that your Andrea M. Jenkins, Program Manager, applications. comments and related material do not U.S. Department of Transportation, Place: Bethesda Marriott Suites, 6711 enter the docket [USCG 2003–16251] (202) 366–0271, for questions on the Democracy Boulevard, Bethesda, MD 20817. more than once, please submit them by docket. Contact Person: Karin F. Helmers, PhD, only one of the following means: SUPPLEMENTARY INFORMATION: Scientific Review Administrator, Center for (1)(a) By mail to the Docket Scientific Review, National Institutes of Management Facility, U.S. Department Public Participation and Request for Health, 6701 Rockledge Drive, Room 3166, Comments MSC 7770, Bethesda, MD 20892, 301–435– of Transportation, room PL–401, 400 1017, [email protected]. Seventh Street SW., Washington, DC We encourage you to participate in Name of Committee: Center for Scientific 20590–0001. this request for comment by submitting Review Special Emphasis Panel, Health (b) By mail to OIRA, 725 17th Street comments and related materials. We Services Organization and Delivery. NW., Washington, DC 20503, to the will post all comments received,

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without change, to http://dms.dot.gov, necessary for the proper performance of discuss various issues relating to the and they will include any personal the functions of the Department. In marine transportation of hazardous information you have provided. We particular, the Coast Guard would materials in bulk. These meetings will have an agreement with DOT to use the appreciate comments addressing: (1) be open to the public. Docket Management Facility. Please see The practical utility of the collection; (2) DATES: CTAC will meet on Thursday, the paragraph on DOT’s ‘‘Privacy Act’’ the accuracy of the Department’s March 4, 2004, from 9 a.m. to 3:30 p.m. below. estimated burden of the collection; (3) The Subcommittee on Hazardous Cargo Submitting comments: If you submit a ways to enhance the quality, utility, and Transportation Security will meet on comment, please include your name and clarity of the information that is the Tuesday, March 2, 2004, from 9 a.m. to address, identify the docket number for subject of the collection; and (4) ways to 4 p.m. and Wednesday, March 3, 2004, this request for comment [USCG 2003– minimize the burden of collection on from 9 a.m. to 4 p.m. These meetings 16251], indicate the specific section of respondents, including the use of may close early if all business is this document to which each comment automated collection techniques or finished. Written material and requests applies, and give the reason for each other forms of information technology. to make oral presentations should reach comment. You may submit your Comments, to DMS or OIRA, must the Coast Guard on or before February comments and material by electronic contain the OMB Control Number of the 27, 2004. Requests to have a copy of means, mail, fax, or delivery to the ICR addressed. Comments to DMS must your material distributed to each Docket Management Facility at the contain the docket number of this member of the Committee should reach address under ADDRESSES; but please request, USCG 2003–16251. Comments the Coast Guard on or before February submit your comments and material by to OIRA are best assured of having their 27, 2004. only one means. If you submit them by full effect if OIRA receives them 30 or ADDRESSES: Both CTAC and the mail or delivery, submit them in an fewer days after the publication of this Subcommittee on Hazardous Cargo unbound format, no larger than 81⁄2 by request. Transportation Security will meet at the 11 inches, suitable for copying and Information Collection Request Coast Guard Headquarters Building, electronic filing. If you submit them by 2100 2nd Street SW., Washington DC, mail and would like to know that they Title: Great Lakes Pilotage Rate 20593, in room 2415. Send written reached the Facility, please enclose a Methodology. material and requests to make oral stamped, self-addressed postcard or OMB Control Number: 1625–0086. presentations to Commander Robert J. envelope. We will consider all Type of Request: Extension of a Hennessy, Executive Director of CTAC, comments and material received during currently approved collection. Commandant (G–MSO–3), U.S. Coast the comment period. We may change Affected Public: Associations of Pilots Guard Headquarters, 2100 Second Street this proposed rule in view of them. on the Great Lakes. SW., Washington, DC 20593–0001 or Viewing comments and documents: Form: This collection of information email: [email protected]. This To view comments, as well as does not require the public to fill out notice is available on the Internet at documents mentioned in this preamble forms, but does require submitting http://dms.dot.gov. information to the Coast Guard in as being available in the docket, go to FOR FURTHER INFORMATION CONTACT: written format. http://dms.dot.gov at any time and Commander Robert J. Hennessy, Abstract: The Director of the Office of conduct a simple search using the Executive Director of CTAC, or Ms. Sara Great Lakes Pilotage uses the docket number. You may also visit the Ju, Assistant to the Executive Director, information collected to carry out Docket Management Facility in room telephone (202) 267–1217, fax (202) financial oversight of the associations PL–401 on the Plaza level of the Nassif 267–4570. Building, 400 Seventh Street SW., and to set rates for pilotage. SUPPLEMENTARY INFORMATION: Notice of Washington, DC, between 9 a.m. and 5 Annual Estimated Burden Hours: The estimated burden is 18 hours a year. these meetings is given under the p.m., Monday through Friday, except Federal Advisory Committee Act, 5 Federal holidays. Dated: January 29, 2004. U.S.C. App. 2. Privacy Act: Anyone can search the Nathaniel S. Heiner, Agenda of Subcommittee Meeting on electronic form of all comments Acting Assistant Commandant for Command, March 2–3, 2004: received in dockets by the name of the Control, Communications, Computers, and (1) Introduce Subcommittee members individual submitting the comment (or Information Technology. and attendees. signing the comment, if submitted on [FR Doc. 04–2750 Filed 2–9–04; 8:45 am] (2) Discuss status of CTAC behalf of an association, business, labor BILLING CODE 4910–15–P recommendations to the Coast Guard union, etc.). You may review the regarding bulk solid ammonium nitrate Privacy Act Statement of DOT in the and ammonium nitrate fertilizers that Federal Register published on April 11, DEPARTMENT OF HOMELAND are classified as oxidizers. 2000 (65 FR 19477), or you may visit SECURITY (3) Discuss status of Maritime http://dms.dot.gov. Transportation Security Act (MTSA) Coast Guard Regulatory History implementation. [USCG–2004–17029] (4) Discuss outreach initiatives. This request constitutes the 30-day Agenda of CTAC Meeting on notice required by OIRA. The Coast Chemical Transportation Advisory Thursday, March 4, 2004: Guard has already published (68 FR Committee (1) Introduce Committee members and 59192, October 14, 2003) the 60-day attendees. notice required by OIRA. That notice AGENCY: Coast Guard, DHS. (2) Status report from the CTAC elicited no comments. ACTION: Notice of meeting. Hazardous Cargo Transportation Security Subcommittee. Request for Comments SUMMARY: The Chemical Transportation (3) Final report from the Outreach The Coast Guard invites comments on Advisory Committee (CTAC) and its Workgroup. the proposed collection of information Hazardous Cargo Transportation (4) Presentation of the initiative to to determine whether the collection is Security Subcommittee will meet to incorporate marine specific

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competencies, for hazardous material SUMMARY: This document gives notice Dated: February 3, 2004. incident responders, into the National that ‘‘DISPALCA’’ has been recorded Paul Pizzeck, Fire Protection Association (NFPA) 472 with CBP as a trade name by Caribbean Acting Chief, Intellectual Property Rights Standard. Imports, Inc., a Florida corporation Branch. (5) Discussion and vote to establish a organized under the laws of the State of [FR Doc. 04–2726 Filed 2–9–04; 8:45 am] new subcommittee on the NFPA 472 Florida, P.O. Box 617308, Orlando, BILLING CODE 4820–02–P Initiative. Florida 32861–7308. (6) Presentation by the Chemical The application for trade name Distribution Institute on their recordation was properly submitted to DEPARTMENT OF HOMELAND Responsible Care Program. CBP and published in the Federal SECURITY (7) Presentation by CTAC reviewing Register. As no public comments in recent marine casualties. opposition to the recordation of this Federal Emergency Management (8) Presentation by the Coast Guard’s trade name were received by CBP Agency Office of Port, Vessel, and Facility within the 60-day comment period, the [FEMA–1498–DR] Security (G–MPS). trade name has been duly recorded with (9) Presentation by the Coast Guard’s CBP and will remain in force as long as California; Amendment No. 5 to Notice Office of Response on Hazardous this trade name is in use by this of a Major Disaster Declaration Substance Response Plan Regulations. manufacturer in accordance with AGENCY: (10) Update of Coast Guard Regulatory § 133.15 of the CBP Regulations. Federal Emergency Projects. EFFECTIVE DATE: February 10, 2004. Management Agency, Emergency Preparedness and Response Directorate, FOR FURTHER INFORMATION CONTACT: La Procedural Department of Homeland Security. Verne Watkins, Paralegal Specialist, These meetings are open to the Intellectual Property Rights Branch, ACTION: Notice. public. Please note that the meetings Office of Regulations and Rulings, U.S. SUMMARY: This notice amends the notice may close early if all business is Customs and Border Protection, 1300 of a major disaster for the State of finished. At the discretion of the Chair, Pennsylvania Avenue, NW., Mint California (FEMA–1498–DR), dated members of the public may make oral Annex, Washington, DC 20229; (202) October 27, 2003, and related presentations during the meetings. If 572–8710. determinations. you would like to make an oral SUPPLEMENTARY INFORMATION: Trade EFFECTIVE DATE: February 3, 2004. presentation at a meeting, please notify names that are being used by the Executive Director and submit manufacturers or traders may be FOR FURTHER INFORMATION CONTACT: written material on or before February recorded with Customs and Border Magda Ruiz, Recovery Division, Federal 27, 2004. If you would like a copy of Protection (CBP) to afford the particular Emergency Management Agency, your material distributed to each business entity with increased Washington, DC 20472, (202) 646–2705. member of the Committee in advance of commercial protection. CBP procedures SUPPLEMENTARY INFORMATION: Notice is a meeting, please submit 25 copies to for recording trade names are provided hereby given that for this disaster, the the Executive Director (see ADDRESSES) at § 133.11 et seq. of the CBP incident period is reopened as October no later than February 27, 2004. Regulations (19 CFR 133.11 et seq.). 21, 2003, through and including March 31, 2004. During the expanded incident Information on Services for Individuals Pursuant to these regulatory procedures, period, only those areas within the With Disabilities Caribbean Imports, Inc., a Florida corporation organized under the laws of designated areas specifically determined For information on facilities or the State of Florida, P.O. Box 617308, by the Federal Coordinating Officer to services for individuals with Orlando, Florida 32861–7308, applied be damaged or adversely affected as a disabilities, or to request special to CBP for protection of its direct result of the compromised assistance at the meeting, telephone the manufacturer’s trade name, watershed conditions and fire-generated Executive Director as soon as possible. ‘‘DISPALCA’’. debris caused by the wildfires will be Dated: February 3, 2004. On Wednesday, November 19, 2003, considered eligible for assistance on a Joseph J. Angelo, CBP published a notice of application case-by-case basis. Director of Standards, Marine Safety, Security for the recordation of the trade name (The following Catalog of Federal Domestic and Environmental Protection. ‘‘DISPALCA’’ in the Federal Register Assistance Numbers (CFDA) are to be used [FR Doc. 04–2736 Filed 2–9–04; 8:45 am] (68 FR 65304). The notice advised that for reporting and drawing funds: 97.030, before final action would be taken on Community Disaster Loans; 97.031, Cora BILLING CODE 4910–15–P Brown Fund Program; 97.032, Crisis the application, consideration would be Counseling; 97.033, Disaster Legal Services given to any relevant data, views, or Program; 97.034, Disaster Unemployment DEPARTMENT OF HOMELAND arguments submitted in writing in Assistance (DUA); 97.046, Fire Management SECURITY opposition of the recordation of this Assistance; 97.048, Individual and trade name. The closing day for the Household Housing; 97.049, Individual and Bureau of Customs and Border comment period was January 20, 2004. Household Disaster Housing Operations; Protection As of the end of the comment period, 97.050 Individual and Household Program— January 20, 2004, no comments were Other Needs, 97.036, Public Assistance [CBP Decision 04—07] received. Accordingly, as provided by Grants; 97.039, Hazard Mitigation Grant § 133.14 of the CBP Regulations, Program.) Recordation of Trade Name: ‘‘DISPALCA’’ is recorded with CBP as Michael D. Brown, ‘‘DISPALCA’’ the trade name used by the Under Secretary, Emergency Preparedness AGENCY: Customs and Border Protection manufacturer, Dispalca, and will remain and Response, Department of Homeland (CBP). in force as long as this trade name is in Security. use by this manufacturer in accordance [FR Doc. 04–2787 Filed 2–9–04; 8:45 am] ACTION: Notice of final action. with § 133.15 of the CBP Regulations. BILLING CODE 9110–10–P

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DEPARTMENT OF HOUSING AND respond; including the use of DEPARTMENT OF THE INTERIOR URBAN DEVELOPMENT appropriate automated collection techniques or other forms of information Fish and Wildlife Service [Docket No. FR–4909–N–02] technology, e.g., permitting electronic submission of responses. Endangered and Threatened Species Notice of Proposed Information Permit Applications Collection for Public Comment on the This Notice also lists the following Survey of Market Absorption of New information: AGENCY: Fish and Wildlife Service, Multifamily Units Title of Proposal: Survey of Market Interior. ACTION: Notice of receipt of applications. AGENCY: Office of Policy Development Absorption of New Multifamily Units. and Research, HUD. OMB Control Number: 2528–0013 SUMMARY: The following applicants have ACTION: Notice. (Expires 10/31/04). applied for permits to conduct certain Description of the need for the activities with endangered species. This SUMMARY: The proposed information information and proposed use: The notice is provided pursuant to section collection requirement described below Survey of Market Absorption (SOMA) 10(c) of the Endangered Species Act of will be submitted to the Office of provides the data necessary to measure 1973, as amended (16 U.S.C. 1531, et Management and Budget (OMB) for the rate at which new rental apartments seq.). approval as required by the Paperwork and new condominium apartments are Reduction Act of 1995. The Department DATES: Written data or comments absorbed; that is, taken off the market, is soliciting public comments on the should be submitted to the Regional usually by being rented or sold, over the subject proposal. Director, U.S. Fish and Wildlife Service, course of the first twelve months Ecological Services, 1 Federal Drive, DATES: Comments Due Date: April 12, following completion of a building. 2004. Fort Snelling, Minnesota 55111–4056, The data is collected at quarterly and must be received on or before ADDRESSES: Interested persons are intervals until the twelve months March 11, 2004. invited to submit comments regarding conclude, or until the units in a this proposal. Comments should refer to FOR FURTHER INFORMATION CONTACT: Mr. building are completely absorbed. The Peter Fasbender, (612) 713–5343. the proposal by name/or OMB Control survey also provides estimates of certain SUPPLEMENTARY INFORMATION: Number and should be sent to: Reports characteristics, i.e., asking rent/price, Liaison Officer, Office of Policy Permit Number: TE081995. number of units, and number of Applicant: James P. Dunn, Allendale, Devleopment and Research, Department bedrooms. of Housing and Urban Development, Michigan. The survey provides a basis for 451 7th Street, SW., Room 8226, The applicant requests a permit to analyzing the degree to which new Washington, DC 20410. take (collect) the Karner blue butterfly apartment construction is meeting the (Lycaedes melissa samuelis) in FOR FURTHER INFORMATION CONTACT: present and future needs of the public. Michigan. The scientific research is Ronald J. Sepanik, Director, Housing Additionally, beginning with new and Demographic Analysis Division, aimed at enhancement of survival of the construction in 2002, the survey will species in the wild. Office of Policy Development and attempt to ascertain the number and Research, Department of Housing and Permit Number: TE0840524–1. degree of services provided by ‘‘Assisted Applicant: Lynn W. Robbins, Urban Development, 451 7th Street, Living’’ type units. SW., Washington, DC 20410; (202) 708– Springfield, Missouri. 1060, x5887. This is not a toll-free Members of affected public: Rental The applicant requests a permit to number. Copies of the proposed forms Agents/Builders. take (collect) the Indiana bat (Myotis and other available documents Estimation of the total numbers of sodalis) and gray bat (M. grisescens) submitted to OMB may be obtained hours needed to prepare the information throughout Iowa, Kansas, Ohio, and from Mr. Sepanik. collection including number of Nebraska. The scientific research is aimed at enhancement of survival of the SUPPLEMENTARY INFORMATION: The respondents, frequency of response, and Department of Housing and Urban hours of response: species in the wild. Development will submit the proposed Estimated Number of Respondents: Permit Number: TE082167. information collection package to OMB 12,000 yearly (maximum). Applicant: Ozark Underground for review as required by the Paperwork Laboratory, Protem, Missouri. Estimated Time Per Response: 20 The applicant requests a permit to Reduction Act of 1995 (44 U.S.C. minutes. chapter 35, as amended). take (collect) the Illinois cave amphipod This Notice is soliciting comments Frequency of Response: four times (Gammarus acherondytes) throughout from members of the public and affected (maximum). Illinois. The scientific research is aimed agencies concerning the proposed Estimated Total Annual Burden at enhancement of survival of the collection of information to (1) Evaluate Hours: 4,000 (12,000 × 20 minutes). species in the wild. whether the proposed collection of Estimated Total Annual Cost: The Permit Number: TE082499. information is necessary for the proper only cost to respondents is that of their Applicant: Applied Science and performance of the functions of the time. Technology, Inc., Brighton, Michigan. agency, including whether the The applicant requests a permit to Authority: The survey is taken under Title take (collect) Northern riffleshell mussel information will have practical utility; 12, United States Code, Section 1701Z. (2) Evaluate the accuracy of the agency’s (Epioblasma torulosa rangiana) in estimate of the burden of the proposed Dated: January 29, 2004. Michigan. The scientific research is collection of information; (3) Enhance Darlene F. Williams, aimed at enhancement of survival of the the quality, utility, and clarity of the General Deputy Assistant Secretary for Policy species in the wild. information to be collected; and (4) Development and Research. Permit Number: TE082500. Minimize the burden of the collection of [FR Doc. 04–2770 Filed 2–9–04; 8:45 am] Applicant: Saint Louis Zoo, St. Louis, information on those who are to BILLING CODE 4210–62–M Missouri.

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The applicant requests a permit to regarding the current policies have been are outside Indian country. The BIA’s take (collect) the American burying raised by Federal, tribal, and local law policy makes clear that although officers beetle (Nicrophorus americanus) in enforcement; therefore, the AS–IA is will not as a rule conduct investigations Missouri. The scientific research is making these policies public so the or make arrests outside Indian country, aimed at enhancement of survival of the public may have a clearer they maintain their law enforcement species in the wild. understanding of the policies which officers’ responsibilities and certain Dated: January 28, 2004. have governed all these types of authorities irrespective of whether they Lynn M. Lewis, agreements. are located in Indian country. An agency may clarify its policies, To assist the AS–IA in fulfilling the Acting Assistant Regional Director, Ecological procedures, and implementation of its BIA’s duties to provide law enforcement Services, Region 3, Fort Snelling, Minnesota. own regulations where these in Indian country and to make clear [FR Doc. 04–2780 Filed 2–9–04; 8:45 am] clarifications do not contradict or alter important policies and working BILLING CODE 4310–55–P the regulations. These clarified policies relationships, the BIA OLES enters into do not change the law enforcement MOAs, MOUs, CDAs, and SLEC regulations. Rather, these clarifications agreements (pursuant to which it grants DEPARTMENT OF THE INTERIOR restate to outside parties what has been special law enforcement commissions to Bureau of Indian Affairs and continues to be the practice and tribal and local law enforcement understanding of the BIA regarding such officers). SLECs support the sovereignty Internal Law Enforcement Services agreements. This Federal Register of tribes by allowing tribal law Policies notice is to advise all parties to Indian enforcement officers to enforce Federal country law enforcement agreements, as law, to investigate Federal crimes, and AGENCY: Bureau of Indian Affairs, well as all other interested persons and to protect the rights of people in Indian Interior. organizations, of the BIA’s policies, country, particularly against crimes ACTION: Notice. understandings, and expectations perpetrated by non-Indians against related to these agreements, though the tribal members. Without such SUMMARY: This notice publishes internal policies on Cross-Deputation issues raised here may not be commissions, tribal law enforcement in exhaustive. many jurisdictions is limited to Agreements, Memoranda of The Federal Government has an restraining these perpetrators until a Understanding, Memoranda of interest in promoting strong tribal county, State, or Federal officer arrives. Agreement, and Special Law governments with the ability to protect It is common for tribes to have difficulty Enforcement Commission Deputation the health and welfare of their members. getting local or State law enforcement to Agreements. These policies apply to all Inherent in this relationship is strong respond to crimes on the reservations. Cross-Deputation Agreements, and effective law enforcement in Indian For example, it is difficult to get local Memoranda of Understanding, country. Due to variations in state law enforcement to respond to domestic Memoranda of Agreement, and Special policies, paired with Indian country violence calls and illegal disposal Law Enforcement Commission crime rates well above the national activities in Indian country. As a result, Deputation Agreements. average, there is a public health and there is a critical void in law DATES: These policies are effective safety need in Indian country that must enforcement in Indian country that February 10, 2004. be addressed. Another issue over the these SLECs fill. FOR FURTHER INFORMATION CONTACT: years has been lack of jurisdictional Due to the nature of law enforcement Peter Maybee, Executive Officer, Bureau clarity, making state and local officials in Indian country, SLEC officers will of Indian Affairs, Law Enforcement reluctant to either arrest or prosecute in often have to respond to calls where it Services Washington, DC Liaison Office, Indian country. This lack of prosecution is unclear initially whether they are 1849 C Street, NW., Washington, DC in Indian country has compounded the responding in their Federal or tribal 20240; Telephone No. (202) 208–4844. problem. capacity. The Federal Government has SUPPLEMENTARY INFORMATION: Under the Indian Law Enforcement an interest in ensuring that Federal and Reform Act, 25 U.S.C. 2801–2809, and federally commissioned officers are able Introduction the corresponding regulations at 25 CFR to respond to calls immediately and This notice is published in the part 12, the Secretary of the Interior, with all of the necessary and exercise of authority under the Indian acting through BIA, is charged with recommended law enforcement tools. Law Enforcement Reform Act, 25 U.S.C. providing, or assisting in the provision The Federal Government and the 2801 et seq., 5 U.S.C. 552(a), 5 U.S.C. of, law enforcement in Indian country. Department also have an interest in 301, 25 U.S.C. 2 and 9, 43 U.S.C. 1457, This is true nationwide—throughout promoting strong tribal governments and under the exercise of authority Indian country and in the areas near and capable of effectively carrying out law delegated by the Secretary of the Interior adjacent to Indian country. To increase enforcement in Indian country. The to the Assistant Secretary—Indian the effectiveness of law enforcement in Government further has an interest in Affairs by 209 Departmental Manual 8. Indian country, the authority and status ensuring the tribes’ sovereign rights to To clarify the existing policies of the of law enforcement officers, do so are respected and the boundaries Bureau of Indian Affairs (BIA) Law relationships among and between law of Indian country do not impede Enforcement Services (OLES) regarding enforcement departments, as well as officers’ travel, use of marked vehicles, the authority and obligations of parties potential liability and liability coverage, emergency response, and other to Memoranda of Agreement (MOAs), must be clear. Law enforcement officers incidental aspects of their Indian Memoranda of Understanding (MOUs), are expected to appear a certain way, country policing authority. Cross Deputation Agreements (CDAs), use certain equipment, and drive certain To ensure the SLEC tribal officers are and in particular, Special Law vehicles both for the safety of the fully qualified to enforce Federal law Enforcement Commission (SLECs) officers and for the safety of the public. and to perform functions which would Deputation Agreements, the Assistant The BIA’s internal policies prescribe all otherwise be performed by BIA officers, Secretary—Indian Affairs (AS–IA) is of these standards and recognize that the BIA has established certain publishing these policies. Questions officers maintain their status when they minimum standards and certification

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requirements for potential officers. The build and strengthen these essential dropped dramatically over the past 10 BIA OLES conditions officer relationships. With strong relationships years. commissions on meeting these and communication, the BIA and tribal, The Act creates a new mechanism for requirements. The Chief of Police of a local, and other Federal law local community collaboration with tribe must perform an FBI criminal enforcement can better meet the law Federal land management activities in history check on each officer and certify enforcement, public health, and safety the selection of projects to be conducted the officers are both full-time employees needs of people in Indian country. on federal lands or that will benefit with a law enforcement program and Dated: January 22, 2004. resources on federal lands using funds certified through either the State or the under Title II of the Act. The BLM Aurene M. Martin, BIA. If an officer is not yet certified by Resource Advisory Committees consist one of the two entities, the BIA provides Principal Deputy Assistant Secretary—Indian of 15 local citizens (plus 6 alternates) Affairs. training before commissioning an representing a wide array of interests. [FR Doc. 04–2842 Filed 2–9–04; 8:45 am] officer. These officers must also meet FOR FURTHER INFORMATION CONTACT: other requirements such as firearms BILLING CODE 4310–G6–J Additional information concerning the certification and maintaining a record BLM Resource Advisory Committees free of any felonies. The SLECs expire DEPARTMENT OF THE INTERIOR may be obtained from Wayne Elliott, after 3 years, when the Chief of Police Designated Federal Official, Eugene must recertify the qualifications of the Bureau of Land Management District Office, P.O. Box 10226, Eugene, officers, and the officers must reapply Oregon 97440, (541) 683–6600, or for SLECs. [email protected]. For SLEC officers to be used [OR–090–5882–PH–EE01; HAG 04–0081] effectively to fill this void, it is Dated: February 3, 2004. Notice of Meeting important that all parties involved in Julia Dougan, Indian country law enforcement have a AGENCY: Bureau of Land Management, Eugene District Manager. clear understanding of each of their Interior. [FR Doc. 04–2781 Filed 2–9–04; 8:45 am] roles and expectations. The BIA expects ACTION: Meeting notice for the Engene BILLING CODE 4310–33–M that, first, liability coverage under the District, Bureau of Land Management Federal Tort Claims Settlement Act (BLM) Resources Advisory Committees DEPARTMENT OF THE INTERIOR (FTCA) may be available to officers under Section 205 of the Secure Rural carrying Federal SLECs, but the Schools and Community Self Bureau of Land Management Department of Justice makes all Determination Act of 2000 (Pub. 106– determinations on FTCA coverage on a 393). [AK–932–1410–ET; F–14838] case-by-case, factual basis, and their decisions are final. Second, because SUMMARY: This notice is published in Public Land Order No. 7595; coordination is the foundation on which accordance with Section 10(a)(2) of the Withdrawal of Public Lands for Bethel effective Indian country law Federal Advisory Committee Act. Village Selection; Alaska enforcement is based, the BIA Meeting notice is hereby given for the AGENCY: encourages full and open coordination Bureau of Land Management, Eugene District BLM Resources Interior. between and among relevant tribal, Advisory Committee pursuant to ACTION: Public land order. local, and Federal law enforcement, and Section 205 of the Secure Rural Schools any relevant task forces or other similar and Community Self Determination Act SUMMARY: This order withdraws organizations. Whenever possible the of 2000, Public Law 106–393 (the Act). approximately 61,139 acres of public BIA encourages the relevant parties to Topics to be discussed by the BLM lands located within and outside of the enter agreements governing these Resource Advisory Committee include Yukon Delta National Wildlife Refuge cooperative relationships. The BIA will selection of a chairperson, public forum from all forms of appropriation under work with any parties to help and proposed projects for funding in the public land laws, including the accomplish this goal. There must also be ‘‘Round 4, FY 05’’ under Title II of the mining and mineral leasing laws, coordination and communication Act. pursuant to section 22(j)(2) of the Alaska among law enforcement entities, DATES: Native Claims Settlement Act. This including local United States Attorney’s The BLM Resource Advisory action also reserves the lands for offices, on Federal policing and Committees will meet on the following selection by the Bethel Native prosecutorial practices and on particular dates: The Eugene Resource Advisory Corporation, the village corporation for cases and prosecutions where Committee will meet at the BLM Eugene Bethel. This withdrawal is for a period appropriate. Finally, the BIA expects District Office, 2890 Chad Drive, of 120 days; however, any lands that tribes and local law enforcement Eugene, Oregon 97440, 9 a.m. to 4:30 will maintain appropriate training and p.m. on May 20, 2004 and 9 a.m. to 4:30 selected shall remain withdrawn by the policies to ensure that their officers will p.m., on June 10, 2004. The public order until they are conveyed. Any be able to maintain the appropriate level forum will be held from 12:30–1 pm on lands described herein that are not of training and are otherwise prepared both days. selected by the corporation will remain to perform their duties as SLEC officers. SUPPLEMENTARY INFORMATION: Pursuant withdrawn as part of the Yukon Delta The BIA will also assist law to the Act, five Resource Advisory National Wildlife Refuge, pursuant to enforcement organizations in Committees have been formed for the Alaska National Interest Lands developing these policies and training western Oregon BLM districts that Conservation Act, and will be subject to standards. contain Oregon & California (U&C) the terms and conditions of any other By clarifying the BIA’s Grant Lands and Coos Bay Wagon Road withdrawal or segregation of record. understandings and expectations of lands. The Act establishes a six year EFFECTIVE DATE: February 10, 2004. agencies participating in Indian country payment schedule to local counties in FOR FURTHER INFORMATION CONTACT: law enforcement, it is the AS-IA’s intent lieu of funds derived from the harvest Robbie J. Havens, Bureau of Land to provide a strong basis on which to of timber on Federal lands, which have Management, Alaska State Office, 222

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W. 7th Avenue, No. 13, Anchorage, 4. This withdrawal will terminate 120 ADDRESSES: For a period until March 26, Alaska 99513–7599, 907–271–5477. days from the effective date of this 2004, interested persons may submit order, provided, any lands selected shall comments regarding the proposed Order remain withdrawn pursuant to this classification, leasing or conveyance of By virtue of the authority vested in order until conveyed. Any lands the land to the Field Manager, Folsom the Secretary of the Interior by Section described in this order not selected by Field Office Bureau of Land 22(j)(2) of the Alaska Native Claims the corporation shall remain withdrawn Management, 63 Natoma Street, Folsom, Settlement Act, 43 U.S.C. 1621 (j)(2) as part of the Yukon Delta National California. (2000), it is ordered as follows: Wildlife Refuge, pursuant to section 303 FOR FURTHER INFORMATION CONTACT: You 1. Subject to valid existing rights, the (7) of the Alaska National Interest Lands may contact Karen Montgomery at (916) following described public lands Conservation Act, 16 U.S.C. 668(dd) 985–4474. located within and outside of the Yukon (2000); and will be subject to the terms Delta National Wildlife Refuge are and conditions of any other withdrawal SUPPLEMENTARY INFORMATION: The GDRD hereby withdrawn from all forms of or segregation of record. proposes an amendment to R&PP Lease appropriation under the public land 5. It has been determined that this CACA 27456–01 to add 190 acres to an laws, including the mining and mineral action is not expected to have any existing lease of 35 acres and to change leasing laws, and are hereby reserved for significant effect on subsistence uses the use of the lease from a local park to selection under Section 12 of the Alaska and needs pursuant to section 810(c) of a regional recreational facility with Native Claims Settlement Act, 43 U.S.C. the Alaska National Interest Lands playing fields, a skate park, a disc golf 1611 (2000), by the Bethel Native Conservation Act, 16 U.S.C. 3120(c) course, a swimming pool, a recreation Corporation, the village corporation for (2000) and this action is exempted from center/gymnasium, and an equestrian Bethel: the National Environmental Policy Act staging area. The following public land, Seward Meridian of 1969, 42 U.S.C. 4321 note (2000), by located in El Dorado County, near the T. 10 N., R. 61 W., (unsurveyed) section 910 of the Alaska National community of Greenwood has been Secs. 5 to 8, inclusive; Interest Lands Conservation Act, 43 examined and found suitable for lease Secs. 16, 17, and 18. U.S.C. 1638 (2000). and/or conveyance for recreational or T. 11 N., R. 61 W., (unsurveyed) Dated: January 9, 2004. public purposes under the provisions of Secs. 3 to 8, inclusive; the Recreation and Public Purposes Act, Secs. 17 to 20, inclusive; Rebecca W. Watson, as amended (43 U.S.C. 869 et seq.). Secs. 30 and 31. Assistant Secretary—Land and Minerals T. 12 N., R. 61 W., (unsurveyed) Management. T. 12 N., R. 10 E., M.D.M., Secs. 27 to 34, inclusive. [FR Doc. 04–2756 Filed 2–9–04; 8:45 am] Sec. 6, lots 8 and 13; T. 10 N., R. 62 W., (unsurveyed) Sec. 7, lots 1, 11, 20, 23, 25, 26, 31, 33, and Secs. 1 and 2; BILLING CODE 4310–JA–P portions of lots 28, 32, and MS 6418. Secs. 7 to 18, inclusive, excepting therefrom Native Allotment application Containing 225 acres, more or less. F–17230. DEPARTMENT OF THE INTERIOR T. 11 N., R. 62 W., (unsurveyed) The land is not required for any Secs. 1 and 2; Bureau of Land Management federal purpose. The lease and/or Secs. 11 to 14, inclusive; conveyance is consistent with current Secs. 23 to 26, inclusive; [CA–180–1430–ES; CACA 27456] Bureau planning for this area and would Secs. 35 and 36. be in the public interest. The lease and/ T. 10 N., R. 63 W., (unsurveyed) Notice of Realty; Recreation and Public or patent, when issued, will be subject Secs. 9 to 16, inclusive. to the provisions of the Recreation and T. 5 N., R. 68 W., (unsurveyed) Purposes Classification for Lease and/ Secs. 1 to 36, inclusive, excepting or Conveyance; El Dorado County, CA Public Purposes Act and applicable therefrom Native Allotment Certificates regulations of the Secretary of the 50–2000–0148, 50–2000–0045, 50–2000– AGENCY: Bureau of Land Management, Interior and will contain the following 0015, and 50–2000–0078. Interior. reservations to the United States: The areas described aggregate a total ACTION: Notice of realty action. 1. A right-of-way thereon for ditches of approximately 61,139 acres. or canals constructed by the authority of SUMMARY: 2. Prior to conveyance of any of the It is proposed to classify 190 the United States, Act of August 30, lands withdrawn by this order, the acres of land for lease and/or 1890 (43 U.S.C. 945). lands shall be subject to administration conveyance to the Georgetown Divide Recreation District (GDRD) under the 2. All minerals shall be reserved to by the Secretary of the Interior under the United States. applicable laws and regulations, and his Recreation and Public Purposes (R&PP) authority to make contracts and to grant Act, such land to be added by 3. Any other valid and existing rights leases, permits, rights-of-way, or amendment to an existing R&PP Act of record not yet identified. lease of 35 acres, CACA 27456–01. As easements shall not be impaired by this Classification Comments withdrawal. explained below, it is further proposed 3. This order constitutes final to change the use of the existing lease Interested parties may submit withdrawal action by the Secretary of from a local park to a regional comments involving the suitability of the Interior under section 22(j)(2) of the recreational facility. the land for a regional park facility. Alaska Native Claims Settlement Act, 43 DATES: The land will be segregated from Comments on the classification are U.S.C. 1621(j)(2)(2000), to make lands all other forms of appropriation under restricted to whether the land is available for selection by the Bethel the public land laws, including the physically suited for the proposal, Native Corporation, to fulfill the general mining laws and leasing under whether the use will maximize the entitlement of the village for Bethel, the mineral leasing laws, except for future use or uses of the land, whether under section 12 and section 14(a) of the leasing or conveyance under the the use is consistent with local planning Alaska Native Claims Settlement Act, 43 Recreation and Public Purposes Act on and zoning, or if the use is consistent U.S.C. 1611 and 1613 (2000). February 10, 2004. with State and Federal programs.

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Application Comments appraisal for a portion of the patented the suitability of the land for a direct Interested parties may submit land, on the following described land. sale. Any adverse comments will be comments regarding the specific use These lands were also previously reviewed by the State Director. proposed in the application, whether segregated from mineral entry under In the absence of any adverse the BLM followed proper administrative case file number N–61968FD, with comments, the decision will become procedures in reaching the decision, or record notation as of October 1, 1997. effective April 12, 2004. The lands will any other factor not directly related to This segregation on the following not be offered for conveyance until after the suitability of the land for a regional described land will terminate upon the decision becomes effective. park. publication of this Notice of Realty Dated: October 24, 2003. Any adverse comments will be Action. John C. Jamrog, reviewed by the State Director. In the Mount Diablo Meridian, Nevada, Acting Field Manager, Las Vegas, NV. absence of any adverse comments, the [FR Doc. 04–2758 Filed 2–9–04; 8:45 am] classification will become effective T. 16 S., R. 57 E., Sec. 33, W1⁄2SW1⁄4NE1⁄4NW1⁄4, BILLING CODE 4310–HC–P April 12, 2004. A plan of development SE1⁄4NW1⁄4NW1⁄4, N1⁄2NE1⁄4SW1⁄4NW1⁄4, for the regional park is on file in the NW1⁄4NW1⁄4SE1⁄4NW1⁄4. Folsom Field Office. Containing 22.5 acres, more or less. DEPARTMENT OF THE INTERIOR (Authority: 43 CFR 2741.5 (h)(1)). The Federal interest has been Bureau of Land Management D.K. Swickard, examined and found suitable for sale [OR–116–5870–EU: HAG04–0023] Field Manager. under the provisions of section 203 of the Federal Land Policy and [FR Doc. 04–2759 Filed 2–9–04; 8:45 am] Management Act of 1976 (P.L. 94–579, Realty Action: Direct Sale of Public BILLING CODE 4310–40–P as amended; 43 CFR 2711.3–3). Land in Josephine County, OR 57956 Direct sale procedures to the State of AGENCY: Bureau of Land Management Nevada are considered appropriate, in DEPARTMENT OF THE INTERIOR (BLM), Interior. this case, as the land described above ACTION: Notice of realty action. Bureau of Land Management was patented to the State of Nevada, and transfer of the Federal interest to any SUMMARY: The following described [NV–056–1430–EU; N–77540] other entity would not protect existing public land in Josephine County, equities in the land. The direct sale is Notice of Realty Action: Non- Oregon, has been examined and found consistent with the current Bureau Competitive Sale of Reversionary suitable for sale under sections 203 and planning for this area and would be in Interest, Portion of Recreation and 209 of the Federal Land Policy and the public interest. The land is not Public Purposes Patent Number 27– Management Act of 1976 (90 Stat. 2750, required for any Federal purpose. The 83–0052 43 U.S.C. 1713 and 1719), at not less patent will be subject to the provisions than the appraised market value. The AGENCY: Bureau of Land Management, of the Federal Land Policy and parcel proposed for sale is identified as Interior. Management Act and applicable suitable for disposal in the Medford ACTION: Notice of Realty Action. regulations of the Secretary of the District Resource Management Plan Interior and the land will continue to be (June 1995). SUMMARY: The following described land subject to the following reservations to The parcel proposed for sale is in Clark County, Nevada, has been the United States: identified as follows: examined and found suitable for direct 1. A right-of-way thereon for ditches sale under section 203 of the Federal or canals constructed by the authority of Willamette Meridian Land Policy and Management Act of the United States, Act of August 30, T. 34 S., R. 7 W., 1976 (Pub. L. 94–579, as amended; 43 1890 (26 Stat. 391, 43 U.S.C. 945). Section 3, lot 5. CFR 2711.3–3). 2. All minerals shall be reserved to The area described contains 2.46 FOR FURTHER INFORMATION CONTACT: the United States, together with the right to prospect for, mine and remove acres, more or less, in Josephine County, Anna Wharton, Supervisory Realty Oregon. The appraised market value for Specialist, (702) 515–5095. such deposits from the same under applicable law and such regulations as this parcel has been determined to be SUPPLEMENTARY INFORMATION: The $4,060.00. following described land in Clark the Secretary of the Interior may County, Nevada, was patented to the prescribe. DATES: On or before March 26, 2004, Detailed information concerning this State of Nevada, Division of State Lands, interested persons may submit written action, including the approved appraisal pursuant to the Act of Congress of June comments. In the absence of any report, is available for review at the Las 14, 1926 (44 Stat. 741, as amended; 43 objections, this proposal will become Vegas Field Office, Bureau of Land U.S.C. 869), on July 20, 1983 for a the determination of the Department of Management, 4701 N. Torrey Pines Dr., prison (N–25221–02). the Interior. Las Vegas, Nevada 89130. ADDRESSES: Written comments should Mount Diablo Meridian, Nevada, For a period until March 26, 2004, be submitted to Lynda Boody, Glendale interested parties may submit comments Resource Area Field Manager, 3040 T. 16 S., 57 E., to the Field Manager, Las Vegas Field Sec. 33, lots 1 to 12, inclusive, N1⁄2. Biddle Road, Medford, Oregon 97504. Office, at the above address. Containing 687.09 acres, more or less. Electronic format submittal is not The patent contains a reversionary Application Comments acceptable. interest to the United States. The State Interested parties may submit FOR FURTHER INFORMATION CONTACT: of Nevada requests the purchase of the comments regarding whether the BLM Detailed information concerning this reversionary interest at not less than the followed proper administrative land sale, including the reservations, fair market value of $124,000, as procedures in reaching the decision or sale procedures and conditions, and determined by a BLM-approved any other factor not directly related to planning and environmental

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documents, is available from Mathew the Comprehensive Environmental PLACE: Room 101, 500 E Street SW., Craddock, Realty Specialist, at the above Response, Compensation and Liability Washington, DC 20436, Telephone: address, phone (541) 618–2221. Act (42 U.S.C. 9620) holding the United (202) 205–2000. SUPPLEMENTARY INFORMATION: This land States harmless from any release of STATUS: Open to the public. is being considered for direct sale to hazardous materials that may have MATTERS TO BE CONSIDERED: Jack and Jackie Gray, the family of Mary occurred as a result of the unauthorized 1. Agenda for future meetings: none. Gray, to resolve a long-term, use of the property by other parties. 2. Minutes. inadvertent, unauthorized occupancy of Acceptance of the direct sale offer 3. Ratification List. the public land. The encroachment constitutes an application for 4. Inv. Nos. 731–TA–1063–1068 involves a residence currently occupied conveyance of the mineral interests also (Preliminary) (Certain Frozen and by Mary Gray, the original historic Gray being offered under the authority of Canned Warmwater Shrimp and Prawns family home, outbuildings, equipment section 209(b) of the Federal Land from Brazil, China, Ecuador, India, storage, a road and a well. The Gray Policy and Management Act of 1976. In Thailand, and Vietnam)—briefing and family owns private property adjacent to addition to the full purchase price, a vote. (The Commission is currently the subject public land. The initial nonrefundable fee of $50 will be scheduled to transmit its determination occupancy began approximately sixty required from the prospective purchaser to the Secretary of Commerce on or years ago when the Gray family placed for purchase of the mineral interests to before February 17, 2004; improvements on the public land be conveyed simultaneously with the Commissioners’ opinions are currently assuming it was part of their adjacent sale of the land. scheduled to be transmitted to the private ownership. The land described is segregated from Secretary of Commerce on or before The sale would assemble the BLM appropriation under the public land February 24, 2004.) lands to the Gray property, protect the laws, including the mining laws, 5. Outstanding action jackets: none. improvements placed on the lands by pending disposition of this action or 270 In accordance with Commission the Gray family, and resolve an days from the date of publication of this policy, subject matter listed above, not inadvertent trespass. The parcel is the notice, whichever occurs first. Protests/ disposed of at the scheduled meeting, minimum size possible to ensure that all comments, including names, street may be carried over to the agenda of the of the improvements are included. A addresses, and other contact following meeting. cadastral survey was completed to information of respondents, will be Issued: February 5, 2004. partition the sale parcel from the larger available for public review. Individual BLM ownership. respondents may request By order of the Commission. In accordance with 43 CFR 2710.0– confidentiality. Marilyn R. Abbott, 6(c)(3)(iii), direct sale procedures are If you wish to request that BLM Secretary to the Commission. appropriate to resolve an inadvertent consider withholding your name, street [FR Doc. 04–2941 Filed 2–6–04; 10:34 am] unauthorized occupancy of the land and address and other contact information BILLING CODE 7020–02–P to protect existing equities in the land. (such as: Internet address, FAX or Jack and Jackie Gray will be allowed phone number) from public review or 30 days from receipt of a written offer from disclosure under the Freedom of DEPARTMENT OF JUSTICE to submit a deposit of at least 20 percent Information Act, you must state this of the appraised market value of the prominently at the beginning of your Antitrust Division parcel, and 180 days thereafter to written comment. BLM will honor submit the balance. requests for confidentiality on a case-by- United States v. First Data Corporation The following rights, reservations, case basis to the extent allowed by law. and Concord EFS, Inc.; Competitive and conditions will be included in the BLM will make available for public Impact Statement, Proposed Final deed conveying the land: Judgment and Complaint 1. A reservation to the United States inspection in their entirety all for a right-of-way for ditches and canals submissions from organizations or Notice is hereby given pursuant to the constructed by the authority of the businesses, and from individuals Antitrust Procedures and Penalties Act, United States, Act of August 30, 1890 identifying themselves as 15 U.S.C. section 16(b) through (h), that (43 U.S.C. 945). representatives or officials of a proposed Final Judgment, Amended 2. A reservation to the United States organizations or businesses. Hold Separate Stipulation and Order, for a right-of-way for Bureau of Land Dated: December 3, 2003. and Competitive Impact Statement have Management road #34–7–2 (OR 1902). Lynda Boody, been filed with the United States The deed would contain a floodplain Field Manager Glendale Resource Area, District Court for the District of covenant pursuant to the authority Medford District Office. Columbia in United States of America v. contained in section 3(d) of Executive [FR Doc. 04–2757 Filed 2–9–04; 8:45 am] First Data Corporation and Concord Order 11988 of May 24, 1977, and BILLING CODE 4310–33–P EFS, Inc., Civil Action No. 03CV02169. sections 203 and 209 of the Federal On October 23, 2003, the United States Land Policy and Management Act of filed a Complaint alleging that the 1976, 90 Stat. 2750, 43 U.S.C. 1713 and proposed acquisition by First Data of INTERNATIONAL TRADE 1719. The deed is subject to a restriction Concord would violate Section 7 of the COMMISSION which constitutes a covenant running Clayton Act, 15 U.S.C. 18. The with the land. The land may be used [USITC SE–04–002] Complaint alleges that the acquisition only for a residential homesite. No would reduce competition substantially additional structures may be placed Sunshine Act Meeting in the PIN debit network services within the floodplain area without the market by combining Concord’s STAR approval of local government planning AGENCY HOLDING THE MEETING: PIN debit network with the NYCE PIN offices. International Trade Commission. debit network. First Data owns a The deed would also include a notice TIME AND DATE: February 17, 2004 at 11 controlling 64 percent interest in NYCE. and indemnification statement under a.m. The proposed Final Judgment requires

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First Data to divest all of its interests in respectively. This significant increase in States would likely have obtained had it NYCE. Copies of the Complaint, market concentration would likely have prevailed at trial. proposed Final Judgment, Amended substantially reduced competition The terms of the Amended Hold Hold Separate Stipulation and Order, among PIN debit networks for merchant Separate Stipulation and Order require and Competitive Impact Statement are customers, resulting in thousands of First Data to take certain steps to ensure available for inspection at the merchants paying higher prices and that NYCE is operated as a Department of Justice in Washington, receiving poorer levels of service for PIN competitively independent, DC, in Room 9500, 600 E Street, NW. debit network services. Merchants economically viable and ongoing and at the Office of the Clerk of the would have passed on at least some of business concern, that will remain United States District Court for the these higher costs by raising the prices independent and uninfluenced by the District of Columbia, Washington, DC. of their goods and services, to the consummation of the acquisition, and Public comment is invited within 60 detriment of tens of millions of that competition is maintained during days of the date of this notice. Such consumers throughout the United the pendency of the ordered divestiture. comments, and responses thereto, will States. Accordingly, the complaint The United States, the Plaintiff States be published in the Federal Register sought: (1) a judgment that the proposed and the Defendants have stipulated that and filed with the Court. Comments acquisition would violate Section 7 of the proposed Final Judgment may be should be directed to Renata Hesse, the Clayton Act; and (2) permanent entered after compliance with the Chief, Networks and Technology injunctive relief that would prevent APPA. Entry of the proposed Final Section, Antitrust Division, Department Defendants from carrying out the Judgment would terminate this action, of Justice, Suite 9500, 600 E Street, NW., acquisition or otherwise combining except that the Court would retain Washington, DC 20530, (telephone: their businesses or assets. jurisdiction to construe, modify or 202–307–6200). On December 15, 2003, the United enforce the provisions of the proposed J. Robert Kramer, II, States, the Plaintiff States and the Final Judgment and to punish violations Director of Operations, Antitrust Division. Defendants filed a proposed Final thereof. Judgment and Hold Separate Stipulation Competitive Impact Statement and Order, which will eliminate the II. Description of the Events Giving Rise to the Alleged Violation Plaintiff, the United States of America anticompetitive effects of the (‘‘United States’’), pursuant to section acquisition. Upon the filing of the A. The Defendants and the Proposed 2(b) of the Antitrust Procedures and proposed Final Judgment and Hold Transaction Penalties Act (‘‘APPA’’), 15 U.S.C. Separate Stipulation and Order, the First Data is a Delaware corporation § 16(b)-(h), files this Competitive Impact Defendants announced that they had headquartered in Greenwood Village, Statement relating to the proposed Final extended the date for closing the Colorado. In 2002, First Data reported Judgment submitted for entry in this transaction until April 30, 2004. On total worldwide revenues of $7.6 civil antitrust proceeding. January 9, 2004, the parties filed an Amended Hold Separate Stipulation billion. First Data owns 64 percent of I. Nature and Purpose of the Proceeding and Order.1 NYCE, which operates the third largest PIN debit network. Citicorp, J.P. Morgan Defendant first Data Corporation The proposed Final Judgment requires Chase & Co., FleetBoston Financial and (‘‘First Data’’) and Defendant Concord First Data, within 150 calendar days HSBC USA Inc. own the remaining 36 EFS, Inc. (‘‘Concord’’) entered into an after the Court’s signing of the original percent of NYCE. First Data also owns Agreement and Plan of Merger on April Hold Separate Stipulation and Order, or substantial merchant and card issuing 1, 2003, pursuant to which First Data five days after notice of the entry of this processing operations, as well as would acquire Concord in an all-stock Final Judgment by the Court, whichever Western Union, the leading provider of transaction then valued at is later, to divest all of its governance consumer-to-consumer money transfer approximately $7 billion. On October rights in NYCE and its entire 64 percent services. 23, 2003, the United States and the ownership interest in NYCE States of Connecticut, Illinois, (collectively ‘‘NYCE Holdings’’).2 The Concord is a Delaware corporation Louisiana, Massachusetts, New York, requirement that First Data divest NYCE headquartered in Memphis, Tennessee. Ohio, Pennsylvania and Texas, and the is equivalent to the relief the United Concord’s revenues in 2002 totaled District of Columbia (‘‘Plaintiff States’’) nearly $2 billion. Concord operates STAR, the largest PIN debit network. filed a civil antitrust complaint, seeking 1 The original Hold Separate Stipulation and to enjoin the proposed acquisition. The Order signed by the Court on December 15, 2003 STAR is comprised of a number of PIN Complaint alleges that the acquisition prohibited any first Data officer, director, manager, debit networks that Concord acquired would reduce competition substantially employee, or agent from serving on the NYCE Board over the last several years. Concord of Directors after December 30, 2003. This deadline brought MAC in 1999, Cash Station in in the PIN debit network services would have required six First Data employees who market by combining the STAR and were serving on the NYCE Board to resign. On 2000, and then STAR in 2001, merging NYCE PIN debit networks, in violation December 30, 2003, with the consent of all parties, it with the MAC network. Shortly before of section 7 of the Clayton Act, 15 the Court issued an order extending First Data’s Concord acquired STAR, STAR bought deadline concerning participation on the NYCE the HONOR network, which had U.S.C. 18. Board until January 9, 2004. On January 9, the PIN debit networks provide a fast and parties filed a consent motion requesting that the recently acquired the MOST network. secure payment mechanism that is used Court enter the Amended Hold Separate Stipulation Concord also is a leading merchant at more than one million merchant and Order, which the Court signed on January 13, processor and provides an array of 2004. The Amended Hold Separate Stipulation and services to debit card issuers and ATM locations. The acquisition would have Order allows First Data to retain its NYCE Board significantly increased the seats for certain limited specifically enumerated owners. concentration levels in the already purposes unless the United States, in its sole First Data and Concord executed a concentrated PIN debit network services discretion, in consultation with the Plaintiff States, merger agreement on April 1, 2003. requires First Data’s representatives on the NYCE market by combining the largest and Board to resign. Under that agreement, First Data would third-largest PIN debit networks in the 2 The term ‘‘NYCE Holdings’’ is defined at ¶II.G acquire Concord through an all-stock United States, STAR and NYCE, of the Final Judgment. transaction.

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B. Product Market: PIN Debit Network transaction is the switch fee plus the services within the meaning of section Services interchange fee. 7 of the Clayton Act, 15 U.S.C. 18. As stated, the Complaint alleges that The Complaint alleges that PIN debit PIN debit network services is a relevant D. Harm to Competition in the PIN Debit network services is a line of commerce antitrust product market. A hypothetical Network Services Market and a relevant antitrust product market monopolist could profitably impose a The Complaint alleges the First Data’s within the meaning of section 7 of the small but significant and nontransitory acquisition of Concord is likely to Clayton Act, 15 U.S.C. § 18. During the increase in the price (‘‘SSNIP’’) of all substantially reduce competition in the 1970s, bank consortiums formed PIN debit network services. Merchants PIN debit network services market by numerous regional electronic funds would not defeat a SSNIP for PIN debit combining the largest and third-largest transfer (‘‘EFT’’) networks to enable network services by requiring or PIN debit networks, STAR and NYCE. their customers to withdraw funds from encouraging their customers to switch to The loss of this significant competition ATMs owned by multiple banks. EFT other payment methods, including would have caused higher prices and networks were first used for PIN debit signature debit network services. In reduced levels of service to merchants transactions in the early 1980s. It was particular, PIN debit networks offer a and consumers. The PIN debit network not until the mid-1990s, however, that number of substantial advantages to services market is already very PIN debit transactions became a popular consumers and merchants that concentrated. As of March 2003, STAR method of payment for consumers to distinguish them from signature debit routed approximately 56 percent of all purchase goods and services at retail networks. PIN debit networks are PIN debit transactions, while Interlink stores. PIN debit transaction volume generally significantly less expensive to and NYCE accounted for approximately grew substantially over the past five merchants than signature debit 15 percent and 10 percent of the PIN years due to merchant and consumer networks. PIN debit networks also often debit market, respectively. Although recognition of the advantages of PIN provide a more secure method of recent contract losses may reduce debit as a form of payment. Today, payment than signature debit networks STAR’s market share (and increase consumers make over 500 million PIN because it is easier to forge a person’s Interlink’s), under the most conservative debit transactions every month. signature than to obtain an individual’s estimates, STAR will remain the largest A PIN debit network provides the PIN. Because of the increased security of PIN debit network in the United States, telecommunications and payments PIN debit network services, there is no with at least a 35 percent market share. infrastructure that connects a network’s need for the charge-back procedures that Thus, if the transaction were completed, participating financial institutions with allow consumers to challenge signature the combined STAR/NYCE network merchant locations throughout the debit transactions, thereby saving would be the largest PIN debit network, United States. A PIN debit network also merchants additional time and money. with at least a 45 percent market share. performs a number of related functions PIN debit transactions also generally Together, the combined STAR/NYCE necessary for the efficient operation of settle more quickly than signature debit network and Interlink would form a the network. For example, PIN debit transactions. Finally, PIN debit near duopoly, accounting for more than networks: (1) Promote their brand networks often allow for faster 80 percent of all PIN debit transactions. names among consumers, merchants execution at the point of sale than This highly concentrated market and financial institutions; (2) establish signature debit networks. structure would have enabled PIN debit rules and standards to govern their Merchants also would not defeat a networks to increase prices and reduce networks; and (3) set fees and SSNIP for PIN debit network services levels of service to merchant customers. assessments for use of the network’s because significant numbers of PIN debit networks compete for products and services. consumers prefer to use PIN debit merchants’ business by convincing transactions over other forms of merchants to accept their networks and To execute a PIN debit transaction, a payment, particularly at supermarkets, to route debit transactions to their customer swipes a debit card at a point- mass merchandisers and drug stores. networks when there is a choice of of-sale terminal and enters a PIN on a Many consumers value the security and routing options. PIN debit networks also numeric keypad. After the PIN is speed of PIN debit transactions, as well compete for merchants by improving entered, the transaction and card as the ‘‘cash back’’ feature that allows their networks’ transmission speed, information is sent over the PIN debit them to receive cash at the register limiting network down-time and network to the card-issuing financial when making a purchase. Consumers reducing the number of improperly institution for authorization. The cannot receive cash back when making rejected transactions. Merchants’ ability financial institution sends an electronic a signature debit purchase. Today, to choose which PIN debit networks to message to the PIN debit network, consumers request cash back in accept at their stores, and to control the accepting or rejecting the transaction. approximately 20 percent of all PIN routing of some PIN debit transactions, The PIN debit network switches this debit transactions. Consequently, many constrains the prices that merchants pay reply back to the merchant to complete merchants would risk causing for PIN debit network services and helps the transaction. The entire process takes substantial customer backlash if they to ensure high quality levels of service. place electronically in several seconds. stopped offering or discouraged PIN 1. Merchant Threats To Drop PIN Debit PIN debit networks charge both the debit transactions. merchant and the card-issuing financial Networks institution a per transaction ‘‘switch’’ C. Geographic Market: United States The Complaint alleges that combining fee for the network’s routing services. While certain PIN debit networks are STAR and NYCE would have harmed PIN debit networks also set an stronger in particular areas of the competition in the PIN debit network ‘‘interchange’’ fee. The interchange fee country, the largest networks, including services market by reducing merchants’ is paid by the merchant to the PIN debit STAR and NYCE, are accepted at many ability to drop either network. The PIN network and then passed through to the merchant locations throughout the debit networks take merchants’ threats card-issuing financial institution. United States. Accordingly, the United to drop their networks seriously. The Generally, the merchant’s total charge States is a relevant geographic market loss merchant customers can from the PIN debit networks for each for the provision of PIN debit network significantly reduce a PIN debit

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network’s profits. In addition to the lost would have increased substantially the STAR and NYCE would have caused. switch fees from merchants, the loss of number of STAR and NYCE PIN debit There has been virtually no new entry merchant business can make a PIN debit transactions executed with debit cards in the PIN debit network services network less attractive to its financial that were single-bugged. market for more than five years. Entry institution customers. PIN debit and expansion are difficult because the 2. Reduced Least-Cost Routing networks compete for financial Opportunities market is characterized by substantial institution members based in part on the ‘‘network effects.’’ A network must number of merchants that accept their The Complaint also alleges that attract a substantial number of financial networks. combining STAR and NYCE would have institutions as members, while at the Merchant have prevented or reduced reduced competition in the PIN debit same time convince a large number of some large price increased from STAR, network services market for merchant merchants to accept the network. NYCE and interlink by credibly customers by limiting merchants’ Coordinated development of both threatening to discontinue acceptance of opportunities to route PIN debit financial institution members and the networks. During the past two years, transactions to the least expensive merchant acceptance is critical because STAR, NYCE and Interlink each network (‘‘least-cost routing’’). Some the utility of a particular PIN debit reduced planned price increases by large merchants, either directly or network to consumers, banks and more than one third because of concerns through their processors, always route merchants depends heavily on the that merchants would drop their PIN debit transactions to the least breadth of its acceptance and use. expensive PIN debit network when a networks. This reduction in the amount In addition, most PIN debit networks debit card is bugged with multiple PIN of the three leading networks’ planned have adopted rules and policies that debit networks. Other merchants and price increases resulted in more than increase the cost of expansion by a processors least-cost route when there $100 million in annual savings to small network or entry by a new market are conflicts in the networks’ routing merchant customers. participant. Most significantly, network Merchants’ ability to drop a PIN debit rules. Conflicts occur when two routing rules that specify the routing of network, or to credibly threaten to do networks both claim ‘‘priority’’ status transactions executed with multi- so, depends on several factors, for a particular debit card. For example, bugged cards sometimes can slow the including: (1) A network’s market share; both STAR and NYCE may require and (2) the number of the network’s PIN merchants (or their processors) to route degree to which a new PIN debit debit transactions that are routed over PIN debit transactions executed with a network can expand. Companies (such ‘‘single-bugged’’ debit cards. Generally, particular debit card over their as First Data and Concord) that own it is riskier for a merchant to drop a PIN networks. In such instances, some both merchant processing operations debit network with a larger market share merchants (and processors) will route to and PIN debit networks also can make because of the increased likelihood of the less expensive network. entry or expansion by PIN debit rejected transactions, delays at check- Least-cost routing opportunities networks more difficult. When a PIN out lines, customer confusion and constrain PIN debit networks from debit transaction is executed with a embarrassment, lost sales, and increasing prices to merchants, or multi-bugged card, in some customers’ use of more costly forms of reducing levels of service, because they circumstances, merchant processors can payment for merchants. Dropping a PIN permit merchants, in some determine which of the multiple PIN debit network with a large market share circumstances, to route around more debit networks receives the transaction. is particularly risky if many of the debit expensive networks, or networks that Accordingly, companies that own both cards that can connect to that network offer poorer levels of service. In recent merchant processing operations and PIN are ‘‘single-bugged’’ with only that years, major supermarkets and mass debit networks may have some network. A single-bugged debit card can merchandisers have obtained superior opportunities and incentives to favor connect to only one PIN debit network. prices and levels of service by routing, their own PIN debit networks. For example, some debit cards are or threatening to route, transactions III. Explanation of the Proposed Final single-bugged only with STAR. If a away from one PIN debit network to Judgment merchant does not accept STAR, then another network. card holders with debit cards that are Merchants currently have a The proposed Final Judgment’s single-bugged only with STAR cannot substantial number of opportunities to requirement that First Data divest its execute a PIN debit transaction at that least-cost route PIN debit transactions NYCE Holdings will eliminate the merchant. In contrast, if a debit card is between STAR and NYCE. A large anticompetitive effects in the PIN debit bugged with STAR and other PIN debit number of debit cards can connect to network services market that the networks, then a merchant’s decision to both STAR and NYCE. Further, STAR transaction would have produced. First drop STAR may not prevent the card and NYCE’s routing rules often conflict. Data’s divestiture of its NYCE Holdings holder from making PIN debit The merger would have prevented will prevent the combination of STAR transactions at the merchant if the merchants from obtaining lower prices and NYCE, the combination of First merchant accepts at least one of the and improved levels of service from Data and Concord’s assets that would other PIN debit networks on the debit STAR and NYCE by leveraging their have violated section 7 of the Clayton card. ability to route PIN debit transactions Act. By preventing the combination of Combining STAR and NYCE would away from STAR to NYCE, and vice STAR and NYCE, the proposed Final have made it substantially more difficult versa. Judgment will ensure that merchants for merchants to drop, or credibly retain their current ability to obtain threaten to drop STAR or NYCE, to E. Timely and Sufficient Entry Is competitive prices and levels of service prevent future price increases. The Unlikely from the two networks, either by: (1) merged networks would have had a The Complaint alleges that, in the Dropping, or credibly threatening to large combined market share of at least near future, entry or expansion into the drop, STAR and/or NYCE; or (2) taking 45%, a significant increase over each PIN debit network services market is advantage of least-cost routing network’s current market share. In unlikely to defeat the anticompetitive opportunities between the two addition, combining STAR and NYCE price increases that the combination of networks.

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The proposed Final Judgment requires Judgment provides that First Data will any aspect of NYCE’s business. First Data, within 150 calendar days pay all costs and expenses of the trustee. Amended Hold Separate Stipulation after the Court’s signing of the original Final Judgment ¶¶ V.B and D. The and Order ¶ V.4. The Order also allows Hold Separate Stipulation and Order,3 trustee’s commission will be structured the United States, in its sole discretion, or five days after notice of the entry of so as to provide an incentive for the in consultation with the Plaintiff States, the Final Judgment by the Court, trustee based on the price obtained and to require all of First Data’s whichever is later, to divest all of its the speed with which the divestiture is representatives on the NYCE board to NYCE Holdings. Final Judgment ¶ IV.A. accomplished. After his or her resign. If the United States exercises its Again, the NYCE Holdings consist of all appointment becomes effective, the discretion to require First Data’s NYCE of First Data’s governance rights in trustee will file monthly reports with directors to resign, First Data may only NYCE, and First Data’s entire 64 percent the Court, the United States and the nominate individuals to fill the vacant ownership interest in NYCE, including Plaintiff States, setting forth his or her NYCE Board seats who are officers or all tangible assets. Final Judgment ¶ II.G. efforts to accomplish the divestiture. managers of NYCE or a minority The United States agreed to allow First Final Judgment ¶ V.F. If First Data has shareholder of NYCE. Amended Hold Data 150 days to divest its NYCE not divested its NYCE Holdings at the Separate Stipulation and Order ¶ V.1. holdings, rather than the 120-day time end of six months, the United States and period typically required for the Plaintiff States will make IV. Remedies Available to Potential divestitures to remedy Section 7 recommendations to the Court, which Private Litigants violations, because NYCE’s minority shall enter such orders as appropriate, Section 4 of the Clayton Act, 15 shareholders, by contract, have 30 days in order to carry out the purpose of the U.S.C. 15, provides that any person who to match any third-party offer to trust, including extending the trust or has been injured as a result of conduct purchase First Data’s interests in NYCE. the term of the trustee’s appointment. prohibited by the antitrust laws may Had the United States not agreed to the Final Judgment ¶ V.G. Defendants must bring suit in federal court to recover additional 30-day divestiture period, cooperate fully with the trustee’s efforts three times the damages the person has First Data effectively would have had to divest First Data’s NYCE Holdings to suffered, as well as costs and reasonable only 90 days to find a buyer for its an acquirer acceptable to the United attorneys’ fees. Entry of the proposed NYCE holdings. States. Final Judgment ¶ V.E. Final Judgment will neither impair nor In addition to divesting its NYCE The proposed Final Judgment filed in assist the bringing of any private Holdings, the proposed Final Judgment this case is meant to ensure the prompt antitrust damage action. Under the requires First Data to provide certain divestiture by First Data of its NYCE provisions of section 5(a) of the Clayton guarantees to the buyer of the NYCE Holdings. The purpose of the divestiture Act, 15 U.S.C. 16(a), the proposed Final holdings, including warranting that: (1) is to ensure the maintenance of a viable Judgment has no prima facie effect in Each asset therein that was operational PIN debit network competitor capable of any subsequent private lawsuit that may as of the date of filing of the Complaint competing effectively to provide PIN be brought against the Defendants. will be operational on the date of the debit network services and to remedy divestiture; and (2) there are no material the anticompetitive effects that the V. Procedures Available for defects in the environmental, zoning or United States and the Plaintiff States Modification of the Proposed Final other permits pertaining to the allege would otherwise result from First Judgment operation of NYCE. Final Judgment Data’s acquisition of Concord. See Final The United States, the Plaintiff States ¶¶ IV.E and G. Judgment ¶ V.H. and the Defendants have stipulated that The United States, in its sole The Amendment Hold Separate the proposed Final Judgment may be discretion, after consultation with the Stipulation and Order will ensure that entered in the Court after compliance Plaintiff States, may agree to one or NYCE is maintained and operated as an with the provisions of the APPA, more extensions of this time period, not independent competing PIN debit provided that the United States has not to exceed in total 90 calendar days. network until First Data divests all of its withdrawn its consent. The APPA Final Judgment ¶ IV.A. The NYCE NYCE Holdings. The Order, except conditions entry upon the Court’s Holdings must be divest in such a way when necessary to carry out First Data’s determination that the proposed Final as to satisfy the United States in its sole obligations under the Order, bars First Judgment is in the public interest. 15 discretion, after consultation with the Data from: (1) Serving as an officer, U.S.C. 16(e). Plaintiff States, that NYCE can and will manager, or employee, or in a be operated by the purchaser as a viable, comparable position with or for NYCE; The APPA provides a period of at ongoing business that can compete (2) exercising any authority through its least 60 days preceding the effective effectively in the relevant market. Final representatives on the NYCE Board of date of the proposed Final Judgment Judgment ¶¶ IV.A and H. First Data Directors, except for limited specifically within which any person may submit to must take all reasonable steps necessary enumerated actions; (3) participating in, the United States written comments to accomplish the divestiture quickly attending, or receiving any notes, regarding the proposed Final Judgment. and shall cooperate with prospective minutes, or agendas of, information 15 U.S.C. 16(b&d). Any person who acquirers. from, or any documents distributed in wishes to comment should do so within If First Data does not accomplish the connection with, any nonpublic meeting 60 days of the date of publication of this ordered divestiture within the of NYCE’s Board of Directors or any Competitive Impact Statement in the prescribed time period, the United committee thereof; and (4) voting or Federal Register. The United States will States will nominate, and the Court will permitting to be voted First Data’s NYCE evaluate and respond to the comments. appoint, a trustee to assume sole power shares. Amended Hold Separate All comments will be give due and authority to complete the Stipulation and Order ¶¶ V.1 through consideration by the United States divestiture. Final Judgment ¶ V.A. If a V.3. In addition, the Order prevents which remains free to withdraw its trustee is appointed, the proposed Final First Data from communicating to or consent to the proposed Final Judgment receiving from any officer, director, at any time prior to entry. The 3 The Court signed the original Hold Separate manager, employee, or agent of NYCE comments and the response of the Stipulation and Order on December 15, 2003. any nonpublic information regarding United States will be filed with the

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Court and published in the Federal whether enforcement mechanisms are The proposed Final Judgment, should Register. sufficient, and whether the decree may not be reviewed under a standard of Written comments should be positively harm third parties. United whether it is certain to eliminate every submitted to: Renata B. Hesse, Chief, States v. Microsoft Corp., 56 F.3d 1448, anticompetitive effect of a particular Networks & Technology Section, 1458–62 (D.C. Cir. 1995). practice or whether it mandates Antitrust Division, United States In conducting this inquiry, ‘‘[t]he certainty of free competition in the Department of Justice, 600 E Street, Court is nowhere compelled to go to future. Court approval of a final NW., Suite 9500, Washington, DC trial or to engage in extended judgment requires a standard more 20530. proceedings which might have the effect flexible and less strict than the standard The proposed Final Judgment of vitiating the benefits of prompt and for a finding of liability. ‘‘[A] proposed provides that the Court retains less costly settlement through the decree must be approved even if it falls jurisdiction over this action and the consent decree process.’’ 119 Cong. Rec. short of the remedy the court would parties may apply to the Court for any 24,598 (1973) (statement of Senator impose on its own, as long as it falls order necessary or appropriate for the Tunney.) 4 Rather: within the range of acceptability or is modification, interpretation or [a]bsent a showing of corrupt failure of the ‘within the reaches of public interest.’’’ enforcement of the Final Judgment. government to discharge its duty, the Court, United States v. American Tel. & Tel. VI. Alternatives to the Proposed Final in making its public interest finding, should Co., 552 F. Supp. 131, 151 (D.D.C. 1982) Judgment * * * carefully consider the explanations of (quoting Gillette, 406 F. Supp. at 716), the government in the competitive statement aff’d sub nom., Maryland v. United The United States considered as an and its responses to comments in order to States, 460 U.S. 1001 (1983). See also alternative to the proposed Final determine whether those explanations are United States v. Alcan Aluminum Ltd., Judgment a full trial on the merits reasonable under the circumstances. 605 F. Supp. 619, 622 (W.D. Ky. 1985) against the Defendants. The United United States v. Mid-America (approving the consent decree even States could have continued the Dairymen, Inc., 1977 WL 4532, 1977–1 though the court would have imposed a litigation and sought permanent Trade Cas. (CCH) ¶ 61,508, at 71,980 greater remedy). injunctive relief against First Data’s (W.D. Mo. May 17, 1977). acquisition of Concord. The United With respect to the adequacy of the Moreover, the Court’s role under the States is satisfied, however, that the relief secured by the decree, a court may APPA is limited to reviewing the divestiture of all of First Data’s interests not ‘‘engage in an unrestricted remedy in relationship to the violations in NYCE to an independent third party evaluation of what relief would best that the United States has alleged in its will achieve all of the relief the United serve the public.’’ United States v. BNS, Complaint, and does not authorize the States would have obtained through Inc., 858 F.2d 456, 462 (9th Cir. 1988) Court to ‘‘construct [its] own litigation and will preserve competition (citing United States v. Bechtel Corp., hypothetical case and then evaluate the for the provision of PIN debit network 648 F.2d 660, 666 (9th Cir. 1981)); see decree against that case.’’ Microsoft, 56 services in the United States. also Microsoft, 56 F.3d at 1460–62. F.3d at 1459. Because the ‘‘court’s Rather, the case law requires that: authority to review the decree depends VII. Standard of Review Under the entirely on the government’s exercising APPA for the Proposed Final Judgment [t]he balancing act of competing social and its prosecutorial discretion by bringing The APPA requires that proposed political interests by a proposed antitrust consent decree must be left, in the first a case in the first place,’’ it follows that consent judgments in antitrust cases instance, to the discretion of the Attorney ‘‘the court is only authorized to review brought by the United States be subject General. The court’s role in protecting the the decree itself,’’ and not to ‘‘effectively to a 60-day comment period, after which public interest is one of insuring that the redraft the complaint’’ to inquire into the Court shall determine whether entry government has not breached its duty to the other matters that the United States of the proposed Final Judgment ‘‘is in public in consenting to the decree. The court might have but did not pursue. Id. at the public interest.’’ 15 U.S.C. 16(e). In is required to determine not whether a 1459–60. making the determination, the Court particular decree is the one that will best may consider: serve society, but whether the settlement is VIII. Determinative Documents ‘‘within the reaches of the public interest.’’ (1) the competitive impact of such More elaborate requirements might There are no determinative materials judgment, including termination of alleged undermine the effectiveness of antitrust or documents within the meaning of the violations, provisions for enforcement and enforcement by consent decree. APPA that were considered by the modification, duration or relief sought, United States in formulating the anticipated effects of alternative remedies Bechtel, 648 F.2d at 666 (emphasis actually considered, and any other added) (citations omitted).5 proposed Final Judgment. consideration bearing upon the adequacy of Dated: January__, 2004 such judgment; 4 See also United States v. Gillette Co., 406 F. Respectfully submitted, (2) the impact of entry of such judgment Supp. 713, 716 (D. Mass. 1975) (recognizing it was upon the public generally and individuals not the court’s duty to settle; rather, the court must For Plaintiff United States: only answer ‘‘whether the settlement achieved alleging specific injury from the violations Joshua H. Soven, Esq., set forth in the complaint including [was] within the reaches of the public interest’’). A ‘‘public interest’’ determination can be made Antitrust Division, U.S. Department of consideration of the public benefit, if any, to properly on the basis of the Competitive Impact be derived from a determination of the issues Justice, 600 E Street, NW., Suite 9500, Statement and Response to Comments filed Washington, DC 20530. at trial. pursuant to the APPA. Although the APPA Id. The United States Court of Appeals authorizes the use of additional procedures, 15 U.S.C. § 16(f), those procedures are discretionary. A limited to approving or disapproving the consent for the District of Columbia Circuit has court need not invoke any of them unless it believes decree)’’; Gillette, 406 F. Supp. at 716 (noting that, held that the statute permits a court to that the comments have raised significant issues in this way, the court is constrained to ‘‘look at the consider, among other things, the that further proceedings would aid the court in overall picture not hypercritically, nor with a relationship between the remedy resolving those issues. See H.R. Rep. No. 93–1463, microscope, but with an artist’s reducing glass’’). 93rd Cong., 2d Sess. 8–9 (1974), reprinted in 1974 See generally Microsoft, 56 F.3d at 1461 (discussing secured and the specific allegations set U.S.C.C.A.N. 6535, 6538. whether ‘‘the remedies [obtained in the decree are] forth in the government’s complaint, 5 Cf. BNS, 858 F.2d at 464 (holding that the so inconsonant with the allegations charged as to whether the decree is sufficiently clear, court’s ‘‘ultimate authority under the [APPA] is fall outside of the ‘reaches of the public interest’’’).

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Final Judgment retailers of shared electronic fund sublicenses, intellectual property, Whereas, plaintiff United States of transfer network services for automatic copyrights, trademarks, computer America (‘‘United States’’), the District teller machine (ATM) transactions, software and related documentation, of Columbia, and the States of online and offline debit point-of-sale trade names, service marks, ‘‘bugs,’’ Connecticut, Illinois, Louisiana, (POS) transactions, electronic benefits services names, technical information, Massachusetts, New York, Ohio, transfer, and point-of-banking know-how, trade secrets, drawings, Pennsylvania, and Texas (‘‘plaintiff transactions. blueprints, designs, design protocols, D. ‘‘EFT processing services’’ means states’’), filed their Complaint on specifications for materials, the provision to financial institutions of October 23, 2003, and the United States, specifications for parts and devices, data real-time processing services that plaintiff states, and defendants, First and results concerning historical and support ATM driving and fully- Data Corporation and Concord EFS, Inc., current research and development, automated monitoring services, gateway by their respective attorneys, have quality assurance and control access, and debit card issuance and consented to the entry of this Final procedures, design tools and simulation authorization solutions. capability, and all manuals and Judgment without trial: E. ‘‘First Data’’ means First Data And whereas, this Final Judgment technical information NYCE provides to Corporation, a Delaware corporation does not constitute any evidence against its employees, customers, suppliers, headquartered in Greenwood Village, or admission by any party, regarding agents or licensees in connection with Colorado, its successors and assigns, the NYCE’s operations. any issue of fact or law; and its subsidiaries, divisions, groups, And whereas, defendants agree to be H. ‘‘Online debit’’ means PIN debit. affiliates, partnerships, and joint bound by the provisions of this Final I. ‘‘PIN’’ means a Personal ventures (excluding those entities not Judgment pending its approval by the Identification Number. controlled by First Data), and their Court; J. ‘‘PIN debit’’ means a method of And whereas, the essence of this Final directors, officers, managers, agents, and electronic card payment by which employees. Judgment is the prompt and certain consumers purchase goods and services F.‘‘NYCE’’ means NYCE Corporation, divestiture of certain rights or assets by form merchants by swiping a bank card a Delaware corporation headquartered First Data to assure that competition is at a point-of-sale terminal and entering in Montvale, New Jersey, and its a PIN on a numeric keypad, upon which not substantially lessened; successors and assigns, its subsidiaries, And whereas, the United States and the purchase amount is debited from the divisions, groups, affiliates, plaintiff states require First Data to customer’s bank account and transferred partnerships, and joint ventures make a certain divestiture for the to the retailer’s bank. (excluding those entities not controlled purpose of remedying the loss of K. ‘‘PIN debit network’’ Means a by NYCE), and their directors, officers, competition alleged in the Complaint; telecommunications and payment managers, agents, and employees. NYCE And whereas, defendants have infrastructure that enables PIN debit includes its EFT network service represented to the United States and transactions by providing the switch business (the NYCE Network) and its plaintiff states that the divestiture that connects merchants to consumers’ EFT processing services business. required below can and will be made demand deposit accounts at banks. G. ‘‘NYCE Holdings’’ means, unless L. ‘‘PIN debit network services’’ and that defendants will later raise no otherwise noted, all of First Data’s claim of hardship or difficulty as means the PIN debit network and its governance rights in NYCE, and First performance of those related functions grounds for asking the Court to modify Data’s entire 64 percent ownership any of the divestiture provisions necessary for the efficient operation of interest in NYCE, including all of the network, including promotion of contained below; NYCE’s rights, titles, and interests in the Now therefore, without trial and upon brand names among consumers, following: merchants, and banks; establishment of consent of the parties, it is ordered, 1. all tangible assets of NYCE, adjudged and decreed: rules and standards to govern the including facilities and real property; networks; and the setting of fees. I. Jurisdiction data centers; assets used for research, III. Applicability This Court has jurisdiction over the development, engineering or other subject matter of and each of the parties support to NYCE, and any real property A. This Final Judgment applies to to this action. The Complaint states a associated with those assets; First Data and Concord, as defined claim upon which relief may be granted manufacturing and sales assets relating above, and all other persons in active against defendants under section 7 of to NYCE, including captial equipment, concert or participation with any of the Clayton Act, as amended, 15 U.S.C. vehicles, supplies, personal property, them who receive actual notice of this 18. inventory, office furniture, fixed assets Final Judgment by personal service or and fixtures, materials, on- or off-site otherwise. II. Definitions warehouses or storage facilities, and B. Defendants shall require, as a As used in this Final Judgment: other tangible property or condition of the sale or other A. ‘‘Acquirer’’ means the entity or improvements; all licenses, permits and disposition of all or substantially all of entities to whom defendant First Data authorizations issued by any their assets or of lesser business units divests NYCE Holdings. governmental organization relating to that include NYCE, that the purchaser B. ‘‘Concord’’ means Concord EFS, NYCE; all contracts, joint ventures, agrees to be bound by the provision of Inc., a Delaware corporation agreements, leases, commitments, and this Final Judgment. headquartered in Memphis, Tennessee, understandings pertaining to the and its successors and assigns, its operation of NYCE; supply agreements; IV. Divestiture subsidiaries, divisions, groups, all customer lists, accounts, and credit A. Defendant First Data is ordered and affiliates, partnerships, and joint records; and other records maintained directed, within one hundred fifty (150) ventures, and their directors, officers, by NYCE in connection with its calendar days after the Court’s signing managers, agents, and employees. operations; and of the Hold Separate Stipulation and C. ‘‘EFT network services’’ means the 2. the intangible assets of NYCE, Order in this matter, or five (5) days provision to financial institutions and including all patents, licenses and after notice of the entry of this Final

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Judgment by the Court, whichever is E. Defendant First Data shall warrant V. Appointment of Trustee to Effect later, to divest NYCE Holdings in a to the Acquirer of NYCE Holdings that Divestiture manner consistent with this Final each asset therein that was operational A. If defendant First Data has not Judgment to an Acquireer acceptable to as of the date of filing to the Complaint divested NYCE Holdings within the the United States in its sole discretion, in this matter will be operational on the time period specified in section IV(A), after consultation with plaintiff states. date of divestiture. it shall notify the United States and F. Defendants shall not take any The United States, in its sole discretion, plaintiff states of that fact in writing. action that will impede in any way the after consultation with plaintiff states, Upon application of the United States, permitting, operation, or divestiture of may agree to one or more extensions of in its sole discretion, after consultation NYCE or NYCE Holdings. this time period, not to exceed in total with plaintiff states, the Court shall ninety (90) calendar days, and shall G. Defendant First Data shall warrant to the Acquirer of NYCE Holdings that appoint a trustee selected by the United notify the Court in each such States, and approved by the Court to circumstance. Defendant First Data there are no material defects in the environmental, zoning, or other permits effect the divestiture of NYCE Holdings. agrees to use its best efforts to divest B. After the appointment of a trustee NYCE Holdings as expeditiously as pertaining to the operation of NYCE, and following the sale of NYCE becomes effective, only the trustee shall possible. have the right to sell NYCE Holdings. B. In accomplishing the divestiture Holdings, defendants shall not undertake, directly or indirectly, any The trustee shall have the power and ordered by this Final Judgment, authority to accomplish the divestiture defendant First Data promptly shall challenges to the environmental, zoning, or other permits relating to the of NYCE Holdings to an Acquirer make known, by usual and customary acceptable to the United States, in its means, the availability of NYCE operation of NYCE. H. Unless the United States otherwise sole judgment after consultation with Holdings. Defendants shall inform any consents in writing, after consultation plaintiff states, at such price and on person making inquiry regarding a with plaintiff states, the divestiture such terms as are then obtainable upon possible purchase of NYCE Holdings pursuant to Section IV, or by trustee reasonable effort by the trustee, subject that it will be divested pursuant to this appointed pursuant to Section V, of this to the provisions of Sections IV, V, and Final Judgment and provide that person Final Judgment, shall include the entire VI of this Final Judgment, and shall with a copy of this Final Judgment. NYCE Holdings as defined in Section have such other powers as this Court Defendant First Data shall offer to II(G) and shall be accomplished in such deems appropriate. Subject to Section furnish to all prospective Acquirers, a way as to satisfy the United States, in V(D) of this Final Judgment, the trustee subject to customary confidentiality its sole discretion, after consultation may hire at the cost and expense of assurances, all information and with plaintiff states, that NYCE can and defendant First Data nay investment documents relating to NYCE will be used by the Acquirer as part of bankers, attorneys, or other agents, who customarily provided in a due diligence a viable, ongoing business engaged in shall be solely accountable to the process except such information or the provision of EFT network services, trustee, reasonably necessary in the documents subject to the attorney-client including PIN debit network services, trustee’s judgment to assist in the or work-product privilege. Defendant and EFT processing services. Divestiture divestiture. First Data shall make available such of NYCE Holdings may be made to an C. Defendants shall not object to a sale information to the United States and Acquirer, provided that it is by the trustee on any ground other than plaintiff states at the same time that demonstrated to the sole satisfaction of the trustee’s malfeasance. Any such such information is made available to the United States, in its sole judgment, objections by defendants must be any other person. after consultation with plaintiff states, conveyed in writing to the United C. Defendant First Data shall provide that the divested asset will remain States, plaintiff states, and the trustee perspective Acquirers of NYCE viable and that the divestiture will within ten (10) calendar days after the Holdings, the United States, and remedy the competitive harm alleged in trustee has provided the notice required plaintiff states information relating to the Complaint. The divestiture, whether under Section VI. the personnel involved in the pursuant to Section IV or Section V of D. The trustee shall serve at the cost production, operation, research, this Final Judgment, and expense of defendant First Data, on development, and sales at NYCE to 1. Shall be made to an Acquirer that, such terms and conditions as the NYCE enable the Acquirer to make offers of in the United States’ sole judgment, approves, and shall account for all employment. Defendants will not after consultation with plaintiff states, monies derived from the sale of NYCE interfere with any negotiations by the has the intent and capability (including Holdings and all costs and expenses so Acquirer to employ any of NYCE’s the necessary managerial, operational, incurred. After approval by the Court of employees whose responsibilities technical, and financial capability) to the trustee’s accounting, including fees includes the production, operation, compete effective in the provision of for its services and those of any development, or sale of the products EFT network services, including PIN professionals and agents retained by the and services of NYCE. debit network services, and EFT trustee, all remaining money shall be D. Defendant First Data shall permit processing services in the United States; paid to defendant First Data and the prospective Acquirers of NYCE and trust shall then be terminated. The Holdings to have reasonable access to 2. Shall be accomplished so as to compensation of the trustee and any personnel and to make inspections of satisfy the United States, in its sole professionals and agents retained by the the physical facilities of NYCE; access to discretion, after consultation with trustee shall be reasonable in light of the any and all environmental, zoning, and plaintiff states, that none of the terms of value of the asset to be divested and other permit documents and any agreement between an Acquirer and based on a fee arrangement providing information; and access to any and all defendants give defendants the ability the trustee with an incentive based on financial, operational, or other unreasonably to raise NYCE’s costs, to the price and terms of the divestiture documents and information customarily lower NYCE’s efficiency, or otherwise to and the speed with which it is provided as part of a due diligence interfere in the ability of NYCE to accomplished, but timeliness is process. compete effectively. paramount.

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E. Defendants shall use their best VI. Notice of Proposed Divestiture to Section IV or V of this Final efforts to assist the trustee in A. Within two (2) business days Judgment. accomplishing the required divestiture. following execution of a definitive VIII. Hold Separate The trustee and any consultants, divestiture agreement, defendant First accountants, attorneys, and other Until the divestiture required by this Data or the trustee, whichever is then Final Judgment has been accomplished, persons retained by the trustee shall responsible for effecting the divestiture have full and complete access to the defendants shall take all steps necessary required herein, shall notify the United to comply with the Hold Separate personnel, books, records, and facilities States and plaintiff states of any of the business to be divested, and Stipulation and Order entered by this proposed divestiture required by Court. Defendants shall take no action defendants shall develop financial and Section IV or V of this Final Judgment. other information relevant to such that would jeopardize the divestiture If the trustee is responsible, it shall ordered by this Court. business as the trustee may reasonably similarly notify defendants. The notice request, subject to customary shall set forth the details of the IX. Affidavits confidentiality protection for trade proposed divestiture and list the name, A. Within twenty (20) calendar days secret or other confidential research, address, and telephone number of each of the Court’s signing of the Hold development, or commercial person not previously identified who Separate Stipulation and Order in this information. Defendants shall take no offered or expressed an interest in or matter, and every thirty (30) calendar action to interfere with or to impede the desire to acquire any ownership interest days thereafter until the divestiture has trustee’s accomplishment of the in NYCE Holdings, together with full been completed under Section IV or V, divestiture. details of the same. defendants shall deliver to the United F. After its appointment, the trustee B. Within fifteen (15) calendar days of States and plaintiff states an affidavit as shall file monthly reports with the receipt by the United States and to the fact and manner of their United States, plaintiff states, and the plaintiff states of such notice, the compliance with Section IV or V of this Court setting forth the trustee’s efforts to United States and plaintiff states may Final Judgment. Each such affidavit accomplish the divestiture ordered request from defendants, the proposed shall include the name, address, and under this Final Judgment. To the extent Acquirer, any other third party, or the telephone number of each person who, such reports contain information that trustee if applicable, additional during the preceding thirty days, made the trustee deems confidential, such information concerning the proposed an offer to acquire, expressed an interest reports shall not be filed in the public divestiture, the proposed Acquirer, and in acquiring, entered into negotiations docket of the Court. Such reports shall any other potential Acquirer. to acquire, or was contacted or made an include the name, address, and Defendants and the trustee shall furnish inquiry about acquiring, any interest in telephone number of each person who, any additional information requested NYCE Holdings and shall describe in during the preceding month, made an within fifteen (15) calendar days of the detail each contact with any such offer to acquire, expressed an interest in receipt of the request, unless the parties person during that period. Each such acquiring, entered into negotiations to shall otherwise agree. affidavit shall also include a description acquire, or was contacted or made an C. Within thirty (30) calendar days of the efforts defendants have taken to inquiry about acquiring, NYCE Holdings after receipt of the notice or within solicit buyers for the asset to be and shall describe in detail each contact twenty (20) calendar days after the divested, and to provide required with any such person. The trustee shall United States and plaintiff states have information to any prospective maintain full records of all efforts made been provided the additional Acquirer, including the limitations, if to divest NYCE Holdings. information requested from defendants, any, on such information. Assuming the G. If the trustee has not accomplished the proposed Acquirer, any third party, information set forth in the affidavit is such divestiture within six months after and the trustee, whichever is later, the true and complete, any objection by the its appointment, the trustee shall United States, in its sole discretion, after United States, in its sole discretion, after promptly file with the Court a report consultation with plaintiff states, shall consultation with plaintiff states, to setting forth (1) the trustee’s efforts to provide written notice to defendants information provided by defendants, accomplish the required divestiture; (2) and the trustee, if there is one, stating including limitations on the the reasons, in the trustee’s judgment, whether or not it objects to the proposed information, shall be made within why the required divestiture has not divestiture. If the United States provides fourteen (14) calendar days of receipt of been accomplished; and (3) the trustee’s written notice that it does not object, the such affidavit. recommendations. To the extent such divestiture may be consummated, B. Within twenty (20) calendar days reports contain information that the subject only to defendants’ limited right of the Court’s signing of the Hold trustee deems confidential, such reports to object to the sale under section V(C) Separate Stipulation and Order in this shall not be filed in the public docket of the Final Judgment. Absent written matter, defendants shall deliver to the of the Court. The trustee shall at the notice that the United States does not United States and plaintiff states an same time furnish such report to the object to the proposed Acquirer or upon affidavit that describes in reasonable United States and plaintiff states, and objection by the United States, a detail all actions defendants have taken the United States and plaintiff states divestiture proposed under Section IV and all steps defendants have shall have the right to make additional or Section V shall not be consummated. implemented on an ongoing basis to recommendations consistent with the Upon objection by defendants under comply with Section VIII of this Final purpose of the trust. The Court Section V(C), a divestiture proposed Judgment. Defendants shall deliver to thereafter shall enter such orders as it under Section V shall not be the United States and plaintiff states an shall deem appropriate to carry out the consummated unless approved by the affidavit describing any changes to the purpose of the Final Judgment, which Court. efforts and actions outlined in may, if necessary, include extending the defendants’ earlier affidavits filed trust and the term of the trustee’s VII. Financing pursuant to this section within fifteen appointment by a period requested by Defendants shall not finance all or (15) calendar days after the change is the United States. any part of any purchase made pursuant implemented.

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C. Defendants shall keep all records of Rule 26(c)(7) of the Federal Rules of Concord EFS, Inc., 2525 Horizon Lake Drive, all efforts made to preserve and divest Civil Procedure,’’ then the United States Memphis, TN 38133, Defendants. NYCE Holdings until one year after such shall give defendants ten (10) calendar Verified Complaint divestiture has been completed. days notice prior to divulging such material in any legal proceeding (other The United States of America, acting X. Compliance Inspection than a grand jury proceeding). under the direction of the Attorney A. For purposes of determining or General of the United States, and the securing compliance with this Final XI. No Reacquisition states of Connecticut, Illinois, Judgment, or of determining whether Defendants may not reacquire any Louisiana, Massachusetts, New York, the Final Judgment should be modified ownership interest in NYCE during the Ohio, and Texas and the District of or vacated, and subject to any legally term of this Final Judgment. Columbia (‘‘Plaintiff States’’), acting recognized privilege, from time to time under the direction of their respective XII. Retention of Jurisdiction duly authorized representatives of the Attorneys General, or other authorized United States, including consultants This Court retains jurisdiction to officials, bring this civil action to enjoin and other persons retained by the enable any party to this Final Judgment the proposed merger of First Data United States, shall, upon written to apply to this Court at any time for Corporation (‘‘First Data’’) and Concord request of a duly authorized further orders and directions as may be EFS, Inc. (‘‘Concord’’), and allege as representative of the Assistant Attorney necessary or appropriate to carry to or follows: General in charge of the Antitrust construe this Final Judgment, to modify 1. First Data’s acquisition of Concord Division, and on reasonable notice to any of its provisions, to enforce would combine the largest and third- defendants be permitted: compliance, and to punish violations of largest point-of-sale (‘‘POS’’) PIN debit 1. access during defendants’ office its provisions. networks in the United States. POS PIN hours to inspect and copy, or at XIII. Expiration of Final Judgment debit networks are the plaintiff’s option, to require defendants telecommunications and payment Unless this Court grants an extension, to provide copies of, all books, ledgers, infrastructure that connects merchants this Final Judgment shall expire ten accounts, records and documents in the to consumers’ demand deposit accounts years from the date of its entry. possession, custody, or control of at banks. These networks enable defendants, relating to any matters XIV. Public Interest Determination consumers to purchase goods and contained in this Final Judgment; and services from merchants through PIN 2. to interview, either informally or on Entry of this Final Judgment is in the debit transactions by swiping their bank the record, defendants’ officers, public interest. card at a merchant’s terminal and employees, or agents, who may have Court approval subject to procedures of the entering a Personal Identification their individual counsel present, Antitrust Procedures and Penalties Act, 15 Number, or PIN. Within seconds, the regarding such matters. The interviews U.S.C. § 16. purchase amount is debited from the shall be subject to the reasonable United States District Judge customer’s bank account and transferred convenience of the interviewee and Case Number 1:03CV02169 to the retailer’s bank. without restraint or interference by Judge: Rosemary M. Collyer. defendants. 2. PIN debit networks provide an Deck Type: Antitrust. increasingly important method of B. Upon the written request of a duly Date Stamp: 10/23/2003. authorized representative of the payment for consumers and retailers United States of America, United States because PIN debit is the least expensive, Assistant Attorney General in charge of Department of Justice, Antitrust Division, the Antitrust Division, defendants shall 600 E Street, NW., Suite 9500, Washington, most efficient, and most secure form of submit written reports, under oath if DC 20530, card payment. In 2002, customers requested, relating to any of the matters State of Connecticut, Office of the Attorney purchased more than $150 billion in contained in this Final Judgment as may General, 55 Elm Street, Hartford, CT 06106, goods and services using PIN debit be requested. State of Illinois, Office of the Illinois networks. PIN debit transaction volume Attorney General, 100 W. Randolph Street, has grown by more than 20 percent C. No information or documents 13th Floor, Chicago, IL 60601, obtained by the means provided in this annually over the past 5 years. Today, State of Louisiana, Department of Justice, 301 merchants accept PIN debit transactions section shall be divulged by the United Main Street, Suite 1250, Baton Rouge, LA States to any person other than an 70801, at more than one million retail locations authorized representative of the Commonwealth of Massachusetts, Office of in the United States. executive branch of the United States, the Attorney General, One Ashburton 3. Concord operates STAR, the except in the course of legal proceedings Place, Boston, MA 02108, nation’s largest PIN debit network. to which the United States is a party State of New York, Office of the Attorney STAR currently handles approximately General, 120 Broadway, Room 26C62, New (including grand jury proceedings), or half of all PIN debit transactions in the York, NY 10271, United States. First Data owns a for the purpose of securing compliance State of Ohio, Attorney General’s Office, 150 with this Final Judgment, or as E. Gay Street, Colombus, OH 43215, controlling interest in NYCE, the otherwise required by law. State of Texas, Office of the Attorney nation’s third-largest PIN debit network. D. If at the time information or General, P.O. Box 12548, Austin, TX 4. PIN debit networks compete for documents are furnished by defendants 78711, merchants to accept and route to the United States, defendants and purchases over their networks. A represent and identify in writing the District of Columbia, Office of the significant number of banks that issue material in any such information or Corporation Counsel, 441 4th Street, NW., debit cards participate in more than one documents to which a claim of Suite 450–N, Washington, DC 20001, PIN debit network. In some cases, this protection may be asserted under Rule Plaintiffs, allows merchants to choose the network 26(c)(7) of the Federal Rules of Civil v. over which to route a transaction; Procedure, and defendants mark each First Data Corporation, 6200 South Quebec merchants made this choice based on a pertinent page of such material, Street, Greenwood Village, CO 80111, variety of factors, including price and ‘‘Subject to claim of protection under and network performance. Large merchants

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usually accept the debit cards of many and emerging payments. First Data’s debit purchases at retailers in the early PIN debit networks. card issuing business offers a 1980s. It was not until the mid-1990s, 5. First Data’s acquisition of Concord comprehensive set of services to banks however, that PIN debit became a would substantially reduce competition that issue debit and credit cards. First popular method of payment for among the PIN debit networks for retail Data’s payment services group includes consumers to purchase goods and transactions in violation of section 7 of Western Union, the leading provider of services at retail stores. PIN debit the Clayton Act, 15 U.S.C. 18. The consumer-to-consumer money transfer transaction volume has grown merger would make prices for PIN debit services. substantially over the past five years network services to merchants less 11. First Data’s merchant services due to merchant and consumer competitive. Merchants will pass on at segment, which primarily consists of recognition of the advantages of PIN least some of the higher costs of PIN NYCE and the merchant processing and debit as a form of payment. Today, over debit transactions by raising the prices acquiring business, was responsible for 500 million PIN debit transactions are of their goods and services, to the $2.8 billion of the company’s revenues made every month. Nearly three- detriment of tens of millions of in 2002. First Data owns 64 percent of quarters of all PIN debit purchases occur consumers throughout the United NYCE Corporation, which operates the at thirty large retail chains. States. The United States and Plaintiff NYCE PIN debit and ATM network. 15. Many EFT networks, including States therefore seek an order Four large banks own the remaining 36 those operated by First Data and permanently enjoining the merger. percent of NYCE Corporation. In Concord, route both ATM and PIN debit transactions. Some companies, however, I. Jurisdiction and Venue addition, First Data is the nation’s leading merchant processor. A merchant operate separate ATM and PIN debit 6. This action is filed by the United processor connects merchants to the networks. For example, while Interlink States under section 15 of the Clayton various payment networks, ensuring is Visa’s PIN debit network, Visa Act, 15 U.S.C. 25, to prevent and that each transaction is sent to the operates a separate ATM network called restrain the Defendants from violating appropriate network. First Data also acts Plus. section 7 of the Clayton Act, 15 U.S.C. as a merchant acquirer; merchant 16. A PIN debit network serves as the 18. acquirers sponsor merchants into the critical electronic switch connecting a 7. The Plaintiff States bring this action PIN debit networks, facilitate network’s participating financial under section 16 of the Clayton Act, 15 settlement, and assume financial institutions with merchants that accept U.S.C. 26, to prevent and restrain the responsibility for the transactions. First the network. PIN debit networks Defendants from violation section 7 of Data provides merchant processing and provide one of the primary means for the Clayton Act, 15 U.S.C. 18. The acquiring services independently and consumers to access the money in their Plaintiff States, by and through their through a series of alliances and checking accounts. A PIN debit network respective Attorneys General, or other partnerships with major financial also performs a number of related authorized officials, bring this action in institutions. functions necessary for the efficient their sovereign capacities and as parens 12. Concord is a corporation operation of the network. For example, patriae on behalf of the citizens, general organized and existing under the laws of PIN debit networks: Promote their brand welfare, and economy of each of their the state of Delaware. Concord’s names among consumers, merchants, states. revenues in 2002 totaled nearly $2 and banks; establish rules and standards 8. First Data and Concord are engaged billion. Concord operates STAR, the to govern their networks; and set fees in interstate commerce and in activities largest PIN debit and ATM network. The and assessments for use of the network’s substantially affecting interstate STAR network is the result of a series products and services. Collectively, these products and services are ‘‘PIN commerce. First Data and Concord of acquisitions of other large networks debit network services.’’ provide PIN debit network services over the past several years. Concord 17. To execute a PIN debit throughout the United States. First bought MAC in 1999 and Cash Station Data’s and Concord’s PIN debit transaction, a customer swipes a debit in 2000. Concord then acquired STAR card at a POS terminal and enters a PIN networks are engaged in a regular, in 2001; STAR itself had acquired the continuous, and substantial flow of on a numeric keypad. After the PIN is Honor network, which in turn had entered, the POS terminal transmits the interstate commerce, and have had a acquired MOST. Concord is also a substantial effect upon interstate transaction and bank card information leading merchant processor and to a ‘‘merchant processor,’’ which acts commerce as well as commerce in each acquirer and provides an array of of the Plaintiff States. The Court has as a conduit between the merchant and services to debit card issuers and ATM the various PIN debit networks. The jurisdiction over this action pursuant to owners. sections 12 and 15 of the Clayton Act, merchant processor sends the 13. On April 1, 2003, First Data and information to the appropriate PIN debit 15 U.S.C. 22, 25, and 28 U.S.C. 1331, Concord entered into an Agreement and 1337. network, which switches the transaction Plan of Merger, pursuant to which First to the issuing bank’s ‘‘card processor.’’ 9. First Data and Concord transact Data will acquire Concord in an all- business and are found in the District of The card processor accesses the bank’s stock transaction valued at account database to verify the PIN and Columbia, Venue is proper under approximately $7 billion. Section 12 of the Clayton Act, 15 U.S.C. ensure that the customer has sufficient 22, and 28 U.S.C. 1391(c). III. The Relevant Market funds to pay for the purchase. The card processor sends an electronic message II. The Defendants and the Transaction A. Description of the Product to the PIN debit network accepting or 10. First Data is a corporation 14. In the late 1970s, bank rejecting the transaction. The PIN debit organized and existing under the laws of consortiums formed numerous regional network switches this reply back to the Delaware. In 2002, First Data reported electronic funds transfer (‘‘EFT’’) merchant through the merchant total worldwide revenues of $7.6 networks to enable their customers to processor to complete the transaction. billion. First Data is organized into four withdraw funds from ATMs owned by The entire authorization process takes business groups: merchant services, a variety of different banks. The EFT place electronically in just seconds. At payment services, card issuer services, networks were first used to handle PIN the same time, the merchant acquirer

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‘‘purchases’’ the transaction from the addition to PIN debit transactions. and nontransitory increase in the price merchant, guaranteeing payment and Signature debit transactions are of all PIN debit network services. facilitating settlement of the transaction. authenticated like credit card 26. Signature debit networks are not 18. A transaction can only be routed transactions, with the customer signing in the same product market as PIN debit over a particular PIN debit network if for identification rather than entering a networks because signature debit the customer’s bank issues a debit card PIN. Visa and MasterCard developed the networks are substantially more that participates in that network. This only two signature debit networks from expensive and have inferior participation is signified by placing the their existing credit card infrastructure. functionality and features. PIN debit network’s logo, or ‘‘bug,’’ on the card. In contrast to a PIN debit transaction, in networks would remain substantially To provide their customers with which the funds are immediately less expensive than signature debit or seamless access to the widest array of transferred from the customer’s account, credit care networks even after a small merchants, a significant number of a signature debit transaction generally but significant nontransitory increase in banks place the bug of more than one takes twenty-four to forty-eight hours to price. Merchants would continue to PIN debit network on their cards. Many settle. purchase and promote the use of PIN networks, including NYCE, have a 23. PIN debit networks offer a number debit network services because of the ‘‘priority routing’’ rule that allows the of substantial advantages to consumers low fraud rate, corresponding lack of card issuer to designate which PIN debit and merchants that distinguish them charge-backs, speed of execution at the network will serve as the primary from signature debit networks. PIN debit register, and the cash back feature that network for PIN debit transactions when networks are generally considerably less many customers demand. As the the bank bugs its cards with two or more expensive to merchants than signature President of First Data Merchant networks. STAR, by contrast, imposes a debit networks, due to significantly Services testified, PIN debit ‘‘is still the network routing rule, requiring most lower interchange rates. PIN debit lowest-cost, most efficient, most secure transactions on cards bearing the STAR networks also provide a more secure transaction there is out there in bug to be routed over the STAR method of payment than signature debit electronic transactions.’’ network, regardless of whether there are because it is much easier to forge a 27. Merchants would not defeat a other bugs on the card. person’s signature than to obtain an small but significant and nontransitory 19. PIN debit networks charge both individual’s PIN; consequently, fraud increase in the price of PIN debit the merchant and the card-issuing bank rates for PIN debit are substantially network services by requiring or a ‘‘switch’’ fee for the network switching lower than for signature debit. Because encouraging their customers to switch services provided by the network. This of the increased security of PIN debit, from PIN debit to signature debit or fee typically ranges from 2 cents to 4 there is no need for the complicated and other payment methods. cents per transaction. The PIN debit 28. The provision of PIN debit expensive charge-back procedures that networks also set an ‘‘interchange’’ fee, network services is a line of commerce allow consumers to challenge signature which is a fee paid by the merchant to and a relevant product market within debit transactions, thereby saving the PIN debit network. The PIN debit the meaning of section 7 of the Clayton merchants additional time and money. network then passes through the Act, 15 U.S.C. 18. interchange fee to the card-issuing bank PIN debit transactions also settle as compensation for permitting access to instantaneously, guaranteeing the D. Relevant Geographic Market the consumer’s bank account. The merchant ready access to its receipts, 29. First Data and Concord compete interchange fee is normally at least 4– whereas signature debit transactions with each other throughout the United 5 times as large as the switch fee, usually take a day or two to settle. States. Merchants in the United States ranging from as low as 10 cents to as Finally, PIN debit networks allow for could not switch to providers of PIN high as 45 cents, depending on the faster execution than signature debit debit network services located outside network, the merchant, and the size of networks. With a PIN debit transactions, of the United States in the event of a the transaction. Consequently, the customers can enter their PIN as soon as small but significant nontransitory merchant’s total charge for each PIN the first product is scanned. By contrast, increase in the price by PIN debit debit transaction is the interchange fee customers cannot sign for signature networks in the United States. While plus the switch fee. debit transactions until after the entire certain networks are stronger in 20. At some networks, such as NYCE order is totaled, prolonging the checkout particular areas of the country, the and Interlink, an advisory board process. largest networks essentially operate on a representing the network’s bank 24.PIN debit networks also allow national scale. Accordingly, the United members has substantial authority over individuals to receive cash back at the States is a relevant geographic market setting the network’s interchange rates register when making a purchase, a within the meaning of Section 7 of the and determining the network’s rules, popular feature with many consumers. Clayton Act, 15 U.S.C. 18. including rules concerning the routing Customers cannot receive cash back IV. Market Concentration of PIN debit transactions. when making a signature debit 21. The PIN debit network services purchase. Today, customers request 30. The relevant market is highly market is characterized by significant cash back in approximately 20 percent concentrated and would become network effects. Financial institutions of all PIN debit transactions. Customers significantly more concentrated as a are more likely to join networks that are also value the additional security result of the proposed transaction. As of accepted by many merchants. provided by PIN verification as opposed March 2003, the most recent period for Conversely, merchants are more likely to signature. which data is available, Concord accounted for approximately 56 percent to accept networks that have many large B. Relevant Product Market financial institutions as members of PIN debit transactions, while First because the value of a particular PIN 25. The relevant product market Data had approximately a 10 percent debit network depends in great measure affected by this transaction is the share. The top four networks—STAR, on the breadth of its acceptance and use. provision of PIN debit network services. Visa’s Interlink, NYCE, and Pulse— 22. Many debit cards can also execute A hypothetical monopolist could routed over 90 percent of all PIN debit ‘‘signature’’ debit transactions, in profitably impose a small but significant transactions. Using a standard measure

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of market concentration called the announced pricing [was] now out of millions of consumers, in the form of ‘‘HHI’’ (defined and explained in balance with new market realities’’ and higher prices for all goods and services. Appendix A), the market is highly followed suit. Merchants do not typically pass through concentrated, with a pre-merger HHI of 34. Combining STAR and NYCE will increase costs for particular forms of approximately 3590. First Data’s make it substantially more difficult for payment on a per-transaction basis. acquisition of Concord would increase merchants to use the possibility of 39. Any efforts the combined First the HHI by approximately 1120, dropping a network to prevent price Data/Concord might make to expand resulting in a post-merger HHI of increases. The larger the network, the PIN debit usage after the merger would approximately 4710. While STAR has more risky it is for a merchant to drop not prevent the company from raising recently lost some significant bank that network because of the increased prices to merchants that already accept contracts to Interlink and NYCE, under likelihood of rejected transactions, PIN debit. PIN debit networks are able even the most conservative estimate of delays at check-out lines, customer to charge different prices to merchants future market shares the combined firm confusion and backlash, lost sales, and based on the value of the network to the would have approximately a 45 percent customer use of other forms of payment particular company or type of merchant. post-merger share. Taking into account that are more costly to the merchant. For example, First Data and Concord these lost contracts, the PIN debit 35. The PIN debit networks take into have both recently offered substantial network services market remains highly account the merchants’ competitive discounts to quick-service restaurants to concentrated and would become reactions when they make decisions encourage them to deploy PIN pads at substantially more concentrated as a about pricing. Earlier this year, NYCE all of their locations. At the same time, result of the merger, with a post-merger was considering raising interchange First Data and Concord have HHI greater than 3000. rates to attract financial institutions to dramatically raised their merchant fees the network. NYCE’s internal analysis of to the market as a whole. This ability to V. Anticompetitive Effects the market recognized, however, that engage in price discrimination will ‘‘[t]aking a leadership role in POS A. The Proposed Transaction Will Likely facilitate First Data’s exercise of market interchange does not come without risk Substantially Reduce Competition power post-merger by allowing it to to the transaction growth engine of the Among PIN Debit Networks simultaneously raise prices to NYCE Network and its current revenue merchants that already accept PIN pads 31. First Data’s acquisition of Concord stream * * * ’’[P]recedent has been set and cut special deals to attract new will combine the largest and third- via major retailers in the past dropping market segments to the network. largest PIN debit networks and enable or threatening to drop a payment card the resulting network to raise prices and network due to pricing. * * * [T]he B. Lack of Countervailing Factors to reduce levels of services to risks are material that certain retailers or merchants. segments may decide to ‘send a 40. It is unlikely that entry or 32. PIN debit networks compete for message’ and simply stop taking NYCE- expansion in the PIN debit network merchant business by attempting to branded cards for purchases.’’ services market will occur in a timely convince merchants to accept their (emphasis added) manner or on a scale sufficient to undo networks and to route to their networks 36. First Data’s acquisition of Concord the competitive harm that the merger when there is a choice of routing will also reduce competition in the PIN will produce. Entry and expansion are options. PIN debit networks also debit market by limiting merchants’ difficult because they require large, compete for merchants by improving ability to route transactions to the least- sunk investments to attract bank their networks’ transmission speed, cost network. Major supermarkets and members, and, to a lesser degree, limiting network down-time, and mass merchandisers have obtained participating merchants. Coordinate reducing the number of improperly superior prices and levels of service by development of both bank members and rejected transactions. Merchants’ ability routing, or threatening to route, merchant acceptance is critical because to choose which networks to accept at transactions away from NYCE to STAR the utility of a particular PIN debit their stores and their control over the and vice versa. After the merger, network to customers, banks, and routing of some transactions acts as a merchants will no longer be able to seek merchants depends not only on the cost constraint on the price of PIN debit lower prices and improved service from and features of the card, but also on the network services to merchants. the combined firm by playing off NYCE breadth of its acceptance and use. These 33. While most large merchants and STAR against each other in this network effects that characterize the PIN generally accept all of the PIN debit manner. debit network services market make it networks, retailers can and have used 37. An internal merger planning difficult for small networks to the threat of dropping a network to document acknowledged the likely significantly expand their market share. obtain lower prices. For example, in effect of First Data’s acquisition of 41. Banks would have little incentive 2001 Visa announced a substantial rate Concord on pricing in the PIN debit to join a new or small network that was increase for its PIN debit network, network services market: The attempting to expand market share by Interlink; STAR, and later NYCE, ‘‘[c]ombination of NYCE and STAR offering lower interchange rates to followed by announcing comparable allows FDC [First Data Corp.] more merchants. To the contrary, a bank price increases. A number of large leeway to set market pricing.’’ would only have an incentive to join a retailers responded by stating that if 38. Interchange fees have risen network if it offered higher interchange Interlink implemented the planned dramatically in the past several years as rates. Without such bank participation, price increase, they would no longer the PIN debit network services market a network’s attempts to expand would accept Interlink. In response, Interlink has become more highly concentrated. prove fruitless. Moreover, financial delayed and substantially scaled back First Data’s acquisition of Concord will institutions benefit from a market its proposed price increase. Then STAR likely exacerbate this trend toward structure characterized by a limited delayed and reduced its planned price higher pricing by further reducing number of significant PIN debit increase to remain competitive. competition in the market. Merchants networks and face fewer competitive Similarly, NYCE concluded in an will be forced to pass on a significant constraints to setting higher prices to internal document that its ‘‘previously portion of the higher fees to tens of merchants.

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42. The PIN debit networks have (c) prices of PIN debit network Federal Bar No. ct09086. adopted rules and policies that further services to merchants that currently use Rachael O. Davis, increase the cost for a network to them would likely increase to levels Assistant Attorney General, expand by developing bank and above those that would prevail absent Antitrust Department, merchant participation. For example, the merger, forcing merchants to pass on Federal Bar No. ct07411. the networks’ priority routing rules these increased costs in the form of DC Bar No. 41357 (inactive). make entry more difficult and less higher prices for all goods and services 55 Elm Street, likely. Even if a network succeeds in Hartford, Connecticut 06106, Tel: (860) 808– to tens of millions of consumers; and 5040. Fax: (860) 808–5033. convincing banks to add its bug to the (d) quality in the provision of PIN banks’ debit cards, the network is debit network services would likely For Plaintiff State of Illinois, unlikely to see many transactions decrease to levels below those that Lisa Madigan, because of the priority routing rules. In would prevail absent the merger. Attorney General. addition, STAR requires its member Robert W. Pratt, banks to use STAR for both ATM and Request for Relief IL ARDC NO. 2247593, Chief, Antitrust Bureau. PIN debit network services; this all-or- 46. The United States and the Plaintiff nothing requirement makes it more States request: Liva S. West, (a) that the proposed acquisition be IL ARDC NO. 6276883, Assistant Attorney difficult for competing networks to General, Office of the Illinois Attorney convince banks to participate in their adjudged to violate section 7 of the General, 100 W. Randolph Street, 13th Floor, network. Finally, banks that want to act Clayton Act, 15 U.S.C. 18; Chicago, IL 60601, Tel: 313–814–6021. Fax: as acquirers for STAR ATM and PIN (b) that the Defendants be 312–814–1154. debit transactions must issue cards that permanently enjoined and restrained participate in the STAR network. from carrying out the Agreement and October 20, 2003. Plan of Merger dated April 1, 2003, or Because a significant number of banks Louisiana’s Signature Page for the FDC/ have substantial ATM or merchant from entering into or carrying out any Concord merger opposition case agreement, understanding, or plan by acquiring businesses, the STAR rule Attorney General, further inhibits potential expansion by which First Data would merge with or Richard P. Ieyoub. acquire Concord, its capital stock, or competing PIN debit networks. After the Jane Bishop Johnson, #21651, merger, the application of any or all of any of its assets; Louisiana Department of Justice, 301 Main these rules to First Data/Concord’s (c) that the United States and the Street, Suite 1250, Baton Rouge, LA 70801, combined network would inhibit entry Plaintiff States be awarded costs of this (225) 342–2754, (225) 342–96537 (FAX). or expansion by other PIN debit action; For the Plaintiff, the Commonwealth of networks. (d) that as the Court may deem Massachusetts 43. Finally, the combination of First appropriate, the Plaintiff States be Thomas F. Reilly, Data’s and Concord’s merchant awarded reasonable attorneys fees and Attorney General processing businesses with their PIN costs as permitted by law; and Betsy S. Whittey, BBO#645593, debit networks will raise barriers to (e) that the United States and the Assistant Attorney General, Consumer entry. The combined First Data/Concord Plaintiff States have such other relief as Protection and Antitrust Division, One will process more than half of all PIN the Court may deem just and proper. Ashburton Place, Boston, MA 02108, 617– debit transactions. As the merchant Dated: October 23, 2003. 727–2200 ext. 2968, 617–727–5765. processor, the merged firm will have For Plaintiff United States: For Plaintiff State of New York: Office of the Attorney General significant control over which network R. Hewitt Pate, routes a transaction on a double-bugged Assistant Attorney General (D.C. Bar No. Jay L. Himes, card. As the owner of the dominant PIN 473598). Chief, Antitrust Bureau, N.Y., Attorney No., 1236934 debit network, First Data will have a Deborah P. Majoras, significant incentive to exercise this Deputy Assistant Attorney General (D.C. Bar Richard E. Grimm, control after it acquires Concord, No. 474239). Assistant Attorney General, N.Y. Attorney No. 1337138. inhibiting other PIN debit networks J. Robert Kramer, II, from expanding their presence in the Director of Operations. Antitrust Bureau, market. Office of the Attorney General, 120 Broadway Renata B. Hesse, Room 26C62, New York, New York 10271– VI. Violation Alleged Chief (Calif. Bar No. 148425), N. Scott Sacks, 0332, Tel: (212) 416–8282, (212) 416–8280, Assistant Chief (D.C. Bar No. 913087), 44. The United states and the Plaintiff Fax: (212) 416–6015. Networks & Technology Enforcement United States of America, et al. (State of States hereby incorporate paragraphs 1 Section. Ohio) v. First Data Corporation and Concord through 43. Respectfully submitted, EFS, Inc. 45. First Data’s acquisition of Concord Joshua H. Soven, For Plaintiff State of Ohio. would likely substantially lessen (D.C. Bar No. 436633). competition in the provision of PIN Jim Petro, Craig W. Conrath, Attorney General, debit network services, in violation of Minnesota Bar No. 18569), Counsel of Record State of Ohio. section 7 of the Clayton Act, 15 U.S.C. Trail Attorneys, U.S. Department of Justice, Mitchell L. Gentile, 18. The transaction would likely have Antitrust Division, Networks & Technology OH Bar Number 0022274, the following effects, among others: Enforcement Section, 600 E Street, NW Principal Attorney, (a) competition between First Data Suite 9500, Washington, DC 20530, (202) Antitrust Section, and Concord in the provision of PIN 307–6200. Ohio Attorney General’s Office, debit network services would be For Plaintiff State of Connecticut 150 E. Gay Street, eliminated; Richard Blumenthal, Columbus, OH 43215–3031, (b) competition generally in the Attorney General. Tel: 614–466–4328, Fax: 614–995–0266. provision of PIN debit network services Steven M. Rutstein, would be eliminated or substantially Assistant Attorney General, For Plaintiff State of Texas. lessened; Department Head/Antitrust Department, Greg Abbott,

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Attorney General of Texas. DEPARTMENT OF LABOR DEPARTMENT OF LABOR Barry R. McBee, First Assistant Attorney General. Employment And Training Employment And Training Edward D. Burbach, Administration Administration Deputy Attorney General for Litigation. [TA-W–53,875] Mark Tobey, [TA–W–53,042] Assistant Attorney General, Cascada De Mexico, Inc., a Division of Chief, Antitrust Division. Cascade West Sportswear, Inc., Solon Manufacturing Co., Rhinelander, Rebecca Fisher, Puyallup, Washington; Notice of Wisconsin; Amended Certification Assistant Attorney General, Termination of Investigation Regarding Eligibility To Apply for State Bar No. 07057800. Worker Adjustment Assistance and Pursuant to section 221 of the Trade Office of the Attorney General, P.O. Box Alternative Trade Adjustment Act of 1974, as amended, an 12548, Austin, Texas 78711–2548, 512/ Assistance 463–2185, 512/320–0975 (Facsimile). investigation was initiated on December 23, 2003 in response to a petition filed Signature by the State of Texas of In accordance with section 223 of the by a company official on behalf of Complaint in United States of America, et al, Trade Act of 1974 (19 U.S.C. 2273) the workers of Cascada de Mexico, Inc., a v. First Data Corporation and Concord EFS, Department of Labor issued a Inc. division of Cascade West Sportswear, Inc., Puyallup, Washington. Certification of Eligibility to Apply for Robert J. Spagnoletti, Worker Adjustment Assistance and Corporation Counsel, DC. The investigation revealed that the Alternative Trade Adjustment Charlotte W. Parker (Bar #186205), subject firm can be certified upon an Assistance on October 22, 2003, Deputy Corporation Counsel, amendment to a previous certification Civil Division. (TA–W–53,873). The workers at the applicable to workers of Solon Bennett Rushkoff (Bar #386925), subject firm were in support of the Manufacturing Company, Rhinelander, Senior Counsel, production facility previously certified Wisconsin. The notice was published in Don Allen Resnikoff (Bar #386688), under (TA–W–53,873). Consequently the Federal Register on November 28, Assistant Corporation Counsel, the investigation has been terminated. 2003 (68 FR 66879). Anika Sanders Cooper (Bar #458863), At the request of the State agency, the Assistant Corporation Counsel. Signed at Washington, DC, this 12th day of January, 2004. Department reviewed the certification Office of the Corporation Counsel, 441 4th for workers of the subject firm. The Street, NW., Suite 450–N, Washington, DC Richard Church, 20001 (202) 727–4170. Certifying Officer, Division of Trade workers are engaged in the production Adjustment Assistance. of ice cream sticks and are not Attorneys for the District of Columbia. [FR Doc. E4–240 Filed 2–9–04; 8:45 am] separately identifiable by product line. Appendix A BILLING CODE 4510–13–P New findings show that there was a Herfindahl-Hirschman Index previous certification, TA–W–39,153, issued on May 8, 2001, for workers of ‘‘HHI’’ means the Herfindahl-Hirschman DEPARTMENT OF LABOR Index, a commonly accepted measure of Solon Manufacturing, Rhinelander, Wisconsin, who were engaged in market concentration. It is calculated by Employment and Training squaring the market share of each firm Administration employment related to the production of competing in the market and then summing ice cream sticks. That certification the resulting numbers. For example, for a [TA–W–53,874] expired May 8, 2003. To avoid an market consisting of four firms with shares of overlap in worker group coverage, the 30%, 30%, 20%, and 20%, the HHI is 2600 Cascade West Sportswear, Inc., (302 + 302 + 202 + 202 = 2600). (Note: certification is being amended to change Puyallup, Washington; Notice of the impact date from September 24, Throughout the Compliant, market share Termination of Investigation percentages have been rounded to the nearest 2002, to May 9, 2003, for workers of the whole number, but HHIs have been estimated Pursuant to section 221 of the Trade subject firm. using unrounded percentages in order to Act of 1974, as amended, an The amended notice applicable to accurately reflect the concentration of the investigation was initiated on December TA–W–53,042 is hereby issued as various markets.) The HHI takes into account 23, 2003 in response to a petition filed the relative size distribution of the firms in follows: by a company official on behalf of a market and approaches zero when a market ‘‘All workers of Solon Manufacturing consists of a large number of small firms. The workers of Cascade West Sportswear, Company, Rhinelander, Wisconsin, who HHI increases both as the number of firms in Inc., Puyallup, Washington. became totally or partially separated from the market decreases and as the disparity in The investigation revealed that the employment on or after May 9, 2003, through size between those firms increases. subject firm can be certified upon an October 22, 2005, are eligible to apply for Markets in which the HHI is between 1000 amendment to a previous certification adjustment assistance under Section 223 of and 1800 points are considered to be (TA–W–53,873). The workers at the the Trade Act of 1974 and are also eligible moderately concentrated, and those in which subject firm were in support of the to apply for alternative trade adjustment the HHI is in excess of 1800 points are production facility previously certified assistance under section 246 of the Trade Act considered to be highly concentrated. See under (TA–W–53,873). Consequently of 1974.’’ Horizontal Merger Guidelines ¶ 1.51 (revised the investigation has been terminated. Apr. 8, 1997). Transactions that increase the HHI by more than 100 points in concentrated Signed at Washington, DC, this 12th day of Signed at Washington, DC, this 22nd day markets presumptively raise antitrust January, 2004. of January, 2004. concerns under the guidelines issued by the Richard Church, Elliott S. Kushner, U.S. Department of Justice and Federal Trade Certifying Officer, Division of Trade Certifying Officer, Division of Trade Commission. See id. Adjustment Assistance. Adjustment Assistance. [FR Doc. 04–2688 Filed 2–9–04; 8:45 am] [FR Doc. E4–242 Filed 2–9–04; 8:45 am] [FR Doc. E4–245 Filed 2–9–04; 8:45 am] BILLING CODE 4410–11–M BILLING CODE 4510–13–P BILLING CODE 4510–13–P

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DEPARTMENT OF LABOR Application for Reconsideration, the Compensation for Ex-servicemembers Department contacted the company to (UCX Program). Employment And Training determine whether the subject company The revised schedule published with Administration had increased import purchases of this Notice reflects increases in military [TA–W–52,774] corrugated medium or shifted pay and allowances, which are effective production abroad. The investigation in January 2004. Weyerhaeuser Company, North Bend, revealed that the amount of corrugated Accordingly, the following new Oregon; Notice of Negative medium imported was minimal and that Schedule of Remuneration, issued Determination on Reconsideration the corrugated medium at issue was pursuant to 20 CFR 614.12(c), applies to actually part of corrugated boxes that ‘‘first claims’’ for UCX, which are On November 19, 2003, the were used to ship other products. effective beginning with the first day of Department issued an Affirmative The investigation also revealed that the first week that begins on or after Determination Regarding Application while the subject company has facilities January 4, 2004. for Reconsideration for the workers and outside the United States, the subject former workers of the subject firm. The company did not shift production of Pay grade Monthly notice was published in the Federal corrugated medium abroad, but did shift wage rate Register on January 2, 2004 (69 FR 117). production domestically in August The Department denied Trade (1) Commissioned Officers: 2003. Adjustment Assistance (TAA) to 0–10 ...... $15,084 The alleged decreased need for workers of the subject firm because 0–9 ...... 14,670 packaging and shipping materials 0–8 ...... 13,539 imports did not ‘‘contribute caused by decreased domestic 0–7 ...... 12,283 importantly’’ and a shift of production production of goods due to overall shifts 0–6 ...... 10,576 relating to the eligibility requirements of of production of goods abroad was not 0–5 ...... 8,911 section 222(3) of the Trade Act of 1974, investigated because the decreased 0–4 ...... 7,561 as amended, were not met. The workers 0–3 ...... 5,966 production of corrugated medium was produced corrugated medium. The 0–2 ...... 4,717 not related to either increased imports investigation revealed neither 0–1 ...... 3,575 of the same or like and directly significant increased imports of (2) Commissioned Officers With competitive product or a shift of corrugated medium nor a shift of Over 4 Years Active Duty As production abroad. An Enlisted Member Or War- production abroad. While the petitioner requested rant Officer: The petitioner requested reconsideration regarding ATAA, the 0–3E ...... $6,877 reconsideration of the negative Department did not investigate whether 0–2E ...... 5,627 determination regarding both TAA and the workers are eligible for this benefit 0–1E ...... 4,788 Alternative Trade Adjustment since they are not eligible for TAA. (3) Warrant Officers: Assistance (ATAA). In the request for W–5 ...... $7,838 reconsideration, the petitioner alleges Conclusion W–4 ...... 6,963 that workers’ separations were caused W–3 ...... 5,883 After reconsideration, I affirm the W–2 ...... 5,110 by the increased imports of corrugated original notice of negative boxes and containerboard, the shift of W–1 ...... 4,249 determination of eligibility to apply for (4) Enlisted Personnel: production abroad, and the decreased worker adjustment assistance for E–9 ...... $6,706 need for packaging and shipping workers and former workers of E–8 ...... 5,577 material due to the general shift of Weyerhaeuser Company, North Bend, E–7 ...... 4,904 production of goods abroad. Workers at Oregon. E–6 ...... 4,238 the subject firm as already indicated E–5 ...... 3,502 produced corrugated medium. Signed at Washington, DC, this 30th day of E–4 ...... 2,888 The petitioner alleges that increased January, 2004. E–3 ...... 2,577 imports of corrugated boxes and Elliott S. Kushner, E–2 ...... 2,429 containerboard have reduced the need Certifying Officer, Division of Trade E–1 ...... 2,180 for corrugated medium. Corrugated Adjustment Assistance. boxes and containerboard are not ‘‘like [FR Doc. E4–241 Filed 2–9–04; 8:45 am] The publication of this new Schedule of Remuneration does not revoke any or directly competitive’’ with the BILLING CODE 4510–13–P articles produced by the subject firm prior schedule or change the period of (corrugated medium). Corrugated time any prior schedule was in effect. medium is a component of DEPARTMENT OF LABOR Signed at Washington, DC, on February 4, containerboard and corrugated boxes. 2004. Employment and Training Corrugated medium is a fluted paper Emily Stover DeRocco, Administration product used to make containerboard. Assistant Secretary of Labor. Containerboard consists of a sheet of Revised Schedule of Remuneration for [FR Doc. 04–2827 Filed 2–9–04; 8:45 am] corrugated medium pressed between the UCX Program BILLING CODE 4510–30–P two sheets of flat paper. Pieces of containerboard are cut and assembled Under section 8521(a)(2) of Title 5 of into corrugated boxes. Therefore, the the United States Code, the Secretary of DEPARTMENT OF LABOR imports of corrugated boxes and Labor is required to issue a Schedule of containerboard are not relevant in Remuneration specifying the pay and Employment Standards Administration meeting the eligibility requirement of allowances for each pay grade of section 222 of the Trade Act of 1974, as members of the military services. The Proposed Collection; Comment amended. schedules are used to calculate the base Request Following the issuance of the period wages and benefits payable ACTION: Notice. Affirmative Determination Regarding under the program of Unemployment

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SUMMARY: The Department of Labor, as II. Review Focus Dated: February 4, 2004. part of its continuing effort to reduce Bruce Bohanon, paperwork and respondent burden, The Department of Labor is Chief, Branch of Management Review and conducts a preclearance consultation particularly interested in comments Internal Control, Division of Financial which: program to provide the general public Management, Office of Management, and Federal agencies with an • Evaluate whether the proposed Administration and Planning, Employment Standards Administration. opportunity to comment on proposed collection of information is necessary [FR Doc. 04–2828 Filed 2–9–04; 8:45 am] and/or continuing collections of for the proper performance of the information in accordance with the functions of the agency, including BILLING CODE 4510–30–P Paperwork Reduction Act of 1995 whether the information will have (PRA95) [44 U.S.C. 3506(c)(2)(A)]. This practical utility; • program helps to ensure that requested Evaluate the accuracy of the NUCLEAR REGULATORY data can be provided in the desired agency’s estimate of the burden of the COMMISSION format, reporting burden (time and proposed collection of information, financial resources) is minimized, including the validity of the Sunshine Act Meeting collection instruments are clearly methodology and assumptions used; understood, and the impact of collection • Enhance the quality, utility and AGENCY HOLDING THE MEETING: Nuclear requirements on respondents can be clarity of the information to be Regulatory Commission. properly assessed. Currently, the collected; and DATES: Weeks of February 9, 16, 23, Employment Standards Administration • Minimize the burden of the March 1, 8, 15, 2004. is soliciting comments concerning the collection of information on those who PLACE: Commissioners’ Conference proposed collection: Notice of Law are to respond, including through the Room, 11555 Rockville Pike, Rockville, Enforcement Officer’s Injury or use of appropriate automated, Maryland. Occupational Disease (CA–721) and electronic, mechanical, or other STATUS: Public and Closed. technological collection techniques or Notice of Law Enforcement Officer’s MATTERS TO BE CONSIDERED: Death (CA–722). A copy of the proposed other forms of information technology, information collection request can be e.g., permitting electronic submissions Week of February 9, 2004 obtained by contacting the office listed of responses. There are no meetings scheduled for below in the addresses section of this III. Current Actions the Week of February 9, 2004. notice. The Department of Labor seeks the Week of February 16, 2004—Tentative DATES: Written comments must be extension of approval to collect this Wednesday, February 18, 2004 submitted to the office listed in the information to determine eligibility for addresses section below on or before benefits. 9:30 a.m. Briefing on Status of Office April 12, 2004. of Chief Financial Officer Programs, Type of Review: Extension. Performance, and Plans (Public ADDRESSES: Ms. Hazel M. Bell, U.S. Agency: Employment Standards Meeting) (Contact: Edward L. New, Department of Labor, 200 Constitution Administration. 301–415–5646). Ave. NW., Room S–3201, Washington, Title: Notice of Law Enforcement This meeting will be webcast live at DC 20210, telephone (202) 693–0418, Officer’s Injury or Occupational Disease the Web address—www.nrc.gov. fax (202) 693–1451, e-mail (CA–721), Notice of Law Enforcement Week of February 23, 2004—Tentative [email protected]. Please use only one Officer’s Death (CA–722). method of transmission for comments OMB Number: 1215–0116. Wednesday, February 25, 2004 (mail, fax, or e-mail). Agency Number: CA–721 and CA– 9 a.m. Discussion of Security Issues SUPPLEMENTARY INFORMATION: 722. (Closed—Ex. 1). I. Background Affected Public: Individuals or Thursday, February 26, 2004 Households; Business or other for-profit; 9:30 a.m. Meeting with UK Regulators The Office of Workers’ Compensation State, Local or Tribal Government. Programs (OWCP) administers the to Discuss Security Issues (Closed— Total Respondents: 23. Federal Employees’ Compensation Act Ex. 1). (FECA). The Act provides that non- Total Annual Responses: 23. 1:30 p.m. Status of Davis Besse Lessons Learned Task Force Issues Federal law enforcement officers and/or Average Time per Response: 60 (Public Meeting) (Contact: Brendan their survivors injured or killed under minutes. Moroney, 301–415–3974). certain circumstances are entitled to Estimated Total Burden Hours: 31. benefits of the Act to the same extent This meeting will be webcast live at Frequency: On occasion. asemployees in the Federal government. the Web address—www.nrc.gov. The Notice of Law Enforcement Total Burden Cost (capital/startup): Week of March 1, 2004—Tentative Officer’s Injury or Occupational Disease $0. (CA–721) and the Notice of Law Total Burden Cost (operating/ Tuesday, March 2, 2004 Enforcement Officer’s Death (CA–722) maintenance): $220.00. 9:30 a.m. Meeting with Advisory are the forms used by non-Federal law Comments submitted in response to Committee on the Medical Uses of enforcement officers and their survivors this notice will be summarized and/or Isotopes (ACMUI) & NRC Staff to claim compensation under FECA. included in the request for Office of (Public Meeting) (Contact: Angela This information collection is currently Management and Budget approval of the Williamson, 301–415–5030). approved for use through August 31, information collection request; they will This meeting will be webcast live at 2004. also become a matter of public record. the Web address—www.nrc.gov.

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Wednesday, March 3, 2004 at www.nrc.gov/what-we-do/policy- requires approximately 30 minutes to making/schedule.html. complete and a burden of 675 hours is 9:30 a.m. 25th Anniversary Three Mile estimated for SF 3112A. The total Island (TMI) Unit 2 Accident * * * * * annual burden for SF 3112 is 12,775 Presentation (Public Meeting) This notice is distributed by mail to several hundred subscribers; if you no hours. (Contact: Sam Walker, 301–415– For copies of this proposal, contact 1965). longer wish to receive it, or would like to be added to the distribution, please Mary Beth Smith-Toomey on (202) 606– This meeting will be webcast live at contact the Office of the Secretary, 8358, Fax (202) 418–3251 or via E-mail the Web address—www.nrc.gov. Washington, DC 20555 (301–415–1969). to [email protected]. Please include a 2:45 p.m. Discussion of Security Issues In addition, distribution of this meeting mailing address with your request. (Closed—Ex. 1). notice over the Internet system is DATES: Comments on this proposal Thursday, March 4, 2004 available. If you are interested in should be received on or before March receiving this Commission meeting 11, 2004. 1:30 p.m. Briefing on Status of Office schedule electronically, please send an ADDRESSES: Send or deliver comments of Nuclear Material Safety and electronic message to [email protected]. to—Ronald W. Melton, Chief, Operation Safeguards (NMSS) Programs, Support Group, Center for Retirement Performance, and Plans—Waste Dated: February 5, 2004. Timothy J. Frye, and Insurance Services, U.S. Office of Safety (Public Meeting) (Contact: Personnel Management, 1900 E Street Claudia Seelig, 301–415–7243). Technical Coordinator, Office of the Secretary. NW., Room 3349A, Washington, DC This meeting will be webcast live at 20415–3540; and Joseph F. Lackey, [FR Doc. 04–2932 Filed 2–6–04; 9:21 am] the Web address—www.nrc.gov. OPM Desk Officer, Office of Information BILLING CODE 7590–01–M and Regulatory Affairs, New Executive Week of March 8, 2004—Tentative Office Building, NW., Room 10235, Tuesday, March 9, 2004 Washington, DC 20503. OFFICE OF PERSONNEL FOR INFORMATION REGARDING 9:30 a.m. Briefing on Status of Office MANAGEMENT of Nuclear Material Safety and ADMINISTRATIVE COORDINATION CONTACT: Safeguards (NMSS) Programs, Submission for OMB Review; Cyrus S. Benson, Team Leader, Performance, and Plans—Material Comment Request for Review of a Publications Team, Support Group, Safety (Public Meeting) (Contact: Revised Information Collection: SF (202) 606–0623. Claudia Seelig, 301–415–7243). 3112 Kay Coles James, This meeting will be webcast live at AGENCY: Office of Personnel Director, U.S. Office of Personnel the Web address—www.nrc.gov. Management. Management. [FR Doc. 04–2733 Filed 2–9–04; 8:45 am] 1:30 p.m. Discussion of Security Issues ACTION: Notice. (Closed—Ex. 1). BILLING CODE 6325–50–P SUMMARY: In accordance with the Week of March 15, 2004—Tentative Paperwork Reduction Act of 1995 (Pub. There are no meetings scheduled for L. 104–13, May 22, 1995), this notice SECURITIES AND EXCHANGE the Week of March 15, 2004. announces that the Office of Personnel COMMISSION *The schedule for Commission Management (OPM) submitted to the meetings is subject to change on short Office of Management and Budget a Submission for OMB Review; notice. To verify the status of meetings request for review of a revised Comment Request call (recording)—(301) 415–1292. information collection. Standard Form Upon written request, copies available Contact person for more information: 3112, CSRS/FERS Documentation in from: Securities and Exchange Timothy J. Frye, (301) 415–1651. Support of Disability Retirement Commission, Office of Filings and * * * * * Application, collects information from Information Services, Washington, DC applicants for disability retirement so 20549. ADDITIONAL INFORMATION: By a vote of 3– that OPM can determine whether to 0 on January 29, the Commission approve a disability retirement. The Extension: determined pursuant to U.S.C. 552b(e) Rule 30e–2; SEC File No. 270–437; OMB applicant will only complete Standard Control No. 3235–0494. and section 9.107(a) of the Forms 3112A and 3112C. Standards Commission’s rules that ‘‘Affirmation of Forms: 3112B, 3112D, and 3112E will be Notice is hereby given that, under the COMSECY–04–0004 (Draft Notice and completed by the immediate supervisor Paperwork Reduction Act of 1995 (44 Order for Louisiana Energy Services)’’ and the employing agency of the U.S.C. 350l-3520), the Securities and be held on January 30, and on less than applicant. Exchange Commission (the one week’s notice to the public. Approximately 12,100 applicants for ‘‘Commission’’) has submitted to the By a vote of 3–0 on February 4, the disability retirement complete Standard Office of Management and Budget a Commission determined pursuant to Forms 3112A and 3112C annually. This request for extension of the previously U.S.C. 552b(e) and section 9.107(a) of is a combined figure including 9,000 approved collection of information the Commission’s rules that CSRS and 3,100 FERS applications. The discussed below. ‘‘Affirmation of SECY–04–0015 (Private SF 3112C requires approximately 60 Section 30(e) of the Investment Fuel Storage Independent Spent Fuel minutes to complete. A burden of Company Act of 1940 [15 U.S.C. 80a- Storage Installation)’’ be held on 12,100 hours is estimated for SF 3112C. 29(e)] (the ‘‘Investment Company Act’’ 1 February 5, and on less than one week’s SF 3112A is used each year by or ‘‘Act’’) and rule 30e-2 thereunder [17 notice to the public. approximately 1,350 persons who are * * * * * 1 Rule 30e–2 was originally adopted as rule 30d– not Federal employees. This is a 2, but was redesignated as rule 30e–2 effective The NRC Commission Meeting combined figure including 1,000 CSRS February 15, 2001. See Role of Independent Schedule can be found on the Internet and 350 FERS applications. SF 3112A Directors of Investment Companies, Securities Act

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CFR 270.30e-2] require registered unit assets in securities of a fund transmit to Washington, DC 20549. Comments must investment trusts (‘‘UITs’’) that invest shareholders at least semi-annually be submitted to OMB within 30 days substantially all of their assets in reports containing financial statements after this notice. securities of a management investment and certain other information is to Dated: February 2, 2004. 2 apprise current shareholders of the company (‘‘fund’’) to send to Margaret H. McFarland, shareholders at least semi-annually a operational and financial condition of Deputy Secretary. report containing certain financial the UIT. Absent the requirement to statements and other information. disclose all material information in [FR Doc. 04–2761 Filed 2–9–04; 8:45 am] Specifically, rule 30e–2 requires that the reports, investors would be unable to BILLING CODE 8010–01–P report contain the financial statements obtain accurate information upon which and other information that rule 30e–1 to base investment decisions and SECURITIES AND EXCHANGE under the Act [17 CFR 270.30e–1] consumer confidence in the securities COMMISSION requires to be included in the report of industry might be adversely affected. the underlying fund for the same fiscal Requiring the submission of these [Investment Company Act Release No. period. Rule 30e–1 requires that the reports to the Commission permits us to 26346; 812–12610] underlying fund’s report contain, among verify compliance with securities law other things, the financial statements requirements. FFTW Funds, Inc. et al.; Notice of and other information that is required to The purpose of the notice and annual Application explanation requirements associated be included in such report by the fund’s February 4, 2004. registration form. Preparing and sending with the householding provisions of the rule is to ensure that investors who wish AGECNCY: Securities and Exchange the above-described reports under rule Commission (‘‘Commission’’). 30e–2 are collections of information to receive individual copies of ACTION: Notice of an application under under the Paperwork Reduction Act. shareholder reports are able to do so. section 12(d)(1)(J) of the Investment Rule 30e–2, however, permits, under The Commission estimates that as of Company Act of 1940 (‘‘Act’’) for an certain conditions, delivery of a single April 2003, approximately 733 UITs exemption from section 12(d)(1)(G)(i)(II) shareholder report to investors who were subject to the provisions of rule of the Act. share an address (‘‘householding’’). The 30e–2. The Commission further estimates that the annual burden purpose of the householding provisions SUMMARY OF APPLICATION: Applicants of the rule is to reduce the amount of associated with rule 30e–2 is 121 hours for each UIT, including an estimated 20 request an order to permit funds of duplicative reports delivered to funds relying on section 12(d)(1)(G) of investors sharing the same address. hours associated with the notice requirement for householding and an the Act to invest in securities and other Specifically, rule 30e–2 permits estimated 1 hour associated with the financial instruments. householding of annual and semi- explanation of the right to revoke APPLICANTS: FFTW Funds, Inc. (the annual reports by UITs to satisfy the consent to householding, for a total of ‘‘Fund’’) and Fischer Francis Trees & delivery requirements of rule 30e–2 if, 88,693 burden hours. Watts, Inc. (the ‘‘Manager’’). in addition to the other conditions set The estimate of average burden hours FILING DATES: The application was filed forth in the rule, the UIT has obtained is made solely for the purposes of the from each applicable investor written or on August 15, 2001, and amended on Paperwork Reduction Act, and is not February 3, 2004. implied consent to the householding of derived from a comprehensive or even HEARING OR NOTIFICATION OF HEARING: An shareholder reports at such address. The a representative survey or study of the rule requires UITs that wish to order granting the application will be costs of Commission rules and forms. issued unless the Commission orders a household shareholder reports with In addition to the burden hours, the hearing. Interested persons may request implied consent to send a notice to each Commission estimates that the cost of a hearing by writing to the applicable investor stating that the contracting for outside services Commission’s Secretary and serving investors in the household will receive associated with complying with rule applicants with a copy of the request, one report in the future unless the 30e–2 is $12,000 per respondent (80 personally or by mail. Hearing requests investors provide contrary instructions. hours times $150 per hour for should be received by the Commission In addition, at least once a year, UITs independent auditor services), for a total by 5:30 p.m. on March 1, 2004, and relying on the rule for householding of $8,796,000 ($12,000 per respondent should be accompanied by proof of must explain to investors who have times 733 respondents). provided written or implied consent An agency may not conduct or service on applicants, in the form of an how they can revoke their consent. sponsor, and a person is not required to affidavit or, for lawyers, a certificate of Preparing and sending the initial notice respond to a collection of information service. Hearing requests should state and the annual explanation of the right unless it displays a currently valid the nature of the writer’s interest, the to revoke consent are collections of control number. reason for the request, and the issues information under the Paperwork Please direct general comments contested. Persons who wish to be Reduction Act. regarding the above information to the notified of a hearing may request The purpose of the requirement that following persons: (i) Desk Officer for notification by writing to the UITs that invest substantially all of their the Securities and Exchange Commission’s Secretary. Commission, Office of Information and ADDRESSES: Secretary, Commission, 450 Rel. No. 7932; Exchange Act Rel. No. 43786; Regulatory Affairs, Office of 5th Street, NW., Washington, DC 20549– Investment Company Act Rel. No. 24816 (Jan. 2, 0609; Applicants, c/o Robin Meister, 2001) [66 FR 3734 (Jan. 16, 2001)]. Management and Budget, Room 10102, 2 Management investment companies are defined New Executive Office Building, Chief Risk and Legal Officer, Fischer in section 4(3) of the Investment Company Act as Washington, DC 20503; and (ii) R. Corey Francis Trees & Watts, Inc., 200 Park any investment company other than a face-amount Booth, Director/Chief Information Ave., New York, NY 10166. certificate company or a unit investment trust, as FOR FURTHER INFORMATION CONTACT: those terms are defined in sections 4(1) and 4(2) of Officer, Office of Information the Investment Company Act. See 15 U.S.C. 80a– Technology, Securities and Exchange Marilyn Mann, Senior Counsel, at (202) 4. Commission, 450 Fifth Street, NW., 942–0582, or Mary Kay Frech, Branch

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Chief, at (202) 942–0564 (Division of investing a portion of its assets in an comply with the provisions of section Investment Management, Office of Underlying Fund that focuses on that 12(d)(1)(G), but for the fact that each Investment Company Regulation). asset class.2 Acquiring Portfolio may invest a portion SUPPLEMENTARY INFORMATION: The Applicants’ Legal Analysis of its assets directly in securities other following is a summary of the than those specified in section application. The complete application 1. Section 12(d)(1)(A) of the Act 12(d)(1)(G)(i)(II). may be obtained for a fee at the provides that no registered investment company (‘‘acquiring company’’) may 3. Section 12(d)(1)(J) of the Act Commission’s Public Reference Branch, provides that the Commission may 450 5th Street, NW., Washington, DC acquire securities of another investment exempt persons or transactions from any 20549–0102 (telephone (202) 942–8090). company (‘‘acquired company’’) if such securities represent more than 3% of the provision of section 12(d)(1) if, and to Applicants’ Representations acquired company’s outstanding voting the extent that, the exemption is 1. The Fund is registered under the stock or more than 5% of the acquiring consistent with the public interest and Act as an open-end management company’s total assets, or if such the protection of investors. Applicants investment company and is organized as securities, together with the securities of request an order under section a Maryland corporation. The Fund other investment companies, represent 12(d)(1)(J) exempting them from section consists of the following nine active more than 10% of the acquiring 12(d)(1)(G)(i)(II). Applicants assert that portfolios (‘‘Portfolios’’): U.S. Short- company’s total assets. Section permitting the Acquiring Portfolios to Term Portfolio, Limited Duration 12(d)(1)(B) of the Act provides that no invest in Other Securities as described Portfolio, Mortgage-Backed Portfolio, registered open-end investment in the application would not raise any Worldwide Portfolio, Worldwide Core company may sell its securities to of the concerns that the requirements of Portfolio, International Portfolio, another investment company if the sale section 12(d)(1)(G) were designed to Emerging Markets Portfolio, U.S. will cause the acquiring company to address. Inflation-Indexed Portfolio, and Global own more than 3% of the acquired Inflation-Indexed Hedged Portfolio. It is company’s voting stock, or cause more Applicants’ Conditions than 10% of the acquired company’s expected that Worldwide Portfolio, Applicants agree that the order Worldwide Core Portfolio, International voting stock to be owned by investment granting the requested relief will be Portfolio and Limited Duration Portfolio companies. subject to the following conditions: (the ‘‘Acquiring Portfolios’’) would each 2. Section 12(d)(1)(G) of the Act acquire shares of one or more of the provides that section 12(d)(1) will not 1. Before approving any advisory following Portfolios: U.S. Short-Term apply to securities of an acquired contract under section 15 of the Act, the Portfolio, Emerging Markets Portfolio, company purchased by an acquiring board of directors of the Fund, with Mortgage-Backed Portfolio, U.S. company if: (i) the acquiring company respect to an Acquiring Portfolio, Inflation-Indexed Portfolio and Global and the acquired company are part of including a majority of the directors Inflation-Indexed Hedged Portfolio (the the same group of investment who are not ‘‘interested persons’’ as ‘‘Underlying Funds’’). The Acquiring companies; (ii) the acquiring company defined in section 2(a)(19) of the Act, Portfolios would also invest in certain holds only securities of acquired will find that advisory fees, if any, debt and equity securities or other companies that are part of the same charged under the contract to the financial instruments (‘‘Other group of investment companies, Acquiring Portfolio are based on Securities’’).1 government securities, and short-term services provided that are in addition to, 2. The Manager is registered as an paper; (iii) the aggregate sales loads and rather than duplicative of, services investment adviser under the distribution-related fees of the acquiring provided pursuant to any Underlying Investment Advisers Act of 1940, and is company and the acquired company are Fund’s advisory contract. Such finding, a wholly-owned subsidiary of Charter not excessive under rules adopted and the basis upon which it was made, Atlantic Corporation. The Manager pursuant to section 22(b) or section will be recorded fully in the minute serves as investment adviser for each 22(c) of the Act by a securities books of the Acquiring Portfolio. Portfolio. Applicants request that each association registered under section 15A registered open-end management of the Securities Exchange Act of 1934 2. Applicants will comply with all investment company, or series thereof, or by the Commission; and (iv) the provisions of section 12(d)(1)(G), except that, currently or in the future, is part acquired company has a policy that for section 12(d)(1)(G)(i)(II) to the extent of the same ‘‘group of investment prohibits it from acquiring securities of that it restricts any Acquiring Portfolio companies’’ as the Fund, as defined in registered open-end management from investing in Other Securities as section 12(d)(1)(G)(ii) of the Act, and is investment companies or registered unit described in the application. advised by the Manager or any entity investment trusts in reliance on section For the Commission, by the Division of controlling, controlled by or under 12(d)(1)(F) or (G). Applicants state that Investment Management, under delegated common control with the Manager, be the proposed arrangement would authority. permitted to rely on the order (included in the terms ‘‘Acquiring Portfolios’’ and 2 Applicants state that in the event an Underlying Margaret H. McFarland, ‘‘Underlying Funds’’). Fund is organized in a master-feeder structure, the Deputy Secretary. Acquiring Portfolio would not invest in shares of [FR Doc. 04–2762 Filed 2–9–04; 8:45 am] 3. Applicants believe that the the feeder fund, but in shares of the master proposed structure will provide a more portfolio. In all such cases, the master portfolio BILLING CODE 8010–01–P efficient way for each Acquiring would be part of the same group of investment Portfolio to allocate investment risk of companies as the Acquiring Portfolio. Such master portfolio is included in the term Underlying Fund. portions of a particular index by All existing entities that currently intend to rely on the order are named as applicants. Any Acquiring 1 These investments will not include shares of Portfolio and any Underlying Fund that may rely any registered investment companies that are not in on the order in the future will do so only in the same group of investment companies as the accordance with the terms and conditions of the Acquiring Portfolios. application.

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SECURITIES AND EXCHANGE which cannot be readily categorized the Company Guide. At the time of COMMISSION under the listing criteria for common issuance, the ABS Securities will and preferred stocks, bonds debentures, receive an investment grade rating from [Release No. 34–49136; File No. SR–Amex– 3 2003–99] or warrants. The Amex proposes to list a nationally recognized securities rating for trading under section 107A of the organization (‘‘NRSRO’’). The issuance Self-Regulatory Organizations; Notice Company Guide, the ABS Securities. of the ABS Securities will be a of Filing and Order Granting The Exchange proposed to list and trade repackaging of the Underlying Corporate Accelerated Approval of Proposed under section 107A of the Company Bonds together with the addition of Rule Change by American Stock guide, asset-backed securities (‘‘ABS either Treasury Securities or GSE Exchange LLC Relating to Trust Securities’’) representing ownership Securities,8 with the obligation of the Certificates Linked to a Basket of interests in the Select Notes Trust 2004– Trust to make distributions to holders of Investment Grade Fixed Income 014 (‘‘Trust’’), a special purpose trust to the ABS Securities depending on the Securities be formed by Structured Obligations amount of distributions received by the Corporation (‘‘SOC’’),5 and the trustee of Trust on the Underlying Securities. January 28, 2004. the Trust pursuant to a trust agreement, However, due to the pass-through and Pursuant to section 19(b)(1) of the which will be entered into on the date passive nature of the ABS Securities, the Securities Exchange Act of 1934 that the ABS Securities are issued. The Exchange intends to rely on the assets (‘‘Act’’),1 and Rule 19b–4 thereunder,2 assets of the Trust will consist primarily and stockholder equity of the issuers of notice is hereby given that on November of a basket or portfolio of up to the Underlying Corporate Bonds as well 19, 2003, the American Stock Exchange approximately twenty-five (25) as GSE Securities, rather than the Trust LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with investment-grade fixed-income to meet the requirement in section 107A the Securities and Exchange securities (‘‘Underlying Corporate of the Company Guide. The corporate Commission (‘‘SEC’’ or ‘‘Commission’’) Bonds’’) and United States Department issuers of the Underlying Corporate the proposed rule change as described of Treasury STRIPS or securities issued Bonds and GSE Securities will meet or in items I, II, and III below, which items by the United States Department of the exceed the requirements of section 107A have been prepared by Exchange. The Treasury (‘‘Treasury Securities’’) or of the Company Guide. The distribution Commission is publishing this notice to government sponsored entity securities and principal amount/aggregate market solicit comments on the proposed rule (‘‘GSE Securities’’). In the aggregate, the value requirements found in sections change from interested persons and is component securities of the basket or 107A(b) and (c), respectively, will approving the proposal on an portfolio will be referred to as the otherwise be met by the Trust as issuer accelerated basis. ‘‘Underlying Securities.’’ of the ABS Securities. In addition, the I. Self-Regulatory Organization’s The ABS Securities will conform to Exchange for purposes of including Statement of the Terms of Substance of the initial listing guidelines under Treasury Securities will rely on the fact 6 the Proposed Rule Change section 107A and continued listing that the issuer is the United States guidelines under sections 1001–10037 of The Exchange proposes to approve for government rather than the asset and stockholder tests found in section 107A. listing and trading under section 107A 3 See Securities Exchange Act Release No. 27753 The basket of Underlying Securities of the Amex Company Guide (March 1, 1990), 55 FR 8624 (March 8, 199) (order (‘‘Company Guide’’), trust certificates approving File No. SR–Amex–89–29). will not be managed and will generally linked to a basket of investment grade 4 Telephone conference between Jeffrey P. Burns, remain static over the term of the ABS fixed income debt instruments. Associate General Counsel, Amex, and Florence E. Securities. Each of the Underlying Harmon, Senior Special Counsel, Division of Securities provide for the payment of II. Self-Regulatory Organization’s Market Regulation, Commission (January 5, 2004). 5 interest on a semi-annual basis, but the Statement of the Purpose of, and SOC is a wholly-owned special purpose entity of J.P. Morgan Securities Holdings Inc. and the ABS Securities will provide for monthly Statutory Basis for, the Proposed Rule registrant under the Form S–3 Registration or quarterly distributions of interest. Change Statement (No. 333–67188) under which the Neither the Treasury Securities or GSE securities will be issued. Securities will make periodic payments In its filing with the Commission, the 6 The initial listing standards for the ABS 9 Amex included statements concerning Securities require: (1) A minimum public of interest. The Exchange represents the purpose of and basis for the distribution of one million units; (2) a minimum of proposed rule change and discussed any 400 shareholders; (3) a market value of at least $4 dealings on the Exchange inadvisable. With respect comments it received on the proposed million; and (4) a term of at least one year. to continued listing guidelines for distribution of However, if traded in thousand dollar the ABS Securities, the Exchange will rely on the rule change. The text of these statements denominations, then there is no minimum holder guidelines for bonds in section 1003(b)(iv). Section may be examined at the places specified requirement. In addition, the listing guidelines 1003(b)(iv)(A) provides that the Exchange will in item IV below. The Amex has provide that the issuer have assets in excess of $100 normally consider suspending dealings in, or prepared summaries, set forth in million, stockholder’s equity of at least $10 million, removing from the list, a security if the aggregate and pre-tax income of at least $750,000 in the last market value or the principal amount of bonds sections A, B, and C below, of the most fiscal year or in two of the three prior fiscal years. publicly held is less than $400,000. significant aspects of such statements. In the case of an issuer which is unable to satisfy 8 A GSE Security is a security that is issued by the earning criteria stated in Section 101 of the a government-sponsored entity such as Federal A. Self-Regulatory Organization’s Company Guide, the Exchange pursuant to section National Mortgage Association (‘‘Fannie Mae’’), Statement of the Purpose of, and the 107A of the Company Guide will require the issuer Federal Home Loan Mortgage Corporation (‘‘Freddie Statutory Basis for, the Proposed Rule to have the following: (1) Assets in excess of $200 Mac’’), Student Loan Marketing Association (‘‘Sallie million and stockholders’ equity of at least $10 Mae’’), the Federal Home Loan Banks and the Change million; or (2) assets in excess of $100 million and Federal Farm Credit Banks. All GSE debt is 1. Purpose stockholders’ equity of at least $20 million. sponsored but not guaranteed by the Federal 7 The Exchange’s continued listing guidelines are government, whereas government agencies such as Under section 107A of the Amex set forth in sections 1001 through 1003 of part 10 Government National Mortgage Association Company Guide, the Exchange may to the Exchange’s Company Guide. Section 1002(b) (‘‘Ginnie Mae’’) are divisions of the United States approve for listing and trading securities of the Company Guide states that the Exchange will government whose securities are backed by the full consider removing from listing any security where, faith and credit of the United States. in the opinion of the Exchange, it appears that the 9 A stripped fixed income security, such as a 1 15 U.S.C. 78s(b)(1). extent of public distribution or aggregate market Treasury Security or GSE Security, is a security that 2 17 CFR 240.19b–4. value has become so reduced to make further Continued

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that, to alleviate this cash flow timing return to investors on the ABS (‘‘S&P’’) ‘‘B’’ rating or equivalent rating issue, the Trust will enter into an Securities will not be leveraged. by another NRSRO; or (5) or if no interest distribution agreement The ABS Securities will mature on NRSRO has assigned a rating to the (‘‘Interest Distribution Agreement’’) as the latest maturity date of the issue, an NRSRO has currently assigned described in the prospectus supplement Underlying Securities. Holders of the (i) an investment grade rating to an related to the ABS Securities ABS Securities will have no direct immediately senior issue or (ii) a rating (‘‘Prospectus Supplement’’).10 Principal ability to exercise any of the rights of a that is no lower than a S&P ‘‘B’’ rating distributions on the ABS Securities are holder of an Underlying Corporate or an equivalent rating by another expected to be made on dates that Bond; however, holders of the ABS NRSRO to a pari passu or junior issue. correspond to the maturity dates of the Securities as a group will have the right In addition to the Exchange’s Bond Underlying Securities, (i.e., the to direct the Trust in its exercise of its and Debenture Listing Standards, an Underlying Corporate Bonds and rights as holder of the Underlying Underlying Security must also be of Treasury Securities or GSE Securities). Securities. investment grade quality as rated by an However, some of the Underlying The proposed ABS Securities are NRSRO and at least 75% of the Securities may have redemption virtually identical to Select Notes Trust underlying basket is required to contain provisions and in the event of an early 2003–02, 2003–03, 2003–04 and 2003– Underlying Securities from issuances of redemption or other liquidation (e.g., 05 previously approved by the $100 million or more. The maturity of 12 upon an event of default) of the Commission. The only difference each Underlying Security is expected to Underlying Securities, the proceeds being the actual Underlying Securities match the payment of principal of the from such redemption (including any in the basket of investment grade fixed- ABS Securities with the maturity date of make-whole premium associated with income securities. Accordingly, the the ABS Securities being the latest such redemption) or liquidation will be Exchange proposes to provide for the maturity date of the Underlying distributed pro rata to the holders of the listing and trading of the ABS Securities Securities. Amortization of the ABS ABS Securities. Each Underlying where the Underlying Securities meet Securities will be based on (1) the Corporate Bond will be issued by a the Exchange’s Bond and Debenture respective maturities of the Underlying corporate issuer and purchased in the Listing Standards set forth in section Securities, including Treasury secondary market. 104 of the Amex Company Guide. The Securities or GSE Securities, (2) Exchange represents that all of the In the case of Treasury Securities, the principal payout amounts reflecting the Underlying Securities in the proposed Trust will either purchase the securities pro-rata principal amount of maturing basket will meet or exceed these listing directly from primary dealers or in the Underlying Securities, and (3) any early standards. secondary market, which consists of redemption or liquidation of the primary dealers, non-primary dealers, The Exchange’s Bond and Debenture Listing Standards in Section 104 of the Underlying Securities, including customers, financial institutions, non- Treasury Securities or GSE Securities. financial institutions and individuals. Company Guide provide for the listing Investors will be able to obtain the Similarly, in the case of GSE Securities, of individual bond or debenture prices for the Underlying Securities the trust will either purchase the issuances provided the issue has an through Bloomberg L.P. (‘‘Bloomberg’’) securities directly from the issuer or in aggregate market value or principal or other market vendors, including the the secondary market. amount of at least $5 million and any Holders of the ABS Securities of: (1) The issuer of the debt security has broker-dealer through whom the generally will receive interest on the equity securities listed on the Exchange investor purchased the ABS 13 face value in an amount to be (or on the New York Stock Exchange Securities. In addition, the Bond determined at the time of issuance of (‘‘NYSE’’) or on the Nasdaq National Market Association (‘‘TBMA’’) provides the ABS Securities and disclosed to Market (‘‘Nasdaq’’)); (2) an issuer of links to price and other bond investors. The rate of interest payments equity securities listed on the Exchange information sources on its investor Web will be based upon prevailing interest (or on the NYSE or on the Nasdaq) site at www.investinginbonds.com. rates at the time of issuance and made directly or indirectly owns a majority Transaction prices and volume data for to the extent that coupon payments are interest in, or is under common control the most actively traded bonds on the received from the Underlying Securities. with, the issuer of the debt security; (3) exchanges are also published daily in Distributions of interest will be made an issuer of equity securities listed on newspapers and on a variety of financial monthly or quarterly. Investors will also the Exchange (or on the NYSE or on the Web sites. The National Association of be entitled to be repaid the principal of Nasdaq) has guaranteed the debt Securities Dealers, Inc. (‘‘NASD’’) Trade their ABS Securities from the proceeds security; (4) an NRSRO has assigned a Reporting and Compliance Engine of the principal payments on the current rating to the debt security that (‘‘TRACE’’) will also help investors Underlying Securities.11 The payout or is no lower than an S&P Corporation obtain transaction information for the most active corporate debt securities, is separated into its periodic interest payments and other than payment default. See Prospectus for a such as investment grade corporate principal repayment. The separate strips are then schedule of the distribution of interest and of the bonds.14 For a fee, investors can have sold individually as zero coupon securities principal upon maturity of each Underlying access to intra-day bellwether quotes.15 providing investors with a wide choice of Security and for a description of payment default alternative maturities. and acceleration of the maturity date. 10 Pursuant to the Interest Distribution 12 See Securities Exchange Act Release Nos. 13 The prices of Underlying Securities generally Agreement, shortfalls in the amounts available to 48791 (November 17, 2003), 68 FR 65750 will be determined by one or more market makers pay monthly or quarterly interest to holders of the (November 21, 2003) (File No. SR–Amex–2003–92); in accordance with applicable law and Exchange’s ABS Securities due to the Underlying Securities 48312 (August 8, 2003), 68 FR 48970 (August 15, rules. paying interest semi-annually will be made to the 2003) (File No. SR–Amex–2003–69); 47884 (May 14 See Securities Exchange Act Release No. 43873 Trust by JP Morgan Chase Bank or one of its 16, 2003), 68 FR 28305 (May 23, 2003) (File No. SR– (January 23, 2001), 66 FR 8131 (January 29, 2001) affiliates and will be repaid out of future cash flow Amex–2003–37); 47730 (April 24, 2003), 68 FR (File No. SR–NASD–99–65). Investors are able to received by the Trust from the Underlying 23340 (May 1, 2003) (File No. SR–Amex–2003–25); access TRACE information at http:// Securities. 46923 (November 27, 2002), 67 FR 72247 www.nasdbondinfo.com/. 11 The Underlying Securities may drop out of the (December 4, 2002) (File No. SR–Amex–2002–92); 15 Corporate prices are available at 20-minute basket upon maturity or upon payment default or and 46835 (November 14, 2002), 67 FR 70271 intervals from Capital Management Services at acceleration of the maturity date for any default (November 21, 2002) (File No. SR–Amex–2002–70). http://www.bondvu.com/.

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Price and transaction information for 2. Statutory Basis the principal office of the Amex. All Treasury Securities and GSE Securities The Exchange believes that the submissions should refer to the File No. may also be obtained at http:// proposed rule change is consistent with SR–Amex–2003–99 and should be publicdebt.treas.gov and http:// section 6 of the Act 19 in general and submitted by March 2, 2004. www.govpx.com, respectively. Price furthers the objectives of section IV. Commission’s Findings and Order quotes are also available to investors via 6(b)(5) 20 in particular in that it is proprietary systems such as Bloomberg, Granting Accelerated Approval of designed to prevent fraudulent and Proposed Rule Change Reuters and Dow Jones Telerate. manipulative acts and practices, 16 Valuation prices and analytical data promote just and equitable principles of After careful consideration, the may be obtained through vendors such trade, remove impediments to and Commission finds that the proposed as Bridge Information Systems, Muller perfect the mechanisms of a free and rule change is consistent with the Data, Capital Management Sciences, open market and a national market requirements of the Act and the rules Interactive Data Corporation and Barra. system, and, in general, protect and regulations thereunder applicable to The ABS Securities will be listed in investors and the public interest. a national securities exchange, and, in $1,000 denominations with the particular, with the requirements of Exchange’s existing debt floor trading B. Self-Regulatory Organization’s section 6(b)(5) of the Act.21 The rules applying to trading. First, pursuant Statement on Burden on Competition Commission finds that this proposal is to Amex Rule 411, the Exchange will The Exchange does not believe that similar to several approved equity- impose a duty of due diligence on its the proposed rule change will impose linked instruments currently listed and members and member firms to learn the any burden on competition. traded on the Amex.22 Accordingly, the essential facts relating to every customer Commission finds that the listing and 17 C. Self-Regulatory Organization’s prior to trading the ABS Securities. trading of the ABS Securities is Statement on Comments on the Second, the ABS Securities will be consistent with the Act and will Proposed Rule Change Received From subject to the debt margin rules of the promote just and equitable principles of 18 Members, Participants or Others Exchange. Third, the Exchange will, trade, foster cooperation and prior to trading the ABS Securities, The Exchange did not receive any coordination with persons engaged in distribute a circular to the membership written comments on the proposed rule regulating, clearing, settling, processing providing guidance with regard to change. information with respect to, and member firm compliance III. Solicitation of Comments facilitating transactions in securities, responsibilities (including suitability and, in general, protect investors and recommendations) when handling Interested persons are invited to the public interest consistent with transactions in the ABS Securities and submit written data, views and section 6(b)(5) of the Act.23 arguments concerning the foregoing, highlighting the special risks and As described more fully above, the including whether the proposed rule characteristics of the ABS Securities. ABS Securities are asset-backed change is consistent with the Act. With respect to suitability securities and represent a repackaging of Persons making written submissions recommendations and risks, the the Underlying Corporate Bonds should file six copies thereof with the Exchange will require members, together with the addition of either member organizations and employees Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Treasury Securities or GSE Securities, thereof recommending a transaction in subject to certain distribution of interest the ABS Securities: (1) To determine Washington, DC 20549–0609. obligations of the Trust. The ABS that such transaction is suitable for the Comments may also be submitted Securities are not leveraged customer, and (2) to have a reasonable electronically at the following e-mail instruments. The ABS Securities are basis for believing that the customer can address: [email protected]. All debt instruments whose price will still evaluate the special characteristics of, comment letters should refer to File No. be derived and based upon the value of and is able to bear the financial risks of SR–Amex–2003–99. This file number the Underlying Securities. The such transaction. should be included on the subject line Exchange represents that the value of The Exchange represents that its if e-mail is used. To help the the Underlying Securities will be surveillance procedures are adequate to Commission process and review your determined by one or more market properly monitor the trading of the ABS comments more efficiently, comments makers, in accordance with Exchange Securities. Specifically, the Amex will should be sent in hardcopy or by e-mail rules. Investors are guaranteed at least rely on its existing surveillance but not by both methods. Copies of the the principal amount that they paid for procedures governing debt, which have submission, all subsequent the Underlying Securities. In addition, been deemed adequate under the Act. In amendments, all written statements each of the Underlying Corporate Bonds addition, the Exchange also has a with respect to the proposed rule will pay interest on a semi-annual basis general policy, which prohibits the change that are filed with the while the ABS securities themselves distribution of material, non-public Commission, and all written will pay interest on a monthly or information by its employees. communications relating to the proposed rule change between the quarterly basis, pursuant to the Interest 16 ‘‘Valuation Prices’’ refer to an estimated price Commission and any person, other than Distribution Agreement. Neither the that has been determined based on an analytical those that may be withheld from the Treasury Securities or GSE Securities evaluation of a bond in relation to similar bonds public in accordance with the will make periodic payments of that have traded. Valuation prices are based on interest.24 In addition, the ABS bond characteristics, market performance, changes provisions of 5 U.S.C. 552, will be in the level of interest rates, market expectations available for inspection and copying in and other factors that influence a bond’s value. the Commission’s Public Reference 21 Id. 17 Amex Rule 411 requires that every member, Room. Copies of such filing will also be 22 See supra note 12. member firm or member corporation use due 23 15 U.S.C. 78f(b)(5). In approving this rule, the diligence to learn the essential facts, relative to available for inspection and copying at Commission notes that it has considered the every customer and to every order or account proposed rule’s impact on efficiency, competition, accepted. 19 15 U.S.C. 78f(b). and capital formation. 15 U.S.C. 78c(f). 18 See Amex Rule 462. 20 15 U.S.C. 78f(b)(5). 24 See supra note 9.

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securities will mature on the latest guidelines under section 107A and Securities promptly. Additionally, the maturity date of the Underlying continued listing guidelines under ABS Securities will be listed pursuant Securities. However, due to the pass- sections 1001–1003 of the Company to Amex’s existing hybrid security through nature of the ABS Securities, Guide, except for the assets and listing standards as described above. the level of risk involved in the stockholder equity characteristics of the Based on the above, the Commission purchase or sale of the ABS Securities Trust. At the time of issuance, the believes that there is good cause, is similar to the risk involved in the Commission also notes that the ABS consistent with sections 6(b)(5) and purchase or sale of traditional common Securities will receive an investment 19(b)(2) of the Act 28 to approve the stock. grade rating from an NRSRO. proposal on an accelerated basis. The Commission notes that the The Commission also believes that the Exchange’s rules and procedures that listing and trading of the ABS Securities V. Conclusion address the special concerns attendant should not unduly impact the market It is therefore ordered, pursuant to to the trading of hybrid securities will for the Underlying Securities or raise section 19(b)(2) of the Act,29 that the be applicable to the ABS Securities. In manipulative concerns. As discussed proposed rule change (SR–Amex–2003– particular, by imposing the hybrid more fully above, the Exchange 99) is hereby approved on an listing standards, suitability, disclosure, represents that, in addition to requiring accelerated basis. and compliance requirements noted the issuers of the Underlying Securities above, the Commission believes the meet the Exchange’s section 107A For the Commission, by the Division of Exchange has addressed adequately the listing requirements (in the case of Market Regulation, pursuant to delegated potential problems that could arise from Treasury securities, the Exchange will authority.30 the hybrid nature of the ABS Securities. rely on the fact that the issuer is the Margaret H. McFarland, Moreover, the Commission notes that United States Government rather than Deputy Secretary. the Exchange will distribute a circular the asset and stockholder tests found in [FR Doc. 04–2826 Filed 2–9–04; 8:45 am] to its membership calling attention to section 107A), the Underlying Securities BILLING CODE 8010–01–P the specific risks associated with the will be required to meet or exceed the ABS Securities. Exchange’s Bond and Debenture Listing The Commission notes that the ABS Standards pursuant to section 104 of the SECURITIES AND EXCHANGE Securities are dependent upon the Amex’s Company Guide, which among COMMISSION individual credit of the issuers of the other things, requires that underlying Underlying Securities. To some extent debt instrument receive at least an this credit risk is minimized by the investment grade rating of ‘‘B’’ or [Release No. 34–49180; File No. SR–BSE– Exchange’s listing standards in section equivalent from an NRSRO. 2004–02] 107A of the Company Guide which Furthermore, at least 75% of the basket Self-Regulatory Organizations; Notice provide that only issuers satisfying asset is required to contain Underlying of Filing and Immediate Effectiveness and equity requirements may issue Securities from issuances of $100 of Proposed Rule Change by the securities such as the ABS Securities. In million or more. The Amex also Boston Stock Exchange, Inc. Relating addition, the Exchange’s ‘‘Other represents that the basket of Underlying to Complex Orders Securities’’ listing standards further Securities will not be managed and will provide that there is no minimum remain static over the term of the ABS February 3, 2004. holder requirement if the securities are securities. In addition, the Amex’s traded in thousand dollar surveillance procedures will serve to Pursuant to Section 19(b)(1) of the 25 deter as well as detect any potential Securities Exchange Act of 1934 denominations. The Commission 1 2 notes that the Exchange has represented manipulation. (‘‘Act’’), and Rule 19b–4 thereunder, that the ABS Securities will be listed in The Commission notes that the notice is hereby given that on January $1000 denominations with its existing investors may obtain price information 28, 2004 the Boston Stock Exchange, debt floor trading rules applying to the on the Underlying Securities through Inc. (‘‘BSE’’ or ‘‘Exchange’’) filed with trading. In any event, financial market venders such Bloomberg, or the Securities and Exchange information regarding the issuers of the though Web sites such as http:// Commission (‘‘Commission’’) the Underlying Securities will be publicly www.investinginbonds.com (for proposed rule change as described in available.26 Underlying Corporate Bonds) and Items I, II, and III below, which Items Due to the pass-through and passive http://publicdebt.treas.gov and http:// have been prepared by the Exchange. nature of the ABS Securities, the www.govpx.com (for Treasury Securities The Commission is publishing this Commission does not object to the and GSE Securities, respectively). notice to solicit comments on the Exchange’s reliance on the assets and The Commission finds good cause for proposed rule change from interested stockholder equity of the Underlying approving the proposed rule change persons. prior to the thirtieth day after the date Securities rather than the Trust to meet I. Self-Regulatory Organization’s of publication of notice thereof in the the requirement in section 107A of the Statement of the Terms of Substance of Federal Register. The Amex has Company Guide. The Commission notes the Proposed Rule Change that the distribution and principal requested accelerated approval because amount/aggregate market value these products are virtually identical to The Exchange proposes to amend its requirements found in sections 107A(b) Select Notes Trust currently listed and rule regarding Complex Orders. The text 27 and (c), respectively, will otherwise be traded on the Amex. The Commission of the proposed rule change is available met by the Trust as issuer of the ABS believes that the ABS Securities will at the Exchange and at the Commission. Securities. Thus, the ABS Securities provide investors with an additional will conform to the initial listing investment choice and that accelerated 28 15 U.S.C. 78f(b)(5) and 78s(b)(2). approval of the proposal will allow 29 15 U.S.C. 78o–3(b)(6) and 78s(b)(2). 25 See Company Guide section 107A. investors to begin trading the ABS 30 17 CFR 200.30–3(a)(12). 26 The ABS Securities will be registered under 1 15 U.S.C. 78s(b)(1). section 12 of the Act. 27 See supra note 12. 2 17 CFR 240.19b–4.

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II. Self-Regulatory Organization’s the strategy created and the time when Commission may designate; and the Statement of the Purpose of, and Complex Orders on the new strategy Exchange has given the Commission Statutory Basis for, the Proposed Rule will begin to trade. Trading would not written notice of its intention to file the Change begin until at least five minutes has proposed rule change. At any time In its filing with the Commission, the elapsed from the time the advisory within 60 days of the filing of the Exchange included statements message was sent from BOX to all BOX proposed rule change, the Commission concerning the purpose of and basis for Participants. Any Complex Orders on may summarily abrogate such rule the proposed rule change and discussed the newly-created strategy that are change if it appears to the Commission any comments it received on the received prior to the start of trading that such action is necessary or proposed rule change. The text of these would be placed in the Complex Order appropriate in the public interest, for statements may be examined at the Book. Complex Orders on the Complex the protection of investors, or otherwise places specified in Item IV below. The Order Book are not disseminated to the in furtherance of the purposes of the Exchange has prepared summaries, set Options Price Reporting Authority Act. (‘‘OPRA’’), but are separately Under Rule 19b–4(f)(6)(iii) of the forth in sections A, B, and C below, of 7 the most significant aspects of such disseminated by BOX through a Act, the proposed rule change does not statements. broadcast to all BOX Participants, become operative for 30 days after the showing the five best limits for each date of filing, or such shorter time as the A. Self-Regulatory Organization’s strategy. Trading in the newly-created Commission may designate if consistent Statement of the Purpose of, and strategy would commence at the time with the protection of investors and the Statutory Basis for, the Proposed Rule announced in the advisory message. public interest. The Exchange has Change requested that the Commission 2. Statutory Basis 1. Purpose accelerate the thirty-day operative date The Exchange believes that the of the proposal and waive the The purpose of the proposed rule proposed rule change is consistent with requirement that the Exchange submit change is to amend Chapter V, Section the requirements of Section 6(b) of the the pre-filing period written notice of its 27 of the Rules of the Boston Options Act,3 in general, and Section 6(b)(5) of intent to file the proposed rule change Exchange (the ‘‘BOX Rules’’) relating to the Act,4 in particular, in that it is at least five business days prior to the the trading of Complex Orders. The designed to promote just and equitable filing date, so that the Exchange may Exchange is proposing to amend Section principles of trade, to remove remain competitive with other 27 by adding new paragraph (c) impediments to and perfect the exchanges that currently have similar specifying the process by which Boston mechanism of a free and open market rules in effect and may begin the trading Options Exchange (‘‘BOX’’) Options and a national market system, and of Complex Orders in options on the Participants (‘‘BOX Participants’’) must protect investors and the public interest Exchange. The Commission, consistent notify BOX of a proposed Complex by granting the Exchange greater with the protection of investors and the Order strategy. The Exchange is also authority to regulate the trading of public interest, has determined to waive setting forth, in the same paragraph, that Complex Orders. the requirements that notice be filed at an advisory message regarding a least five business days prior to the Complex Order strategy would be sent B. Self-Regulatory Organization’s filing and to accelerate the 30-day by BOX to all BOX Participants at its Statement on Burden on Competition operative date to February 3, 2004,8 and, creation and prior to the start of its The Exchange does not believe that therefore, the proposal is effective and trading. the proposed rule change will impose operative on that date. Each Complex Order strategy would any burden on competition. be treated as a separate trading IV. Solicitation of Comments instrument on the Complex Order Book. C. Self-Regulatory Organization’s Interested persons are invited to During the trading day BOX would Statement on Comments on the submit written data, views, and maintain a listing, accessible to all BOX Proposed Rule Change Received From arguments concerning the foregoing, Participants through the BOX system, of Members, Participants, or Others including whether the proposed rule all Complex Order strategies available The Exchange has neither solicited change is consistent with the Act. on BOX. This list would not show any nor received comments on the proposed Persons making written submissions orders or prices. A BOX Participant who rule change. should file six copies thereof with the wishes to propose trading in a Complex Secretary, Securities and Exchange Order strategy, that is not already listed III. Date of Effectiveness of the Commission, 450 Fifth Street, NW., as available on the BOX Complex Order Proposed Rule Change and Timing for Washington, DC 20549–0609. Book, must either send an electronic Commission Action Comments may also be submitted Complex Order strategy request to BOX The foregoing rule change has become electronically at the following e-mail through the BOX trading system or effective pursuant to section 19(b)(3)(A) address: [email protected]. All make a telephone request with the BOX of the Act 5 and Rule 19b-4(f)(6) 6 comment letters should refer to File No. Market Operations Center. Along with thereunder because it does not: (i) SR–BSE–2004–02. This file number this request, the BOX Participant may Significantly affect the protection of should be included on the subject line also place a Complex Order in the investors or the public interest; (ii) if e-mail is used. To help the proposed strategy. BOX would check impose any significant burden on Commission process and review your each strategy request to validate that the competition; and (iii) become operative comments more efficiently, comments option components of the strategy are for 30 days from the date on which it should be sent in hardcopy or by e-mail listed on BOX and that the Complex was filed, or such shorter time as the Order type is available on BOX. 7 17 CFR 240.19b–4(f)(6)(iii). 8 For purposes only of accelerating the 30-day After validation, an ‘‘advisory’’ 3 15 U.S.C. 78f(b). operative period for this proposal, the commission message regarding the Complex Order 4 15 U.S.C. 78f(b)(5). has considered the proposed rule’s impact on strategy would be sent by BOX to all 5 15 U.S.C. 78s(b)(3)(A). efficiency, competition and capital formation. 15 BOX Participants, stating the terms of 6 17 CFR 240.19b–4(f)(6). U.S.C. 78c(f).

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but not by both methods. Copies of the comments on the proposed rule change II. Self-Regulatory Organization’s submission, all subsequent from interested persons. Statement of the Purpose of, and amendments, all written statements Statutory Basis for, the Proposed Rule with respect to the proposed rule I. Self-Regulatory Organization’s Change change that are filed with the Statement of the Terms of Substance of the Proposed Rule Change In its filing with the Commission, the Commission, and all written Exchange included statements communications relating to the The BSE proposes to add new concerning the purpose of and basis for proposed rule change between the paragraph (f), relating to anticipatory the proposed rule change and discussed Commission and any person, other than hedging, to Chapter III, ‘‘Business any comments it received on the those that may be withheld from the proposed rule change. The text of these public in accordance with the Conduct,’’ Section 4, ‘‘Prevention of the Misuse of Material Nonpublic statements may be examined at the provisions of 5 U.S.C. 552, will be places specified in Item IV below. The available for inspection and copying in Information,’’ of the Boston Options Exchange trading rules (‘‘BOX Rules’’). Exchange has prepared summaries, set the Commission’s Public Reference forth in sections (A), (B), and (C) below, Proposed new language is italicized. Room. Copies of such filings will also be of the most significant aspects of such available for inspection and copying at * * * * * statements. the principal office of the Exchange. All submissions should refer to File No. Chapter III Business Conduct A. Self-Regulatory Organization’s SR–BSE–2004–02 and should be Statement of the Purpose of, and Sec. 4 Prevention of the Misuse of submitted by March 2, 2004. Statutory Basis for, the Proposed Rule Material NonPublic Information Change For the Commission, by the Division of (a)–(e) no change Market Regulation, pursuant to delegated 1. Purpose authority.9 (f) It may be considered conduct The purpose of the proposed rule Margaret H. McFarland, inconsistent with just and equitable change is to add new paragraph (f), Deputy Secretary. principles of trade for any Participant or relating to anticipatory hedging, to [FR Doc. 04–2760 Filed 2–9–04; 8:45 am] person associated with a Participant Chapter III, ‘‘Business Conduct,’’ BILLING CODE 8010–01–P who has knowledge of all material terms Section 4, ‘‘Prevention of the Misuse of and conditions of: Material Nonpublic Information,’’ of the (i) an order and a solicited order, BOX Rules. Currently, Chapter III, SECURITIES AND EXCHANGE Section 4 of the BOX Rules contains COMMISSION (ii) an order being facilitated or submitted to the Price Improvement policies and procedural requirements, [Release No. 34–49171; File No. SR–BSE– as well as definitional language, Period, or 2004–03] regarding the obligations of Boston (iii) orders being crossed; Options Exchange participants (‘‘BOX Self-Regulatory Organizations; Notice Participants’’) to prevent the misuse of of Filing and Immediate Effectiveness the execution of which are imminent, to enter, based on such knowledge, an material nonpublic information. To of Proposed Rule Change by the remain consistent with similar rules of Boston Stock Exchange, Inc. Relating order to buy or sell an option for the same underlying security as any option other options exchanges, the BSE is to Its Boston Options Exchange proposing to adopt new paragraph (f) that is the subject of the order, or an Trading Rules regarding anticipatory hedging. The rest order to buy or sell the security of Chapter III, Section 4, will remain February 2, 2004. underlying such class, or an order to Pursuant to Section 19(b)(1) of the unchanged. buy or sell any related instrument until Paragraph (f) would expressly Securities Exchange Act of 1934 (a) the terms and conditions of the order (‘‘Act’’),1 and Rule 19b–4 thereunder,2 prohibit any BOX Participant or person and any changes in the terms and notice is hereby given that on January associated with a BOX Participant who conditions of the order of which the 29, 2004, the Boston Stock Exchange, has knowledge of the material terms and Inc. (‘‘BSE’’ or ‘‘Exchange’’) filed with Participant or person associated with conditions of a solicited order, an order the Securities and Exchange the Participant has knowledge are being facilitated or submitted to the Commission (‘‘Commission’’) the disclosed to the trading crowd, or (b) the Price Improvement Period (‘‘PIP’’),6 or proposed rule change as described in trade can no longer reasonably be orders being crossed, the execution of Items I, II, and III below, which Items considered imminent in view of the which are imminent, from entering, have been prepared by the Exchange.3 passage of time since the order was based on such knowledge, an order to The BSE has submitted the proposed received. The terms of an order are buy or sell an option for the same rule change under Section 19(b)(3)(A) of ‘‘disclosed’’ to the trading crowd on underlying security; an order to buy or the Act 4 and Rule 19b–4(f)(6) BOX when the order is entered into the sell the security underlying such class; thereunder,5 which renders the proposal BOX Book or the Price Improvement or an order to buy or sell any related effective upon filing with the Period, as defined in Chapter V, Section instrument. The prohibition would Commission. The Commission is 18 of these Rules. For purposes of this remain in effect until the terms and publishing this notice to solicit Paragraph (f), an order to buy or sell a conditions of such solicited, facilitated, ‘‘related instrument’’ means, in PIP or crossed order are disclosed to the 9 17 CFR 200.30–3(a)(12). reference to an index option, an order trading crowd, or until the trade can no 1 15 U.S.C. 78s(b)(1). to buy or sell securities comprising 10% longer reasonably be considered 2 17 CFR 240.19b–4. imminent in view of the passage of time 3 or more of the component securities in File No. SR–BSE–2004–03 replaces and since the order was received. supersedes File No. SR-BSE–2003–24. See letter the index or an order to buy or sell a To allow BOX Participants to know from John Boese, Vice President, Legal and futures contract on an economically Compliance, BSE, dated January 23, 2004. what constitutes a ‘‘related instrument’’ 4 15 U.S.C. 78s(b)(3)(A). equivalent index. 5 17 CFR 240.19b–4(f)(6). * * * * * 6 See BOX Rules Chapter V, Section 18.

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in reference to an index option, burden on competition not necessary or At any time within 60 days of the paragraph (f) clarifies that an order to appropriate in furtherance of the filing of such proposed rule change, the buy or sell a related instrument means, purposes of the Act. Commission may summarily abrogate in reference to an index option, an order C. Self-Regulatory Organization’s such rule change if it appears to the to buy or sell securities comprising 10% Statement on Comments on the Commission that such action is or more of the component securities in Proposed Rule Change Received From necessary or appropriate in the public the index or an order to buy or sell a Members, Participants or Others interest, for the protection of investors, futures contract on an economically or otherwise in furtherance of the equivalent index. The BSE has neither solicited nor purposes of the Act. Under the proposal, a violation of received comments on the proposed paragraph (f) may be considered rule change. IV. Solicitation of Comments conduct inconsistent with just and equitable principles of trade.7 The III. Date of Effectiveness of the Interested persons are invited to purpose of the proposed rule is to Proposed Rule Change and Timing for submit written data, views and expressly prohibit anticipatory hedging Commission Action arguments concerning the foregoing, that is based on inside information. The The BSE has filed the proposed rule including whether the proposed rule Exchange believes that a codified change pursuant to Section 19(b)(3)(A) change is consistent with the Act. prohibition, and the proposed language of the Act 11 and subparagraph (f)(6) of Persons making written submissions stating that a violation of the rule may Rule 19b–4 thereunder.12 Because the should file six copies thereof with the be considered conduct inconsistent with foregoing proposed rule change: (1) Secretary, Securities and Exchange just and equitable principles of trade, Does not significantly affect the Commission, 450 Fifth Street, NW., should function as a deterrent to protection of investors or the public Washington, DC 20549–0609. possible manipulative practices based interest; (2) does not impose any Comments may also be submitted on inside information.8 significant burden on competition; and electronically at the following e-mail 2. Statutory Basis (3) does not become operative for thirty address: [email protected]. All days from the date on which it was comment letters should refer to File No. The Exchange believes that the filed, or such shorter time as the SR–BSE–2004–03. This file number proposal is consistent with the Commission may designate if consistent should be included on the subject line requirements of Section 6(b) of the Act,9 with the protection of investors and the if e-mail is used. To help the in general, and Section 6(b)(5) of the public interest, the proposed rule Act,10 in particular, in that it is designed Commission process and review change has become effective pursuant to comments more efficiently, your to promote just and equitable principles Section 19(b)(3)(A) of the Act and Rule of trade, to remove impediments to and comments should be sent in hardcopy 19b–4(f)(6) thereunder. The BSE or by e-mail but not by both methods. perfect the mechanism of a free and provided the Commission with written Copies of the submission, all subsequent open market and a national market notice of its intent to file the proposed amendments, all written statements system, and protect investors and the rule change at least five business days with respect to the proposed rule public interest by granting the Exchange prior to the filing date. change that are filed with the greater authority to regulate anticipatory A proposed rule change filed under Commission, and all written hedging. Rule 19b–4(f)(6) normally does not communications relating to the B. Self-Regulatory Organization’s become operative prior to 30 days after proposed rule change between the Statement on Burden on Competition the date of filing. However, Rule 19b– 4(f)(6)(iii) permits the Commission to Commission and any person, other than The BSE does not believe that the designate a shorter time if such action those that may be withheld from the proposed rule change will impose any is consistent with the protection of public in accordance with the 13 provisions of 5 U.S.C. 552, will be 7 See BSE Rules of the Board of Governors investors and the public interest. The Chapter II, Section 14, stating that a member, BSE has requested that the Commission available for inspection and copying in member organization, or person associated with or waive the 30-day operative delay to the Commission’s Public Reference employed by a member or member organization allow the BSE to remain competitive Section, 450 Fifth Street, NW., shall not engage in conduct inconsistent with just Washington, DC 20549. Copies of such and equitable principles of trade. Other BOX Rules with other options exchanges that expressly reference just and equitable principles of currently have similar rules in effect. filing will also be available for trade. See, e.g., BOX Rules Chapter V, Section 18(f) The Commission believes waiving the inspection and copying at the principal and (i), Section 27.01 and Chapter VII, Section 1(d). 30-day operative delay is consistent office of the BSE. All submissions The lack of express reference in other BSE rules should not be construed as waiving the ability to with the protection of investors and the should refer to File No. SR–BSE–2004– make a violation of Chapter II, Section 14 of the public interest. Acceleration will allow 03 and should be submitted by March BSE Rules of the Board of Governors, co-exist with the BSE to institute its anticipatory 2, 2004. any other violation, depending on the facts and hedging rules immediately. For these circumstances of the case. The Exchange believes reasons, the Commission, consistent For the Commission, by the Division of that a violation of the existing crossing, facilitation Market Regulation, pursuant to delegated with the protection of investors and the and solicitation provisions of the BOX Rules could authority.14 be a violation of just and equitable principles of public interest has determined to make trade and could be subject to disciplinary action as the proposed rule change operative as of Margaret H. McFarland, such. In addition, a violation of paragraph (f) of Deputy Secretary. Chapter III, Section 4 of the BOX Rules, for January 29, 2004. instance, could be in and of itself a stand-alone [FR Doc. 04–2806 Filed 2–9–04; 8:45 am] violation. 11 15 U.S.C. 78s(b)(3)(A). BILLING CODE 8010–01–U 8 Depending on the facts and circumstances 12 17 CFR 240.19b–4(f)(6). surrounding individual cases, anticipatory hedging 13 For purposes only of accelerating the operative activity may be a violation of other BSE Rules or date of this proposal, the Commission has rules under the Act. considered the proposed rule’s impact on 9 15 U.S.C. 78f(b). efficiency, competition, and capital formation. 15 10 15 U.S.C. 78f(b)(5). U.S.C. 78c(f). 14 17 CFR 200.30–3(a)(12).

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SECURITIES AND EXCHANGE CBOE’s Nominating Committee electronic mail, as well as in person or COMMISSION The proposal amends CBOE by mail or telephone as is currently provided in Section 10.1 while deleting [Release No. 34–49184; File No. SR–CBOE– Constitution Section 4.1(b) to allow a 2003–55] member of the Nominating Committee wireless, telegraph, and cable as who was elected to a term of less than available communication methods. In Self-Regulatory Organizations; Order three years as a result of a vacancy to addition, the proposal amends Approving Proposed Rule Change and stand for reelection. The proposal also Constitution Section 10.2 to allow for Amendment No. 1 Thereto by the deletes from CBOE Constitution Section the waiver of notice by the same means Chicago Board Options Exchange, Inc. 4.3 the requirements that the as notice may be given. To Amend Provisions of Its Nominating Committee hold three Provisions for Notice to CBOE Members Constitution and Rules Pertaining to meetings in October, and that it the Governance of the Exchange announce its slate of candidates no later The proposal adopts new CBOE February 4, 2004. than October 10th or the first business Constitution Section 10.1(b) which day thereafter if October 10th is not a limits the types of notices that may be I. Introduction business day. In addition, the proposal given via e-mail to those notices On November 19, 2003, the Chicago adopts new CBOE Constitution Section provided in the Exchange Bulletin and Board Options Exchange, Inc. (‘‘CBOE’’ 4.8 to require that members of the Regulatory Bulletin and any other types or ‘‘Exchange’’) filed with the Securities Nominating Committee continuously of notices designated by the Board. and Exchange Commission meet the eligibility criteria for the CBOE Constitution Section 10.1(b) will (‘‘Commission’’), pursuant to Section category to which they were elected. specifically provide that the Exchange 19(b)(1) of the Securities Exchange Act New Constitution Section 4.8 also may provide the Exchange Bulletin and of 1934 (‘‘Act’’),1 and Rule 19b–4 specifies that the Board of Directors the Regulatory Bulletin (including the thereunder,2 a proposed rule change to alone determines whether a Nominating notices contained therein) by e-mail. In Committee member satisfies the amend provisions of CBOE’s addition, Section 10.1(b) will allow the qualification criteria for the category to Constitution and rules pertaining to the Exchange to permit members and which he or she was elected and that a governance of the Exchange. On associated persons to request delivery of member of the Nominating Committee December 11, 2003, CBOE submitted the Bulletins (or such other notices as who fails to maintain the applicable Amendment No. 1 to the proposed rule the Board may designate) by other change. The proposed rule change, as qualifications has 45 days from the date the Board determines the member is not means, in a form and manner prescribed amended, was published for comment by the Exchange. in the Federal Register on December 29, qualified to requalify. During any period 2003.3 No comments were received on in which a member of the Nominating Securities Transaction Policy the proposed rule change. This order Committee fails to maintain the approves the proposed rule change, as applicable qualifications, the member The proposal deletes CBOE amended. shall be deemed not to hold office and Constitution Section 11.4, which the seat formerly held by the member generally prohibited officers and II. Description of the Amended shall be deemed to be vacant for all employees of the Exchange from trading Proposal purposes. The proposal also adopts new any CBOE-listed option and required Terms of Office of Directors and Vice CBOE Constitution Section 4.9, which them to report to the Exchange every Chairman specifies that the Board may remove a purchase or sale of any security Nominating Committee member in the underlying a CBOE-listed option. CBOE The proposed rule change will amend event of the refusal, failure, neglect, or has represented that the securities CBOE Constitution Sections 6.1(b), 6.4, inability to discharge his or her duties, and 8.1 to specify that Directors and the transaction policy will now be included or for any cause affecting the best Vice Chairman take office on January 1. in the Exchange Employee Handbook, interests of the Exchange. Currently, the term of office of Directors instead of in the Exchange’s starts at the first regular meeting of the Election and Voting Procedures Constitution. The proposal also deletes from CBOE Rule 9.17 the requirement Board held after January 1 following the The proposal adopts CBOE annual election, while the Vice that a member organization must obtain Constitution Section 3.8 to authorize the authorization from the CBOE before Chairman’s term starts on the 3rd Friday Board to set a ‘‘record date’’ to in December of each year. The proposal executing securities transactions for determine which members are entitled officers or employees of any national also amends CBOE Constitution Section to receive notice and to vote in any 6.3(b) to provide the later of 45 days or securities exchange that is a participant Exchange election or vote. The record of The Options Clearing Corporation. until the next regular Board meeting for date will be the day preceding the date a Director who fails to maintain on which notice of the vote is given, if CBOE has represented that it plans to qualifications for a designated category an alternate record date is not fixed by liberalize the securities transaction to requalify. During any period in which the Board. The proposal also amends policies to allow employees (with a Director fails to maintain CBOE Constitution Section 5.2 to certain restrictions applicable to qualifications for a designated category, provide that the Exchange may allow Regulatory Services Division the Director shall be deemed not to hold voting members to electronically submit employees) to trade CBOE-listed office and the seat formerly held by the ballots and proxies and to provide for a products and to require employees to Director shall be deemed vacant for all confidential electronic or online voting report transactions in CBOE listed purposes. process in the future, if the Board products to the Exchange. In addition, determines to do so. The proposal also CBOE Rule 9.17 will continue to require 1 15 U.S.C. 78s(b)(1). member organizations to obtain 2 amends CBOE Constitution Section 10.1 17 CFR 240.19b–4. authorization from the CBOE before 3 See Securities Exchange Act Release No. 48950 to allow the Exchange to give notice to (December 18, 2003), 68 FR 74991 (‘‘Notice of members and associated persons by executing securities transactions for Proposed Rule Change’’). messenger, courier service, facsimile or CBOE officers and employees.

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Composition of the MTS Committee Terms of Office for Committee Members practices, and, in general, protect investors and the public interest. The proposed rule change also CBOE is amending Rule 8.82 to The Commission believes that the amends CBOE Rule 2.1 to provide that modify the composition of the MTS proposed rule change should clarify the term of office for committee Committee. Under the proposed rule CBOE’s Constitution with respect to the members appointed pursuant to that change, the nine elected members of the terms of office of its Directors and Rule will continue until the first regular MTS Committee will include: three committee members, as well as the Board meeting of the next calendar year persons whose primary business is as a composition of its Nominating and until their successors are appointed Market-Maker, three persons whose Committee and thereby should increase or until death, resignation or removal. In primary business is as a Market-Maker the efficiency of CBOE’s governance. In addition, amended Rule 2.1 provides or as a Designated Primary Market addition, the Commission believes that that any action taken by majority of the Maker (‘‘DPM’’) Designee, and three the amendments to the composition of committee members voting, as opposed persons whose primary business is as a CBOE’s MTS Committee are consistent to present, at a meeting shall be the act with its obligation to ensure its Floor Broker, at least two of whom of the committee. represent public customer business in members are fairly represented in the the course of their activities as a Floor Other Business Activities of the administration of its affairs, and should Broker. The proposal removes a President of the Exchange permit CBOE to include representatives of diversified broker-dealers on the provision requiring that no more than The Exchange also is amending CBOE two members of the MTS Committee be Committee without permitting the Constitution Section 8.6 to allow the Committee to become dominated by any associated with a DPM. The Vice Board of Directors to exempt the Chairman of the Exchange and the one type of member constituency. President from the prohibition against Further, the Commission believes that Chairman of the Market Performance engaging in any business other than as Committee will continue to serve on the the proposed rule change should update President of the Exchange, in the same CBOE’s election and voting procedures, MTS Committee. manner that the Board may exempt the as well as the methods by which CBOE The amendments to CBOE Rule 8.82 Chairman of the Board pursuant to may provide notice to its members. also provide that one of the nine elected Constitution Section 8.2. The positions on the MTS Committee may Commission notes that the Pacific IV. Conclusion instead be filled by a lessor whose Exchange, Inc. (‘‘PCX’’) has a similar For the foregoing reasons, the 4 primary business is not as a Market- provision in its Constitution. In Commission finds that the proposed Maker, DPM Designee, or Floor Broker, addition, the Commission notes that rule change, as amended, is consistent and whose primary residence is located under CBOE Rule 8.1(d), the President with the requirements of the Act and cannot be affiliated with a CBOE within 80 miles of the Exchange’s rules and regulations thereunder. member. trading floor. In addition, the It is therefore ordered, pursuant to amendments to Rule 8.82 provide that In addition to the changes described Section 19(b)(2) of the Act,8 that the the sole judge of whether a candidate above, the Exchange is adopting changes proposed rule change, as amended, (SR- satisfies the applicable qualifications for to several provisions of its Constitution CBOE–2003–55) is approved. election to the MTS Committee in a and rules that are intended to update those provisions to reflect current For the Commission, by the Division of designated category shall be the Market Regulation, pursuant to delegated practice. Those changes are described in Nominating Committee, in the case of authority.9 the Notice of Proposed Rule Change. candidates nominated by the Margaret H. McFarland, Nominating Committee, or the III. Discussion Deputy Secretary. Executive Committee, in the case of After careful review, the Commission [FR Doc. 04–2824 Filed 2–9–04; 8:45 am] candidates nominated by petition, and finds that the proposed rule change, as BILLING CODE 8010–01–P the decision of the respective committee amended, is consistent with the shall be final. The proposal further requirements of the Act and the rules amends CBOE Rule 8.82 to provide that: SECURITIES AND EXCHANGE and regulations thereunder applicable to COMMISSION (i) no elected member of the MTS a national securities exchange.5 In Committee may be affiliated with any particular, the Commission finds that other elected member of the MTS the proposal is consistent with the [Release No. 34–49188; File No. SR–CHX– Committee; (ii) the term of office of requirements of Sections 6(b)(3) 6 and 2003–17] elected MTS Committee members will 7 6(b)(5) of the Act. Section 6(b)(3) Self-Regulatory Organizations; Order commence at the time of the first regular requires, among other things, that the Board meeting of the calendar year; (iii) Approving Proposed Rule Change and CBOE’s rules assure a fair representation Amendment No. 1 Thereto by the the Board of Directors is the sole judge of its members in the administration of Chicago Stock Exchange, Incorporated of whether or not an MTS Committee its affairs. Section 6(b)(5) requires, Relating to Automatic Quotations member no longer qualifies to serve on among other things, that CBOE’s rules the Committee; (iv) the Board may be designed to promote just and February 4, 2004. remove MTS Committee members for equitable principles of trade, to prevent On June 16, 2003, the Chicago Stock cause; and (v) the Vice Chairman, with fraudulent and manipulative acts and Exchange, Incorporated (‘‘CHX’’ or the approval of the Board, may fill ‘‘Exchange’’) filed with the Securities vacancies on the MTS Committee until 4 See PCX Constitution Section 2(a). and Exchange Commission the first regular Board meeting of the 5 In approving this proposed rule change, the (‘‘Commission’’), pursuant to Section calendar year following the next annual Commission has considered the proposed rule’s impact on efficiency, competition, and capital 19(b)(1) of the Securities Exchange Act election. The MTS Committee monitors formation. 15 U.S.C. 78c(f). and implements the Exchange’s DPM 6 15 U.S.C. 78f(b)(3). 8 15 U.S.C. 78s(b)(2). program. 7 15 U.S.C. 78f(b)(5). 9 17 CFR 200.30–3(a)(12).

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of 1934 (‘‘Act’’),1 and Rule 19b–4 have any negative effect on execution change.6 On January 29, 2004, the NYSE thereunder,2 a proposed rule change prices. filed Amendment No. 4 to the proposed that would delete an interpretation of It is therefore ordered, pursuant to rule change.7 This order approves the CHX Article XX, Rule 7 that prohibits Section 19(b)(2) of the Act,7 that the proposed rule change, as amended. specialists from disseminating proposed rule change, as amended, (SR– II. Description of the Proposed Rule automatically-generated quotations that CHX–2003–17) be, and it hereby is, Change are more than $.10 away from the approved. Intermarket Trading System best bid or The NYSE filed the proposed rule For the Commission, by the Division of change to codify long-standing offer. On November 26, 2003, CHX filed Market Regulation, pursuant to delegated Amendment No. 1 to the proposed rule authority.8 interpretive material to several NYSE 3 rules and to respond to change. The Federal Register Margaret H. McFarland, recommendations made by an published the proposed rule change, as Deputy Secretary. amended, for comment on December 31, independent consultant retained by the [FR Doc. 04–2807 Filed 2–9–04; 8:45 am] 8 2003.4 The Commission received no NYSE. BILLING CODE 8010–01–P comments on the proposal. A. NYSE Rule 72 The Commission finds that the NYSE Rule 72 delineates the basic proposed rule change is consistent with SECURITIES AND EXCHANGE rule governing the priority and the requirements of the Act and the COMMISSION precedence of bids and offers at the rules and regulations thereunder same price on the Exchange. NYSE Rule applicable to a national securities [Release No. 34–49183; File No. SR–NYSE– 72(b) provides that certain types of 5 2002–32] exchange. In particular, the agency cross transactions at a given Commission believes that the proposed price receive priority over pre-existing rule change is consistent with Section Self-Regulatory Organizations; New York Stock Exchange, Inc.; Order bids or offers at that price. The 6(b)(5) of the Act,6 which requires, Exchange proposes to add a sentence to among other things, that an exchange’s Approving Proposed Rule Change and Amendment Nos. 1, 2, 3, and 4 To NYSE Rule 72(b) to clarify that a broker rules be designed to remove whose cross is broken up because impediments to and perfect the Incorporate Interpretive Material to Several NYSE Rules another member has provided price mechanism of a free and open market improvement must follow the crossing and a national market system, and, in February 4, 2004. procedures of NYSE Rule 76 before general, to protect investors and the completing the balance of the cross. public interest. The CHX has I. Introduction The Exchange is also proposing to add represented that, following the On August 12, 2002, the New York an example to NYSE Rule 72(b) to securities industry’s transition to Stock Exchange (‘‘NYSE’’ or illustrate its interpretation that a sale decimal pricing, the consolidated ‘‘Exchange’’) filed with the Securities ‘‘clears the floor,’’ meaning all bids and quotations in the national securities and Exchange Commission offers not satisfied in a given transaction markets flicker significantly throughout (‘‘Commission’’), pursuant to section are deemed to be simultaneously re- the trading day. Consequently, the 19(b)(1) of the Securities Exchange Act entered and on parity with each other. quotations generated by CHX’s auto- 1 of 1934 (‘‘Act’’) and Rule 19b–4 B. NYSE Rule 75 quote functionality flicker significantly thereunder,2 a proposed rule change to during the trading day, resulting in incorporate interpretive material to The Exchange is proposing to codify significant, costly quotation traffic. several existing NYSE Rules. On March formally in NYSE Rule 75 its long- Given that the Consolidated Quotation 11, 2003, the Exchange filed standing practice that Floor disputes Association is now charging Amendment No. 1 to the proposed rule involving $10,000 or more, or participants based on their capacity change.3 On May 21, 2003, the questioned trades, can be referred for requirements, CHX wants to eliminate Exchange filed Amendment No. 2 to the resolution to a panel of three Floor any unnecessary use of capacity. The proposed rule change.4 Governors, Senior Floor Officials, or Commission notes that, since automatic On June 9, 2003, the proposed rule executions are required to be executed change, as amended by Amendment 6 See letter from Mary Yeager, Assistant Secretary, NYSE, to Nancy J. Sanow, Assistant Director, at the national best bid or offer in effect Nos. 1 and 2, was published for Division, Commission, dated June 10, 2003 at the time the order is received or comment in the Federal Register.5 The (‘‘Amendment No. 3’’). In Amendment No. 3, the better, the proposed change should not Commission received no comments on Exchange added the phrase ‘‘or rejected’’ to a the proposed rule change, as amended. sentence within NYSE Rule 91.10 to clarify that transactions that are not rejected are deemed to be 1 15 U.S.C. 78s(b)(1). On June 11, 2003, the NYSE filed accepted for the purposes of NYSE Rule 91.10. This 2 17 CFR 240.19b–4. Amendment No. 3 to the proposed rule sentence now reads that ‘‘[t]ransactions which are 3 See letter from Kathleen M. Boege, Associate not then confirmed or rejected in accordance with General Counsel, CHX, to Nancy J. Sanow, Assistant the procedures above are deemed to have been 7 15 U.S.C. 78s(b)(2). Director, Division of Market Regulation, accepted.’’ This is a technical amendment and is 8 Commission, dated November 25, 2003 17 CFR 200.30–3(a)(12). not subject to notice and comment. 1 (‘‘Amendment No. 1’’). In Amendment No. 1, the 15 U.S.C. 78s(b)(1). 7 See letter from Darla C. Stuckey, Corporate Exchange expanded its discussion regarding the 2 17 CFR 240.19b–4. Secretary, NYSE, to Nancy J. Sanow, Assistant consequences of the proposed rule change, and also 3 See letter from Mary Yeager, Assistant Secretary, Director, Division, Commission, dated January 29, clarified that the proposed rule change was filed NYSE, to Nancy J. Sanow, Assistant Director, 2004 (‘‘Amendment No. 4’’). In Amendment No. 4, pursuant to Section 19(b)(2) of the Act. 15 U.S.C. Division of Market Regulation (‘‘Division’’), the Exchange provided the Commission with 78s(b)(2). Commission, dated March 10, 2003 (‘‘Amendment examples of different scenarios for confirming 4 See Securities Exchange Act Release No. 48982 No. 1’’). principal transactions under NYSE Rule 91.10. This (December 23, 2003), 68 FR 75674. 4 See letter from Darla C. Stuckey, Corporate is a technical amendment and is not subject to 5 In approving this proposed rule change, the Secretary, NYSE to Nancy J. Sanow, Assistant notice and comment. Commission notes that it has considered the Director, Division, Commission, dated May 20, 2003 8 See In the Matter of New York Stock Exchange, proposed rule’s impact on efficiency, competition, (‘‘Amendment No. 2’’). Inc., 70 S.E.C. Docket 106, Securities Exchange Act and capital formation. 15 U.S.C. 78c(f). 5 See Securities Exchange Act Release No. 47961 Release No. 41574 (June 29, 1999), Administrative 6 15 U.S.C. 78f(b)(5). (June 2, 2003), 68 FR 34453. Proceeding File No. 3–9925.

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Executive Floor Officials, or any to return it to the specialist. Third, the appropriateness of the continued combination thereof if the parties to the broker could determine to go to the pattern of rejections by the broker, to dispute so agree. The proposed rule specialist’s post as soon as practicable make sure he is representing his change further provides that members under the prevailing circumstances to customer as fiduciary and not giving the may, as an alternative, resolve such reject the trade. specialist, in effect, a kind of disputes through the arbitration What is reasonable for a floor broker conditional order that is not recognized procedures established under the in taking timely action under NYSE under Exchange rules. If a continued Exchange’s Constitution and Rules. Rule 91.10 depends on his location on pattern of rejections does occur because the trading floor in relation to where the the customer will not accept executions C. NYSE Rule 91 specialist’s post is located, how busy he with the specialist as contra party, the NYSE Rule 91.10 addresses the is, how timely the customer was in Floor broker should represent the order procedures a member follows to confirm relaying his instructions to confirm/ himself or herself to ensure appropriate a transaction involving another member reject/do nothing, as well as prevailing representation of the order in who has elected to take or supply for his market conditions. Any disagreement accordance with the broker’s fiduciary own account the securities named in an about whether a member or member responsibility to the customer. The order entrusted to him. The Exchange is organization took timely action in proposed NYSE Rule 91.50 clarifies, proposing to amend NYSE Rule 91.10 to rejecting a trade or about whether a however, that neither the Floor make clear in the rule that only a transaction was properly deemed to Official’s review of a broker’s actions, member may confirm a transaction in have been accepted under NYSE Rule nor the characterization of an order as the situations covered by the rule. The 91.10 would be resolved in accordance a conditional order compromises the Exchange is also proposing to add a with NYSE Rule 75, which gives the unconditional right of a broker to reject sentence to the Rule to clarify that final determination to a Floor Official. If any trade where the specialist trades as transactions that are not confirmed or called upon to resolve such a dispute, principal. The proposed rule further rejected are deemed to have been a Floor Official would be expected to provides that a broker’s exercise of his accepted.9 In addition, the Exchange weigh the factors noted above. Any right to reject a trade will not trigger a proposes to amend NYSE Rule 91.10 to resolution of the dispute would, of disciplinary action against the broker. provide that a member receiving a necessity, depend on the unique facts of report of execution of a transaction each particular situation. A Floor broker D. NYSE Rule 95 where another member acted as who received a report of execution The Exchange is proposing to add principal triggers the member’s within one minute of a trade, was material to NYSE Rule 95(a) making unconditional right to reject the trade as located in close proximity to the trading clear that members may not create an soon as practicable, given the prevailing post, and who took no action upon order or a material term of an order, but circumstances. Furthermore, the receiving the execution report, might, in must receive an order from off the Floor Exchange is amending NYSE Rule 91.10 the judgment of a Floor Official, be which includes all the material terms of to clarify that disputes as to whether precluded from rejecting a trade after a an order, regardless of how familiar they there was sufficient time to reject the period that could be as brief as several are with a customer’s strategy. trade would be resolved under NYSE minutes, if the Floor Official concluded E. NYSE Rule 115A Rule 75. that the broker had not acted as soon as The Exchange provided several practicable under the circumstances. NYSE Rule 115A provides, among examples of situations involving Conversely, a broker who did not other matters, procedures for members confirmation of a principal trade by a receive an execution report until 10 or to confirm transactions on openings. specialist 10 and whether the member 15 minutes after the trade, and was The Exchange is proposing to add to took timely action. Under Rule 91.10, actively executing orders in another NYSE Rule 115A an intra-rule cross- three different scenarios can occur in trading room, might be deemed to have reference to make clear that while a situations involving confirmation of a acted as soon as practicable in rejecting broker should confirm a transaction as principal trade by a specialist. First, the a trade after a period of a half hour or promptly as possible, the specialist is broker can determine to take no action, more, depending on the Floor Official’s not responsible for losses 30 minutes in which case the transaction with the assessment of the reasonableness of the after the opening. specialist would be deemed confirmed/ broker’s actions. F. NYSE Rule 116 accepted under NYSE Rule 91.10 since The Exchange is also proposing to ‘‘transactions which are not then amend NYSE Rule 91.20 to replace the The Exchange is proposing three confirmed or rejected * * * are deemed term ‘‘should’’ with ‘‘must,’’ to reflect changes to NYSE Rule 116. First, the to have been accepted.’’ Second, the the mandatory nature of the procedures Exchange proposes to amend NYSE broker could determine to go to the outlined, pertaining to principal Rule 116.20 to state directly a specialist’s post as soon as practicable transactions effected against orders in a prohibition against a Floor broker under the prevailing circumstances to specialist’s possession. ‘‘stopping’’ stock. Second, the Exchange confirm the transaction by initialing the The Exchange proposes to add NYSE is proposing to amend NYSE Rule memorandum record of the specialist Rule 91.50 regarding the rejection of 116.30(3)(a) to make clear that a which shows the details of the trade and specialist’s principal transactions. The specialist should ‘‘stop’’ an order in a proposed rule states that if there is a minimum variation market only when 9 See Amendment No. 3, supra note 6. continued pattern of rejections of a there is an imbalance in the quotation 10 See Amendment No. 4, supra note 7. The specialist’s principal transactions, a suggesting the likelihood of price Exchange also confirmed that the scenarios provided by the Exchange regarding principal Floor Official may be called upon to improvement for the ‘‘stopped’’ order. trades by a specialist would also apply to members require the broker to review his actions. And third, the Exchange is proposing to involved in a principal transaction with any If a customer gives a continued pattern add to NYSE Rule 116.40 a cross- Exchange member. Telephone conversation of rejection instructions to a Floor reference to NYSE Rule 123C, which between Donald Siemer, Director of Rule Development, Market Surveillance Division, NYSE, broker to reject any trade where the codifies the Exchange’s procedures and Terri Evans, Assistant Director, Division, specialist acted as principal, a Floor regarding execution of market-on-close Commission on February 3, 2004. Official would be able to review the and limit-on-close orders.

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III. Discussion and Commission of flexibility in the rule to accommodate published for comment in the Federal Findings various situations occurring during the Register on December 29, 2003.4 The After careful review, the Commission trading day. Commission received no comment With respect to the changes proposed finds that the proposed rule change, as letters on the proposal. This order for NYSE Rule 91.50, the Commission amended, is consistent with the approves the proposed rule change, as notes that a Floor Official’s review of a requirements of the Act and the rules amended. broker’s continued pattern of rejections and regulations thereunder applicable to The Commission finds that the of a specialist’s principal transactions in a national securities exchange.11 proposed rule change, as amended, is no way compromises the unconditional Specifically, the Commission believes consistent with the requirements of the right of a broker to reject any trade the proposed rule change, as amended, Act and the rules and regulations where the specialist trades as principal. is consistent with section 6(b)(5) of the thereunder applicable to a national Furthermore, the Commission notes that Act,12 which requires among other securities exchange 5 and, in particular, the proposed rule provides that no things, that the rules of the Exchange are the requirements of Section 6 of the disciplinary process would be triggered designed to prevent fraudulent and Act 6 and the rules and regulations by the broker exercising his or her right manipulative acts and practices, to thereunder. Specifically, the to reject a trade. promote just and equitable principles of Commission believes that the proposed trade, to remove impediments to and IV. Conclusion rule change is consistent with Section perfect the mechanism of a free and It is therefore ordered, pursuant to 6(b),7 which, among other things, open market, and in general to protect section 19(b)(2) of the Act,15 that the requires that the PCX’s rules be investors and the public interest. proposed rule change (SR–NYSE–2002– designed to promote just and equitable The Commission believes that the 32), as amended, is approved. principles of trade, to foster cooperation proposed rule change codifies current and coordination with persons engaged For the Commission, by the Division of practices on the Exchange and existing in regulating, clearing, settling, interpretations of NYSE rules and is Market Regulation, pursuant to delegated authority.16 processing information with respect to, responsive to recommendations made Margaret H. McFarland, and facilitating transactions in by an independent consultant retained securities, to remove impediments to Deputy Secretary. by the Exchange.13 The Commission and perfect the mechanism of a free and also believes that the proposed rule [FR Doc. 04–2825 Filed 2–9–04; 8:45 am] open market and a national market change should clarify Exchange BILLING CODE 8010–01–P system, and, in general, to protect members’ rights and obligations under investors and the public interest. The certain rules such as a broker having to Commission notes that the PCX’s recross a clean agency cross when there SECURITIES AND EXCHANGE COMMISSION restrictions on Market Makers requiring has been price improvement, a them to become odd-lot dealers and to member’s ability to resolve certain [Release No. 34–49176; File No. SR–PCX– maintain cleanup orders in the disputes involving a monetary 2003–59] securities in which they maintain a difference of $10,000 or more by a panel market currently impose a competitive or through arbitration, a member’s Self-Regulatory Organizations; Pacific barrier vis-a`-vis other market centers in requirement to receive all material terms Exchange, Inc.; Order Granting attracting Market Maker participation on of an order from the member’s customer Approval to a Proposed Rule Change ArcaEx because competing market off the floor of the Exchange, a and Amendment No. 1 Thereto by the centers do not impose such specialist’s responsibility for losses Pacific Exchange, Inc. To Amend Its requirements.8 The Commission notes incurred by other members because of Rules Governing Market-Maker that the Exchange believes that an opening transaction, and the Obligations on the Archipelago eliminating the aforementioned conditions for stopping stock. Exchange requirements will facilitate additional Moreover, the Commission believes February 3, 2004. Market Maker participation on ArcaEx the proposed rule change will clarify the On October 21, 2003, the Pacific and will further enhance order process by which a member can confirm Exchange, Inc. (‘‘PCX’’ or ‘‘Exchange’’), interaction, provide greater depth in or reject a transaction involving another through its wholly-owned subsidiary liquidity, and foster price competition. member who has elected to take or PCX Equities, Inc. (‘‘PCXE’’), filed with Moreover, the Exchange believes that supply for his own account the security the Securities and Exchange the elimination of such requirements named in an order entrusted to him.14 Commission (‘‘Commission’’), pursuant will place ArcaEx on a level playing The Commission notes that several of to Section 19(b)(1) of the Securities field with other market centers and the changes to NYSE Rule 91 codify the Exchange Act of 1934 (‘‘Act’’),1 and allow ArcaEx to fairly compete for NYSE’s prior interpretation of this rule. 9 Rule 19b–4 thereunder,2 a proposed rule Market Maker, and that the impact on As a result, the Commission believes change to amend its rules governing the system from removing these that codification of these interpretations Market Maker obligations on the requirements for Market Makers would will add greater transparency to the Archipelago Exchange (‘‘ArcaEx’’), the be minimal on the ArcaEx. NYSE’s rules. Further, the Commission equities trading facility of PCXE. The notes that the proposed changes to 4 PCX filed Amendment No. 1 to the See Securities Exchange Act Release No. 48928 NYSE Rule 91 aim to maintain a degree proposal on December 2, 2003.3 The (December 16, 2003), 68 Fr 75010 (December 29, 2003). proposed rule change, as amended, was 11 The Commission has considered the proposed 5 In approving this proposed rule change, the rules’ impact on efficiency, competition and capital Commission notes that it has considered its impact formation. 15 U.S.C. 78c(f). 15 15 U.S.C. 78s(b)(2). on efficiency, competition, and capital formation. 12 15 U.S.C. 78f(b)(5). 16 17 CFR 200.30–3(a)(12). 15 U.S.C. 78c(f). 13 See supra note 8. 1 15 U.S.C. 78s(b)(1). 6 15 U.S.C. 78f. 14 The Commission notes that Exchange members 2 17 CFR 240.19b–4. 7 15 U.S.C. 78f(b). should assure that any agency issues are addressed 3 Amendment No. 1 replaces the originally filed 8 See e.g., NASD Rules 4611 and 4612. by their respective customer agreements. Form 19b–4 in its entirety. 9 See note 4, supra.

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It is therefore ordered, pursuant to Option Payment for Order Flow Charges A. Self-Regulatory Organization’s Section 19(b)(2) of the Act,10 that the Schedule 4 and subject to certain Statement of the Purpose of, and proposed rule change and Amendment exceptions listed below. The Phlx Statutory Basis for, the Proposed Rule No. 1 thereto (File No. SR–PCX–2003– intends to implement the payment for Change 59) are approved. order flow fees for trades settling on or The Phlx has reinstated its payment after February 1, 2004 through April 30, For the Commission, by the Division of for order flow program.6 Under the Market Regulation, pursuant to delegated 2004. The rate levels would not change: authority.11 program, the Phlx charges ROTs a per- the top-ranked equity option would be contract fee with respect to their Margaret H. McFarland, charged a fee of $1.00 per contract; the transactions in the top 120 most actively Deputy Secretary. next 49 equity options would be traded equity options issues, subject to [FR Doc. 04–2811 Filed 2–9–04; 8:45 am] charged a fee of $.40 per contract; and certain exceptions.7 The fees are set BILLING CODE 8010–01–P no fee would be imposed for the forth on the Phlx’s ROT Equity Option remaining equity options in the top Payment for Order Flow Charges 120.5 The Exchange’s ROT Equity Schedule. SECURITIES AND EXCHANGE Option Payment for Order Flow Charges COMMISSION Schedule is available at the Phlx and at 1. Purpose [Release No. 34–49170; File No. SR–Phlx– the Commission. The purpose of the proposed rule 2004–05] II. Self-Regulatory Organization’s change is to establish the payment for order flow fees for the top 120 equity Self-Regulatory Organizations; Notice Statement of the Purpose of, and options for trades settling on or after of Filing and Immediate Effectiveness Statutory Basis for, the Proposed Rule February 1, 2004 through April 30, of Proposed Rule Change by the Change 2004. The Phlx will file with the Philadelphia Stock Exchange, Inc. Commission a proposed rule change to Relating to the Payment for Order Flow In its filing with the Commission, the address changes to the fee schedule for Fees for the Top 120 Options Phlx included statements concerning the purpose of and basis for the subsequent time periods. The Phlx is February 2, 2004. proposed rule change and discussed any not making any other changes to its Pursuant to Section 19(b)(1) of the comments it had received on the payment for order flow program at this Securities Exchange Act of 1934 proposed rule change. The text of these time. 1 2 (‘‘Act’’) , and Rule 19b–4 thereunder, statements may be examined at the 2. Statutory Basis notice is hereby given that on January places specified in Item IV below. The 22, 2004, the Philadelphia Stock Phlx has prepared summaries, set forth The Exchange believes that this Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) in Sections A, B, and C below, of the proposal to amend its schedule of dues, filed with the Securities and Exchange most significant aspects of such fees and charges would be an equitable Commission (‘‘Commission’’) the statements. allocation of reasonable fees among Phlx proposed rule change as described in members, and that the proposal is Items I, II, and III below, which the Phlx consistent with Section 6(b) of the Act 8 has prepared. The Commission is measuring period for the top 120 equity options was and furthers the objectives of Section publishing this notice to solicit based on volume statistics from July, August and 6(b)(4) of the Act.9 comments on the proposed rule change September 2003. See Securities Exchange Act from interested persons. Release No. 48688 (October 24, 2003), 68 FR 61845 B. Self-Regulatory Organization’s (October 30, 2003) (SR–Phlx–2003–70). For the Statement on Burden on Competition I. Self-Regulatory Organization’s payment for order flow fees imposed on trades Statement of the Terms of Substance of settling on or after February 1, 2004 through April The Exchange does not believe that the Proposed Rule Change 30, 2004, as set forth in this proposal, the measuring the proposed rule change will impose period for the top 120 equity options is based on any inappropriate burden on The Phlx proposes to establish its volume statistics from October, November, and competition. equity options payment for order flow December 2003. fees imposed on the transactions of Phlx 4 To avoid confusion, the ROT Equity Option C. Self-Regulatory Organization’s Registered Options Traders (‘‘ROTs’’) for Payment for Order Flow Charges Schedule reflects Statement on Comments on the the period from February 2004 through only those options being charged more than $0.00. Proposed Rule Change Received From April 2004 for the top 120 equity 5 Under the Exchange’s payment for order flow Members, Participants, or Others options based on volume statistics from program, a 500 contract cap per individual cleared side of a transaction is imposed. Thus, the The Phlx neither solicited nor October, November and December applicable payment for order flow fee would be 3 received written comments on this 2003, as set forth on the ROT Equity imposed only on the first 500 contracts per individual cleared side of a transaction. For proposal. 10 15 U.S.C. 78s(b)(2). example, if a transaction consists of 750 contracts 11 17 CFR 200.30–3(a)(12). by one ROT, the applicable payment for order flow 6 See Securities Exchange Act Release No. 47090 1 15 U.S.C. 78s(b)(1). fee would be applied to, and capped at, 500 (December 23, 2002), 68 FR 141 (January 2, 2003) 2 17 CFR 240.19b–4. contracts for that transaction. Also, if a transaction (SR-Phlx-2002–75). 3 The Exchange’s payment for order flow fee is consists of 600 contracts, but is divided equally 7 The payment for order flow fee does not apply imposed on transactions in the top 120 most among three ROTs, the 500 contract cap would not to specialist transactions or to transactions between: (1) A ROT and a specialist; (2) a ROT and a ROT; actively traded equity options in terms of the total apply to any such ROT and each ROT would be (3) a ROT and a firm; and (4) a ROT and a broker- number of contracts that are traded nationally, assessed the applicable payment for order flow fee dealer. According to the Phlx, the fee is not based on volume statistics provided by the Options on 200 contracts, as the payment for order flow fee Clearing Corporation. The measuring period for the imposed with respect to the above-specified is assessed on a per ROT, per transaction basis. See top 120 equity options encompasses three months transactions because the primary focus of the and the Exchange files a separate proposed rule Securities Exchange Act Release No. 47958 (May program is to attract order flow from customers. The change for each three-month trading period. With 30, 2003), 68 FR 34026 (June 6, 2003) (proposing payment for order flow fee also does not apply to respect to the payment for order flow fees imposed SR–Phlx–2002–87) and Securities Exchange Act index or foreign currency options. on trades settling on or after November 1, 2003 Release No. 48166 (July 11, 2003), 68 FR 42540 8 15 U.S.C. 78f(b). through January 31, 2004, for example, the (July 17, 2003) (approving SR–Phlx–2002–87). 9 15 U.S.C. 78f(b)(4).

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III. Date of Effectiveness of the For the Commission, by the Division of program is scheduled to expire on Proposed Rule Change and Timing for Market Regulation, pursuant to delegated January 31, 2004.4 The $2,500 fee would 12 Commission Action authority. continue to apply to ECN trades where Margaret H. McFarland, the ECN is not acting as a specialist or The foregoing proposed rule change Deputy Secretary. a floor broker, but rather an order flow has been designated as a fee change [FR Doc. 04–2809 Filed 2–9–04; 8:45 am] provider. This fee is in lieu of the equity pursuant to Section 19(b)(3)(A)(ii) of the BILLING CODE 8010–01–P transaction value charge that would Act 10 and Rule 19b–4(f)(2) 11 normally apply to (non-specialist) thereunder. Accordingly, the proposal equity trades. has taken effect upon filing with the SECURITIES AND EXCHANGE The text of the proposed rule change Commission. At any time within 60 COMMISSION is available at the Office of the days after the filing of the proposed rule [Release No. 34–49173; File No. SR–Phlx– Secretary, the Phlx, and the change, the Commission may summarily 2004–07] Commission. abrogate the rule change if it appears to II. Self-Regulatory Organization’s the Commission that such action is Self-Regulatory Organizations; Notice Statement of the Purpose of, and necessary or appropriate in the public of Filing and Immediate Effectiveness Statutory Basis for, the Proposed Rule interest, for the protection of investors, of Proposed Rule Change by the Change Philadelphia Stock Exchange, Inc. or otherwise in furtherance of the In its filing with the Commission, the purposes of the Act. Relating to the Extension of Its Pilot Program To Implement Its Existing Fee Exchange included statements IV. Solicitation of Comments Schedule for Electronic concerning the purpose of and basis for Communications Networks the proposed rule change and discussed Interested persons are invited to any comments it received on the submit written data, views and February 2, 2004. proposed rule change. The text of these arguments concerning the foregoing, Pursuant to Section 19(b)(1) of the statements may be examined at the including whether the proposed rule Securities Exchange Act of 1934 places specified in Item IV below. The change is consistent with the Act. (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Exchange has prepared summaries, set Persons making written submissions notice is hereby given that on January forth in sections A, B, and C below, of should file six copies thereof with the 28, 2004, the Philadelphia Stock the most significant aspects of such Secretary, Securities and Exchange Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) statements. filed with the Securities and Exchange Commission, 450 Fifth Street, NW., A. Self-Regulatory Organization’s Commission (‘‘SEC’’ or ‘‘Commission’’) Washington, DC 20549–0609. Copies of Statement of the Purpose of, and the proposed rule change as described the submission, all subsequent Statutory Basis for, the Proposed Rule in Items I, II, and III below, which Items amendments, all written statements Change with respect to the proposed rule have been prepared by the Exchange. The Commission is publishing this change that are filed with the 1. Purpose notice to solicit comments on the Commission, and all written The purpose of the proposed rule proposed rule change from interested communications relating to the change is to extend the Exchange’s persons. proposed rule change between the current ECN pilot program that imposes Commission and any person, other than I. Self-Regulatory Organization’s a $2,500 monthly fee for ECNs that are those that may be withheld from the Statement of the Terms of Substance of member organizations and send order public in accordance with the the Proposed Rule Change flow to the Exchange’s equity trading floor for an additional one-year period, provisions of 5 U.S.C. 552, will be The Exchange proposes to extend the until January 31, 2005. The continuation available for inspection and copying in Exchange’s current pilot program for an of the $2,500 fee is intended to attract the Commission’s Public Reference additional one-year period (until equity order flow from ECNs to the Room. Comments may also be submitted January 31, 2005), in order to continue Exchange by continuing to substitute a electronically at the following e-mail to impose a $2,500 monthly fee for fixed monthly fee, in light of the Electronic Communications Networks address: [email protected]. All potential for high volumes of order flow (‘‘ECNs’’) that are member organizations comment letters should refer to File No. from ECNs.5 SR–Phlx–2004–05. This file number and send order flow to the Exchange’s 3 should be included on the subject line equity trading floor. The current pilot than riskless principal. See SEC Rule 11Ac1–1(a)(8). if e-mail is used. To help the The Exchange is herein proposing minor changes to Commission process and review your 12 17 CFR 200.30–3(a)(12). this definition, which appears on the fee schedule, 1 15 U.S.C. 78s(b)(1). to correct inconsistencies between the text of the comments more efficiently, comments 2 17 CFR 240.19b–4. SEC Rule 11Ac1–1(a)(8) and the text that appears should be sent in hard copy or by e- 3 As stated on the Phlx fee schedule, ECNs shall on the Exchange’s fee schedule. mail, but not by both methods. Copies mean any electronic system that widely 4 See Securities Exchange Act Release No. 47120 of such filing will also be available for disseminates to third parties orders entered therein (January 3, 2003), 68 FR 1498 (January 10, 2003) by an Exchange market maker or over-the-counter (Notice of Filing and Immediate Effectiveness of inspection and copying at the principal (‘‘OTC’’) market maker, and permits such orders to SR–Phlx–2002–83, extending the ECN fee pilot office of the Phlx. All submissions be executed against in whole or in part; except that program until January 31, 2004). See also Securities should refer to File No. SR–Phlx–2004– the term ECN shall not include: any system that Exchange Act Release Nos. 44155 (April 5, 2001), 05 and should be submitted by March crosses multiple orders at one or more specified 66 FR 19274 (April 13, 2001) (Notice of Filing and times at a single price set by the ECN (by algorithm Immediate Effectiveness of SR–Phlx–2001–09, 2, 2004. or by any derivative pricing mechanism) and does adopting the ECN fee program on a pilot basis); and not allow orders to be crossed or executed against 45456 (February 19, 2002), 67 FR 8831 (February directly by participants outside of such times; or, 26, 2002) (Notice of Filing and Immediate any system operated by, or on behalf of, an OTC Effectiveness of SR–Phlx–2002–08, extending the market-maker or exchange market-maker that ECN fee pilot program until January 31, 2003). 10 15 U.S.C. 78s(b)(3)(A)(ii). executes customer orders primarily against the 5 To recoup costs due from the Exchange to the 11 17 CFR 240.19b–4(f)(2). account of such market maker as principal, other Commission pursuant to Section 31(b) of the Act,

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The monthly fee will continue to Trader Initial Registration Fee and of the Act,11 in particular, by providing apply to ECN order flow to the Annual Fee, and Remote Specialist for the equitable allocation of reasonable Exchange’s equity trading floor, fees.9 dues, fees and other charges among its including from ECNs that either became Because the $2,500 fee is a flat members due to the unique character of members or began sending order flow monthly fee as opposed to a per- ECNs, and because the fixed monthly after the commencement of the initial transaction fee, it is intended to fee is a reasonable method of attracting program. The $2,500 fee would continue encourage ECN volume. Currently, the a new form of order flow to the to apply to ECNs that are not acting as equity transaction charge (that would Exchange. a Phlx specialist or floor broker.6 otherwise apply to an ECN’s equity Currently, no ECN operates from the trades) ranges, based on share volumes, B. Self-Regulatory Organization’s Exchange’s equity trading floor as a with a $50 maximum fee per trade side, Statement on Burden on Competition floor broker or specialist unit. If, and various other applicable discounts. The Exchange does not believe that however, an ECN did operate from the Thus, many variables determine the proposed rule change will impose equity trading floor, it could be subject whether the proposed monthly $2,500 any inappropriate burden on to various floor-related fees respecting fee is generally more favorable than the competition. its floor operation.7 In addition, an equity transaction charge, depending C. Self-Regulatory Organization’s ECN’s transactions as a floor broker upon the number of trades, size of the Statement on Comments on the would be subject to the equity trade and type (i.e., PACE). As a general Proposed Rule Change Received From transaction charge and its specialists matter, the Exchange believes that Members, Participants or Others would be subject to other charges. 8 $2,500 would be more favorable to the Even if the ECN was acting as a floor ECN because it is a fixed amount. No written comments were either broker or specialist with respect to some The Exchange believes that the solicited or received. monthly ECN fee provides competitive trades, those trades for which it was not III. Date of Effectiveness of the fees with appropriate incentives, thus acting as a floor broker or specialist, but Proposed Rule Change and Timing for providing a reasonable method to attract rather an ECN, would be subject only to Commission Action the flat monthly fee and not other large order flow providers such as ECNs transaction charges. An ECN that only to the Exchange. Additional order flow The foregoing rule change establishes operates as a specialist or floor broker should enhance liquidity, and improve or changes a due, fee, or charge imposed would not have to pay the monthly fee, the Exchange’s competitive position in by the Exchange and, therefore, has because it would, instead, be paying the equity trading. The Exchange believes become effective upon filing pursuant to normal transaction charges applicable to that structuring this fee for ECNs is Section 19(b)(3)(A)(ii) of the Act 12 and floor brokers and specialists. appropriate, as ECNs are unique in their Rule 19b–4(f)(2) thereunder.13 At any An ECN would also continue to be role as order flow providers to the time within 60 days of the filing of the subject to, if applicable, the following Exchange. Specifically, ECNs operate a proposed rule change, the Commission membership-related fees: Foreign unique electronic agency business, may summarily abrogate such rule Currency User Fees, Application Fee, similar to a securities exchange, as change if it appears to the Commission Initiation Fee, Transfer Fee for Foreign opposed to directly executing orders for that such action is necessary or Currency Options Participations, Phlx their own customers as principal or appropriate in the public interest, for CCH Guide Fee, Examinations Fee, agent. the protection of investors, or otherwise Review/Process Subordinated Loans in furtherance of the purpose of the Act. 2. Statutory Basis Fee, Registered Representative IV. Solicitation of Comments Registration fees, Trading Floor The Exchange believes that the Personnel Registration Fee, Off-Floor proposed rule change is consistent with Interested persons are invited to Section 6(b) of the Act,10 in general, and submit written data, views, and the Exchange intends to continue to apply such fee furthers the objectives of Section 6(b)(4) arguments concerning the foregoing, to ECNs, as the current fee schedule reflects. including whether the proposed rule 6 An ECN would also continue to incur certain 9 In a separate proposed rule change, the change is consistent with the Act. license fees and other fees as specified on the Exchange states that it amended its schedule of Persons making written submissions Exchange’s schedule of dues, fees and charges. In dues, fees, and charges to adopt permit fees in should file six copies thereof with the addition, an ECN would continue to incur specialist connection with the Exchange’s recent or equity floor brokerage transaction fees if it acts demutualization and to make other related post- Secretary, Securities and Exchange as a Phlx specialist or floor broker. demutualization fee changes. Pursuant to that Commission, 450 Fifth Street, NW., 7 According to the Exchange, these include the proposal, permit fees were adopted and certain fees Washington, DC 20549–0609. Trading Post/Booth Fee, Trading Post w/Kiosk Fee, were deleted from the Exchange’s fee schedule. For Comments should be submitted Kiosk Construction Fee (when requested by example, fees that were deleted included specialist), Controller Space Fee, Floor Facility Fee, membership dues, charges relating to Equity electronically at the following e-mail Shelf Space on Equity Option Trading Floor Fee, Trading Permits, Foreign Currency Options address: [email protected]. All Computer Equipment Services, Repairs or Participation fee, Technology Fee for Exchange comment letters should refer to File No. Replacements Fee and Computer Relocation members and for Foreign Currency Options SR–Phlx–2004–07. This file number Requests Fee. Certain communications fees could Participants who do not hold legal title to a Phlx also apply, such as the Direct Wire to the Floor Fee, membership. References to the capital funding fee should be included on the subject line Telephone System Line Extensions, Wireless and monthly credit were also deleted and the if e-mail is used. To help the Telephone System, Tether Initial Connectivity Fee, Foreign Currency User Fee was increased. See Commission process and review your Tether Monthly Service Fee, Execution Services/ Securities Exchange Act Release No. 49157 (January comments more efficiently, comments Communication Charge, Stock Execution Machine 30, 2004) (Notice of Filing and Immediate Registration Fee (Equity Floor), Equity, Option, or Effectiveness of SR–Phlx–2004–02). This proposal should be sent in hard copy or by e-mail FCO Transmission Charge, FCO Pricing Tape, became effective for new members and participants but not by both methods. Copies of the Option Report Service Fee, Quotron Equipment Fee, upon the issuance of permits when the Exchange’s submission, all subsequent Instinet, Reuters Equipment Pass-Through Fee and demutualization became effective (January 20, amendments, all written statements the Option Mailgram Service Fee. 2004). Pre-demutualization membership-related 8 For example, certain license fees may apply to fees will remain in effect for then current members, specialists, and the Equity Floor Brokerage participants, and member and participant 11 15 U.S.C. 78f(b)(4). Assessment and Equity Floor Brokerage Transaction organizations for the month of January 2004. 12 15 U.S.C. 78(s)(b)(3)(A)(ii). Fee apply to floor brokerage activity. 10 15 U.S.C. 78f(b). 13 17 CFR 240.19b–4(f)(2).

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with respect to the proposed rule August 2, 2004.3 The System is a new August 2, 2004, in order to continue to change that are filed with the component of the Exchange’s have rules in place concerning the Commission, and all written Automated Options Market (AUTOM) System and to ensure that Floor Brokers communications relating to the and Automatic Execution (AUTO–X) using the System during the continuing proposed rule change between the System.4 deployment would not be in violation of Commission and any person, other than current Exchange rules regarding ticket II. Self-Regulatory Organization’s those that may be withheld from the marking requirements. The rules had Statement of the Purpose of, and public in accordance with the previously been effective through Statutory Basis for, the Proposed Rule provisions of 5 U.S.C. 552, will be August 29, 2003, extended through Change available for inspection and copying at September 12, 2003, November 14, the Commission’s Public Reference In its filing with the Commission, the 2003, and February 6, 2004.5 Room. Copies of such filing will also be Phlx included statements concerning The System is designed to enable available for inspection and copying at the purpose of, and basis for, the Floor Brokers and/or their employees to the principal office of the Exchange. All proposed rule change and discussed any enter, route and report transactions submissions should refer to File No. comments it received on the proposed stemming from options orders received SR–Phlx–2004–07 and should be rule change. The text of these statements on the Exchange. Floor Brokers or their submitted by March 2, 2004. may be examined at the places specified employees access the System through an in Item III below. The Phlx has prepared electronic Exchange-provided handheld For the Commission, by the Division of device on which they would have the Market Regulation, pursuant to delegated summaries, set forth in sections A, B, authority.14 and C below, of the most significant ability to enter the required information as set forth in Phlx Rule 1063(e), either Margaret H. McFarland, aspects of such statements. from their respective posts on the Deputy Secretary. A. Self-Regulatory Organization’s options trading floor or in the trading [FR Doc. 04–2810 Filed 2–9–04; 8:45 am] Statement of the Purpose of, and crowd. The System will eventually BILLING CODE 8010–01–P Statutory Basis for, the Proposed Rule replace the Exchange’s current Floor Change Broker Order Entry System (‘‘FBOE’’),6 1. Purpose as part of a roll-out of the new System SECURITIES AND EXCHANGE The purpose of the proposed rule floor-wide. COMMISSION All of the rules pertaining to the change is to extend the effectiveness of System effective February 6, 2004 are [Release No. 34–49178; File No. SR–Phlx– the rules governing the System through 2004–10] proposed to be extended until August 2, 2004, including: Rules 1014(g), 1015, 3 On July 31, 2003, the Exchange filed a proposed Self-Regulatory Organizations; Notice rule change to implement a pilot program to deploy 1051, 1063, 1064, and 1080.06, as well of Filing and Order Granting the Exchange’s new System. The proposed rule as Option Floor Procedure Advices Accelerated Approval of Proposed change was noticed, and accelerated approval was (‘‘Advice’’) A–11, B–6, B–8, C–2, C–3, Rule Change by the Philadelphia Stock granted thereto, on July 31, 2003. The pilot was F–1, F–2, and F–4. scheduled to expire on August 29, 2003. See Exchange, Inc. Relating To a Pilot Securities Exchange Act Release No. 48266 (July 31, The Exchange believes that the Program To Deploy the Options Floor 2003), 68 FR 152 (August 7, 2003) (SR–Phlx–2003– System will enable Floor Brokers to Broker Management System 56). On August 29, the Commission extended the handle orders they represent more pilot to September 12, 2003. See Securities efficiently, and will further enable the February 3, 2004. Exchange Act Release No. 48425 (August 29, 2003), 68 FR 53210 (September 9, 2003) (SR–Phlx–2003– Exchange to comply with the audit trail Pursuant to Section 19(b)(1) of the 60). On September 12, 2003, the Commission requirement for non-electronic orders Securities Exchange Act of 1934 extended the pilot again until November 14, 2003. required under the Order Instituting (‘‘Act’’),1 and Rule 19b–4 2 thereunder, See Securities Exchange Act Release No. 48490 Public Administrative Proceedings notice is hereby given that on February (September 12, 2003), 68 FR 54926 (September 19, 2003). On December 18, 2003, the Commission Pursuant to Section 19(h)(1) of the 2, 2004, the Philadelphia Stock extended the pilot until February 6, 2004. See Securities Exchange Act of 1934, Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) Securities Exchange Act Release No. 48947 Making Findings and Imposing filed with the Securities and Exchange (December 18, 2003), 68 FR 75012 (December 29, Sanctions.7 Commission (‘‘SEC’’ or ‘‘Commission’’) 2003). In order to avoid a lapse in the effectiveness of this pilot, the Commission now is approving the 2. Statutory Basis the proposed rule change as described Exchange’s proposal to extend the rule from in Items I and II below, which Items February 6, 2004 until August 2, 2004. The The Exchange believes that the have been prepared by the Phlx. The Exchange has also filed for permanent approval of proposed rule change is consistent with Commission is publishing this notice to the proposed rules. See Securities Exchange Act Section 6(b) of the Act 8 in general, and Release No. 48265 (July 31, 2003), 68 FR 47137 solicit comments on the proposed rule (August 7, 2003) (SR–Phlx–2003–40). The Exchange change from interested persons and to acknowledges that SR–Phlx–2003–40 and 5 See note 3, supra. approval the proposal, on an accelerated Amendment No. 1 thereto are subject to public 6 See Securities Exchange Act Release No. 41524 basis. comment, which may result in amendments to the (June 14, 1999), 64 FR 33127 (June 21, 1999) (SR– proposed rules. Phlx–99–11). The FBOE, a component of AUTOM, I. Self-Regulatory Organization’s 4 AUTOM is the Exchange’s electronic order currently provides a means for (but does not require) Floor Brokers to route eligible orders to the Statement of the Terms of Substance of delivery, routing, execution and reporting system, which provides for the automatic entry and routing specialist’s post, consistent with the order delivery the Proposed Rule Change of equity option and index option orders to the criteria of the AUTOM System set forth in Exchange Rule 1080(b). The new System would include the The Exchange proposes to extend its Exchange trading floor. Orders delivered through AUTOM may be executed manually, or certain same functionality as the FBOE, in addition to pilot program pertaining to the Options orders are eligible for AUTOM’s automatic providing an electronic audit trail for non- Floor Broker Management System (the execution feature, AUTO–X. Equity option and electronic orders received by Floor Brokers by way ‘‘System’’) from February 6, 2004 until index option specialists are required by the of the entry of the required information in proposed Exchange to participate in AUTOM and its features Rule 1063(e). and enhancements. Option orders entered by 7 See Securities Exchange Act Release No. 43268 14 17 CFR 200.30–3(a)(12). Exchange members into AUTOM are routed to the (September 11, 2000) and Administrative 1 15 U.S.C. 78s(b)(1). appropriate specialist unit on the Exchange trading Proceeding File 3–10282 (the ‘‘Order’’). 2 17 CFR 240.19b–4. floor. See Exchange Rule 1080. 8 15 U.S.C. 78f(b).

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furthers the objectives of Section 6(b)(5) available for inspection and copying at SECURITIES AND EXCHANGE of the Act 9 in particular, in that it is the principal office of the Exchange. All COMMISSION designed to promote just and equitable submissions should be submitted by principles of trade, remove [Release No. 34–49181; File No. SR–Phlx– March 2, 2004. 2004–06] impediments to and perfect the IV. Discussion mechanisms of a free and open market Self-Regulatory Organizations; Notice and a national market system, and to After careful review, the Commission of Filing and Immediate Effectiveness protect investors and the public interest, finds that the proposed rule change is of Proposed Rule Change by the by providing a System that enables Philadelphia Stock Exchange, Inc. Floor Brokers to handle orders they consistent with the requirements of the Act and the rules and regulations Relating to Member Organizations’ represent more efficiently, while Security Requirements enabling the Exchange to comply with thereunder applicable to a national the requirement in the Order to provide securities exchange.10 In particular the February 3, 2004. an electronic audit trail for non- Commission finds that the proposed Pursuant to section 19(b)(1) of the electronic orders entered on the rule is consistent with Section 6(b)(5) of Securities Exchange Act of 1934 Exchange. the Act, which requires that the rules of (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 an exchange be designed to promote just B. Self-Regulatory Organization’s notice is hereby given that on January and equitable principles of trade, Statement on Burden on Competition 23, 2004, the Philadelphia Stock remove impediments to and perfect the Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) The Exchange does not believe that mechanism of a free and open market filed with the Securities and Exchange the proposed rule change will impose and a national securities System, and Commission (‘‘Commission’’) the any inappropriate burden on protect investors and the public proposed rule change as described in competition. interest.11 Items I, II, and III below, which the C. Self-Regulatory Organization’s The Commission finds good cause for Exchange has prepared. The Commission is publishing this notice to Statement on Comments on the approving the proposed rule change solicit comments on the proposed rule Proposed Rule Change Received From prior to the thirtieth day after the date change from interested persons. Members, Participants, or Others of the publication of notice thereof in No written comments were either the Federal Register. The Commission I. Self-Regulatory Organization’s solicited or received. believes that granting accelerated Statement of the Terms of Substance of the Proposed Rule Change III. Solicitation of Comments approval to the proposed rule change on a pilot basis will allow the Exchange to The Phlx proposes to amend Phlx Interested persons are invited to have enforceable rules governing use of Rules 909 and 972. The amendment to submit written data, views and the Exchange’s new System in effect Phlx Rule 909 would create an arguments concerning the foregoing, prior to permanent approval of the additional method for member including whether the proposed rule rules, and will help ensure that organizations to provide security to the change is consistent with the Act. Exchange for the payment of any claims Persons making written submissions members are properly trained and owed to the Exchange, Stock Clearing should file six copies thereof with the familiar with the rules. In addition, that Corporation of Philadelphia (‘‘SCCP’’), Secretary, Securities and Exchange Commission is granting accelerated and other Exchange members or Commission, 450 Fifth Street, NW., approval in order to prevent a lapse in member organizations (the ‘‘Security Washington, DC 20549–0609. the effectiveness of the Exchange’s rules Requirement’’). The amendments to Comments may also be submitted governing operation of the System to Phlx Rule 972 would extend the time electronically at the following e-mail ensure continuity of the pilot. available to member organizations to address: [email protected]. All V. Conclusion meet the Security Requirement comment letters should refer to File No. following the transition of the Exchange SR–Phlx–2004–10. This file number It is therefore ordered, pursuant to from a non-stock to a stock corporation should be included on the subject line 12 Section 19(b)(2) of the Act, that the (the ‘‘Demutualization’’).3 The if e-mail is used. To help the proposed rule change (SR–Phlx–2004– amendments to Phlx Rule 972 would Commission process and review your 10) is approved on an accelerated basis also correct two cross-references comments more efficiently, comments on a pilot basis until August 2, 2004. contained in that rule. should be sent in hardcopy or by e-mail The text of the proposed rule change but not by both methods. Copies of the For the Commission, by the Division of is below. Proposed new language is submission, all subsequent Market Regulation, pursuant to delegated 13 italicized; deletions are in brackets. amendments, all written statements authority. with respect to the proposed rule Margaret H. McFarland, * * * * * change that are filed with the Deputy Secretary. Rule 909. Security for Exchange Fees Commission, and all written [FR Doc. 04–2812 Filed 2–9–04; 8:45 am] and Other Claims communications relating to the BILLING CODE 8010–01–P proposed rule change between the (a) Each member organization, and all Commission and any person, other than applicants for registration as such shall, those that may be withheld from the except as provided below, be required to public in accordance with the provide (and maintain) security to the 10 In approving this proposed rule change, the Exchange for the payment of any claims provisions of 5 U.S.C. 552, will be Commission notes that it has also considered the available for inspection and copying in proposed rule’s impact on efficiency, competition, 1 15 U.S.C. 78s(b)(1). the Commission’s Public Reference and capital formation. 15 U.S.C. 78c(f). 2 17 CFR 240.19b–4. 11 15 U.S.C. 78f(b)(5). Room. Copies of such filing will also be 3 See Securities Exchange Act Release No. 49098 12 15 U.S.C. 78f(b)(2). (January 16, 2004), 69 FR 3974 (January 27, 2004) 9 15 U.S.C. 78f(b)(5). 13 17 CFR 200.30–3(a)(12). (SR–Phlx–2003–73).

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owed to the Exchange, Stock Clearing this rule, in a segregated account, the if the [30 day] period specified therein Corporation of Philadelphia (‘‘SCCP’’), proceeds of which may be applied by shall have elapsed). and to Exchange members and/or other the Exchange in the same manner as Any member or member organization member organizations. If the member proceeds from transfers of participations of the Exchange prior to the Merger that, organization maintains excess net under Section 15–3 of the By-Laws (as as of the effective date of the Merger, capital of at least the amount if references in such Section 15–3 to has been suspended shall not be issued established by the Exchange and ‘‘foreign currency options participant’’ a permit or shall not be deemed a published by the Exchange from time to were to ‘‘member organization’’). Such member organization, as the case may time (the ‘‘Excess Net Capital Test’’), deposit may be invested by the be, automatically upon the Merger. If then no guaranty or deposit shall be Exchange in United States government the member or member organization required; provided that, if at the end of obligations or any other investments shall cure any delinquency within 30 any calendar month a member which provide safety and liquidity of days of the Merger, then the foregoing organization has less than such amount the principal invested, interest or provisions of this Rule 972 shall apply of excess net capital, then it shall within income on which deposit shall be paid (but as if the dates specified therein run 30 calendar days of the end of such periodically by the Exchange to such from the date of the cure of any month deliver to the Exchange security member organization. delinquency, rather than the date of the as provided in Rule 909(a)(i) or (ii); (b) No change. Merger); otherwise, such prior members provided, further, that any member * * * * * and member organizations must reapply organization relying upon the Excess for a permit, or registration as a member Net Capital Test shall deliver to the Rule 972. Continuation of Status After organization, as the case may be, as if Membership Services Department of the the Merger they were new applicants for admission Exchange each quarter a FOCUS report, Each member (including, without or registration. and shall promptly advise the limitation, each holder of an equity For the avoidance of doubt, foreign Membership Services Department if trading permit), inactive nominee and currency options participants and such member organization’s excess net member organization holding such participant organizations, as well as capital at any time falls below such status immediately prior to the effective approved lessors of foreign currency minimum established by the Exchange. time of the Merger and that, at such options participations holding such If the member organization does not time, is not subject to any suspension of status prior to the Merger will continue satisfy the Excess Net Capital Test, then such status shall, from and after the to hold such status following the the member organization shall provide Merger, maintain such status as a Merger. security to the Exchange in one of the member, inactive nominee or member * * * * * following forms: organization and in the case of (i) An acceptable guaranty by a II. Self-Regulatory Organization’s members, shall be permit holders and clearing member organization Statement of the Purpose of, and issued a permit, provided that such acceptable to the Exchange guaranteeing Statutory Basis for, the Proposed Rule the payment by such member member, inactive nominee and member Change organization of any claims, or if organization shall provide to the Admissions Committee and the In its filing with the Commission, the acceptable to the Exchange, a security Exchange included statements agreement among the Exchange, SCCP Exchange: (x) not later than 15 days following the Merger,[: The security concerning the purpose of and basis for and the member organization, in form the proposed rule change and discussed and substance satisfactory to the required by Rule 909 (unless the member organization has obtained an any comments it had received on the Exchange, duly executed and delivered proposed rule change. The text of these by the member organization, whereby exemption under Rule 909(c));] the form to be filed by the member organization’s statements may be examined at the the member organization shall create in places specified in Item IV below. The favor of the Exchange, to secure qualifying permit holder pursuant to Rule 921(a)[;] and the designation of the Exchange has prepared summaries, set payment of any claims owed by the forth in sections A, B, and C below, of member organization to the Exchange, member organization’s Member Organization Representative pursuant to the most significant aspects of such SCCP, and to Exchange members and/ statements. or other member organizations, a valid Rule 921(b) in the form prescribed by first priority perfected lien on and the Exchange; and (y) not later than 45 A. Self-Regulatory Organization’s continuing security interest in so much days following the Merger, the security Statement of the Purpose of, and of the funds and other property of the required by Rule 909 (unless the Statutory Basis for, the Proposed Rule member organization (including without member organization has obtained an Change limitation all securities, security exemption under Rule 909). 1. Purpose entitlements, financial assets, The consequences of a failure to investment property and other property furnish within such period: The purpose of the proposed rule and assets) held from time to time in the (a) The security required by Rule 909 change is to facilitate the administration margin account of the member (unless the member organization has of new Phlx Rules 909 and 972, which organization maintained with SCCP as obtained an exemption under Rule were recently adopted as part of the shall then exceed the required margin 909[(c)]) and/or the form to be filed by Exchange’s Demutualization. The amount (as such term is used in the the member organization’s qualifying Exchange believes that the minor Margin Account Agreement then in permit holder pursuant to Rule 921(a) changes proposed in this filing make it effect between SCCP and the member shall be the immediate suspension of easier for the Exchange to administer organization); or the member organization’s status as the new rules because they allow more (ii) A deposit with the Exchange in an such; and time to comply, in the case of Phlx Rule amount not to exceed $50,000, as (b) The designation of the member 972, and because they add an additional established by the Exchange with prior organization’s Member Organization method of compliance in the case of notice, to be held, together with all Representative pursuant to Rule 921(b) Phlx Rule 909. The purpose of the other such deposits made pursuant to shall be as provided in Rule 921(c) (as proposed amendment to Phlx Rule 909

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is to provide Phlx member organizations Demutualization and to correct two section 19(b)(3)(A)(iii) 9 of the Act and with an additional method by which cross-references contained in Phlx Rule Rule 19b–4(f)(6) 10 under the Act they may satisfy the Security 972. Phlx Rule 972 requires member because it effects a change that: (i) Does Requirement, which was omitted from organizations to satisfy the Security not significantly affect the protection of the original draft. Phlx Rule 909 Requirement within 15 days following investors or the public interest; (ii) does provides that the Security Requirement the closing of Demutualization in order not impose any significant burden on may be satisfied by a member for member organizations to avoid competition; and (iii) by its terms, does organization in one of three ways: (1) By suspension. The Exchange is proposing not become operative for 30 days after maintaining excess net capital in an to extend the 15-day time period to 45 the date of the filing, or such shorter amount specified by the Exchange; (2) days. The Exchange believes that the time as the Commission may designate by providing an acceptable guaranty by extension of time will provide member if consistent with the protection of a clearing member organization organizations with sufficient time to investors and the public interest. guaranteeing the payment of any claims process and complete the tasks The Exchange has requested that the against the member organization; or (3) necessary to meet the Security Commission waive the thirty day pre- by maintaining a deposit with the Requirement and avoid suspension. operative waiting period and the five Exchange in an amount not to exceed Finally, Phlx Rule 972 contains two business day pre-filing period, in order $50,000. cross-references that are incorrect. First, to facilitate member organization The current proposal would add a Phlx Rule 909(c) is referred to in Phlx compliance with new Phlx Rule 909. fourth method by which a member Rule 972(a). The cross-reference should The Commission believes that it is organization may satisfy the Security simply be to Phlx Rule 909. Second, consistent with the protection of investors and the public interest to Requirement. Specifically, the proposed Phlx Rule 972(b) refers to a 30-day accelerate the operative date of the amendment to Phlx Rule 909 would period from Phlx Rule 921(c). That 30- proposal and waive the pre-filing allow a member organization to satisfy day reference is incorrect (it is a 60-day requirement.11 The Commission the Security Requirement by entering period in Phlx Rule 921(c)). The believes that such acceleration and into an acceptable agreement among the reference should simply refer to the 4 waiver would provide member Exchange, SCCP and the member ‘‘period’’ in Phlx Rule 921(c). organization (a ‘‘Security Agreement’’), organizations with a somewhat greater which would establish and assign to the 2. Statutory Basis period of time to satisfy the Security Exchange a first priority perfected lien Requirement and help facilitate The Exchange believes that its on and continuing security interest in compliance with new Phlx Rule 909. proposal is consistent with section 6(b) the excess margin funds held in such For this reason, the Commission of the Act 7 in general, and furthers the member organization’s SCCP margin designates that the proposal become objectives of section 6(b)(5) of the Act 8 account.5 Should a member operative immediately and that the five in particular, in that it promotes just organization elect to provide security to business day pre-filing period be and equitable principles of trade, the Exchange in the form of a Security waived. At any time within sixty days removes impediments to and perfects Agreement, any outstanding claims by after the filing of the proposed rule the mechanisms of a free and open the Exchange, SCCP or other Exchange change, the Commission may summarily market, and in general, protects members or member organizations abrogate this rule change if it appears to investors and the public interest by would be satisfied against the excess the Commission that such action is offering member organizations another margin funds in the Phlx member necessary or appropriate in the public method to satisfy the Security organization’s SCCP margin account. interest, for the protection of investors, Requirement, by allowing member The Exchange had intended to capture or otherwise in furtherance of the organizations more time to comply with this form of security when drafting the purposes of the Act. provision in Phlx Rule 909 covering an the Security Requirement and by acceptable guaranty by a clearing correcting cross-references in Phlx Rule IV. Solicitation of Comments member organization, but omitted to 972. Interested persons are invited to capture SCCP specifically.6 B. Self-Regulatory Organization’s submit written data, views and Accordingly, this new method of Statement on Burden on Competition arguments concerning the foregoing, meeting the Security Requirement is a including whether the proposed rule variation of an existing method, The Exchange does not believe that change is consistent with the Act. particularly because many member the proposed rule change will impose Persons making written submissions organizations doing business on the any burden on competition. should file six copies thereof with the equity floor do not have a relationship C. Self-Regulatory Organization’s Secretary, Securities and Exchange with a ‘‘clearing member organization;’’ Statement on Comments on the Commission, 450 Fifth Street, NW., their ‘‘clearing’’ relationship is instead Proposed Rule Change Received From Washington, DC 20549–0609. with SCCP. Members, Participants or Others Comments may also be submitted The purpose of the proposed electronically at the following e-mail amendments to Phlx Rule 972 is to The Phlx neither solicited nor address: [email protected]. All extend the time member organizations received written comments with respect comment letters should refer to File No. have to satisfy the Security Requirement to the proposed rule change. SR–Phlx–2004–06. This file number following the closing of III. Date of Effectiveness of the should be included on the subject line Proposed Rule Change and Timing for 4 SCCP, a subsidiary of Phlx, is a registered Commission Action 9 15 U.S.C. Section 78s(b)(3)(A)(iii). clearing agency. 10 17 CFR 240.19b–4(f)(6). 5 See SCCP, Phlx Rule 9. The foregoing rule change has become 11 For purposes of accelerating the operative date 6 Although SCCP is a corporate member, under immediately effective pursuant to of the proposed rule and waiving the five-day pre- Phlx By-Law Article XII, Sections 12–2 and 12–4, filing period, the Commission notes that it has also it is neither a member organization nor even a considered the proposed rule’s impact on broker-dealer, and thus technically does not comply 7 15 U.S.C. 78f(b). efficiency, competition, and capital formation. 15 with the existing language of Phlx Rule 909(a)(i). 8 15 U.S.C. 78f(b)(5). U.S.C. 78c(f).

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if e-mail is used. To help the Form Number: DS–2053, DS–3024, 27, 1978, the Foreign Affairs Reform and Commission process and review DS–3025 and DS–3026. Restructuring Act of 1998 (112 Stat. comments more efficiently, comments Respondents: Immigrant visa and 2681, et seq.; 22 U.S.C. 6501 note, et should be sent in hardcopy or by e-mail refugee applicants. seq.), Delegation of Authority No. 234 of but not by both methods. Copies of the Estimated Number of Respondents: October 1, 1999, Delegation of Authority submission, all subsequent 630,000 per year. No. 236 of October 19, 1999, as amendments, all written statements Average Hours Per Response: 1 hour. amended, and Delegation of Authority with respect to the proposed rule Total Estimated Burden: 630,000 No. 257 of April 15, 2003 [68 FR 19875], change that are filed with the hours per year. I hereby determine that the objects to be Commission, and all written Public comments are being solicited included in the exhibition ‘‘Nicholas communications relating to the to permit the agency to: and Alexandra: At Home with the Last proposed rule change between the • Evaluate whether the proposed Tsar and his Family,’’ imported from Commission and any person, other than information collection is necessary for abroad for temporary exhibition within those that may be withheld from the the proper performance of the functions public in accordance with the of the agency, including whether the the United States, are of cultural provisions of 5 U.S.C. 552, will be information will have practical utility. significance. The objects are imported available for inspection and copying in • Evaluate the accuracy of the pursuant to loan agreements with the the Commission’s Public Reference agency’s estimate of the burden of the foreign owners. I also determine that the Room. Copies of such filing will also be proposed collection, including the exhibition or display of the exhibit available for inspection and copying at validity of the methodology and objects at the Museum of Fine Arts, the principal office of the Phlx. All assumptions used. Santa Fe, New Mexico, from on or about submissions should refer to file number • Enhance the quality, utility, and May 28, 2004 until on or about SR–Phlx–2004–06 and should be clarity of the information to be September 6, 2004, at the Newark submitted by March 2, 2004. collected. Museum, Newark, New Jersey, from on For the Commission, by the Division of • Minimize the reporting burden on or about September 27, 2004 until on or Market Regulation, pursuant to delegated those who are to respond, including about January 9, 2005, at the Cinncinati authority.12 through the use of automated collection Museum Center, Cincinnati, Ohio, from Margaret H. McFarland, techniques or other forms of technology. on or about January 29, 2005 until on or Deputy Secretary. FOR FURTHER INFORMATION CONTACT: about May 1, 2005, and at possible [FR Doc. 04–2813 Filed 2–9–04; 8:45 am] Copies of the proposed information additional venues yet to be determined, BILLING CODE 8010–01–P collection and supporting documents is in the national interest. Public Notice may be obtained from Brendan of these Determinations is ordered to be Mullarkey of the Office of Visa Services, published in the Federal Register. DEPARTMENT OF STATE U.S. Department of State, 2401 E St. NW, RM L–703, Washington, DC 20520, FOR FURTHER INFORMATION CONTACT: For [Public Notice 4620] who may be reached on (202) 663–1166. further information, including a list of the exhibit objects, contact the Office of 30-Day Notice of Proposed Information Public comments and questions should the Legal Adviser, U.S. Department of Collection: Forms DS–2053, DS–3024, be directed to the State Department State, telephone: (202) 619–6982. The DS–3025 and DS–3026; Medical Desk Officer, Office of Information and Examination for Immigrant or Refugee Regulatory Affairs, Office of address is U.S. Department of State, SA– Applicant; OMB Control Number 1405– Management and Budget (OMB), 44, 301 4th Street SW., Room 700, 0113 Washington, DC 20530, who may be Washington, DC 20547–0001. reached on (202) 395–7860. Dated: February 3, 2004. AGENCY: Department of State. Dated: January 30, 2004. C. Miller Crouch, ACTION: Notice. Janice L. Jacobs, Principal Deputy Assistant Secretary for SUMMARY: The Department of State has Deputy Assistant Secretary of State for Visa Educational and Cultural Affairs, Department submitted the following information Services, Bureau of Consular Affairs, of State. collection request to the Office of Department of State. [FR Doc. 04–2823 Filed 2–9–04; 8:45 am] [FR Doc. 04–2829 Filed 2–9–04; 8:45 am] Management and Budget (OMB) for BILLING CODE 4710–08–P approval in accordance with the BILLING CODE 4710–06–P Paperwork Reduction Act of 1995. Comments should be submitted to OMB DEPARTMENT OF STATE within 30 days of the publication of this DEPARTMENT OF STATE notice. [Public Notice 4618] [Public Notice 4589] The following summarizes the information collection proposal Culturally Significant Objects Imported Overseas Security Advisory Council submitted to OMB: for Exhibition Determinations: (OSAC) Meeting Notice; Closed Type of Request: Extension of ‘‘Nicholas and Alexandra: At Home Meeting currently approved collection. With the Last Tsar and His Family’’ Originating Office: Bureau of Consular Affairs, Department of State (CA/VO). AGENCY: Department of State. The Department of State announces a meeting of the U.S. State Department— Title of Information Collection: ACTION: Notice. Medical Examination for Immigrant or Overseas Security Advisory Council on Refugee Applicant. SUMMARY: Notice is hereby given of the February 24 and 25 at the Bechtel Frequency: On occasion. Once per following determinations: Pursuant to Corporation in San Francisco, respondent. the authority vested in me by the Act of California. Pursuant to Section 10(d) of October 19, 1965 (79 Stat. 985; 22 U.S.C. the Federal Advisory Committee Act 12 17 CFR 200.30–3(a)(12). 2459), Executive Order 12047 of March and 5 U.S.C. 552b(c) (1) and (4), it has

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been determined the meeting will be DEPARTMENT OF TRANSPORTATION pm, Monday through Friday, except closed to the public. Matters relative to Federal holidays. classified national security information Federal Aviation Administration FOR FURTHER INFORMATION CONTACT: as well as privileged commercial Tim information will be discussed. The [Summary Notice No. PE–2004–09] Adams (202) 267–8033, Sandy agenda will include updated committee Buchanan-Sumter (202) 267–7271, reports, a global threat overview, and Petitions for Exemption; Summary of Office of Rulemaking (ARM–1), Federal other discussions involving sensitive Petitions Received Aviation Administration, 800 and classified information, and Independence Avenue, SW., AGENCY: Federal Aviation Washington, DC 20591. corporate proprietary/security Administration (FAA), DOT. information, such as private sector This notice is published pursuant to physical and procedural security ACTION: Notice of petitions for 14 CFR 11.85 and 11.91. policies and protective programs and exemption received and of dispositions of prior petitions. Issued in Washington, DC, on February 4, the protection of U.S. business 2004. information overseas. SUMMARY: Pursuant to FAA’s rulemaking Donald P. Byrne, For more information contact Marsha provisions governing the application, Assistant Chief Counsel for Regulations. Thurman, Overseas Security Advisory Council, Department of State, processing, and disposition of petitions Petitions for Exemption Washington, DC 20522–2008, phone: for exemption part 11 of Title 14, Code (571) 345–2214. of Federal Regulations (14 CFR), this Docket No.: FAA–2003–16475. notice contains a summary of certain Dated: January 20, 2004. Petitioner: Soaring Society of petitions seeking relief from specified America, Inc. Joe D. Morton, requirements of 14 CFR, dispositions of Director of the Diplomatic Security Service, certain petitions previously received, Section of 14 CFR Affected: 14 CFR Department of State. and corrections. The purpose of this 91.215(c). [FR Doc. 04–2822 Filed 2–9–04; 8:45 am] notice is to improve the public’s Description of Relief Sought: BILLING CODE 4710–24–P awareness of, and participation in, this To allow members of the Soaring aspect of FAA’s regulatory activities. Society of America, Inc., to operate Neither publication of this notice nor transponder-equipped gliders with the DEPARTMENT OF TRANSPORTATION the inclusion or omission of information transponders turned off, when the glider in the summary is intended to affect the is being operated more than 40 nautical Office of the Secretary legal status of any petition or its final miles from the primary airport in class disposition. Motor Vehicles; Alternative Fuel B airspace and more than 20 nautical Vehicle (AFV) Report DATES: Comments on petitions received miles from the primary airport in class must identify the petition docket C airspace. AGENCY: Office of the Secretary, DOT. number involved and must be received [FR Doc. 04–2882 Filed 2–9–04; 8:45 am] ACTION on or before March 1, 2004. : Notice of availability—Fleet BILLING CODE 4910–13–P (AFV) report. ADDRESSES: You may submit comments [identified by DOT DMS Docket Number SUMMARY: In accordance with the Energy FAA–200X–XXXXX] by any of the DEPARTMENT OF TRANSPORTATION Policy Act of 1992 (EPAct) (42 U.S.C. following methods: 13211–13219) as amended by the • Federal Aviation Administration Energy Conservation Reauthorization Web Site: http://dms.dot.gov. Act of 1998 (Pub. L. 105–388), and Follow the instructions for submitting Executive Order (EO) 13149, ‘‘Greening comments on the DOT electronic docket [Summary Notice No. PE–2004–10] site. the Government Through Federal Fleet • Petitions for Exemption; Summary of and Transportation Efficiency,’’ the Fax: 1–202–493–2251. • Mail: Docket Management Facility; Petitions Received; Dispositions of Department of Transportation’s FY 2003 Petitions Issued annual alternative fuel vehicle report is U.S. Department of Transportation, 400 available on the Department of Seventh Street, SW., Nassif Building, Room PL–401, Washington, DC 20590– AGENCY: Federal Aviation Transportation Web site: http:// Administration (FAA), DOT. isddc.dot.gov/OLPFiles/OST/010978.pdf 001. The report is also available at: http:// • Hand Delivery: Room PL–401 on ACTION: Notice of petitions for isddc.dot.gov, follow the search the plaza level of the Nassif Building, exemption received and of dispositions instructions to search for ‘‘DOT FY03 400 Seventh Street, SW., Washington, of prior petitions. AFV.’’ DC, between 9 am and 5 pm, Monday through Friday, except Federal holidays. SUMMARY: Pursuant to FAA’s rulemaking FOR FURTHER INFORMATION CONTACT: • Federal eRulemaking Portal: Go to provisions governing the application, George Kuehn, Office of Transportation http://www.regulations.gov. Follow the processing, and disposition of petitions and Facilities, 400 7th Street SW., online instructions for submitting for exemption part 11 of Title 14, Code Washington, DC 20590; telephone (202) comments. of Federal Regulations (14 CFR), this 366–1614. Docket: For access to the docket to notice contains a summary of certain Dated: January 29, 2004. read background documents or petitions seeking relief from specified Rita Martin, comments received, go to http:// requirements of 14 CFR, dispositions of Director, Administrative Management Policy dms.dot.gov at any time or to Room PL– certain petitions previously received, Division. 401 on the plaza level of the Nassif and corrections. The purpose of this [FR Doc. 04–2739 Filed 2–9–04; 8:45 am] Building, 400 Seventh Street, SW., notice is to improve the public’s BILLING CODE 4910–62–P Washington, DC, between 9 am and 5 awareness of, and participation in, this

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aspect of FAA’s regulatory activities. 10 operations at LGA without the FOR FURTHER INFORMATION CONTACT: Neither publication of this notice nor necessary slots required under § 93.123. Sheryl Scarborough, Financial Analysis the inclusion or omission of information [FR Doc. 04–2883 Filed 2–9–04; 8:45 am] and Passenger Facility Charge Branch in the summary is intended to affect the (APP–510), Room 619, Airports BILLING CODE 4910–13–P legal status of any petition or its final Financial Assistance Division, Office of disposition. Airport Planning and Programming, Federal Aviation Administration, 800 DATES: Comments on petitions received DEPARTMENT OF TRANSPORTATION Independence Avenue, SW., must identify the petition docket Federal Aviation Administration Washington, DC 20591, telephone (202) number involved and must be received 267–8825. on or before March 1, 2004. Notice of Policy Regarding the SUPPLEMENTARY INFORMATION: In recent ADDRESSES: You may submit comments Eligibility of Airport Ground Access yeas, the FAA has been requested to [identified by DOT DMS Docket Number Transportation Projects for Funding approve PFC funding of airport ground FAA–200X–XXXXX] by any of the Under the Passenger Facility Charge access transportation facilities. following methods: Program Proposals to build rail transit projects in • Web Site: http://dms.dot.gov. AGENCY: Federal Aviation particular have tended to involve large Follow the instructions for submitting Administration (FAA), DOT. amounts of funds—from several comments on the DOT electronic docket ACTION: Notice. hundred million to more than a billion site. dollars—and thereby generated close • Fax: 1–202–493–2251. SUMMARY: In accordance with section scrutiny, if not controversy. The Federal • Mail: Docket Management Facility; 123(e) of the Vision 100—Century of Transit Administration (FTA) estimates U.S. Department of Transportation, 400 Aviation Reauthorization Act, (Pub. L. that three dozen or more localities Seventh Street, SW., Nassif Building, 108–176, December 12, 2003), the currently have plans or proposals to Room PL–401, Washington, DC 20590– Federal Aviation Administration (FAA) build fixed guideway access projects to 001. is publishing its policy with regard to their airports. • Hand Delivery: Room PL–401 on the eligibility of airport ground access We are publishing this policy to the plaza level of the Nassif Building, transportation projects for funding comply with the requirement of section 400 Seventh Street, SW., Washington, under the Passenger Facility Charge 123(e) of the Vision Act. Section 123(e) DC, between 9 am and 5 pm, Monday (PFC) program. directs the FAA to publish its current through Friday, except Federal The FAA determines the eligibility of policy on airport ground access Holidays. airport ground access transportation transportation project eligibility for PFC • Federal eRulemaking Portal: Go to projects, no matter the technology funding within 60 days after enactment http://www.regulations.gov. Follow the proposed (e.g. road, heavy or light rail, of the Vision 100 Act. By consolidating online instructions for submitting water) for funding under the PFC guidance set forth in the preamble to the comments. program, on a case-by-case basis after a PFC regulation as well as the PFC Docket: For access to the docket to review of the particulars associated with regulation itself (14 CFR part 158), FAA read background documents or each unique proposal. In general, a Order 5500.1 ‘‘Passenger Facility comments received, go to http:// request to use PFC’s to fund an airport Charge’’ (August 9, 2001), the AIP dms.dot.gov at any time or to Room PL– ground access transportation project Handbook (change 1 to FAA Order 401 on the plaza level of the Nassif must be submitted by a qualified 5100.38B (January 8, 2004), and FAA Building, 400 Seventh Street, SW., applicant and the project must be PFC Records of Decision and Final Washington, DC, between 9 am and 5 eligible for funding under the Airport Agency Decisions approving the use of pm, Monday through Friday, except Improvement Program (AIP); meet at PFC revenue to finance airport ground Federal Holidays. least one of the PFC program objectives access transportation projects, this and, if applicable, at least one of the FOR FURTHER INFORMATION CONTACT: Tim notice should assist public agencies significant contribution requirements 1; Adams (202) 267–8033, Sandy eligible to impose PFC’s, air carriers, and be adequately justified (49 U.S.C. Buchanan-Sumter (202) 267–7271, local transit operators, and other 40117(d)(3)). In addition, all PFC Office of Rulemaking (ARM–1), Federal stakeholders in understanding how the projects must conform to other Aviation Administration, 800 FAA applies the statutory and applicable regulatory requirements as Independence Avenue, SW., regulatory criteria governing the PFC referenced in 14 CFR part158 (e.g., Washington, DC 20591. program to airport ground access environmental requirements, specified transportation projects. The FAA has a This notice is published pursuant to implementation schedules). Airport 14 CFR 11.85 and 11.91. more extensive background in ground access transportation projects evaluating highway ground access Issued in Washington, DC, on February 4, proposed at a PFC level higher than $3 projects through its experiences with 2004. must also conform to the AIP funding the various FAA airport grant programs Donald P. Byrne, test (49 U.S.C. 40117(b)(4)(B); 14 CFR and through the numerous requests for Assistant Chief Counsel for Regulations. 158.17(a)(2)) and the airside needs test PFC funding of highway access projects (49 U.S.C. 40117(d)(4); 14 CFR Petitions for Exemption (e.g. Las Vegas McCarran International, 158.17(a)(3)). Miami International, and Baltimore- Docket No.: FAA–2003–15925. ADDRESSES: This is an informational Washington International Airports). Petitioner: AirTran Airways, Inc. notice only and comments are not being Therefore, although it can be used for Section of 14 CFR Affected: solicited at this time. any proposed mode of transportation, 14 CFR 93.123. this summary of FAA policy reflects the Description of Relief Sought: 1 As the FAA has applied the significant FAA’s recent experience in approving contribution requirement, a finding that a project AirTran seeks reconsideration for the meets a PFC objective is subsumed within a finding three major fixed guideway access denial of its petition for exemption, that a project meets the significant contribution projects—the Light Rail System (LRS) at which would allow AirTran to conduct requirement. John F. Kennedy International Airport

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(JFK), the monorail project at Newark 2. May Other Parties Participate in use of eligibility criteria for access roads Liberty International Airport, and the Project Design and Development? to judge eligibility of rail and fixed Airport MAX project at Portland Public agencies are strongly guideway systems is based, in part, on International Airport (PDX). This FAA encouraged to coordinate the design and a March 15, 1971, opinion by the FAA policy is subject to refinement in the development of airport ground access Assistant Associate General Counsel. In future as different issues are raised transportation projects with local and that opinion, the Assistant Associate during the evaluation of new projects. regional transportation planning boards General Counsel determined that rail service to an airport was AIP eligible The FAA determines the eligibility (e.g., metropolitan planning organizations). This is especially under the category of airport ‘‘entrance and justification for airport ground and service roads.’’ The eligibility access transportation projects, no matter important in cases where the PFC- funded project necessitates access or criteria summarized in the paragraphs the technology proposed (e.g., road, access improvements to a public cited above were themselves established heavy or light rail, water), on a case-by- roadway or transit system off airport through agency legal opinions case basis after a review of the property. (Section 187 of the Vision 100 interpreting 49 U.S.C. and its particulars associated with each unique Act requires public agencies controlling predecessor statutes. proposal (Preamble to 14 CFR part 158, large or medium hub airports that are To be AIP and PFC eligible, the § 158.15 Project eligibility (56 FR 24258, planning to construct or relocate an airport ground access transportation May 29, 1991)). In general, an airport airport or construct a new runway or project must meet the following ground access transportation project major runway extension to offer the conditions: (1) The road or facility may must: be submitted by a qualified local metropolitan planning only extend to the nearest public applicant; be eligible for funding under organization the opportunity to review highway or facility of sufficient capacity the AIP; meet at least one of the PFC any airport layout plan or master plan to accommodate airport traffic; (2) the program objectives and, if applicable, at in which the proposed project is access road or facility must be located on the airport or within a right-of-way least one of the significant contribution depicted. This provision is intended to acquired by the public agency; and (3) findings; and be adequately justified (49 ensure that any ground access improvements necessitated by the the access road or facility must U.S.C. 40117(d)(3)). In addition, all PFC exclusively serve airport traffic . Related projects must conform to other proposed project are identified in a timely manner.) However, projects to be facilities, such as acceleration and applicable regulatory requirements as deceleration lanes, exit and entrance referenced in 14 CFR part 158 (e.g., funded with PFC revenues must conform to the eligibility conditions ramps, lighting, equipment to provide environmental requirements, specified operational control of a rail system or implementation schedules). Airport specified below. In addition, the public agency is the final authority on the type people mover, and rail system or people ground access transportation projects mover stops at intermediate point on the approved for PFC levels above $3 must and scope of an airport ground access transportation project submitted for PFC airport are eligible when they are a also conform to the AIP funding test (49 funding. 49 U.S.C. 40117(b)(2) specifies necessary part of an eligible access road U.S.C. 40117(b)(4)(B); 14 CFR that ‘‘A state, political subdivision of a or facility (change 1 to FAA Order 158.17(a)(2)) and the airside needs test state, or authority of a state or political 5100.38B (January 8, 2004) paragraphs (49 U.S.C. 40117(d)(4); 14 CFR subdivision that is not the eligible 620a(5) and 622(a). Related facilities may also include information 158.17(a)(3)), as discussed more fully agency may not regulate or prohibit the technology and other electronic systems below. imposition or collection of a passenger that will improve the operation, facility fee or the use of the passenger I. Qualified Applicants for PFC Projects capacity or safety of the ground access facility revenue.’’ 1. Who May Apply? facility, overhead variable message II. PFC Project Eligibility signs, and traffic control systems. In addition to the above eligibility The PFC statute (49 U.S.C. 1. How Is PFC Eligibility Established? 40117(a)(2)) and regulation (14 CFR part criteria, the public agency must retain 158.5) provide that only ‘‘a public Under 49 U.S.C. 40117(a)(3)(A), PFC ownership of the completed ground agency that controls a commercial eligibility for airport ground access access transportation project. The public service airport’’ may submit an transportation projects is identical to agency may choose to operate the application to fund a specific project that of AIP projects. AIP eligibility of facility on its own or may choose to with PFC revenues. As defined in 14 airport projects, codified in Chapter 471 lease the facility to a local or regional CFR 158.3, a public agency may be ‘‘a of 49 U.S.C., is summarized in change transit agency for operation within a 1 to FAA Order 5100.38B, AIP State or any agency of one or more larger local or regional transit system. Handbook (January 8, 2004). 49 U.S.C. States; a municipality or other political 47102(3)(1) specifically identifies 2. What Does the FAA Consider the subdivision of a State; an authority projects to support the movement of Nearest Highway or Facility? created by Federal, State, or local law; passengers, cargo, and baggage as being An airport ground access a tax supported organization; or an eligible airport development. transportation project extending off the Indian tribe or pueblo that controls a In past decisions on the eligibility of airport must connect to the nearest commercial service airport.’’ In airport ground access transportation public highway or facility (depending addition, the sponsor of an airport projects, the FAA has relied on the on the transportation mode in question) participating in the Pilot Program on eligibility conditions summarized in of sufficient capacity to accommodate Private Ownership of Airports (49 paragraphs 620a, ‘‘Access Roads,’’ and airport traffic (change 1 to FAA Order U.S.C. 47134) may also submit a PFC 622b, ‘‘Rail Service to Airports’’ of 5100.38B, paragraph 620a(1)). More application. A commercial service change 1 to FAA Order 5100.38B than one access facility and/or airport is defined in 14 CFR 158.3 as ‘‘a (January 8, 2004) and its predecessor connection point may be eligible if the public airport enplaning 2,500 or more FAA Order 5100.38A (October 24, airport traffic is of sufficient volume to passengers annually and receiving 1989), paragraphs 553, ‘‘Airport Roads,’’ require more than one access route scheduled service.’’ and 555 ‘‘Rapid Transit Facilities.’’ The (change 1 to FAA Order 5100.38B,

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paragraph 620a(4)). Situations where to the airport terminus to be considered facility (some exceptions may exist if more than one access route is needed within the airport boundary.2 the rail station is also convenient to a would occur if an existing access route nearby non-airport facility). A facility 4. What Is Exclusive Airport Use? could not be expanded to meet expected near the boundary of an airport or traffic due to physical, environmental, The requirement under change 1 of which otherwise may attract non-airport or other binding constraints; or if a FAA Order 5100.38B paragraph 620a(3) use may qualify as exclusive use if particular access route is poorly situated that the airport ground access system access control could be to serve a significant flow of traffic transportation project be for the implemented by design features, pricing associated with a geographically exclusive use of airport patrons and techniques (making non-airport use separate region served by the airport. employees means that the facility can non-economical), routing to discourage experience no more than incidental use Moreover, the FAA has allowed an non-airport use, or other methods by non-airport users. ‘‘Incidental use by approved by the FAA 3. If a road or airport ground access transportation non-airport users’’ means that through project to connect to more than one facility is intended to serve both airport system access control procedures, and non-airport users, only those point of a public transportation mode if physical alignment, schedules, pricing the connections are to physically physically-discrete subsections of the or for other reasons, routine use by non- road or facility that exclusively serve separated systems. For instance, in the airport users would be unattractive and airport users could be funded with AIP case of the LRS at JFK, the FAA allowed non-airport users in fact constitute only or PFC funds. In the case of the PDX the LRS to connect to the nearest-points- a minor percentage of total system Airport MAX rail system, the FAA of access of two separate public rail ridership. Exclusive airport use does not permitted PFC funding for only one of systems (i.e., the New York City Transit mean that any non-airport use must be three discrete segments (the on-airport Subway and the Long Island Rail Road). prevented at all costs. In evaluating this segment ending at the terminal) as it Given the size of the New York City requirement, the FAA considers alone was solely intended for use by metropolitan area and the extremely whether techniques that would enable airport patrons and employees. close proximity of one rail connection the public agency to prevent non-airport point to airport parking facilities to be use would be prohibitively expensive. III. PFC Objective and Significant served by the LRS, the FAA determined However, use of the airport ground Contribution Findings that the access to two rail sites serving access transportation project by more In addition to AIP eligibility, the PFC geographically distinct areas was than a minor percentage of non-airport statute as implemented by 14 CFR part reasonable. users would raise the FAA’s concerns 158, requires that PFC projects, 3. What Qualifies as Airport-Owned with regard to a project’s eligibility. including PFC-funded airport ground Determining whether a facility meets Land or Rights-of-Way? access transportation projects, must the standard of exclusive use requires a accomplish one or more PFC program Airport ground access transportation case-by-case evaluation, although objectives and, if applicable, be found to projects built entirely on airport-owned certain types of facilities are easier to make a significant contribution to the land within the traditional boundaries evaluate than others. A rail station national air transportation system in one of an airport clearly meet the airport- located within the airport boundary or more specific areas, depending on the owned land requirement for AIP (particularly one in or adjacent to an size of the airport and the proposed PFC eligibility, as stated in change 1 to FAA airport terminal as in the case of level. In accordance with 49 U.S.C. Order 5100.38B, paragraph 620a(2). Lambert-St. Louis, Chicago O’Hare, 40117(d)(2), as implemented by 14 CFR Moreover, an airport ground access Hartsfield-Jackson Atlanta, Ronald 158.15(a), the PFC program objectives transportation project may extend off Reagan Washington National, and are: (1) Preserving or enhancing the the traditional boundaries of an airport Baltimore-Washington airports) would safety, capacity, or security of the (to the nearest off-airport highway or typically be used only by airport users national air transportation system; (2) access facility) provided that the right- and therefore be an exclusive use reducing noise or mitigate noise impacts of-way for the project will be owned and resulting from an airport that is part of 2 The Court reviewed the FAA’s application of the such system; or (3) furnishing controlled by the public agency for the eligibility standards from FAA Order 5100.38A life of the project and the project is (October 29, 1989), paragraph 553, ‘‘Airport Roads,’’ opportunities for enhanced competition connected to the airport at some point, and paragraph 555, ‘‘Rapid Transit Facilities.’’ between or among air carriers. In thus qualifying as an appurtenant area Among other things, the petitioner had contented accordance with 49 U.S.C. that the right-of-way between the Jamaica Long 40117(b)(4)(A) as implemented by 14 and within the airport boundary under Island Rail Road Station, a 3.1 mile elevated railway 49 U.S.C. 47102(2)(A)(ii). To satisfy this along the Van Wyck Expressway, and JFK did not CFR 158.17(b), a large or medium hub eligibility requirement, the public meet FAA eligibility requirements because this airport proposing a project at a $4 or agency must amend its Airport Layout right-of-way was not ‘‘on-airport.’’ The petitioner $4.50 PFC level must demonstrate that argued that for a right-of-way to be on-airport, it the project makes a significant Plan and Exhibit A to show the right-of- must be attached to the airport landing area along way. The FAA’s application of these its entire length. The court upheld the FAA’s contribution to: (1) Improving air safety eligibility standards was upheld by the position, based upon FAA Order 5100.38A, and security; (2) increasing competition U.S. Court of Appeals for the District of paragraphs 553 and 555, that the right-of-way need among air carriers; (3) reducing current only be attached to the airport landing area at some or anticipated congestion; or (4) Columbia Circuit for the JFK LRS PFC point, but not necessarily along the entire length of decision in the case of the Air Transport the right-of-way. The court also noted that the Association of America v. FAA, 169 FAA’s interpretation, that once a public agency 3 For instance, during the FAA’s evaluation of the F.3d. 1, 5 (D.C. Cir 1999) finding a owns the right-of-way, that strip of land is by JFK LRS, it was suggested that local non-airport definition airport-owned and therefore ‘‘within the commuters might park in the JFK long term parking certification by the eligible agency to airport’’ was ‘‘reasonable’’ and ‘‘consisted with the facilities and enter the LRS to access the Long take ownership of the right-of-way FAA’s own regulations and past practice.’’ 169 F. Island Railroad or the subway lines. The FAA before it would use PFC funds to be 3d at 6. The court also cited 56 FR 24,254, 24,258 concluded that such non-airport uses of the LRS adequate, and further, finding that the (1991), the FAA’s preamble to the final PFC rule, would be economically unfeasible due to the which states that ‘‘ground transportation projects combined cost of the roundtrip LRS fare and airport eligible airport ground access are eligible if the public agency acquires the right- parking relative to alternative means of accessing transportation project may be attached of-way.’’ 169 F. 3d at 6. the non-LRS transit system.

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reducing the impact of aviation noise on 2. Which Significant Contribution criteria of eligibility, PFC-funded people living near the airport. Findings Are Typically Proposed for an ground access transportation projects Any public agency requesting PFC Airport Ground Access Transportation must be adequately justified. This funding for an airport ground access Project? requirement is established by 49 U.S.C. 40117(d)(3). The nature of the project transportation project at a $1, $2, or $3 Similar to the PFC objectives justification depends in large measure PFC level must meet the PFC Objectives requirement, public agencies typically on which PFC objective the public prepare an airport ground access requirement. Ground access agency relief on to support the project. transportation project description and transportation projects proposed for Airport ground access transportation justification to meet the ‘‘reduce current funding at a $4 or $4.50 PFC level at a projects are typically intended to or anticipated congestion‘‘significant small hub or smaller airport must also preserve or enhance the capacity of the contribution finding. The public meet the PFC Objectives requirement. national air transportation system. In agency’s analysis may be similar to that However, airport ground access this case, the justification should be outlined under the PFC objectives transportation projects proposed for framed in terms of the project’s effect on discussion above. In analyzing the funding at a $4 or $4.50 PFC level at a capacity. large or medium hub airport must meet significant contribution benefits of a ‘‘congestion’’ project, the FAA considers 1. How Can a Public Agency the significant contribution the following questions; in addition to Demonstrate Adequate Justification for requirement. any unique aspects of a project: (1) Does an Airport Access Road Project? 1. Which PFC Objectives Are Typically the project support or is it a part of a In the case of standard airport access Met by an Airport Ground Access capacity project to which the FAA has road projects, the case for new or Transportation Project? allocated Federal resources or that enlarged roads can usually be made by would qualify for such resources?; (2) Is a straightforward traffic study. The Typically, public agencies propose the project included in an AIP Letter of traffic study should demonstrate the that an airport ground access Intent or does it satisfy the FAA’s impact of the access road project in transportation project meets the benefit-cost criteria for large AIP reducing roadway congestion and trip objective of preservation or discretionary investments?; (3) Has the times to the airport. Usually, the need enhancement of capacity of the national project been identified as an important for new road capacity is evident to all air transportation system, in that airport item in an FAA Airport Capacity users of an airport and can be clearly passengers or air cargo customers may Enhancement Plan?; or (4) Does the demonstrated based on these studies. project alleviate an important constraint be afforded faster and/or more reliable 2. How Can a Public Agency access times to airports, thus reducing on airport growth or service? (FAA Order 5500.1, Passenger Facility Charge, Demonstrate Adequate Justification for total trip times. The FAA uses reduced an Intermodal Project? trip time as a rough gauge of capacity (August 9, 2001), paragraph 10–12b.) benefits as it means that the national air Intermodal projects—especially rail or 3. How Does the FAA Analyze an other fixed guideway systems—can be transportation system can accommodate Airport Ground Access Transportation complex to analyze. To date, the FAA the same number of people or amount Project That Is Undertaken To Obtain has issued PFC decisions on only a few of air cargo with less average delay, or Necessary Local Approvals for Other large-scale airport rail projects and has alternatively, a larger number of people PFC Financed Projects? employed two methods to determine or a larger amount of air cargo at the In some cases, a state or local adequate justification. Due to this same level of average delay. These government agency (other than the limited scope of prior experience, the airport passengers or air cargo airport public agency) may condition its FAA continues to consider adequate customers could include users of the approval of an airport project requested justification on a case-by-case basis and proposed access system, as well as users by the public agency with the is not prepared at this time to constrain of other means of airport access who requirement that the public agency also public agencies’ options for establishing would benefit from reductions in build an airport ground access justification. The FAA has relief on the ground congestion enabled by the transportation project. To date, the FAA specialized expertise of the FTA to proposed system. has not permitted the PFC objectives or validate measured capacity effects of A public agency may propose that an other PFC requirements that must be airport rail projects and will continue to airport ground access transportation met by the requested airport project to do so. An airport ground access project meets other PFC objectives apart be imputed to the airport ground access transportation project can be found from or in addition to capacity transportation project simply because adequately justified if it has the effect of preservation or enhancement. For the access project has been made a condition of the airport project’s alleviating a ground access constraint instance, a project could benefit approval as a matter of state or local that otherwise would impede or restrain competition between airlines if the law. Rather, the FAA has consistently use of the airport by air passengers. improved ground access results in a required that the proposed airport Using this method, the public agency passenger being able to choose between ground access transportation project, on must demonstrate that, but for the air carriers operating at different its own merits, satisfy one or more of proposed system, use of the airport airports. In all cases, the objective(s) the PFC objectives, as well as conform would be substantially less, either now cited for the project must be realistic to the other requirements of the PFC or in the future, than it would otherwise and supported by analysis. The degree statute and regulation, before granting be due to ground access constraints. The to which the project meets its approval of the airport ground access Office of the Inspector General (OIG) objective(s) is, in turn, the basis for the transportation project. agreed with this as an approach to the determination of the project’s adequate justification requirement in a justification. IV. Adequate Justification January 21, 1998, management advisory The FAA notes that, in addition to to the FAA pertaining to the JFK LRS meeting the statutory and regulatory PFC decision. In the case of the JFK

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LRS, the FAA found the LRS to be create a risk to investment plans for does not depend upon whether the adequately justified based on analysis enhancing airside safety, security, and public agency also contemplates using that showed that, but for the LRS, 3.35 capacity. The OIG also recommended other sources to fund portions of the million fewer air passengers would be that the public agency explain why the project. There is no requirement in the able to access JFK by the year 2013 due LRS should be funded without PFC statute or regulation for public to roadway access constraints. contribution from surface transportation agencies to fund such projects The FAA has also accepted as funds or other non-airport revenues. intermodally (i.e., from multiple transit adequate justification the public funding sources). The FAA has agency’s demonstration that the benefits 1. Must a Public Agency Fully Fund identified factors that could encourage of the project in terms of reduced travel Airside Safety, Security, and Capacity or discourage a public agency in time to the airport (either for project Projects Before Applying PFC Funds to passengers themselves or for all air Airport Ground Access Transportation pursuing intermodal funding. The passengers who benefit from less Projects? magnitude of aviation benefits expected congested roadways) are reasonable The answer to this question depends of the project to establish adequate relative to the PFC cost of the project. on what PFC level the public agency justification for PFC funding will be less This approach was used, in part, to proposes for the project. if the amount of PFC funding requested establish adequate justification for the The PFC statute and regulation do not is reduced by non-PFC participation. Airport MAX light rail system that will assign priority to projects meeting any Non-PFC or non-airport financial link PDX to the regional rail network. one objective of the PFC program or to participation may also help build local Use of this method of analysis is airside projects in preference to non- consensus for the project by voluntary for the public agency, as airside projects for projects proposed at ameliorating concerns on the part of the current regulations do not require a $1, $2, or $3 PFC level. Accordingly, aviation community about the use of public agencies to use benefit-cost the FAA cannot require that a public airport resources for non-airside analysis to show adequate justification agency fund an airside project in investments. However, the partial for a PFC project. preference to an airport ground access funding of a project from non-PFC transportation project at these PFC However, the requirement for sources does not negate the exclusive levels. However, the FAA would be very adequate justification is not voluntary. use requirement associated with PFC A decision not to a benefit-cost analysis concerned to find that critical airport funding. In any instance where PFC does not relieve a public agency of the safety, security, and/or airside capacity funding is used to fund a component of need to demonstrate adequate needs could not be funded as a result of justification in some other way. The the funding of an airport ground access an intermodal project, that component FAA and FTA will consider other transportation project. In order to must be for exclusive airport use (see methods of establishing adequate evaluate such concerns, the FAA may PFC Project Eligibility, above) and the justification that a public agency may require that the public agency provide public agency must adequately believe better addresses its unique relevant materials for the FAA’s review. demonstrate that the funding sources access project. At a minimum, an The PFC regulation, 14 CFR 158.25, are viable. The exclusive use acceptable approach must demonstrate already requires that the public agency requirement might complicate the that a rail project will produce a submit the airport’s capital plan with ability of a public agency to qualify for reasonable stream of congestion the PFC application. If a funding the expenditure of funds from reduction or other access benefits to air deficiency is revealed, the FAA would traditional sources of transit capital (e.g. passengers relative to the scale and cost encourage the public agency to correct FTA’s major capital investments of the project. Thus, under whatever this deficiency. program) unless the project can be method is selected, the FAA would Airport ground access transportation easily separated into exclusive and normally expect the level of justification projects proposed at a $4 or $4.50 PFC mixed-use components. for the project to increase as the amount level, regardless of the size of the of PFC funding requested for the project airport, must meet an airside needs test 3. Must a Public Agency Use or Pledge increases. We strongly recommend that pursuant to 49 U.S.C. 40117(d)(4); 14 To Use AIP Grant Funds on an Airport the public agency consult with the FAA CFR 158.17(a)(3). This test requires that Ground Access Transportation Project and FTA early in the planning/study the public agency demonstrate that it Before the Project Can Be Approved for process (and well in advance of has made adequate provision for PFC Funding? submission of a PFC application to fund financing the airside needs of the such a project) to identify a mutually airport, including runways, taxiways, The answer to this question depends acceptable approach to establishing aprons, and aircraft gates. Typically, the on what PFC level the public agency adequate justification for the particular FAA reviews any available planning proposes for the project. project. and inspection documents to determine The PFC statute and regulation do not the airside needs of the airport and then V. Other Issues Potentially Affecting require that a public agency use AIP reviews the public agency’s airport PFC Decisions on Airport Ground grant funds for projects proposed at a capital plan, submitted with the PFC Access Transportation Projects $1, $2, or $3 PFC level. application, to ensure that any needed Airport ground access transportation In its January 21, 1998, management airside projects are included in the advisory to the FAA, the OIG capital plan. projects proposed at a $4 or $4.50 PFC recommended that the FAA consider level, regardless of the size of the two other elements about the JFK LRS 2. Does the Allocation of Some Non-PFC airport, must meet an AIP funding test. in addition to the project’s effect on air Funds to an Airport Ground Access This test requires that the FAA make a passenger use of JFK (see Adequate Transportation Project Increase the finding that the project cannot be paid Justification, above). Because of the Likelihood That the Project Will Be for from AIP funds reasonably expected great expense of the LRS project, the Approved for PFC Funding? to be available in order to approve the OIG recommended that the FAA verify The PFC eligibility of an airport project (49 U.S.C. 40117(b)(4); 14 CFR that the project, if approved, would not ground access transportation project 158.17(a)(2)).

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VI. Use of Other Airport Revenue To name of the individual submitting the most Federal motor vehicle safety Finance Airport Ground Access comment (or signing the comment, if standards. Transportation Projects submitted on behalf of an association, Webautoworld submitted information Eligibility for funding of airport business, labor union, etc.). You may with its petition intended to ground access transportation projects review DOT’s complete Privacy Act demonstrate that non-U.S. certified with airport revenues is different than Statement in the Federal Register 2002–2004 Aston Martin Vanquish that for PFC or AIP funds. Guidance for published on April 11, 2000 (Volume passenger cars, as originally use of such airport revenues on airport 65, Number 70; Pages 19477–78) or you manufactured, conform to many Federal ground access transportation projects is may visit http://dms.dot.gov. motor vehicle safety standards in the provided in ‘‘Policies and Procedures FOR FURTHER INFORMATION CONTACT: same manner as their U.S. certified Concerning the Use of Airport Coleman Sachs, Office of Vehicle Safety counterparts, or are capable of being Revenue,’’ Section V.A.9 (64 FR 7718– Compliance, NHTSA (202) 366–3151. readily altered to conform to those 7719, February 16, 1999). SUPPLEMENTARY INFORMATION: standards. Specifically, the petitioner claims that Issued in Washington, DC on February 3, Background 2004. non-U.S. certified 2002–2004 Aston Martin Vanquish passenger cars are Catherine M. Lang, Under 49 U.S.C. 30141(a)(1)(A), a identical to their U.S. certified Deputy Associate Administrator for Airports. motor vehicle that was not originally manufactured to conform to all counterparts with respect to compliance [FR Doc. 04–2884 Filed 2–9–04; 8:45 am] applicable Federal motor vehicle safety with Standard Nos. 101 Controls and BILLING CODE 3510–DS–M standards shall be refused admission Displays, 102 Transmission Shift Lever into the United States unless NHTSA Sequence, 103 Defrosting and Defogging Systems, 104 Windshield Wiping and DEPARTMENT OF TRANSPORTATION has decided that the motor vehicle is substantially similar to a motor vehicle Washing Systems, 105 Hydraulic Brake National Highway Traffic Safety originally manufactured for importation Systems, 106 Brake Hoses, 109 New Administration into and sale in the United States, Pneumatic Tires, 113 Hood Latch certified under 49 U.S.C. 30115, and of Systems, 116 Brake Fluid, 118 Power [Docket No. NHTSA–2004–16999] the same model year as the model of the Window Systems, 124 Accelerator Control Systems, 135 Passenger Car Notice of Receipt of Petition for motor vehicle to be compared, and is capable of being readily altered to Brake Systems, 201 Occupant Protection Decision That Nonconforming 2002– in Interior Impact, 202 Head Restraints, 2004 Aston Martin Vanquish conform to all applicable Federal motor vehicle safety standards. 204 Steering Control Rearward Passenger Cars Are Eligible for Displacement, 205 Glazing Materials, Importation Petitions for eligibility decisions may be submitted by either manufacturers or 206 Door Locks and Door Retention AGENCY: National Highway Traffic importers who have registered with Components, 207 Seating Systems, 209 Safety Administration, DOT. NHTSA pursuant to 49 CFR part 592. As Seat Belt Assemblies, 210 Seat Belt ACTION: Notice of receipt of petition for specified in 49 CFR 593.7, NHTSA Assembly Anchorages, 212 Windshield decision that nonconforming 2002–2004 publishes notice in the Federal Register Mounting, 214 Side Impact Protection, Aston Martin Vanquish passenger cars of each petition that it receives, and 216 Roof Crush Resistance, 219 are eligible for importation. affords interested persons an Windshield Zone Intrusion, 225 Child opportunity to comment on the petition. Restraint Anchorage Systems, 301 Fuel SUMMARY: This document announces At the close of the comment period, System Integrity, 302 Flammability of receipt by the National Highway Traffic NHTSA decides, on the basis of the Interior Materials, and 401 Interior Safety Administration (NHTSA) of a petition and any comments that it has Trunk Release. petition for a decision that 2002–2004 received, whether the vehicle is eligible The petitioner claims that the vehicles Aston Martin Vanquish passenger cars for importation. The agency then also comply with the Bumper Standard that were not originally manufactured to publishes this decision in the Federal found in 49 CFR part 581. comply with all applicable Federal Register. The petitioner also contends that the motor vehicle safety standards are Webautoworld.com Corp. of Pampano vehicles are capable of being readily eligible for importation into the United Beach, Florida (‘‘Webautoworld’’) altered to meet the following standards, States because (1) they are substantially (Registered Importer 02–295) has in the manner indicated: similar to vehicles that were originally petitioned NHTSA to decide whether Standard No. 108 Lamps, Reflective manufactured for importation into and 2002–2004 Aston Martin Vanquish Devices and Associated Equipment: (a) sale in the United States and that were passenger cars are eligible for Installation of U.S.-model headlamp certified by their manufacturer as importation into the United States. The assemblies and sidemarker lights with complying with the safety standards, vehicles which Webautoworld believes reflectors; (b) installation of U.S.-model and (2) they are capable of being readily are substantially similar are 2002–2004 tail light assemblies and sidemarker altered to conform to the standards. Aston Martin Vanquish passenger cars lights with reflectors. DATES: The closing date for comments that were manufactured for importation Standard No. 110 Tire Selection and on the petition is March 11, 2004. into, and sale in, the United States and Rims: Installation of a tire information ADDRESSES: Comments should refer to certified by their manufacturer as placard. the docket number and notice number, conforming to all applicable Federal Standard No. 111 Rearview Mirror: and be submitted to: Docket motor vehicle safety standards. Replacement of the passenger side Management, Room PL–401, 400 The petitioner claims that it carefully rearview mirror with a U.S.-model Seventh St. SW., Washington, DC compared non-U.S. certified 2002–2004 component or inscription of the 20590. Docket hours are from 9 a.m. to Aston Martin Vanquish passenger cars required warning statement on the 5 p.m. Anyone is able to search the to their U.S.-certified counterparts, and mirror’s face. electronic form of all comments found the vehicles to be substantially Standard No. 114 Theft Protection: received into any of our dockets by the similar with respect to compliance with Programming of the vehicle’s computer

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to activate the key warning buzzer and F—Exempt Abandonments to abandon a Provided no formal expression of the belt warning buzzer. 43.9+/-mile line of railroad, between intent to file an offer of financial Standard No. 208 Occupant Crash milepost 24.6+/-near Wayzata and assistance (OFA) has been received, this Protection: Reprogramming of the milepost 68.5+/-in Hutchinson, in exemption will be effective on March vehicle’s computer to activate the seat McLeod, Carver and Hennepin 11, 2004, unless stayed pending belt warning system. The petitioner Counties, MN. In its notice, HCRRA reconsideration. Petitions to stay that do states that the vehicles should be indicates that the right to conduct not involve environmental issues,1 equipped at the front and rear outboard freight rail operations on the line is formal expressions of intent to file an seating positions with combination lap pursuant to a freight rail operations OFA under 49 CFR 1152.27(c)(2),2 and and shoulder belts that are self- easement in its favor. HCRRA further trail use/rail banking requests under 49 tensioning and that release by means of indicates that the underlying property CFR 1152.29 must be filed by February a single red pushbutton. The petitioner located in McLeod County is owned by 20, 2004. Petitions to reopen or requests further states that the vehicles are McLeod County Regional Railroad for public use conditions under 49 CFR equipped with driver’s and passenger’s Authority (MCRRA), in Carver County is 1152.28 must be filed by March 1, 2004, airbags, and with a seat belt warning owned by the Carver County Regional with: Surface Transportation Board, lamp that is identical to the lamp Railroad Authority (CCRRA), and in 1925 K Street, NW., Washington, DC installed on U.S.-certified models. Hennepin County is owned by HCRRA, 20423–0001.3 The petitioner also states that a and that MCRRA, CCRRA and HCRRA A copy of any petition filed with the vehicle identification plate must be are all political subdivisions of the State Board should be sent to HCRRA’s affixed to the vehicles near the left of Minnesota. HCRRA has filed this representative: Marilyn J. Maloney, windshield post and a reference and notice to terminate its common carrier Assistant County Attorney, 2000A certification label must be affixed in the obligation on the line and, upon the Government Center, Minneapolis, MN area of the left front door post to meet effective date of the proposed 55487. the requirements of 49 CFR part 565. abandonment exemption, it has agreed If the verified notice contains false or Interested persons are invited to to release the freight rail operations misleading information, the exemption submit comments on the petition easement in its favor for that portion of is void ab initio. described above. Comments should refer the line located in Carver County to HCRRA has filed an environmental to the docket number and be submitted CCRRA, and for that portion of the line report which addresses the to: Docket Management, Room PL–401, located in McLeod County to MCRRA, abandonment’s effects, if any, on the 400 Seventh St. SW., Washington, DC and HCRRA will retain its portion of the environment and historic resources. 20590. Docket hours are from 9 a.m. to line located in Hennepin County, all for SEA will issue an environmental 5 p.m. It is requested but not required the purposes of preserving the line for assessment (EA) by February 13, 2004. that 10 copies be submitted. future rail transportation use and other Interested persons may obtain a copy of All comments received before the compatible transportation uses. The line the EA by writing to SEA (Room 500, close of business on the closing date traverses United States Postal Service Surface Transportation Board, indicated above will be considered, and Zip Codes 55323, 55350, 55354, 55356, Washington, DC 20423–0001) or by will be available for examination in the 55360, 55361, 55364, 55367, 55375, calling SEA, at (202) 565–1539. docket at the above address both before 55381, 55384, 55387, and 55391. [Assistance for the hearing impaired is and after that date. To the extent HCRRA has certified that: (1) No local available through the Federal possible, comments filed after the traffic has moved over the line for at Information Relay Service (FIRS) at 1– closing date will also be considered. least 2 years; (2) there is no overhead 800–877–8339.] Comments on Notice of final action on the petition traffic on the line; (3) no formal environmental and historic preservation will be published in the Federal complaint filed by a user of rail service matters must be filed within 15 days Register pursuant to the authority on the line (or by a state or local indicated below. government entity acting on behalf of 1 The Board will grant a stay if an informed decision on environmental issues (whether raised Authority: 49 U.S.C. 30141(a)(1)(A) and such user) regarding cessation of service by a party or by the Board’s Section of (b)(1); 49 CFR 593.8; delegations of authority over the line either is pending with the Environmental Analysis (SEA) in its independent at 49 CFR 1.50 and 501.8. Surface Transportation Board (Board) or investigation) cannot be made before the with any U.S. District Court or has been exemption’s effective date. See Exemption of Out- Issued on: February 4, 2004. of-Service Rail Lines, 5 I.C.C.2d 377 (1989). Any Kenneth N. Weinstein, decided in favor of complainant within request for a stay should be filed as soon as possible the 2-year period; and (4) the Associate Administrator for Enforcement. so that the Board may take appropriate action before requirements at 49 CFR 1105.7 the exemption’s effective date. [FR Doc. 04–2740 Filed 2–9–04; 8:45 am] (environmental reports), 49 CFR 1105.8 2 Each OFA must be accompanied by the filing BILLING CODE 4910–59–P fee, which currently is set at $1,100. See 49 CFR (historic reports), 49 CFR 1105.11 1002.2(f)(25). (transmittal letter), 49 CFR 1105.12 3 HCRRA has requested that the Board make DEPARTMENT OF TRANSPORTATION (newspaper publication), and 49 CFR certain determinations regarding the imposition of 1152.50(d)(1) (notice to governmental public use and trail use conditions here. The agencies) have been met. Board’s Class Exemption process, which HCRRA Surface Transportation Board has invoked, does not provide for such As a condition to this exemption, any [STB Docket No. AB–864X] determinations in issuing a notice of exemption, employee adversely affected by the and it is not clear that these determinations are necessary in this proceeding. While no one has Hennepin County Regional Railroad abandonment shall be protected under Oregon Short Line R. Co.— made a proper filing for either a public use or trail Authority-Abandonment Exemption-in use condition, should a party wish to proceed McLeod, Carver and Hennepin Abandonment—Goshen, 360 I.C.C. 91 under the Board’s public use or trail use Counties, MN (1979). To address whether this procedures, such party should make the appropriate condition adequately protects affected filings within the time frames set forth above, as provided in the Board’s rules at 49 CFR 1152.28 Hennepin County Regional Railroad employees, a petition for partial (Public use procedures) and at 49 CFR 1152.29 Authority (HCRRA) has filed a notice of revocation under 49 U.S.C. 10502(d) (Prospective use of right-of-way for interim trail use exemption under 49 CFR 1152 Subpart must be filed. and rail banking, respectively).

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after the EA becomes available to the is pending with the Surface If the verified notice contains false or public. Transportation Board (Board) or with misleading information, the exemption Environmental, historic preservation, any U.S. District Court or has been is void ab initio. public use, or trail use/rail banking decided in favor of complainant within PRR and NSR have filed an conditions will be imposed, where the 2-year period; and (4) the environmental report which addresses appropriate, in a subsequent decision. requirements at 49 CFR 1105.7 the effects, if any, of the abandonment Pursuant to the provisions of 49 CFR (environmental reports), 49 CFR 1105.8 and discontinuance on the environment 1152.29(e)(2), HCRRA shall file a notice (historic reports), 49 CFR 1105.11 and historic resources. SEA will issue of consummation with the Board to (transmittal letter), 49 CFR 1105.12 an environmental assessment (EA) by signify that it has exercised the (newspaper publication), and 49 CFR February 13, 2004. Interested persons authority granted and fully abandoned 1152.50(d)(1) (notice to governmental may obtain a copy of the EA by writing the line. If consummation has not been agencies) have been met. to SEA (Room 500, Surface effected by HCRRA’s filing of a notice of As a condition to these exemptions, Transportation Board, Washington, DC consummation by February 10, 2005, any employee adversely affected by the 20423) or by calling SEA, at (202) 565– and there are no legal or regulatory abandonment or discontinuance shall be 1539. [Assistance for the hearing barriers to consummation, the authority protected under Oregon Short Line R. impaired is available through the to abandon will automatically expire. Co.—Abandonment—Goshen, 360 I.C.C. Federal Information Relay Service Board decisions and notices are 91 (1979). To address whether this (FIRS) at 1–800–877–8339.] Comments available on our Web site at condition adequately protects affected on environmental and historic ‘‘www.stb.dot.gov.’’ employees, a petition for partial preservation matters must be filed Decided: February 2, 2004. revocation under 49 U.S.C. 10502(d) within 15 days after the EA becomes By the Board, David M. Konschnik, must be filed. Provided no formal available to the public. Director, Office of Proceedings. expression of intent to file an offer of Environmental, historic preservation, public use, or trail use/rail banking Vernon A. Williams, financial assistance (OFA) has been conditions will be imposed, where Secretary. received, these exemptions will be effective on March 11, 2004, unless appropriate, in a subsequent decision. [FR Doc. 04–2590 Filed 2–9–04; 8:45 am] Pursuant to the provisions of 49 CFR BILLING CODE 4915–00–P stayed pending reconsideration. Petitions to stay that do not involve 1152.29(e)(2), PRR shall file a notice of environmental issues,1 formal consummation with the Board to signify that it has exercised the authority DEPARTMENT OF TRANSPORTATION expressions of intent to file an OFA under 49 CFR 1152.27(c)(2),2 and trail granted and fully abandoned the line. If Surface Transportation Board use/rail banking requests under 49 CFR consummation has not been effected by 1152.29 must be filed by February 20, PRR’s filing of a notice of [STB Docket No. AB–859 (Sub-No. 1X) and consummation by February 10, 2005, STB Docket No. AB–290 (Sub-No. 245X)] 2004. Petitions to reopen or requests for public use conditions under 49 CFR and there are no legal or regulatory barriers to consummation, the authority Pennsylvania Lines LLC— 1152.28 must be filed by March 1, 2004, with: Surface Transportation Board, to abandon will automatically expire. Abandonment Exemption—in Board decisions and notices are 1925 K Street, NW., Washington, DC Northampton County, PA, and Norfolk available on our Web site at 20423–0001.3 Southern Railway Company— www.stb.dot.gov. Discontinuance of Service A copy of any petition filed with the Decided: February 4, 2004. Exemption—in Northampton County, Board should be sent to applicants’ PA representative: James R. Paschall, By the Board, David M. Konschnik, Director, Office of Proceedings. General Attorney, Norfolk Southern Pennsylvania Lines LLC (PRR) and Corporation, Three Commercial Place, Vernon A. Williams, Norfolk Southern Railway Company Norfolk Southern Railway Company, Secretary. (NSR) (collectively, petitioners) have Norfolk, VA 23510. [FR Doc. 04–2718 Filed 2–9–04; 8:45 am] jointly filed a notice of exemption under BILLING CODE 4915–00–P 49 CFR Part 1152, Subpart F—Exempt 1 The Board will grant a stay if an informed Abandonments and Discontinuances of decision on environmental issues (whether raised Service for PRR to abandon, and NSR to by a party or by the Board’s Section of DEPARTMENT OF THE TREASURY discontinue service over, a 3.7-mile line Environmental Analysis (SEA) in its independent of railroad between milepost EK–53.0 at investigation) cannot be made before the exemption’s effective date. See Exemption of Out- Submission for OMB Review; Hellertown and milepost EK–56.7 at of-Service Rail Lines, 5 I.C.C.2d 377 (1989). Any Comment Request Bethlehem, in Northampton, PA. The request for a stay should be filed as soon as possible line traverses United States Postal so that the Board may take appropriate action before February 2, 2004. Service Zip Codes 18015, 18016, 18017, the exemption’s effective date. The Department of Treasury has 18018, 18020, 18025 and 18055. 2 Each offer of financial assistance must be submitted the following public accompanied by the filing fee, which currently is PRR and NSR have certified that: (1) set at $1,100. See 49 CFR 1002.2(f)(25). information collection requirement(s) to No local traffic has moved over the line 3 On February 2, 2004, the Bucks County OMB for review and clearance under the for at least 2 years; (2) no overhead Transportation Management Association (Bucks Paperwork Reduction Act of 1995, Pub. traffic has moved over the line for at County) filed a letter in opposition to the L. 104–13. Copies of the submission(s) abandonment of the rail line. Bucks County states least 2 years and overhead traffic, if that the line represents the only existing rail line may be obtained by calling the Treasury there were any, could be rerouted over between Philadelphia and the Allentown/ Bureau Clearance Officer listed. other lines; (3) no formal complaint Bethlehem area and that abandonment of the line Comments regarding this information filed by a user of rail service on the line would eliminate any possibility of restoring collection should be addressed to the commuter rail service through this area. Bucks (or by a state or local government entity County and any other interested person may file OMB reviewer listed and to the acting on behalf of such user) regarding petitions for relief within the deadlines established Treasury Department Clearance Officer, cessation of service over the line either in this notice. Department of the Treasury, Room

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11000, 1750 Pennsylvania Avenue, collection should be addressed to the to reduce paperwork and respondent NW., Washington, DC 20220. OMB reviewer listed and to the burden, invites the general public and DATES: Written comments should be Treasury Department Clearance Officer, other Federal agencies to take this received on or before March 11, 2004 to Department of the Treasury, Room opportunity to comment on proposed be assured of consideration. 11000, 1750 Pennsylvania Avenue, and/or continuing information NW., Washington, DC 20220. collections, as required by the Internal Revenue Service (IRS) DATES: Written comments should be Paperwork Reduction Act of 1995, OMB Number: 1545–0145. received on or before March 11, 2004, to Public Law 104–13(44 U.S.C. Form Number: IRS Form 2439. be assured of consideration. 3506(c)(2)(A)). Currently, the IRS is Type of Review: Extension. Internal Revenue Service (IRS) soliciting comments concerning Form Title: Notice to Shareholder of OMB Number: 1545–0148. 966, Corporate Dissolution or Undistributed Long-Term Capital Gains. Form Number: IRS Form 2758. Liquidation. Type of Review: Extension. Description: Form 2439 is sent by DATES: Written comments should be regulated investment companies and Title: Application for Extension of Time to File Certain Excise, Income, and received on or before April 12, 2004 to real estate investment trusts to report be assured of consideration. undistributed capital gains and the Other Returns. Description: Internal Revenue Code ADDRESSES: Direct all written comments amount of tax paid on these gains (ICR) 6081 permits the Secretary to grant to Glenn Kirkland, Internal Revenue designated under Internal Revenue Code a reasonable extension of time for filing Service, room 6411, 1111 Constitution (IRC) section 852(b)(3)(D) or any returns, declaration, statement, or Avenue, NW., Washington, DC 20224. 857(b)(3)(D). The company, the trust, other document. This form is used by FOR FURTHER INFORMATION CONTACT: and the shareholder file copies of Form fiduciaries and certain organizations to Requests for additional information or 2439 with IRS. IRS uses the information request an extension of time to file their copies of the form and instructions to check shareholder compliance. returns. The information is used to should be directed to Allan Hopkins, at Respondents: Business or other for- determine whether the extension should (202) 622–6665, or at Internal Revenue profit. be granted. Service, room 6407, 1111 Constitution Estimated Number of Respondents/ Respondents: Business or other for- Avenue NW., Washington, DC 20224, or Recordkeepers: 8,363. profit, not-for-profit institutions. through the Internet, at Estimated Burden Hours Respondent/ Estimated Number of Respondents/ [email protected]. Recordkeeper: Recordkeepers: 70,371. Recordkeeping—3 hr., 21 min. SUPPLEMENTARY INFORMATION: Estimated Burden Hours Respondent/ Title: Corporate Dissolution or Learning about the law or the Recordkeeper: form—53 min. Liquidation. Recordkeeping—5 hr. OMB Number: 1545–0041. Preparing and sending the form to Learning about the law or the the IRS—59 min. Form Number: Form 966. form—12 min. Abstract: Form 966 is filed by a Frequency of Response: Annually. Preparing and sending the form to corporation whose shareholders have Estimated Total Reporting/ the IRS—16 min. agreed to liquidate the corporation. As Recordkeeping Burden: 43,739 hours. Frequency of Response: On occasion. a result of the liquidation, the Clearance Officer: Glenn P. Kirkland, Estimated Total Reporting/ shareholders receive the property of the (202) 622–3428, Internal Revenue Recordkeeping Burden: 375,923 hours. corporation in exchange for their stock. Service, Room 6411–03, 1111 Clearance Officer: Glenn P. Kirkland, The IRS uses Form 966 to determine if Constitution Avenue, NW., Washington, (202) 622–3428, Internal Revenue the liquidation election was properly DC 20224. Service, Room 6411–03, 1111 made and if any taxes are due on the OMB Reviewer: Joseph F. Lackey, Jr., Constitution Avenue, NW.,Washington, DC 20224. transfer of property. (202) 395–7316, Office of Management Current Actions: There are no changes and Budget, Room 10235, New OMB Reviewer: Joseph F. Lackey, Jr., (202) 395–7316, Office of Management being made to the form at this time. Executive Office Building, Washington, Type of Review: Extension of a DC 20503. and Budget, Room 10235, New Executive Office Building,Washington, currently approved collection. Affected Public: Business or other for- Lois K. Holland, DC 20503. Treasury PRA Clearance Officer. profit organzations. Lois K. Holland, Estimated Number of Respondents: [FR Doc. 04–2852 Filed 2–9–04; 8:45 am] Treasury PRA Clearance Officer. 26,000. BILLING CODE 4830–01–P [FR Doc. 04–2853 Filed 2–9–04; 8:45 am] Estimated Time Per Respondent: 6 BILLING CODE 4830–01–P hours, 7 minutes. Estimated Total Annual Burden DEPARTMENT OF THE TREASURY Hours: 159,120. The following paragraph applies to all Submission for OMB Review; DEPARTMENT OF THE TREASURY of the collections of information covered Comment Request Internal Revenue Service by this notice: February 4, 2004. An agency may not conduct or sponsor, The Department of Treasury has Proposed Collection; Comment and a person is not required to respond to, submitted the following public Request for Form 966 a collection of information unless the collection of information displays a valid information collection requirement(s) to AGENCY: Internal Revenue Service (IRS), OMB control number. Books or records OMB for review and clearance under the Treasury. Paperwork Reduction Act of 1995, Pub. relating to a collection of information must ACTION: Notice and request for be retained as long as their contents may L. 104–13. Copies of the submission(s) comments. become material in the administration of any may be obtained by calling the Treasury internal revenue law. Generally, tax returns Bureau Clearance Officer listed. SUMMARY: The Department of the and tax return information are confidential, Comments regarding this information Treasury, as part of its continuing effort as required by 26 U.S.C. 6103.

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Request for Comments FOR FURTHER INFORMATION CONTACT: techniques or other forms of information Comments submitted in response to Requests for additional information or technology; and (e) estimates of capital this notice will be summarized and/or copies of the regulations should be or start-up costs and costs of operation, included in the request for OMB directed to Larnice Mack at Internal maintenance, and purchase of services approval. All comments will become a Revenue Service, room 6407, 1111 to provide information. matter of public record. Comments are Constitution Avenue, NW., Washington, Approved: February 3, 2004. invited on: (a) Whether the collection of DC 20224, or at (202) 622–3179, or Glenn Kirkland, through the Internet at information is necessary for the proper IRS Reports Clearance Officer. [email protected]. performance of the functions of the [FR Doc. 04–2855 Filed 2–9–04; 8:45 am] SUPPLEMENTARY INFORMATION agency, including whether the : BILLING CODE 4830–01–P information shall have practical utility; Title: Estate and Gift Taxes; Qualified (b) the accuracy of the agency’s estimate Disclaimers of Property. of the burden of the collection of OMB Number: 1545–0959. Regulation DEPARTMENT OF THE TREASURY information; (c) ways to enhance the Project Number: LR–213–76. quality, utility, and clarity of the Abstract: Internal Revenue Code Internal Revenue Service information to be collected; (d) ways to section 2518 allows a person to disclaim minimize the burden of the collection of an interest in property received by gift Proposed Collection; Comment information on respondents, including or inheritance. The interest is treated as Request for Form 8703 if the disclaimant never received or through the use of automated collection AGENCY: Internal Revenue Service (IRS), techniques or other forms of information transferred such interest for Federal gift Treasury. technology; and (e) estimates of capital tax purposes. A qualified disclaimer ACTION: must be in writing and delivered to the Notice and request for or start-up costs and costs of operation, comments. maintenance, and purchase of services transferor or trustee. to provide information. Current Actions: There is no change to SUMMARY: The Department of the this existing regulation. Approved: February 3, 2004. Treasury, as part of its continuing effort Type of Review: Extension of a to reduce paperwork and respondent Glenn Kirkland, currently approved collection. IRS Reports Clearance Officer. burden, invites the general public and Affected Public: Individuals or other Federal agencies to take this [FR Doc. 04–2854 Filed 2–9–04; 8:45 am] households. opportunity to comment on proposed BILLING CODE 4830–01–P Estimated Number of Respondents: and/or continuing information 2,000. collections, as required by the Estimated Time Per Respondent: 30 DEPARTMENT OF THE TREASURY Paperwork Reduction Act of 1995, minutes. Public Law 104–13 (44 U.S.C. Estimated Total Annual Burden 3506(c)(2)(A)). Currently, the IRS is Internal Revenue Service Hours: 1,000. soliciting comments concerning Form The following paragraph applies to all [LR–213–76] 8703, Annual Certification of a of the collections of information covered Residential Rental Project. Proposed Collection; Comment by this notice: DATES: Written comments should be Request for Regulation Project An agency may not conduct or sponsor, received on or before April 12, 2004 to and a person is not required to respond to, be assured of consideration. AGENCY: Internal Revenue Service (IRS), a collection of information unless the Treasury. collection of information displays a valid ADDRESSES: Direct all written comments ACTION: Notice and request for OMB control number. Books or records to Glenn Kirkland, Internal Revenue comments. relating to a collection of information must Service, room 6411, 1111 Constitution be retained as long as their contents may Avenue, NW., Washington, DC 20224. SUMMARY: The Department of the become material in the administration of any FOR FURTHER INFORMATION CONTACT: Treasury, as part of its continuing effort internal revenue law. Generally, tax returns Requests for additional information or to reduce paperwork and respondent and tax return information are confidential, as required by 26 U.S.C. 6103. copies of the form and instructions burden, invites the general public and should be directed to Larnice Mack at other Federal agencies to take this Request for Comments Internal Revenue Service, room 6407, opportunity to comment on proposed Comments submitted in response to 1111 Constitution Avenue NW., and/or continuing information this notice will be summarized and/or Washington, DC 20224, or at (202) 622– collections, as required by the included in the request for OMB 3179, or through the Internet at Paperwork Reduction Act of 1995, approval. All comments will become a [email protected]. Public Law 104–13 (44 U.S.C. matter of public record. Comments are SUPPLEMENTARY INFORMATION: 3506(c)(2)(A)). Currently, the IRS is invited on: (a) Whether the collection of Title: Annual Certification of a soliciting comments concerning an information is necessary for the proper Residential Rental Project. existing final regulation, LR–213–76 (TD performance of the functions of the OMB Number: 1545–1038. 8095), Estate and Gift Taxes; Qualified agency, including whether the Form Number: 8703. Disclaimers of Property (Section information shall have practical utility; Abstract: Form 8703 is used by the 25.2518–2(b)). (b) the accuracy of the agency’s estimate operator of a residential rental project to DATES: Written comments should be of the burden of the collection of provide annual information that the IRS received on or before April 12, 2004 to information; (c) ways to enhance the will use to determine whether a project be assured of consideration. quality, utility, and clarity of the continues to be a qualified residential ADDRESSES: Direct all written comments information to be collected; (d) ways to rental project under Internal Revenue to Glenn Kirkland, Internal Revenue minimize the burden of the collection of Code section 142(d). If so, and certain Service, room 6411, 1111 Constitution information on respondents, including other requirements are met, bonds Avenue NW., Washington, DC 20224. through the use of automated collection issued in connection with the project

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are considered ‘‘exempt facility bonds’’ DEPARTMENT OF THE TREASURY The following paragraph applies to all and the interest paid on them is not of the collections of information covered taxable to the recipient. Internal Revenue Service by this notice: An agency may not conduct or Current Actions: There are no changes Proposed Collection; Comment sponsor, and a person is not required to being made to the form at this time. Request for Revenue Procedure 2004– respond to, a collection of information Type of Review: Extension of a 15 unless the collection of information currently approved collection. AGENCY: Internal Revenue Service (IRS), displays a valid OMB control number. Affected Public: Business or other for- Treasury. Books or records relating to a collection of information must be retained as long profit organizations. ACTION: Notice and request for as their contents may become material Estimated Number of Respondents: comments. in the administration of any internal 6000. SUMMARY: The Department of the revenue law. Generally, tax returns and Estimated Time Per Respondent: 6 Treasury, as part of its continuing effort tax return information are confidential, hours, 32 minutes. to reduce paperwork and respondent as required by 26 U.S.C. 6103. Estimated Total Annual Burden burden, invites the general public and Request for Comments Hours: 39,180. other Federal agencies to take this Comments submitted in response to The following paragraph applies to all opportunity to comment on proposed and/or continuing information this notice will be summarized and/or of the collections of information covered included in the request for OMB by this notice: collections, as required by the Paperwork Reduction Act of 1995, approval. All comments will become a An agency may not conduct or sponsor, Public Law 104–13 (44 U.S.C. matter of public record. Comments are and a person is not required to respond to, 3506(c)(2)(A)). Currently, the IRS is invited on: (a) Whether the collection of a collection of information unless the soliciting comments concerning information is necessary for the proper collection of information displays a valid Revenue Procedure 2004–15, Waivers of performance of the functions of the OMB control number. Books or records Minimum Funding Standards. agency, including whether the relating to a collection of information must information shall have practical utility; DATES: Written comments should be be retained as long as their contents may (b) the accuracy of the agency’s estimate received on or before April 12, 2004 to become material in the administration of any of the burden of the collection of be assured of consideration. internal revenue law. Generally, tax returns information; (c) ways to enhance the and tax return information are confidential, ADDRESSES: Direct all written comments quality, utility, and clarity of the as required by 26 U.S.C. 6103. to Glenn P. Kirkland, Internal Revenue information to be collected; (d) ways to Service, room 6411, 1111 Constitution minimize the burden of the collection of Request for Comments Avenue NW., Washington, DC 20224. information on respondents, including Comments submitted in response to FOR FURTHER INFORMATION CONTACT: through the use of automated collection this notice will be summarized and/or Requests for additional information or techniques or other forms of information included in the request for OMB copies of the revenue procedure should technology; and (e) estimates of capital or start-up costs and costs of operation, approval. All comments will become a be directed to Carol Savage at Internal Revenue Service, room 6407, 1111 maintenance, and purchase of services matter of public record. Comments are Constitution Avenue NW., Washington, to provide information. invited on: (a) Whether the collection of DC 20224, or at (202) 622–3945, or information is necessary for the proper Approved: February 4, 2004. through the Internet at Glenn P. Kirkland, performance of the functions of the [email protected]. agency, including whether the IRS Reports Clearance Officer. information shall have practical utility; SUPPLEMENTARY INFORMATION: [FR Doc. 04–2857 Filed 2–9–04; 8:45 am] (b) the accuracy of the agency’s estimate Title: Waivers of Minimum Funding BILLING CODE 4830–01–P of the burden of the collection of Standards. information; (c) ways to enhance the OMB Number: 1545–1873. quality, utility, and clarity of the Revenue Procedure Number: Revenue DEPARTMENT OF VETERANS Procedure 2004–15. information to be collected; (d) ways to AFFAIRS Abstract: Revenue Procedure 2004–15 minimize the burden of the collection of describes the process for obtaining a [OMB Control No. 2900–0577] information on respondents, including waiver from the minimum funding through the use of automated collection standards set forth in section 412 of the Agency Information Collection techniques or other forms of information Code. Activities Under OMB Review technology; and (e) estimates of capital Current Actions: There are no changes AGENCY: Veterans Benefits or start-up costs and costs of operation, being made to the revenue procedure at Administration, Department of Veterans maintenance, and purchase of services this time. Affairs to provide information. Type of Review: Extension of a ACTION: Notice. Approved: February 4, 2004. currently approved collection. Glenn Kirkland, Affected Public: Business or other for- SUMMARY: In compliance with the profit organizations, not-for-profit Paperwork Reduction Act (PRA) of 1995 IRS Reports Clearance Officer. institutions, farms, and state, local or (44 U.S.C. 3501–21), this notice [FR Doc. 04–2856 Filed 2–9–04; 8:45 am] tribal governments. announces that the Veterans Benefits BILLING CODE 4830–01–P Estimated Number of Respondents: Administration (VBA), Department of 55. Veterans Affairs, has submitted the Estimated Annual Average Time Per collection of information abstracted Respondent: 86 hours. below to the Office of Management and Estimated Total Annual Hours: 4,730. Budget (OMB) for review and comment.

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The PRA submission describes the control number. The Federal Register The purpose of the Task Force is to nature of the information collection and notice with a 60-day comment period conduct an independent review of the its expected cost and burden and soliciting comments on this collection VR&E program within the Veterans includes the actual data collection of information was published on Benefits Administration. The Task Force instrument. November 13, 2003, at pages 64427– will provide recommendations to the DATES: Comments must be submitted on 64428. Secretary of Veterans Affairs on or before March 11, 2004. Affected Public: Individuals or improving the Department’s ability to FOR FURTHER INFORMATION OR A COPY OF households. deliver employment and vocational Estimated Annual Burden: 500 hours. THE SUBMISSION CONTACT: Denise rehabilitation services to veterans with McLamb, Records Management Service Estimated Average Burden Per service-connected disabilities and (005E3), Department of Veterans Affairs, Respondent: 15 minutes. employment handicaps. 810 Vermont Avenue, NW., Frequency of Response: On occasion. The principal purpose of the meeting Estimated Number of Respondents: Washington, DC 20420, (202) 273–8030, is to conduct final deliberations on FAX (202) 273–5981 or e-mail: 2,000. those recommendations contained in [email protected]. Please Dated: January 26, 2004. the Task Force report which will be refer to ‘‘OMB Control No. 2900–0577.’’ By direction of the Secretary. formally presented to the Secretary of Send comments and Jacqueline Parks, Veterans Affairs in the near future. The recommendations concerning any IT Specialist, Records Management Service. meeting will convene at 10 a.m. and conclude after the Task has completed aspect of the information collection to [FR Doc. 04–2796 Filed 2–9–04; 8:45 am] VA’s OMB Desk Officer, OMB Human discussions on the report. BILLING CODE 8320–01–P Resources and Housing Branch, New No time will be allocated for receiving Executive Office Building, Room 10235, oral presentations from the public. Washington, DC 20503 (202) 395–7316. DEPARTMENT OF VETERANS Members of the public may submit Please refer to ‘‘OMB Control No. 2900– AFFAIRS written comments for review by the 0577’’ in any correspondence. Task Force to Mr. John O’Hara, SUPPLEMENTARY INFORMATION: Vocational Rehabilitation and Designated Federal Officer, Vocational Title: Award Attachment For Certain Employment Task Force; Notice of Rehabilitation and Employment Task Children with Disabilities Born of Meeting Force, c/o Office of Policy, Planning, Vietnam Veterans, VA Form 21–0307. and Preparedness (008B), Department of Type of Review: Extension of a The Department of Veterans Affairs Veterans Affairs, 810 Vermont Avenue, currently approved collection. (VA) gives notice under Public Law 92– NW., Washington, DC 20420. Mr. Abstract: VA Form 21–0307 is used to 463 (Federal Advisory Committee Act) O’Hara’s e-mail is provide children of Vietnam veterans that a meeting of the VA Vocational john.o’[email protected] and his fax with Spina Bifida information about VA Rehabilitation and Employment (VR&E) number is (202) 273–5991. health care and vocational training and Task Force will be held on Thursday, the steps they must take to apply for February 18, 2004, at the Paralyzed Dated: February 2, 2004. By Direction of the Secretary. such benefits. Veterans of America (PVA) National An agency may not conduct or Headquarters, 801 18th Street, NW., E. Philip Riggin, sponsor, and a person is not required to Main Conference Room, Washington, Committee Management Officer. respond to a collection of information DC 20006. The meeting will be open to [FR Doc. 04–2686 Filed 2–9–04; 8:45 am] unless it displays a currently valid OMB the public. BILLING CODE 8320–01S–M

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Part II

Department of Transportation Federal Aviation Administration

14 CFR Parts 121 and 139 Certification of Airports; Final Rule

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DEPARTMENT OF TRANSPORTATION business, labor union, etc.). You may Aviation Investment and Reform Act for review DOT’s complete Privacy Act the 21st Century (Air-21; Public Law Federal Aviation Administration statement in the Federal Register 106–181), that the FAA issue a Notice published on April 11, 2000 (Volume of Proposed Rulemaking (NPRM) within 14 CFR Parts 121 and 139 65, Number 70; Pages 19477–78) or you 60 days and a Final Rule 1 year after the [Docket No. FAA–2000–7479; Amendment may visit http://dms.dot.gov. close of the NPRM comment period Nos. 121–304, 135–94] implementing 49 U.S.C. 44706(a)(2), Small Business Regulatory Enforcement relating to the issuance of AOCs for RIN 2120–AG96 Fairness Act small scheduled passenger air carrier The Small Business Regulatory operations. Certification of Airports Enforcement Fairness Act (SBREFA) of The FAA implemented its new AGENCY: Federal Aviation 1996 requires FAA to comply with authority on airport certification by Administration (FAA), DOT. small entity requests for information or publishing an NPRM on June 21, 2000 ACTION: Final rule. advice about compliance with statutes (65 FR 38636). This NPRM proposed to and regulations within its jurisdiction. If revise the current airport certification SUMMARY: This rule revises the airport you are a small entity and you have a requirements in 14 CFR part 139 and to certification regulation and establishes question regarding this document, you establish certification requirements for certification requirements for airports may contact its local FAA official, or the airports serving scheduled air carrier serving scheduled air carrier operations person listed under FOR FURTHER operations in aircraft with more than 9 in aircraft designed for more than 9 INFORMATION CONTACT. You can find out passenger seats but less than 31 passenger seats but less than 31 more about SBREFA on the Internet at passenger seats. The NPRM also passenger seats. In addition, this rule http://www.faa.gov/avr/arm/sbrefa.htm, proposed a conforming amendment to amends a section of an air carrier or by e-mailing us at -AWA- 14 CFR part 121. The public comment operation regulation to conform with [email protected]. period was originally scheduled to close changes to airport certification on September 9, 2000, but was extended Background requirements. This rule is necessary to to November 3, 2000, in response to ensure safety in air transportation at all Regulatory History several requests made by airport certificated airports. operators and the State of Maine. Since 1970, the FAA Administrator In the NPRM, the FAA proposed to DATES: Effective June 9, 2004. has had the statutory authority under revise certain outdated safety FOR FURTHER INFORMATION CONTACT: title 49, United States Code (U.S.C.) requirements and require certification of Linda Bruce, Airport Safety and 44706 to issue Airport Operating airports not currently certificated that Operations Division (AAS–300), Office Certificates (AOCs) to airports serving serve scheduled air carrier operations of Airport Safety and Standards, Federal certain air carriers and to establish conducted in aircraft with more than 9 Aviation Administration, 800 minimum safety standards for the passenger seats but less than 31 Independence Avenue SW., operation of those airports. The FAA passenger seats. The proposal also Washington, DC 20591; telephone: (202) uses this authority to issue requirements clarified existing requirements, 267–8553; or e-mail: for the certification and operation of incorporated existing industry practices, [email protected]. certain land airports through part 139 of and responded to an outstanding SUPPLEMENTARY INFORMATION: title 14, Code of Federal Regulations (14 petition for rulemaking and certain CFR part 139). NTSB recommendations. Availability of Rulemaking Documents This statutory authority was limited Further, the FAA proposed to revise You can get an electronic copy using to those land airports serving passenger the existing airport certification process the Internet by: operations of an air carrier that are to incorporate all airports covered by (1) Searching the Department of conducted with an aircraft designed for the statute, including those serving Transportation’s electronic Docket at least 31-passenger seats. In response scheduled, smaller air carrier aircraft. Management System (DMS) web page to recommendations made by the Under this changed certification (http://dms.dot.gov/search); General Accounting Office (GAO) in process, airports would be reclassified (2) Visiting the Office of Rulemaking’s 1987 and the National Transportation into four new classes, based on the type Web page at http://www.faa.gov/avr/ Safety Board (NTSB) in 1994, the of air carrier operations served. Class I, arm/index.cfm; or Secretary of Transportation sought II, and IV airports would be those that (3) Accessing the Government authority from Congress to broaden the currently hold AOCs and Class III Printing Office’s Web page at http:// FAA’s authority to certificate airports, would be those airports being newly www.access.gpo.gov/su_docs/aces/ and the FAA’s authority was broadened certificated. aces140.html. when Congress passed the Federal Airports serving all types of You can also get a copy by submitting Aviation Reauthorization Act of 1996 scheduled operations of air carrier a request to the Federal Aviation (Public Law 104–264), amending 49 aircraft designed for at least 31 Administration, Office of Rulemaking, U.S.C. 44706. This amendment granted passenger seats (large air carrier ARM–1, 800 Independence Avenue the FAA the authority to certificate aircraft), and any other type of air SW., Washington, DC 20591, or by airports serving scheduled air carrier carrier operations, would be known as calling (202) 267–9680. Make sure to operations conducted in aircraft with Class I airports. These airports currently identify the amendment number or more than 9 passenger seats but less hold an AOC. docket number of this rulemaking. than 31 passenger seats, except in the Airports that currently hold a Limited Anyone is able to search the State of Alaska. There was no change to Airport Operating Certificate would be electronic form of all comments the FAA’s existing authority to regulate known as either Class II or IV airports. received into any of our dockets by the airports serving air carrier operations The FAA proposed that Class II airports name of the individual submitting the using aircraft with more than 30 seats. would be those that serve scheduled comment (or signing the comment, if In April 2000, Congress further operations of small air carrier aircraft submitted on behalf of an association, mandated, in the Wendell H. Ford (aircraft designed for more than 9

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passenger seats but less than 31 immediately provide the FAA a report of Vermont, State of West Virginia, passenger seats) and unscheduled on certifying airports serving small air Williamson County Regional Airport operations of large air carrier aircraft. carrier aircraft that included draft (IL), and Yuma County Airport Class IV airports would be those that regulatory language. Authority (AZ). serve only unscheduled operations of While the working group agreed on • Representatives of employees: Air large air carrier aircraft. many issues, two members (ALPA and Line Pilots Association, The Aircraft As proposed, Class III airports would NATA) disagreed with several of the Rescue and Fire Fighting Working be those airports that serve only group’s recommendations on regulatory Group, International Association of Fire scheduled operations of small air carrier requirements, including marking and Chiefs, Coalition of Airline Pilots aircraft and, as noted above, would be lighting, ARFF, and the handling of Association, International Association required for the first time to be hazardous substances and materials. of Fire Fighters, and International certificated under part 139. As specified Subsequently, in February 1997, both Brotherhood of Teamsters. in the authorizing statute, proposed the majority and minority views of the • Associations: Aircraft Owners and airport certification requirements would working group, and those of individual Pilot Association, Airports Council not be applicable to airports located in workgroup members, were presented to International-North America, American the State of Alaska that only serve the FAA. Association of Airport Executives, scheduled operations of small air carrier As noted in the NPRM, the FAA National Air Transportation aircraft. considered these positions in this Association, National Association of Similar to how the FAA currently rulemaking. However, the decisions in State Aviation Officials, National certificates airports, the proposal this document are the FAA’s. Business Aviation Association, National required airport operators choosing to Discussion of Comments Fire Protection Association, Northeast be certificated under part 139 to Chapter of American Association of document their procedures for The FAA received 929 comments on Airport Executives, Regional Airline complying with part 139, as well as the NPRM, of which 858 are similar Association, and the Wyoming Airport with the safety and operational letters from individuals and Operators Association. requirements. To accommodate organizations addressing concerns about • The National Transportation Safety variations in airport layout, operations, Centennial Airport in Greenwood, CO Board. air carrier service, and to address other (see discussion on public charters • U.S. Department of Agriculture. local considerations, the FAA proposed below). The remaining 72 commenters • U.S. Department of Defense. that compliance procedures for the more addressed part 139 and part 121 issues. • Individuals. burdensome requirements be tailored These commenters included— Except for issues about public • for each airport operator. Air carriers: Eagle Canyon Airlines charters, commenters support the new d.b.a. Scenic Airlines, Era Aviation, and structure of the regulations. However, Industry Participation Champlain Enterprises d.b.a. U.S. commenters were evenly divided on Through the Aviation Rulemaking Airways Express. their support or opposition to the Advisory Committee (ARAC), the FAA • Airport operators, including state proposed requirements for airports sought industry input on regulatory and and local governments: Augusta State serving smaller air carrier operations. As nonregulatory issues on the certification Airport (ME), Boone County Airport anticipated, airport operators express of airports serving smaller air carrier (AR), Chautauqua County Airports concerns over the increased burden and operations. The FAA asked the ARAC to Commission (NY), Cheyenne Airport cost impacts of the proposed rule. They consider alternatives to minimize the (WY), City of Alamogordo (NM), City of are particularly concerned about the operational burden on smaller airports, Phoenix (AZ), City of Show Low (AZ), costs to comply with proposed ARFF including options for aircraft rescue and City and County of Twin Falls (ID), City requirements. Conversely, the firefighter firefighting (ARFF) services. The FAA of Yankton (SD), Clark County and pilot labor organizations believe the also suggested that the ARAC conduct a Department of Aviation (NV), Clinton proposal did not go far enough. survey of affected airports to gauge the County Airport (NY), County of Hill Most operators of certificated airports impact of any proposed requirement. (MT), Dallas/Fort Worth Int’l Airport did not comment on the proposal. Of In 1995, the ARAC appointed the (TX), Dane County Regional Airport the 656 currently certificated airports Commuter Airport Certification (WI), Dawson Community Airport (MT), (both civilian and military airports), Working Group to complete these tasks. Fort Lauderdale—Hollywood Int’l only 18 airport operators sent This working group comprised Airport (FL), Hancock County’Bar comments. Most of these airport representatives from industry trade and Harbor Airport (ME), Havre City— operators recommended changes to the union associations, including Air Line County Airport (MT), Garfield County proposal. Of the 37 proposed Class III Pilots Association (ALPA), Aircraft (UT), Grant County Commissioners airports (airports that are to be newly Owners and Pilots Association (AOPA), (NM), Jamestown Airport Authority certificated), 14 airport operators sent American Association of Airport (ND), Kingman Airport Authority (AZ), comments. Although all of these airport Executives (AAAE), National Air Lebanon Municipal Airport (NH), operators recommend changes to the Transportation Association (NATA), Manchester Airport (NH), Mercer proposal, only one supports certifying National Association of State Aviation County Airport (WV), Metropolitan proposed Class III airports. Officials (NASAO), and Regional Airline Airports Commission (MN), Miles City The final rule is adopted, as modified Association (RAA). The FAA and Airport Commission (MT), Ocala and detailed below. In adopting the Landrum and Brown, an airport Regional Airport (FL), Port Authority of final rule, the FAA has tried to strike a planning and engineering consulting New York and New Jersey, Rutland balance and has made changes to the firm, also provided technical support. Region Transportation Council (VT), final rule in response to the comments. However, after the passage of the Sidney—Richland Airport (MT), Comments specific to a section are Federal Aviation Reauthorization Act of Spencer Municipal Airport (IA), State of discussed below in the section-by- 1996, the FAA decided to consider Alaska, State of Hawaii, State of Iowa, section analysis, following the exercising its new authority to regulate State of Michigan, State of Montana, discussion of Public Charters and airports and asked the ARAC to State of Maine, State of New York, State General Comments.

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General Comments Class III airports. While specific or all prescribed ARFF requirements. In comments on ARFF requirements are addition, the alternative ARFF Public Charters addressed in the section-by-section compliance measures have been Comment: The FAA received 858 discussion below, the FAA has made established for Class III airports. This is similar letters from individuals and several changes in the final rule that intended to provide Class III airports organizations addressing concerns about affect ARFF cost concerns and warrant relief. The FAA recognizes that it would Centennial Airport in Greenwood (near a general discussion on the matter. be too burdensome to require these Denver), CO. These commenters state To standardize ARFF at certificated airports to provide the same level of the NPRM does not consider legislation airports, the FAA proposed that all ARFF services required of airports amending 49 U.S.C. 41104 (Air-21; certificated airports serving both serving large air carrier operations. Public Law 106–181). The legislation, in scheduled and unscheduled operations The FAA also received the following part, forbids air carriers, including be required to comply with all ARFF general comments on the proposal: indirect air carriers, from providing requirements. However, the FAA agrees Comment: A commenter, a Class I regularly scheduled charter air that requiring all airports to comply airport operator, states that its facility is transportation to or from uncertificated with all ARFF requirements may pose a already fully compliant with the airports with aircraft designed for more substantial cost for airports that do not proposal and would therefore not be than 9 passenger seats (49 U.S.C. currently provide minimum ARFF affected by the NPRM. 41104(b)). The apparent interest of these coverage or do so only to cover an FAA Response: As mentioned in the commenters, though not stated occasional unscheduled air carrier NPRM preamble’s ‘‘General Discussion specifically in the form letter, but made flight. This would include both of the Proposal’’ section, many airport clear by other comments, is to ban currently certificated airports and operators will need to do little to regularly scheduled charter operations airports that would be newly comply with revised part 139 from serving Centennial Airport, which certificated (Class III airports). requirements. However, some airport is not now certificated under part 139. The FAA is directed by the operators will be required to revise their FAA Response: The comments authorizing statute (Title 49, U.S.C. certification manuals to comply with received address an issue that is beyond 44706) to issue requirements for the the adopted changes to existing the scope of this rulemaking and a certification and operation of airports. requirements. Other operators may be matter not regulated by the FAA. The statute requires the FAA to required to implement certain safety Originally, Congress included an establish minimum safety standards for measures on a more frequent basis if amendment to Public Charter certificated airports that provide for the they serve small air carrier operations Operations (49 U.S.C. 41104) in the Air- operation and maintenance of adequate that do not occur concurrently with 21 legislation. However, Section safety equipment, including firefighting large air carrier aircraft operations. 41104(b) is directed to the air carriers’ and rescue equipment. The authorizing Comment: Two commenters support economic authority, which is regulated statute also allows the FAA to exempt the proposal. One commenter, the and administered by the Office of the certain airport operators from all or National Transportation Safety Board, Secretary within the Department of some of ARFF requirements (certificated states that the promulgation of the Transportation (DOT). In response to the airports that have less than one-quarter proposal will ‘‘enhance the level of concerns raised by these commenters of one percent of the total number of safety at airports served by commuter and others, Congress passed further annual passenger boardings) and allows airlines.’’ The other commenter states legislation, the Airport Security the FAA to adopt regulatory alternatives that the inclusion of airports serving Improvement Act of 2000 (Public Law for commuter airports (Class III airports) smaller air carrier operation in part 139 106–528, 11/22/2000), in which that are ‘‘least costly, most cost-effective is a ‘‘viable means to increase air travel technical amendments were made to or the least burdensome’’ but provide safety.’’ this section. The DOT has determined comparable safety at all certificated FAA Response: The FAA believes this that no implementing regulations are airports. rule will enhance safety in air required as this is a stand-alone The FAA has revised part 139 to transportation. statutory requirement that became better exercise its statutory authority to Comment: Five commenters oppose effective December 22, 2000. provide appropriate exemptions from the adoption of certification However, to ensure that air carriers— some or all prescribed ARFF requirements for airports serving who are governed by 14 CFR 121.590, requirements and allow for alternative scheduled operations of small air carrier Use of Certificated Land Airports in the means of compliance for certain airports aircraft. They state that such United States—are aware of the (Class III airports). While the FAA requirements are unnecessary as these statutory requirements of 49 U.S.C. believes that a single set of airport airports have a good safety record and 41104(b), the FAA has added an certification standards promote the their implementation would be advisory note explaining those consistent application of safety prohibitively expensive. One of these provisions in the flush paragraph measures, the use of statutory commenters states that the current part following the amendatory language of exemptions and alternative compliance 139 is enough to ensure safety in air 14 CFR 121.590 and 14 CFR 139.5. For measures that are monitored closely by transportation. further questions on public charter the FAA will ensure that ARFF FAA Response: The FAA disagrees operations conducted under 14 CFR part requirements are appropriate for the that the proposed changes to part 139 380, contact DOT, Office of Aviation airport size and type of air carrier are unnecessary. The FAA has Analysis, at (202) 366–5903. operations. determined that the changes to part 139 As adopted, this rule requires all are necessary to ensure safety in air General Comments on Part 139 certificated airports to provide some transportation at all covered airports. As noted in the above section, many level of ARFF service. Where This was not based on the fact that some of the comments received from airport appropriate, the FAA will provide airports have a poor safety record (no operators express concern regarding the limited exemptions on a case-by-case category of airport has a poor safety cost to comply with proposed ARFF basis for airports with infrequent or record); rather the changes are intended requirements, particularly at proposed smaller air carrier operations from some to provide, to the extent possible, safety

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in air transportation at all airports AIP funds for such costs each year for Most airports that would be newly covered by the statute and part 139. 4 fiscal years following the effective certificated under this rule (Class III The FAA believes that airports date of this rule (see Section 128 of Air airports) have accepted Federal funds serving small air carrier operations will 21). and are required by grant assurances to not have difficulty complying with most In meeting the requirements of comply with the FAA standards. As part 139 requirements. While airport Section 518, the FAA chose to noted in the proposal (65 FR 38664), all operators that choose to be certificated certificate these airport operators in a airports that are likely to be Class III under part 139 will be required to manner similar to that used for airports have received Federal funds for prepare a tailored Airport Certification currently certificated airports. However, capital developments, safety equipment, Manual (ACM) detailing how they will the FAA recognizes that in some and in certain circumstances, airport comply with part 139 safety and instances the cost to comply with maintenance. Between 1982 and 2002, operational requirements, these airport certain certification requirements may operators of proposed Class III airports operators will be allowed flexibility in be substantial for these smaller airports. received $207 million in Federal funds. complying with the requirements, The FAA will work with airport With this infusion of Federal funds, including ARFF requirements. In operators to establish compliance most proposed Class III airports already tailoring an ACM, the FAA will appropriate for the size of airport and comply with many part 139 consider with each airport operator types of operations served to ensure that requirements. The standards used to variations in airport layout and air they are the least costly and comply with grant assurances are the carrier operations served. burdensome, but still provide safety in standards used to comply with part 139. In addition, the FAA will assist an air transportation. For those compliance items not eligible airport operator in obtaining Federal Comment: Six commenters, including for Federal funding, the FAA will work funds to be used to comply with part operators of airports that are likely to be with the airport operator or consider 139 requirements. If compliance with Class III airports, state that existing granting exemptions, as described part 139 is still too burdensome, airport revenue and operating income earlier. particularly where the local community The FAA does not have the authority cannot cover the initial and recurring resources are limited, the airport to provide a permanent source of costs associated with part 139. These operator may petition the FAA for an funding. This authority remains a matter commenters request the FAA provide a exemption, as specified under the for Congress. permanent source of funding to help authorizing statute. The FAA also has Although legislative changes that may airport operators in complying with the established alternative compliance affect AIP and EAS funding have been new requirements or exempt these measures in the final rule for Class III proposed by Congress as of the date of airport operators from the more costly airports (see the section-by-section this publication, Congress has already analysis of § 139.111, Exemptions and requirements, such as ARFF. directed the FAA in Air-21, as discussed § 139.315, Aircraft rescue and Several of these commenters state that above, to set aside $15 million of AIP firefighting: Index determination). federally mandated safety requirements funds each year for 4 fiscal years Comment: Two commenters state that should be fully funded. In the absence following the effective date of this rule Title V, Section 518, of the Wendell H. of such funding, these commenters to help airport operators meet the Ford Aviation Investment and Reform believe airport operators should be requirements of this rule (49 U.S.C. Act for the 21st Century (Air-21; Public granted exemptions if they can 47116(e)). Congress also has increased Law 106–181), titled ‘‘Small Airport demonstrate an unreasonable cost, EAS funding, which may be used to Certification,’’ appears to have resulted burden, or that the requirements are offset the costs incurred by small air in this NPRM. However, other impractical. One of these commenters carriers as the result of this rulemaking. provisions of the act appear to also suggests that AIP funds set aside for Otherwise, the FAA has limited undermine the policy on air service to small airports be used by small airports discretion in distributing Federal funds rural areas and the Essential Air Service to cover costs associated with the to airport operators under the (EAS) program because rural proposal. authorizing statute. Without legislation, communities lack sufficient resources to FAA Response: The FAA partly the FAA is unable to provide the comply with the provisions of the agrees. In some instances, the cost to permanent funding suggested by the proposed rule. comply with certain part 139 commenters. FAA Response: The FAA disagrees. requirements could be too burdensome Comment: A commenter, an operator Section 518 directs the FAA to issue an for airport operators serving small air of an airport likely to be a Class I airport NPRM to implement the section of the carrier operations. In such cases, the under the rule, states that initial costs to authorizing statute (49 U.S.C. FAA will work with the airport operator comply with the proposed rule will be 44706(a)(2)) allowing the FAA to in developing and tailoring an ACM to eligible for AIP funds. However, the certificate certain airports serving small achieve safety in air transportation at commenter further notes that the long- air carrier operations. Section 518 does that airport. Further, the FAA will assist term costs of compliance, such as not specify safety requirements and the airport operator in obtaining Federal maintenance and labor, will be the standards that the FAA must propose funds, as appropriate. In addition, the airport operator’s responsibility and for the certification of these airports and FAA has the statutory authority to grant may burden the local community. This does not conflict with those sections of exemptions from part 139 requirements, commenter notes that the certification of Air-21 that set aside Federal funds for including ARFF requirements, that proposed Class III airports could be air service to rural communities. In fact, would be too costly, burdensome, or costly, but it will enhance the safety of Air-21 requires Airport Improvement impractical and has established aviation and airports in the Federal Program (AIP) funds to be set aside for alternative compliance measures for transportation system. costs related to the certification of Class III airports (see the section-by- FAA Response: The FAA agrees. airports serving small air carrier section analysis of § 139.111, Comment: Many of the commenters operations. As of the date of the Exemptions and § 139.315, Aircraft that oppose the proposal state that it publication of this final rule, the FAA rescue and firefighting: Index will have a negative economic impact is required to set aside $15 million of determination). on air carrier service at smaller airports.

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These commenters believe the management, and fueling requirements, procedures at nontowered airports. The implementation of the proposal will as well as guidance on the exemption commenter suggests that an additional result in the loss of air carrier service process, including alternatives specified airport classification be created for because the cost to comply is to too high in the authorizing statute. nontowered airports that serve to be absorbed by the local community FAA Response: The FAA disagrees. scheduled air carrier operations and and the airport’s tenant air carriers. This Although all airport users share the requires enhanced aircraft operating and is particularly true of air carriers that benefits of part 139 compliance, the cost communication procedures, including receive subsidies through the of part 139 compliance is typically the use of the Common Air Traffic Department of Transportation’s EAS passed onto air carriers and their Advisory (CTAF) frequency. program. passengers. FAA Response: The FAA agrees in Some of these commenters provided While part 139 is for the benefit of part. Both the existing and proposed economic and operational cost data to certain air carrier operators, the cost to part 139 requirements place a greater support their positions. comply with part 139 ultimately results emphasis on accident prevention than FAA Response: The FAA recognizes in the maintenance and improvement of accident mitigation. As stated in the that the regulations may have an the airport that benefits all airport users. proposal at 65 FR 38664, most part 139 adverse economic effect on some General aviation aircraft also use, at requirements are intended to reduce the airports. As previously stated, the FAA most airports, areas used by air carrier possibility of an accident by providing will assist the airport operator in aircraft, such as runways, taxiways, and a safe and standardized operating developing ACM’s that meet the intent ramps. Such areas are usually better environment. While requiring airport of the rule and consider unique and maintained and equipped than similar operators serving small air carrier local airport issues, including economic areas at airports serving only general operations to comply only with accident issues. aviation aircraft. General aviation prevention measures would be the least Congress authorized the FAA to aircraft operators also benefit from costly regulatory approach, the FAA certificate certain airports. The emergency response services, daily believes that some level of accident authorizing statute focuses on safety in safety inspections, and airport condition mitigation, including ARFF, still is air transportation, not economics. reporting provided at airports necessary to enhance safety in air However, the authorizing statute does certificated under part 139. The FAA transportation at all covered airports. direct the FAA to prepare a report on believes general aviation aircraft The FAA agrees that the cost of the economic impact of this final rule operators will benefit from the part 139 complying with certain part 139 ARFF on air carrier service. The FAA requirements. requirements would be too burdensome considered the economic and Airport operators that receive Federal for some airport operators serving small operational cost data provided by the funds are prohibited under grant air carrier operations. In such instances, commenters in preparing the regulatory assurances from using revenue the FAA will use its statutory authority evaluation and the Report to Congress generated by the airport for non-airport to consider exemptions from part 139 required by the authorizing statute. Both purposes. In addition, they may not requirements, including ARFF documents are available in the divert such revenue to non-airport requirements, that would be too costly, regulatory docket. accounts, such as the general fund of the burdensome, or impractical and has Comment: A commenter expresses local government that owns the airport. established alternative compliance concerns over the economic impact that However, the use of airport revenues measures for Class III airports (see the the proposal, if adopted, will have on generated from general aviation users to section-by-section analysis of § 139.111, general aviation. In particular, the comply with part 139 requirements, Exemptions and § 139.315, Aircraft commenter expresses concern that such as ARFF response provided by off- rescue and firefighting: Index added airport certification costs will be airport sources, would not be a violation determination). passed onto general aviation users, most of the airport’s grant assurances. The FAA partly disagrees with the of whom do not want or need the extra The FAA agrees that in some recommendation to change part 139 to services. instances additional compliance require additional aircraft operation and The commenter suggests that through guidance may be useful, particularly for communication procedures at ‘‘flexibility, creative means, and by airport operators seeking certification nontowered airports. Such air traffic facilitating compliance,’’ the FAA for the first time. However, the FAA control and flight communication should retain a critical role in lessening believes additional rulemakings are not procedures go beyond the scope of part the adverse economic impact the necessary because there is already a 139 and the proposal. However, the proposal will impose on certain process in place for providing airport FAA has made changes to part 139 to airports. The commenter believes this operators compliance guidance that require personnel at non-towered can be achieved if the FAA is flexible includes advisory circulars (ACs) and airports (or during periods when an air in carrying out its authority to certificate CertAlerts. traffic control tower is closed) to airports and issues further policy and Comment: A commenter, a proposed monitor CTAF when in movement areas guidance specifying compliance Class I airport operator, supports the and safety areas (see section-by-section alternatives to help airport operators proposed rule, with the exception of analysis of § 139.319, Aircraft rescue comply with part 139 in a cost-effective ARFF requirements. The commenter and firefighting: Operational manner. believes the cost of providing ARFF requirements. This commenter also states that coverage is considerable and would Comment: A commenter notes that several part 139 compliance issues are result in termination of air carrier the proposal states that AIP funds are a cause of contention for general service should airport operators pass available for capital costs associated aviation and that additional ARFF costs on to tenant air carriers. The with the implementation of the rulemakings and policy must be commenter recommends that proposed rule. The commenter states developed before a final rule is requirements for proposed Class III that such funds are limited, and many published. In particular, the commenter airports only focus on accident operating and maintenance costs are not requests compliance guidance for ARFF prevention, including more emphasis on AIP eligible. The commenter believes equipment, wildlife hazard aircraft operating and communication that additional operating and

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maintenance costs associated with the requirements. Further, compliance will U.S.C. 47133, and the FAA Policy and proposal will be burdensome to smaller reduce many of the uncertainties and Procedures Concerning the Use of airports and will result in these airports miscommunications that can cause Airport Revenue (64 FR 7696) restrict being poorly operated. accidents by ensuring airport facilities the use of airport revenue to airport FAA Response: The FAA partly (i.e., pavement, lighting, markings, and purposes. Consequently, equipment agrees. The commenter is correct in signs) are available, consistent from acquired with airport revenue must be asserting that AIP funds are limited. As airport to airport, and properly used primarily for airport purposes. discussed in the proposal at 65 FR maintained. 38664, most operating and maintenance Comment: Several commenters Section-by-Section Analysis costs associated with part 139 are not recommended that the FAA adopt the Section 121.590 Use of Certificated eligible for Federal funds. ARAC majority report rather than Land Airports in the United States AIP funds may be used to purchase implement the proposal. safety equipment needed to comply FAA Response: The FAA agrees in Proposal: The existing language of with part 139 requirements only under part. As stated in the proposal at 65 FR § 121.590 was modified to conform to two situations. First, the equipment is 38638, the FAA did consider the ARAC the proposed changes made to part 139. required under regulation, or second, majority report, including The existing requirements for air the FAA has determined that this recommended rule language, as carriers operating aircraft designed for at equipment will contribute significantly discussed in the proposal’s Section-by- least 31 passenger seats were not to the safety or security of persons or Section Analysis that follows. In many changed. property at an airport (see the section- instances, the FAA used the majority’s Added to this section was the by-section analysis of § 139.109, recommended rule language and proposed requirement for air carriers Duration of certificate). supporting data. However, the FAA did who conduct scheduled passenger- In some instances, administrative not adopt the entire majority report for carrying operations with airplanes costs associated with preparing and several reasons. First, the majority designed for more than 9 passenger documenting operating procedures report opposed regulating airports seats but less than 31 passenger seats to required under part 139 may be AIP serving scheduled operations of small operate at part 139 airports in the eligible if such efforts result in a capital air carrier aircraft and in many United States, except in the state of improvement project. For example, the instances, recommended regulatory Alaska. Also added to this section was cost to develop a wildlife hazard language that would not ensure safety at the proposed requirement restricting air management plan may be eligible if the all covered airports. Second, the carrier passenger-carrying operations to plan requires the installation of a fence majority report recommended rule those airports with the appropriate part or habitat modification. In addition, language that was intended for a 139 airport classification (Classes I–IV). some maintenance costs associated with separate rulemaking for small air carrier In addition, the FAA proposed to pavement and lighting are AIP-eligible airports rather than changing existing require that air carriers and commercial for airports that serve less than 10,000 part 139 requirements. However, this operators who conduct passenger- annual enplanements. did not take into account airports with carrying operations with airplanes The FAA disagrees that the cost mixed air carrier operations. Third, the designed for at least 31 passenger seats associated with the implementation of FAA determined that the majority report or who conduct scheduled passenger- this rule will lead to ‘‘poorly operated’’ based many of its recommendations on carrying operations with airplanes airports. Instead, the FAA believes that incorrect assumptions about existing designed for more than 9 passenger the implementation of the proposal will part 139 requirements and incorrect cost seats but less than 31 passenger seats to ensure the consistent application of data. conduct those operations at airports safety measures. The FAA will work Comment: A commenter recommends operated by the U.S. Government only with airport operators to tailor part 139 an alternative approach to regulating if those airports meet the equivalent requirements to individual airports and airports serving small air carriers if the requirements of part 139. will exercise its statutory authority to FAA chooses not to adopt the ARAC Finally, provisions excepting certain consider exemptions from part 139 majority position. This alternative air carriers from operating into part 139 requirements, if appropriate. The would only require these airport certificated airports were added to exemption process is discussed in detail operators to coordinate an emergency conform to proposed changes to part under the section-by-section analysis of response plan with local government 139. § 139.111. agencies and to acquire emergency Comment: A commenter questions Comment: A commenter recommends response equipment with AIP funds. why the proposal appears to require that the FAA study the benefit of Emergency equipment purchased with supplemental operations in Alaska, building and staffing an air traffic AIP funds would be based with the using airplanes with more than 9 control tower at proposed Class III appropriate emergency response passenger seats but less than 31 airports. The commenter believes this personnel. passenger seats to follow the same would be a more proactive response to FAA Response: The FAA partly requirements for operating into a part safety concerns than implementing the disagrees. The FAA believes that both 139 certificated airport that apply to proposal. risk reduction measures and accident domestic or flag operations using the FAA Response: The FAA disagrees. mitigation measures, including an same type airplanes. Installation of air traffic control towers emergency response plan, are necessary The commenter notes that 14 CFR will not address many accident to ensure safety in air transportation at 119.3 requires that operators who prevention measures. The potential for airports covered by the statute. conduct on-demand operations under aircraft collisions with ground The actual location and use of part 135, and who also use the same obstructions (such as wildlife, emergency equipment purchased with type airplanes in their domestic or flag construction, and maintenance AIP funds and airport revenue is operations under part 121, must instead equipment) and certain airspace restricted by law. The FAA provides operate these airplanes under the obstructions can be reduced if an airport Federal funding for emergency supplemental operations rules of part operator complies with part 139 safety equipment for airport use only. Title 49, 121.

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If the FAA intended supplemental operators have not obtained a new or AOC if they serve air carrier operations operations in Alaska, using airplanes revised AOC. For Class I airports, the that use aircraft designed for more than with more than 9 and less than 31 date is 12 months after the effective date 9 passenger seats but less than 31 passenger seats, to be conducted at of the rule. For Class II, III, and IV passenger seats. airports certificated under part 139, it airports, the date is 18 months after the FAA Response: The FAA disagrees. would unduly burden air carriers and effective date of the rule; Congress created the statutory airport operators, as well as the flying (4) Adding new paragraph (f) to define exemption for Alaskan airports (49 public. The commenter, therefore, terms used in this section; U.S.C. 44706(a)(2)). In addition, to recommends that paragraph (c) of the (5) Clarifying that air carriers who ensure the consistent application of proposed section be changed to include conduct certain operations are not safety and operational standards at supplemental operations. required to conduct those operations at airports serving air carrier operations, FAA Response: The FAA agrees. The part 139 airports through the use of the the FAA has decided to issue AOCs to unintended consequence of the proposal terms ‘‘all cargo operation,’’ ‘‘domestic all other airports, as permitted under the has been corrected in this final rule. The operation,’’ ‘‘flag operation,’’ and authorizing statute. final rule makes it clear in the ‘‘supplemental operation’’ defined in An airport operator can petition for reorganization of the requirements of § 119.3, Certification: Air carriers and relief from part 139 requirements by the section and the definitions in new commercial operators, of this requesting an exemption under paragraph (f) that supplemental subchapter; and through the use of the § 139.111. The FAA will consider operations conducted with airplanes terms ‘‘domestic type operation,’’ ‘‘flag granting this relief if the airport operator designed for fewer than 31 passenger type operation,’’ and ‘‘supplemental can substantiate that compliance with seats (as determined by the type type operation’’ defined in new part 139 would cause financial and certificate issued by a competent civil paragraph (f) of this section; and operational hardships. The airport aviation authority) are not required to be (6) Adding an advisory note operator may also decide to decline operated at a part 139 airport in the describing the new economic statutory certain air carrier operations rather than United States. provisions pertaining to the use of part comply with part 139. Comment: A commenter recommends 139 airports for regularly scheduled Comment: A commenter requests that adding a provision to this section that charter air transportation flights, in the the language in proposed paragraph (b) would prohibit the operation of all- flush paragraph following new excluding certain airports in the State of cargo aircraft at or over 60,000 pounds paragraph (h). Alaska be repeated in paragraph (a). maximum weight at airports that do not Otherwise, the commenter states, have adequate ARFF capability in place Subpart A—General Alaskan airports serving a mixture of air at the time of operations. Section 139.1 Applicability carrier operations would also be FAA Response: The FAA finds that required to comply with part 139 Proposal: The language of this the commenter’s recommended revision standards during times when they only section, which prescribes rules for the to this section cannot be adopted serve small air carrier operations. certification and operation of airports because it is outside the scope of the FAA Response: The FAA concurs and serving certain air carrier operations, proposal. has revised proposed paragraph (b) (new Section as Adopted: This section is was expanded, clarified, and paragraph (c)) to clarify that part 139 is adopted with changes. The FAA is reorganized into proposed new not applicable to Alaskan airports revising proposed § 121.590 based on paragraphs (a) and (b). during periods of time when no large air comments received on § 121.590 and Proposed paragraph (a) incorporated a carrier operations are being served. comments received on proposed new group of airports that would Comment: A number of commenters § 139.101, General requirements, on the require an AOC before serving certain recommend that part 139 be extended to compliance times needed for the air carrier operations. Further, the FAA cover air cargo operations. They state development, submittal, and approval of proposed to move language currently that air cargo aircraft might carry ACM’s, including revisions thereto, as found in § 139.101(a)—which specifies hazardous freight that would justify well as a revision of the statutory that part 139 is applicable to land ARFF capabilities. One commenter even provisions of 49 U.S.C. 44706 and airports in the United States, the District suggests that this section be amended to 41104(b), by— of Columbia, or any U.S. territory or specify that ARFF requirements be (1) Changing the title to add ‘‘in the possession—to proposed paragraph applicable to land airports that serve United States’’; § 139.1(a). any cargo operation by aircraft with a (2) Reorganizing the provisions in Proposed paragraph (b) listed the maximum weight of 60,000 pounds or paragraphs (a), (b), and (c) and restating types of airports that would be exempt more. those provisions in new paragraphs (b) from part 139, including U.S. FAA Response: The FAA disagrees. In through (e); Government-operated airports, certain 49 U.S.C. 44706(a), Congress limits the (3) Revising paragraph (a) to— Alaskan airports, and heliports. FAA’s authority to grant AOCs to those (i) Add the exemption provisions of Comment: Several commenters are airports serving certain passenger air 49 U.S.C. 44706(c) that allow the FAA unclear as to why Alaskan airports carrier operations. Congress would have to exempt certain airport operators from serving scheduled operations of small to amend this authority before the FAA part 139 ARFF requirements, air carrier aircraft have a statutory could issue AOCs based on air cargo (ii) Clarify that no air carrier, and no exemption from part 139. Still others operations. pilot used by an air carrier, may operate ask for the same exclusion for such Although the FAA does not issue at a part 139 airport unless that airport airports in their States, noting that their AOCs to cover air cargo operations, such is classified under part 139 to serve the States have financial and operational operations already benefit from part 139 type of airplane to be operated and the hardships similar to those of the State safety measures. At approximately 343 type of operation to be conducted, and of Alaska. These commenters request certificated airports, required part 139 (iii) Add compliance dates after that their States be added to proposed safety measures are typically applied which operations at part 139 airports paragraph (b), which specifies airports continuously as air carrier schedules will be prohibited if those airport in the State of Alaska do not need an vary so much that it is more convenient

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and economical to comply with part 139 FAA Response: The FAA partly FAA Response: The FAA does not requirements at all times. disagrees. Congress did not give the concur with this request. The mitigation Comment: In response to the FAA’s FAA the statutory authority to regulate of aircraft noise is beyond the scope of request for information on the airports operated by U.S. Government this rulemaking and the FAA’s authority certification of heliports, a commenter agencies. However, a new paragraph (b) to certificate airports. Establishing a recommends using the National Fire has been added to this section to clarify nighttime noise curfew is a complex Protection Association (NFPA) that part 139 requirements apply to the process that is initiated by the airport standards for heliports (NFPA 418, civilian portions of a shared-use or operator under 14 CFR part 161, Notice Standards for Heliports) in conjunction joint-use airport that elects to obtain a and Approval of Airport Noise and with AC 150/5390–2, Heliport Design. part 139 certificate. Consequently, Access Restrictions. Another commenter suggests the FAA proposed paragraph (b) has been Section adopted: This section is consult with other government offices to redesignated as new paragraph (c). adopted with changes. An editorial determine if passengers using heliports Further, the terms ‘‘joint-use airport’’ change was made to paragraphs (a) and deserve the same safety standards as and ‘‘shared-use airport’’ have been (b) so that the language of these passengers flying into an airport defined (see discussion comments for paragraphs better conforms to the certificated under part 139. § 139.5, Definitions, below). statutory language. FAA Response: While in general Comment: A commenter disagrees For the reasons discussed above, a agreement with these comments, the with the use of the phrase ‘‘aircraft new paragraph was added and changes FAA has determined it is not in the designed for seating capacity’’ in place were made to proposed paragraph (b). A public interest to certificate heliports at of the phrase ‘‘aircraft seating capacity.’’ new paragraph (b) was added to clarify this time. Heliports typically are used This commenter argues that there are the applicability of part 139 at airports where civilian and military aircraft by general aviation operators and serve circumstances where aircraft may have operations commingle. Consequently, very few air carrier operations (currently been designed with a seating capacity proposed paragraph (b) was only one heliport is voluntarily greater than the operator is using redesignated as new paragraph (c), and certificated under part 139 although it without being required to amend the a new element was added to clarify that does not serve air carrier operations aircraft type certificate. The commenter part 139 is not applicable to Alaskan conducted in helicopters with more also notes that the proposal is airports during periods of time when no than 30 seats). Further, there are very inconsistent with existing air carrier large air carrier operations are being few helicopters that can seat more than regulations (parts 119, 121, and 135) served. With the addition of new nine passengers, and even fewer still are because these regulations typically base paragraph (c)(4), proposed paragraph used for scheduled passenger operational and equipment (b)(4) regarding heliports is now operations. Since Congress has not requirements on aircraft seating redesignated paragraph (c)(5). given the FAA the authority to capacity. certificate facilities serving general FAA Response: The FAA disagrees Section 139.3 Delegation of Authority aviation operations and the vast with this comment. The statutory Proposal: This proposed new section majority of operations served by authority for 14 CFR parts 119, 121, and sets forth the FAA’s delegation authority heliports are by general aviation 135 differs from the authorizing statute for FAA employees to act on behalf of operators, certificating the few heliports for airport certification. The authorizing the FAA Administrator in the oversight that serve air carrier operations would statute for airport certification specifies of the certification of airports. As not significantly enhance safety. ‘‘design’’ rather than ‘‘seating capacity.’’ proposed, the Administrator’s However, the FAA will continue to However, the change to ‘‘design’’ from delegation authority would not change, monitor the situation and encourage ‘‘seating capacity’’ was not done and the FAA’s Associate Administrator heliport operators to follow AC 150/ consistently throughout the proposal. for Airports would be authorized to act 5390–2 and NFPA 418 since the This has been corrected. for the Administrator. Existing § 139.3, provisions of part 139 are designed for Comment: Another commenter notes Definitions, was moved to proposed airports serving fixed-wing aircraft and that references to the number of § 139.5, Definitions. often do not transfer to heliports. In passenger seats specified in the Comment: Nine commenters oppose addition, those heliport operators that authorizing statute differ from the the provision of this section that sets have accepted Federal funds may be proposal’s preamble and the rule forth the duties that the Administrator obligated to comply with AC 150/5390– language. Specifically, the discussion of delegates to the FAA regional offices, 2 under their grant assurances. Class III airports refers to airports specifically the authority to amend an Comment: Three commenters express serving aircraft with 10 to 30 seats ACM. These commenters interpret this opposition to the FAA’s finding that rather than ‘‘more than 9 passenger seats provision to mean that the FAA has the airports operated by the U.S. but less than 31 passenger seats’’ as exclusive authority to amend an ACM Government, including the Department specified in the statute. and recommend that proposed of Defense (DOD), are not subject to part FAA Response: While both § 139.3(b)(3) be revised to read, 139. These commenters believe that descriptions of the number of required ‘‘Approve ACM’s and any amendments DOD standards for their airports differ passenger seats are correct and have the thereto required under this part.’’ significantly from part 139 and that same meaning, further references to FAA Response: While the FAA does such facilities are not maintained in a aircraft seats will use the statutory have the exclusive authority to approve manner adequate for air carriers. At a language. amendments to an ACM, this new minimum, these commenters Comment: A commenter requests that section was not intended to preempt recommend that the revised regulation the San Francisco International Airport procedures under proposed § 139.205, should include definitions of ‘‘joint-use be required to implement a nighttime Amendment of airport certification airport’’ and ‘‘shared-use airport’’ and curfew of aircraft operations between 10 manual, that permit either the certificate clarify that the civilian operations of p.m. and 7 a.m. The commenter lives holder or the FAA to propose an such airports would come under the under a flight path used by aircraft amendment to an ACM. To avoid purview of part 139. operators using this airport. confusion, and possible conflicts with

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exemption procedures of § 139.111, removed from part 139. In addition, conducted in the aircraft referenced by proposed paragraph (b) has been seating capacity of air carrier aircraft is one commenter, a Cessna 172, would deleted. However, this change does not used to classify certificated airports and not require an airport operator to have affect the FAA Administrator’s to determine the specific part 139 an AOC as it neither meets the part 139 delegation to FAA employees in the requirements for each type of airport criteria for seating capacity nor covered oversight of the certification of airports. classification. This should not be air carrier operations. Section as Adopted: This section is confused with ARFF Index Comment: A commenter notes that adopted with changes for the reason requirements that use the length of an the definition of ‘‘movement area’’ does discussed above. Paragraph (b) has been air carrier aircraft to determine the type not reference air traffic control (ATC). deleted and paragraph (a) combined of ARFF equipment and quantity of This individual states that in the Pilot/ with the section’s first sentence to form extinguishing agents that must be used. Controller Glossary of the FAA’s a single paragraph. The FAA acknowledges that an Aeronautical Information Manual In addition, the reference to 49 U.S.C. airport operator could be serving small (AIM), the definition of movement area 44706 has been deleted from this air carrier aircraft (more than 9 states, ‘‘At those airports with a tower, section. Only the authority to deny and passenger seats but less than 31 specific approval for entry onto the issue an AOC is found in 49 U.S.C. passenger seats) that are longer than 90 movement area must be obtained from 44706. The Administrator’s authority to feet. In such cases, the airport operator ATC.’’ The commenter recommends that revoke an AOC is found in 49 U.S.C. would have to meet the ARFF Index this language be added to the definition 44709. Rather than cite several sections appropriate to the size of aircraft served, of movement area to be consistent with of the authorizing statute, which may regardless of the number of passenger the definition contained in the AIM, as change as the statute is periodically seats. For example, an airport classified well as the description of the non- revised, this section has been revised to as a Class III airport could be required movement area boundary markings in refer generally to the Administrator’s to meet Index B if it serves scheduled AC 150/5340–1, Standards for Airport authority. air carrier operations conducted in an Markings. FAA Response: The FAA disagrees. Section 139.5 Definitions air carrier aircraft that has 19 seats and is 110 feet in length. Further, part 139 The part 139 definition of ‘‘movement Proposal: This redesignated section does not limit the airport operator from area’’ is intended to describe only the establishes terms, and their definitions, providing more ARFF coverage than physical boundaries in which certain used in part 139. Revisions proposed to required; e.g., the air carrier aircraft part 139 requirements are applicable. this section reflect proposed changes served requires Index A but the airport Part 139 does not address air traffic made throughout the rule. As such, operator can provide Index C coverage. control procedures. Not all part 139 several existing definitions were However, the airport operator must airports have air traffic control towers, modified or deleted and new definitions always provide, at a minimum, the and at those part 139 airports with were proposed. ARFF Index specified in the ACM. towers, there already exists processes Comment: Five commenters note that Comment: Two commenters state that for communicating air traffic control the definition of ‘‘small air carrier the definition of ‘‘air carrier’’ contained procedures to pilots and other airport aircraft’’ poses a dilemma. These in 14 CFR part 1 is not compatible with users, such as contained in the AIM. commenters state that the degree of part 139. These commenters note that Comment: Several commenters compliance with part 139 is based on part 1 defines an air carrier as a person request that the terms ‘‘joint-use the number of passenger seats—except who is engaged in air transportation, yet airport’’ and ‘‘shared-use airport’’ be for ARFF requirements, which are based part 139 standards are specific to defined because of applicability on the length of aircraft. Since there are passenger-carrying operations in aircraft requirements at airports where civilian many air carrier aircraft that are less with a certain number of seats. They are and military aircraft operations than 90 feet in length (ARFF Index A) concerned that the use of the part 1 commingle. (See discussion comments with greater than 30 passenger seats, the definition could require an airport for § 139.1, Applicability.) commenters reason that the use of serving any type of passenger, mail, or FAA Response: The FAA agrees. This aircraft seats versus aircraft length cargo operations to come under the section is revised to include the would restrict a Class III airport from purview of part 139. One commenter definitions of joint-use airport and serving aircraft that require an ARFF even suggests that the part 1 definition shared-use airport. ‘‘Joint-use airports’’ Index greater than Index A. They would require an airport serving a are defined as airports owned by the believe it is unreasonable to deny an Cessna 172 engaged in air transportation United States, which lease a portion of airport from serving the scheduled to be certificated under part 139. these facilities to the local government operations of any air carrier in the ARFF FAA Response: The FAA disagrees. for civilian air carrier operations. Index if the airport operator has The definition of air carrier in part 1 is ‘‘Shared-use airports’’ are defined as co- adequate ARFF capability. used within the context of part 139. located U.S. and local government To reconcile, these commenters Section 139.1 prescribes rules for the airports at which portions of the recommend that the definition of ‘‘small certification and operation of airports movement areas, such as runways, air carrier aircraft’’ be changed to serving scheduled and unscheduled air taxiways, and ramps, are shared. These ‘‘aircraft less than 90 feet in length’’ and carrier operations conducted in aircraft definitions were discussed in the the definition of ‘‘large air carrier with a certain number of seats. Section proposal’s preamble on 65 FR 38642. aircraft’’ be changed to ‘‘aircraft 90 feet 139.5 further defines what is a Section as Adopted: This section is in length or longer.’’ In addition, they scheduled operation and an adopted with changes. For the reasons suggest that all references to seating unscheduled operation. Since the discussed above, the terms ‘‘joint-use capacity in the regulation be deleted. regulation is read as a whole, only air airport’’ and ‘‘shared-use airport’’ have FAA Response: The FAA disagrees. carrier operations meeting both the been added. Seating capacity of an air carrier aircraft definition of part 1 and the criteria Several definitions have been serving an airport is the criterion used defined in part 139 would require an modified for clarity. As there are many to determine if an AOC is required. This airport operator to be certificated under places in the regulation where the term is specified by statute and will not be part 139. Thus, air transportation ‘‘air carrier aircraft’’ is used without

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reference to the number of passenger standards and procedures approved by and when the FAA approves the seats, the terms ‘‘small air carrier the Administrator’’ was done to simplify document. As such, proposed paragraph aircraft’’ and ‘‘large air carrier aircraft’’ this section, and its absence should not (c) is revised to require only the are now defined under the single term be interpreted to mean that only submittal of an ACM for FAA approval. ‘‘air carrier aircraft.’’ In addition, the methods and procedures contained in Comment: Seven commenters request definition of ‘‘safety area’’ has been ACs are acceptable. As stated on 65 FR additional time to submit an ACM. In modified to clarify that the safety area 38643 of the NPRM, certificate holders particular, these commenters express may also be used by aircraft landing may comply with part 139 requirements concern that Class III airports would short of a runway and to correspond to by means other than those specified in need more time than proposed since the definition of runway and taxiway the ACs. However, any alternative must these airports would be developing a safety areas contained in AC 150/5300– be authorized by the FAA and must manual for the first time, rather than 13, Airport Design. Also, the definition provide an equivalent level of safety. amending an existing document. They of ‘‘Index’’ has been reordered for Comment: An airport operator also request that Class III airports be allowed clarity, and the definition of ‘‘heliport’’ requests that the FAA reinsert 18 months to develop and submit their has been moved as it was not listed in references to specific ACs throughout ACM’s. Additionally, one commenter the correct alphabetical order. the regulation. This commenter believes requests that the FAA allow Class I Further, modifications have been that it is generally accepted that when airports 6 months (180 days), and made to the definitions of ‘‘scheduled referencing a document within a another suggests 24 months (2 years) for operation’’ and ‘‘unscheduled regulation, the referenced document all airport classes. operation.’’ The term ‘‘commercial becomes part of the regulation by virtue FAA Response: The FAA agrees that operator’’ has been deleted from both of its reference therein. additional compliance time may be definitions as adopted changes to FAA Response: This assumption is needed for all airport classes and has § 121.590 regarding air carrier not correct. References to ACs in part modified paragraph (c). Class I airports operations into airports operated by the 139 are intended only to alert the will be allowed an additional 3 months, U.S. Government make this phrase certificate holder of the availability of a for a total of 6 months, to submit their unnecessary. Also, the definition of preapproved method for complying revised ACM’s. Class II and III airports ‘‘unscheduled operation’’ has been with the regulation. Their use is not will be allowed an additional 4 months, reordered for clarity and the term mandatory, but the Administrator must for a total of 12 months. Class IV ‘‘feral’’ has been added to the definition approve any alternative means of airports also will be allowed an of ‘‘wildlife’’ to make clear that the FAA compliance. Further, listing specific AC additional 6 months, for a total of 12 considers animals that have escaped numbers throughout the regulation has months. from domestication and become wild a proven impractical. ACs are revised In addition to this extended time potential hazard to aircraft. periodically, and referring to them In addition, an advisory note has been period for compliance, all airport generically ensures the regulation classes will have an additional 120 days added to the end of the section to alert remains current. airport operators that air carriers to comply with the rule as Most ACs used to comply with part implementation dates are based on the conducting certain public charter 139 are available, free of charge, on the operations have additional statutory rule’s effective date. As specified by the FAA Web site at http://www.faa.gov/ authorizing statute, this rule becomes requirements to operate to and from an arp/. Proposed changes to these ACs airport certificated under part 139, as effective 120 days after its submission to also are posted on this Web site, and Congress. The FAA intends to submit specified under 49 U.S.C. 41104(b). For comments on such proposals are further questions regarding public the rule to Congress on the same day it encouraged. is published in the Federal Register. charter operations, contact DOT, Office Section as Adopted: This section is of Aviation Analysis, at (202) 366–5903. Comment: Three commenters are adopted as proposed. concerned that their limited airport staff Section 139.7 Methods and Procedures Subpart B—Certification would not have time to develop an ACM for Compliance and a consultant would have to be Section 139.101 General Requirements Proposal: This relocated and retitled hired. One of these commenters section specifies that a certificate holder Proposal: This section required each estimates that it would cost $10,000 to must comply with the requirements of airport operator to adopt, and comply have a manual professionally part 139 in a manner acceptable to the with, an ACM. The section title was developed. Administrator. Revisions to this section shortened, current paragraphs (a) and FAA Response: The FAA is not clarify that the Administrator considers (b) were combined into a new paragraph requiring an airport operator to use a the methods and procedures contained (a), and new paragraphs (b) and (c) were consultant to develop an ACM. The in FAA ACs to be an acceptable manner proposed. Compliance dates for airport operator has the discretion to in which to comply with the submitting an ACM were established, develop its ACM in any manner it requirements of part 139, but not the language no longer applicable was deems best. If an airport operator only way to comply. deleted, and revisions were made to decides to develop its own manual, Comment: One commenter asks if the correspond to the new certification FAA resources are available to simplify change to this section meant that no process. this process. This includes the FAA other standards and procedures other Comment: A commenter recommends airport certification and safety than those contained in ACs would be that the language of § 139.101(c) be inspectors who are available via acceptable to the Administrator. To changed from ‘‘approved and telephone or e-mail and guidance clarify, the commenter suggests that the implemented’’ to ‘‘submitted to the FAA materials pertaining to ACM’s, previous statement ‘‘or other standards for approval.’’ particularly AC 120/139.201–1, Airport and procedures approved by the FAA Response: The FAA agrees. Certification Manual (ACM) and Airport Administrator’’ be reinserted. Approval and implementation dates Certification Specifications (ACS), FAA Response: The FAA disagrees. will vary depending on when the airport which will be updated and reissued to The deletion of the statement ‘‘or other operator submits an ACM for approval correspond to the issuance of this rule.

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Section as Adopted: This section is Section as Adopted: This section is encourage air carrier service or for adopted with changes for the reasons adopted as proposed. budgetary reasons. However, in discussed above. The language in response to comments, the FAA has Section 139.107 Issuance of Certificate proposed paragraph (c) is changed from reconsidered its approach to inspecting ‘‘approved and implemented’’ to Proposal: This section revised an airport certificate holder at an airport ‘‘submitted to the FAA for approval.’’ In standards that must be met before the that is no longer currently serving air addition, the time that certificate FAA could issue a certificate, including carrier operations. holders have to submit their manuals is requirements for an ACM. A new Accordingly, the FAA has deleted extended. Class I airports have 6 months provision was added that requires proposed paragraph (b) and will work from the effective date to submit their applicants to provide written with airports not serving air carrier manuals. All other airport classes have documentation that air carrier service service on a case-by-case basis to 12 months. would begin on a specific date. In determine the need for inspections. The Several modifications also have been addition, terms that were no longer FAA also will consider developing an made to paragraph (c). The term applicable were deleted, and the ‘‘inactive’’ category for such airports in ‘‘airports’’ has been replaced with standard ‘‘public interest’’ was revised its inspection policies, but will not ‘‘persons’’ to clarify that a person, not to read ‘‘safety in air transportation’’ to change the rule at this time. an airport, is the holder of an AOC. reflect revisions to the authorizing Comment: One commenter is Additionally, references to other statute. concerned about the impact the sections have been deleted. These Comments: No comments were revocation of a part 139 AOC would references implied that there are received on this section. have on an airport operator’s Federal Section as Adopted: This section is alternative compliance dates for certain funding. adopted with an editorial clarification. FAA Response: Federal funding sections of an ACM. This is incorrect. The term ‘‘certificate holder’’ in provided to airport operators through Section 139.103 Application for paragraph (a) has been changed to the Airport Improvement Program (AIP) Certificate ‘‘applicant’’ to clarify that this section is not dependent on a part 139 AOC. applies to an applicant for a certificate, AIP funds are available to all airports Proposal: This section revised not a current certificate holder. that are identified in the FAA’s National requirements to apply for an AOC. In Plan of Integrated Airport Systems addition, application requirements Section 139.109 Duration of Certificate (NPIAS). found elsewhere in the regulation were Proposal: This section revised The NPIAS identifies U.S. airports added, and terms that were no longer existing language into new paragraph (a) that are important to national applicable were deleted. and proposed a new paragraph (b) that transportation and, therefore, eligible to Comment: Several commenters modify existing standards for the receive grants under the AIP. To be request clarification on whether they suspension or revocation of an AOC by included in the NPIAS, an airport must can continue to serve air carrier stipulating that the Administrator may meet certain criteria. Such criteria do operations during the time between the revoke an AOC if air carrier operations not require an airport to be certificated issuance of this rule and the FAA have not occurred for 24 consecutive under part 139. Most of the 3,344 approval of their ACM. months. This section also included airports identified in the NPIAS are not FAA Response: During this transition language notifying the certificate holder certificated under part 139. A copy of period, an airport operator that that it can appeal an order revoking its the NPIAS is available on the FAA’s currently holds an AOC will be certificate. Web site at http://www.faa.gov/arp. permitted to serve air carrier operations, Comment: Four commenters oppose Certain airports identified in the as specified in its existing ACM or the language stipulating that the NPIAS receive an annual apportionment airport certification specifications. Administrator may revoke an AOC. of AIP funds based on the number of Similarly, an airport operator that will These commenters are particularly passengers enplaned. These funds are be a certificate holder for the first time concerned with the new provision that known as entitlement funds and and already is serving air carrier specifies that the duration of a distributed to airports based solely on operations on the date this rule becomes certificate is tied to air carrier service. passenger activity levels, not part 139 effective can continue to serve such They question why an airport operator certification. Funding and certification operations until the FAA approves its should lose its operating certificate are unrelated, although the loss of air ACM. when not serving air carrier operations carrier service may result in an airport Section as Adopted: This section is if it continues to meet the requirements operator losing both its AIP funds and adopted as proposed. of part 139. These commenters note that AOC. Section 139.105 Inspection Authority an AOC helps market an airport to air Additionally, an airport’s certification carriers and protects the airport against status does not affect its priority in Proposal: This section incorporated budget cutbacks imposed by the local receiving AIP funds. The FAA existing inspection authority provisions governing body. One of these prioritizes the distribution of AIP funds found in existing § 139.105, Inspection commenters suggests that an ‘‘inactive’’ based on the type of project to be authority, and § 139.301, Inspection category be established to allow an funded, not an airport’s certification authority. Specifically, it stated that the airport to go without air carrier service status. Administrator may make inspections for five years before its certificate is In some instances, the loss of a part and tests to determine compliance with revoked. 139 AOC may affect certain AIP funding airport certification regulations. FAA Response: While the FAA for safety equipment: AIP funds may be Revisions also were made to update understands that an AOC helps market provided for safety equipment language referencing statutory authority an airport to air carriers and protects the purchases needed to comply with part and to delete terms that were no longer airport against budget cutbacks imposed 139 requirements. As of the date of the applicable. by the local governing body, the FAA publication of this final rule, safety Comments: No comments were issues AOCs under part 139 to ensure equipment is only eligible for AIP received on this section. safety in air transportation, not to funding under two situations. The

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equipment is required under regulation recommendations based on current part FAA sufficient supporting cost or or the FAA has determined that this 139 standards. operational data to justify their position equipment will contribute significantly If an airport operator uses these that compliance with ARFF to the safety or security of persons or resources to keep informed of changes requirements would be too costly. To property at an airport (49 U.S.C. to the part 139 airport certification ensure petitioners adequately justify 47102(3)(B)(ii), as amended). program, the cost should be the same to that ARFF requirements are Comment: The FAA received one comply voluntarily with part 139 as it unreasonably costly, burdensome, or comment from an airport operator on would be to maintain an uninterrupted impractical, paragraph (b) has been the cost of surrendering a certificate and AOC. modified to detail the type of financial then later regaining it versus In addition, the FAA disagrees with information the FAA would need when maintaining a certificate uninterrupted. the commenter’s assertion that FAA considering a request for exemption. At some point, this airport operator airport certification and safety The new paragraph added to surrendered its AOC and then, in 1991, inspectors are allowed to make varying § 139.315 provides an alternative means applied for another certificate. The cost interpretations of part 139. This is not of compliance for Class III airports that to do this was $125,000, excluding the FAA policy. An airport operator would allow the certificate holder to administrative expenses. This should contact the local FAA Regional either comply with Index A ARFF commenter notes that the concept of an Airports Division Manager if an FAA requirements or comply with alternate airport simply maintaining its facility to inspector’s interpretation of the ARFF requirements that provide a part 139 standards is faulty as the regulation seems incorrect or if it seems comparable level of safety (see discretion given FAA inspectors allows that the airport operator is being held to discussion comments for § 139.315, for varying interpretations as to what is a different standard than other Aircraft rescue and firefighting: Index required. Thus, an airport operator may certificate holders. determination). These alternate ARFF be found not in compliance although it Section as Adopted: This section is requirements must be approved by the has tried to remain so while not adopted with changes. For the reasons FAA and include provisions for certificated. discussed above, proposed paragraph (b) prearranged emergency response has been deleted. services and that emergency responders FAA Response: The FAA agrees that are familiar with air carrier schedules, the methods and procedures for Section 139.111 Exemptions airport layout, and airfield complying with certain part 139 Proposal: This section detailed the communications. Such services may be requirements may change during the procedures for a certificate holder to those identified in the airport time when an airport’s certificate is petition for an exemption from the emergency plan required under surrendered and then reinstated. Thus, requirements of part 139, including § 139.325, Airport emergency plan. an airport operator that continued to ARFF requirements. Changes were There are no timed response, comply with its certification manual proposed that would require a petition equipment, or personnel requirements during this timeframe may not meet part for relief from ARFF requirements to as were proposed in the now deleted 139 requirements when reapplying for include additional information, as § 139.321, ARFF: Exemptions. an AOC. In such instances, there may be specified in proposed § 139.321, ARFF: Comment: A commenter states that a one-time cost to become certificated Exemptions. In addition, changes were criteria the FAA uses to determine if an again that the airport operator might proposed to update references to 14 CFR airport operator can petition for relief otherwise have absorbed over a longer part 11. from ARFF requirements is outdated period if it had remained certificated. Comment: Four commenters state that and ineffective. The commenter believes To avoid such situations, an airport the alternative emergency response that allowing airports with ‘‘less than operator should request that the local services specified in proposed § 139.321 one-quarter of 1 percent of the total FAA Airports Regional Office continue are as stringent as the ARFF passengers enplaned at all air carrier to provide it with airport information requirements that a petitioner would be airports’’ to petition the FAA for relief notices, including changes to the airport seeking relief from. These commenters from ARFF requirements is too liberal. certification program. The FAA regional request that the FAA provide total relief The commenter notes that one-quarter offices maintain a contact list of airport from an ARFF requirement if an airport of 1 percent of the total U.S. passenger operators (often a combination of part operator can show that the requirement enplanements has grown from 478,372 139 certificate holders and is unreasonably costly, burdensome, or enplanements in 1972 to 1,588,505 noncertificate holders, recipients of AIP impractical, as specified in the enplanements in 1999. funds, and those serving only general authorizing statute. Instead, the commenter suggests that aviation operations), State aviation FAA Response: The FAA agrees. the FAA base ARFF exemptions on the agencies, and other interested parties. Proposed § 139.321 has been deleted in 1982 amendment of the Airport and This list is used to distribute its entirety in the final rule, and all Airway Improvement Act’s definition of information about airport safety and requirements for petitions for relief from ‘‘primary airports.’’ The commenter standards, the part 139 airport all or some ARFF requirements are now states that this law defined a primary certification program, and upcoming contained in § 139.111(b). As discussed airport as a commercial service airport training events and to request comments in the General Comments section above, that is determined by the Secretary of on proposed changes to regulations and a new paragraph (e) has been added to Transportation to have .01 percent or standards. Many regions also distribute § 139.315 to provide an alternative more of the total number of passengers informational newsletters, sponsor means of compliance with ARFF enplaned annually at all commercial training events, and maintain Internet requirements for Class III airports. service airports. Under this revised sites that provide airport operators up- Based on comments received, several criterion, the commenter argues that to-date information on airport operators of Class II and III airports may only airports with 63,540 enplanements certification issues. As resources permit, be petitioning the FAA for relief from all or less could petition for relief from the FAA regional offices may conduct ARFF requirements due to cost ARFF requirements. occasional safety inspections of considerations. However, most of these FAA Response: The FAA disagrees. noncertificated airports and make airport operators did not provide the The authorizing statute specifies that

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the FAA may consider exempting from preparing for emergency response deleted. All requirements for petitions ARFF requirements an airport that without some FAA oversight. for relief from ARFF requirements are enplanes annually less than one-quarter Since accident mitigation costs could now contained in § 139.111, and this of 1 percent of the total number of have a significant economic effect on paragraph has been modified to require passengers enplaned at all air carrier airports serving small air carrier aircraft, the petitioner to provide the FAA airports. Congress would have to amend the FAA has added language to clarify additional information. this authority before the FAA could how an airport operator can apply for an limit ARFF exemptions to only those exemption from all or some ARFF Section 139.113 Deviations airports categorized as primary airports. requirements that would be too costly, Proposal: This section permits the In addition, the commenter’s revised burdensome, or impractical. Language certificate holder to deviate from criterion is based on an incorrect also has been added to allow alternative requirements of Subpart D—Operations definition. The commenter suggests compliance measures for Class III of the regulation during emergency using the definition of ‘‘primary airport’’ airports (see the section-by-section conditions. A revision was proposed to found in the 1982 amendment of the analysis of § 139.111, Exemptions and allow the certificate holder more Airport and Airway Improvement Act. § 139.315, Aircraft rescue and flexibility during emergencies requiring In 1994, Congress amended and firefighting: Index determination). a deviation from some part 139 recodified the Airport and Airway Comment: A commenter states that requirements, including the flexibility Improvement Act. Under the current the FAA should not use its authority to to notify the FAA of deviations by statute, a primary airport is defined as grant exemptions as a means of telephone, or other means of electronic a commercial service airport the remedying funding shortages at smaller communications, rather than requiring Secretary of Transportation determines certificated airports. Instead, the an automatic written notification. In to have more than 10,000 passenger commenter recommends that the FAA addition, the term ‘‘Airport Certification boardings each year (49 U.S.C. 47102 develop a new funding mechanism. Manual’’ was added to clarify that the (11)). FAA Response: The FAA disagrees. certificate holder may, when responding Comment: Two commenters request Instead of alternative funding sources, to an emergency, deviate from both its guidance on the circumstances under the FAA can use its exemption authority certification manual and any which the FAA would grant an in instances where compliance with requirements of subpart D. exemption to part 139 requirements. part 139 would be unduly burdensome. Comments: No comments were Without this guidance, the commenters The authorizing statute requires the received on this section. believe it would be difficult for airport FAA to consider regulatory alternatives Section as Adopted: This section is operators to determine whether serving for airports serving small air carrier adopted as proposed. scheduled air carrier operations could operations that are the ‘‘least costly, be justified in light of the incremental most cost-effective, or least Subpart C—Airport Certification cost of part 139 certification. One of burdensome’’ and will provide Manual these commenters recommends that the ‘‘comparable safety’’ at all certificated FAA develop criteria for approving airports. As noted earlier, the Section 139.201 General Requirements exemptions that would improve safety authorizing statute also provides Proposal: This section was retitled and also allow small airports with small exemption authority from ARFF and specified that each airport operator budgets to focus their resources on requirements for certain airports. The shall adopt, and comply with, an ACM accident prevention rather than accident FAA will use its general exemption in accordance with part 139. It further mitigation. authority under 49 U.S.C. 44701 and its specified that the Administrator may FAA Response: The FAA partially specific authority to grant limited authorize an airport operator to serve air agrees. The FAA has the authority to exemptions from ARFF requirements carrier operations not otherwise approve an exemption request from any under 49 U.S.C. 44706 to require safety permitted under the regulation. part 139 requirements and will consider measures at all airports serving small air This section consolidated existing any petition for exemption from these carrier aircraft consistent with the requirements from §§ 139.201, 139.203, requirements that is submitted in the requirements of 49 U.S.C. 44706. 139.207, 139.209, 139.211, and 139.215 manner outlined in the final rule, as After publication of the proposal, into a single section. Requirements that adopted. However, varying airport Congress did direct the FAA to set aside an airport subject to this part may not operations, sizes, and local a portion of existing AIP funds to assist be operated without an operating circumstances make it difficult to airport operators in meeting the terms of certificate, or in violation of its generalize what exemptions would be this rule (49 U.S.C. 47116(e)). As of the certificate, were combined, as were the granted and it would be difficult to date of the publication of this final rule, requirements for preparing and provide in this final rule. the FAA is required to set aside $15 maintaining a manual. In addition, As stated in the proposal (65 FR million of AIP funds per year for 4 fiscal language no longer applicable was 38664), the FAA considered requiring years following the effective date of this deleted, revisions were made to airport operators that serve small air rule. Beyond that, the FAA has limited correspond to the new certification carrier operations to comply only with options for developing new funding process, and implementation dates were accident prevention measures, or risk mechanisms. The FAA executes statutes established. reduction requirements, and not for the distribution of Federal funds to Comment: Four commenters request accident mitigation requirements (such airport operators, as directed by that the reference to ACs in paragraph as ARFF and emergency planning). Congress. Congress would have to (d) be limited to those in the 150 series While this approach to regulating these appropriate any additional Federal that pertain to airports. airports would promote a minimum funds. FAA Response: The FAA disagrees. level of safety through consistent Section as Adopted: This section is The AC pertaining to the development compliance with risk reduction adopted with changes. For the reasons of an ACM is not in the 150 series. requirements, experience has shown discussed above, proposed § 139.321 is Rather, it is in the 120 series (AC 120/ that not all airport owners and operators deleted in its entirety, and all references 139.201–1, Airport Certification Manual would place enough emphasis on to § 139.321 in § 139.111 have been (ACM) and Airport Certification

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Specifications (ACS)). Further, FAA Response: The FAA disagrees. The proposal did not require Class IV referencing specific AC series has While § 139.203 does require Class III airport operators to include in their proven impractical. ACs are revised airports to comply with the same manuals procedures for avoiding power periodically, and referring to them subpart D sections as Class I and II interruption or failure, snow and ice generically ensures the regulation airports, several of these sections have control, control of ground vehicles, remains current. different requirements for Class III marking and lighting obstructions, Section as Adopted: This section is airports. For example, Class III airports protection of NAVAIDS, public adopted with administrative changes. would not have to conduct an protection, wildlife hazard management, Minor grammatical edits have been emergency disaster drill every 3 years and marking and lighting construction made to paragraph (b)(3). (§ 139.325(h)) and would not be and unserviceable areas. required to have internally illuminated However, based on comments Section 139.203 Contents of Airport signs, except for holding position and received, the FAA reviewed manual Certification Manual Instrument Landing System (ILS) content requirements for Class IV Proposal: Under the proposal, existing critical area signs (§ 139.311(b)(3)). airport operators. The FAA agrees with standards of § 139.203 for maintaining Comment: Two commenters object to commenters that it is necessary for an ACM were incorporated into the FAA proposing that Class IV airport safety and standardization purposes to proposed § 139.201, General operators need not include in their require Class IV airport operators to requirements, as previously discussed. manuals procedures for complying with include in their manual procedures for The contents of existing § 139.205, certain subpart D requirements. To the removal, marking, or lighting of Contents of airport certification manual, encourage standardization, one of these obstructions, as specified in subpart D. and § 139.213, Contents of airport commenters recommends that all To ensure all certificate holders monitor certification specifications, were revised certificated holders be required to the status of obstructions, and take and became the new proposed include in their ACM procedures for appropriate action when necessary, § 139.203. This section required all complying with all subpart D proposed § 139.203(b)(26) has been certificate holders to have an ACM and requirements. The other commenter revised to require all part 139 certificate to include in their certification manual suggests that Class IV airport operators holders remove, mark, or light a description of procedures and at least be required to address their obstructions within their control. equipment used to comply with the manual procedures for complying with For example, an object, such as a tree requirements of part 139, particularly proposed § 139.313, Snow and ice or tower, may penetrate certain airspace subpart D. New manual contents were control; § 139.323, Traffic and wind and affect aircraft operations. To required for each airport class to direction indicators; § 139.331, determine the impact on airspace of correspond to the new classifications of Obstructions; § 139.335, Public such objects, the FAA conducts an certificated airports and changes to protection; and § 139.337, Wildlife aeronautical study and makes subpart D. hazard management. recommendations that may require the Class I airport certificate holders were FAA Response: The FAA partly agrees owner to remove, mark, or light any required to include in their manual all and has revised this section as object deemed an obstruction. If this is elements that are currently required and discussed below. However, commenters not possible, visual and instrument several new elements. Airport operators may have misunderstood what is approaches to runways near the currently holding a Limited Airport required for a Class IV ACM. This may obstruction may be changed to help Operating Certificate were required to be the result of errors contained in the ensure aircraft stay clear of the object. convert their existing airport proposal. The proposal incorrectly This ongoing process involves both certification specifications into an AOC identified Class IV ACM requirements certificated and non-certificated and include several new elements. and contradicted statements in the airports, and most airports certificated These airports were classified as either preamble. These errors are in the chart under part 139 have already removed, Class II or Class IV airports. Class II on page 38648 that compares current marked, or lighted any obstruction to airport operators were required to and proposed part 139 requirements and FAA standards. include more elements in their manual in the chart contained in proposed Comment: A commenter questions than were operators of Class IV airports. § 139.203, Contents of airport whether differences between similar In addition, airports that would be certification manual, paragraph (b) on elements of the table contained in newly certificated under the proposal page 38674. A correction was issued on § 139.203 are intentional. Specifically, (Class III airports) were required for the August 15, 2001 (66 FR 42807). this commenter notes that first time to develop an ACM. As noted in the correction, Class IV § 139.203(b)(18) differs slightly from Comment: A commenter disagrees airport operators would continue to § 139.203(b)(19). Both element (18) and that airports serving small air carrier address in their ACM procedures for (19) address storing and handling aircraft would be permitted some complying with several subpart D hazardous materials but element (19) flexibility in complying with requirements, including any proposed does not reference a subpart D section requirements that the commenter revisions to such requirements. The as does element (18). This is also the believes are more burdensome. This existing requirements are for personnel, case for elements (20) and (21), which commenter argues that § 139.203 makes paved and unpaved surfaces, safety address traffic and wind direction no distinction between Class I, II, and III areas, marking, lighting, signs, and indicators, and elements (23) and (24), airports as all three airport airport conditions reporting. Additional which address self-inspections. classifications must have the same manual elements were proposed that FAA Response: These differences certification manual contents. Likewise, include procedures for complying with were not intentional. Rather, language the commenter states that nowhere in subpart D requirements for ARFF, the from a previous version of part 139 was the proposed regulation are Class III storage and handling of hazardous inadvertently left in § 139.203(b). As airports allowed to comply with materials, wind and traffic indicators, discussed previously, a correction was requirements differently than Class I and self-inspections. Such changes are issued on August 15, 2001 (66 FR and II airports. adopted as proposed. 42807).

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Comment: A commenter, an operator both scheduled and unscheduled Section 139.205 Amendment of of a Class I airport, agrees with the operations are required to comply with Airport Certification Manual proposed requirement to include in the these ARFF requirements, subject to the Proposal: Under the proposal, the ACM a description of personnel training exemption discussed above. contents of existing § 139.205, Contents and equipment and a system for Accordingly, no changes have been of airport certification manual, were maintaining records. However, this made to proposed § 139.203(b)(16), and moved and consolidated into proposed commenter notes such additional all operators of certificated airports are § 139.203, Contents of airport requirements would have an economic required to include procedures in their certification manual. In existing impact. No cost data is provided to ACM’s for complying with ARFF § 139.217, Amendment to airport support the commenter’s position. requirements appropriate to the air certification manual or airport FAA Response: The FAA agrees that carrier aircraft and operations served. certification specifications, procedures there will be costs associated with new Comment: One commenter notes that and requirements for amending the personnel and recordkeeping the table in § 139.203 indicates that requirements. While many Class I Class IV airports do not have to comply ACM were redesignated as proposed airports already comply with these with certain sections of subpart D, § 139.205 and retitled. This section requirements and need only to contradicting language in these subpart revised existing amendment procedures document their existing procedures, D sections. Specifically, the commenter and requirements to reflect changes other airport operators, particularly is concerned that the language ‘‘each made to the certification process and those newly certificated under the certificate holder shall’’ in specified deleted language that was no longer revised rule, may have additional labor subpart D sections means that every applicable. In addition, this section and training costs. Due to variances certificate holder must comply even if delegated to the Associate between airports, such costs will differ § 139.203 states otherwise. Administrator for Airports the authority from airport to airport, even among FAA Response: The FAA disagrees. to act on a petition for the airports within the same classification. Section 139.203 is tied to subpart D as Administrator. The section also Several other airport operators it establishes what subpart D established a deadline for the FAA to provided the FAA with cost and requirements a certificate holder is dispose of an amendment. operational data regarding compliance required to address in its ACM. If Comment: A commenter states that with new personnel and recordkeeping § 139.203 does not require compliance the FAA should not have the unilateral requirements (see section-by-section with a subpart D section, then the authority to amend an ACM. This analysis of § 139.301, Records, and certificate holder is not obligated to commenter argues that there are § 139.303, Personnel). The FAA has comply with that section. sufficient safeguards within part 139 evaluated this data and made Comment: A commenter notes that authorizing the FAA Administrator to adjustments to associated cost estimates, the reference to § 139.319(l) in proposed revoke or suspend an AOC. as appropriate (Chapter V of the § 139.203(b)(6) is incorrect. The FAA Response: The FAA disagrees. Regulatory Evaluation). reference should be to § 139.319(k). The commenter is confusing the process Comment: A commenter opposes the FAA Response: The FAA agrees. to amend an ACM with the process to requirement that Class III airports Section 139.203(b)(6) was changed in revoke an AOC. Revocation of an AOC include in their ACM’s a description of the correction issued on August 15, is the result of an enforcement action how they will meet ARFF requirements 2001 (66 FR 42807). due to noncompliance with part 139 of subpart D. The commenter is Section as Adopted: This section is requirements. The process to amend an concerned that this requirement will adopted with changes. Section numbers ACM would not be used in this make air carrier service cost prohibitive, referenced throughout § 139.203 have instance. particularly for airport operators in New been changed to reflect the correction For various reasons, the FAA or the York State. issued on August 15, 2001 (66 FR certificate holder may need to amend FAA Response: The FAA agrees that, 42807), and the renumbering of some the ACM to ensure that the manual in some instances, the cost to comply subpart D sections. accurately reflects how the certificate with ARFF requirements may be too For reasons discussed above, holder is complying with part 139, to costly for Class III airport operators, § 139.203(b)(23) has been revised to implement new standards, or to address even if such costs are passed onto require Class IV airport operators to an emergency situation. Such an airport users. As discussed in the include procedures in their certification amendment typically addresses a few section-by-section analysis of § 139.111, manuals for removal, marking, or sections of the rule, and the certificate new procedures have been established lighting of obstructions. holder’s overall compliance is for certain airport operators to petition In addition, a minor editorial change unaffected. the FAA for relief from ARFF was made to paragraph (a), as well as Either the FAA or a certificate holder requirements that are unreasonably changes to paragraph (b)(13), to clarify can propose an amendment to the ACM, costly, burdensome, or impractical. In that a certificate holder’s runway as specified under proposed § 139.205. addition, the FAA has established markings and holding position markings However, the FAA has the exclusive alternative compliance measures for must be indicated in the runway and authority to approve amendments to an Class III airports (see the section-by- taxiway identification plan. Further, the ACM. This is currently the case and section analysis of § 139.111, reference to proposed § 139.321 in would not change with this rulemaking. Exemptions and § 139.315, Aircraft paragraph (b)(17) was changed to In fact, this rule makes very few changes rescue and firefighting: Index § 139.111, paragraphs (b)(22) and (28) to the amendment process, except to determination). were updated to reflect the title change clarify that the FAA will respond within However, the FAA does not agree that to the referenced subpart D sections, a time certain as to the disposition of an § 139.203 should be changed to exclude and paragraph (b)(26) was changed to amendment it has initiated. The Class III airports from complying with clarify that all wildlife hazard certificate holder still may petition that ARFF requirements specified in subpart management procedures are to be the Associate Administrator for D. To standardize ARFF at certificated included in the ACM, not just the Airports, under § 139.205(d), reconsider airports, all certificated airports serving wildlife hazard management plan. an amendment initiated by the FAA.

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The Associate Administrator for FAA Response: The FAA agrees but operations, such as repairing runway Airports stays the effective date of the does not envision the training required lights or conducting inspections of amendment, pending a decision. to be more than ‘‘on-the-job’’ training. movement areas. As such, new Section as Adopted: This section is This training is discussed in more detail paragraph (c) is limited to personnel adopted with an administrative change. in the following section, § 139.303, that access movement areas and safety Language in paragraph (b) has been Personnel. areas to perform duties necessary to changed to clarify that the amendment Section as Adopted: For the reason comply with the ACM and part 139. process requires the certificate holder to discussed above, this section is adopted As requested, new paragraph (c) also file an application for an amendment in with changes. Proposed paragraph (b) specifies subject areas that required writing and submit it to the FAA has been replaced with a new paragraph training must cover. These subject areas Regional Airports Division Manager. that identifies recordkeeping include airport familiarization, requirements found throughout part 139 procedures for accessing and operating Subpart D—Operations and the length of time these records in movement areas and safety areas, Section 139.301 Records must be maintained. Consequently, airfield communications, duties references to other sections in paragraph specified in the ACM and part 139, and Proposal: Under the proposal, the (c) have been deleted. any additional training required under contents of existing § 139.301 dealing part 139, such as training required for Section 139.303 Personnel with inspection authority was moved ARFF and emergency medical and consolidated with § 139.105, Proposal: This section expanded on personnel. Inspection authority, and this new the existing requirement for all New paragraph (c) does not specify section on records was proposed. This certificate holders to have available how training must be conducted. This is new section required all certificate sufficient qualified personnel necessary intentional to allow the certificate holders to maintain, and make available to comply with the requirements of part holder some flexibility in complying to FAA inspectors, records to show 139. Changes were made to clarify the with training requirements in a manner compliance with part 139. Existing certificate holder’s responsibilities to best suited for local circumstances. recordkeeping requirements found train and equip personnel performing Thus, training could consist of on-the- throughout part 139 were combined duties required under the proposed part job training, formal classroom lectures, with new recordkeeping requirements. 139. Requirements also were proposed industry training meetings, or some This section also required a certificate to ensure a certificate holder provides combination thereof. holder that serves less than 10,000 its personnel the necessary resources to While this section does not require annual air carrier operations to make properly perform these duties. Further, the certificate holder to test personnel to and maintain records of each scheduled new training and recordkeeping determine comprehension of the or unscheduled operation of large air requirements were proposed. required subject areas, the FAA carrier aircraft and scheduled operations Comment: A commenter states that it recommends that the certificate holder of small air carrier aircraft that occurred supports the ‘‘requirement for initial establish some sort of testing procedures during the previous 2 years. and recurrent training of personnel, and to determine the effectiveness of Comment: Three commenters oppose complementary training records.’’ training. During inspections, FAA the new requirement for a certificate FAA Response: The FAA agrees. inspectors may test covered personnel holder that serves less than 10,000 Comment: Five commenters state that to determine if training has been annual air carrier operations to make the revised section is unclear as to who completed and the effectiveness of this and maintain records of certain air should be trained and what the training training. carrier operations. One of these curriculum should address. They Paragraph (c) still requires the commenters was unclear on the need to recommend that the section be revised certificate holder to ensure covered keep such records and suggests that air to clearly define what personnel must personnel are trained before the initial carriers be required to provide this data be trained, what topics the training performance of part 139 duties. instead. Another commenter suggests should cover, and what the training However, this applies only to personnel that FAA air traffic control towers records should include. One of these assigned to part 139 duties after the collect the data. All agree that it would commenters suggests that the section be effective date of this rule. This be difficult for airport operators to revised so that it only applies to requirement is not retroactive for comply with this requirement. personnel responsible for part 139 personnel that currently perform part FAA Response: Due to changes made compliance and not general 139 duties, and paragraph (d) has been to proposed § 139.105, Duration of administrative personnel. revised to clarify that initial training certificate, the FAA has deleted the FAA Response: The FAA agrees. records need only be maintained for requirement for certain certificate Proposed paragraphs (c) and (d) have training given after the effective date of holders to make and maintain records of been revised and new paragraphs (e) the rule. air carrier operations. Instead, the FAA and (f) added. These revisions clarify This paragraph also requires will request air carrier operations data who must be trained, how frequently personnel performing part 139 duties to on a case-by-case basis from those this training must be provided, what receive recurrent training in the operators of airports at which the FAA subject areas training must cover, and specified curriculum at least once every is considering discontinuing inspections what training records must be kept. 12 consecutive calendar months. This or requesting the operator surrender its In proposing new training requirement is applicable to all covered AOC (see section-by-section analysis of requirements, it was not the FAA’s personnel but is not retroactive. § 139.105, Inspection authority). intent to extend this requirement to Beginning 1 year after the effective date Comment: One commenter states that administrative personnel. While such of this rule, the certificate holder must the new recordkeeping requirements personnel may assist in the maintenance ensure that all covered personnel will create additional costs for airport of an ACM or records to show receive recurrent training. operators if the training required under compliance, they typically do not access Such recurrent training need not be proposed § 139.303, Personnel, is more movement areas or perform duties that accomplished at one time and could be than ‘‘on-the-job’’ training. directly affect the safety of air carrier staggered throughout the year. As long

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as the five required subject areas are certificate holders have developed a under paragraph (d). The FAA will covered, recurrent training could be as generic form to minimize the time it consider a certificate holder to have involved as initial training or an takes to record ARFF and emergency qualified personnel if the certificate informal discussion between a medical training. A copy of this form is holder has complied with these supervisor and employee. made for each covered employee, and requirements. As previously stated, to Comment: Four commenters oppose then specific information about the determine if the certificate holder has the revision of existing personnel individual is filled in as training occurs. qualified personnel to comply with its requirements, claiming they are Each subject area that must be covered ACM and part 139, FAA inspectors may unnecessary and overly burdensome. is listed on this form, next to which is test covered personnel. One of these commenters notes that a space to fill in the training date and The FAA intentionally did not define FAA annual inspections ensure that the signature of the training instructor. the term ‘‘sufficient.’’ It would be airport operators have sufficient and This form is kept in a training notebook impractical to define the number of qualified personnel. Thus there is no and is provided to the FAA inspector personnel each certificate holder would need for new recordkeeping and during periodic inspections to show need to comply with part 139 due to the recurrent training requirements. Two compliance with part 139 training variations between airport size and other commenters state there is no requirements. This low-cost approach to layout, type of operations served, and benefit to conducting or documenting a recordkeeping system is an acceptable the local governing body. If a certificate recurrent training for duties that are means of complying with recordkeeping holder is found to be in noncompliance done frequently, if not daily. requirements of this section. with part 139 and its ACM, the FAA The remaining commenter states that Additionally, the FAA disagrees with will review the number and its two employees already know their the commenter that annual FAA qualification of employees used to duties; thus training would be inspections ensure compliance with comply with part 139. This review may unnecessary and would require the part 139 without the need for onerous result in the FAA requiring the commenter to hire an administrative recordkeeping and recurrent training certificate holder to provide additional clerk, at $26,557 a year, to comply. program. This commenter argues that if personnel. FAA Response: The FAA disagrees an airport is found in compliance with Comment: Two commenters state that with the commenters that revisions to part 139, then it is providing sufficient the FAA has underestimated the time a this section will be burdensome and and qualified personnel. certificate holder will need to set up a will require the certificate holder to hire While full compliance with part 139 recordkeeping system for training additional personnel. Most certificate during a FAA inspection is certainly a records. They note that FAA’s holders already comply with this good indicator that the certificate holder recordkeeping estimates for certificate section and need only to document is complying with personnel holders to comply with this section— existing training procedures. requirements, such inspections typically 4,848 hours for initial recordkeeping As discussed above, the FAA has occur once a year. Part 139 personnel hours and 13,909 hours annual made several changes to this section to requirements ensure that the airport recordkeeping—equates to 8 hours per clarify training requirements. In operator provides qualified and airport to set up a recordkeeping system. particular, the changes made to sufficient number of personnel to They claim this is not enough time for paragraph (d) to clarify that training comply with part 139 at all times, not any size airport, particularly large requirements are not retroactive address just during FAA inspections. Such airports with staff numbering in the the commenters’ concerns about the cost requirements also ensure a more hundreds, and recommend the FAA to train existing employees. Rather, consistent approach to training. This is conduct further analysis to develop a within a year of the effective date of this particularly important for personnel that more reasonable time estimate. No cost rule, these employees would need to may not perform their duties on a or operational data is provided to receive annual recurrent training that regular basis, such as ARFF and support these comments, nor did covers the five specified subject areas. emergency medical personnel. commenters provide an alternate time As noted above, the FAA allows the Even personnel that perform their estimate. certificate holder some flexibility in duties on a daily basis can benefit from FAA Response: The FAA disagrees. conducting and scheduling this training recurrent training. Such employees may This time estimate was based on the so that the certificate holder can comply become complacent in their duties and assumption that current certificate with the requirements of this section in recurrent training will help ensure that holders have an established system for a manner best suited to its operations they continue to perform their duties, maintaining training records for ground and budget needs. correctly and safely. Recurrent training vehicle operations, as required under The FAA also does not agree that also provides the opportunity for existing § 139.329 Ground vehicles. documenting the training would require employees to discuss any changes to Since the training requirements of this the certificate holder to hire additional part 139 and any revisions to standards section apply to the same individuals personnel. The training documents or the ACM. that must be trained under existing required under this section can be as Comment: Two commenters request § 139.329, the FAA estimates that these simple or complex as the certificate that this section clearly state what the airport operators would need only 8 holder desires. This section only FAA considers to be ‘‘sufficient and hours to update this system to requires training records to contain a qualified personnel.’’ incorporate new training records description and date of training received FAA Response: The FAA agrees. required under this section. for each covered employee. Based on comments received, these Some of these airport operators have For instance, a handwritten or typed requirements have been clarified and automated their recordkeeping systems, letter containing this information for restated. which create and store required records each covered employee that the This section, as adopted, requires the electronically. These systems may take certificate holder certifies is accurate certificate holder to ensure such longer than 8 hours to update, but this meets the requirements of this section. personnel are trained in the subject section does not require such In complying with similar training areas specified in paragraph (c) and to automation. As noted above, a paper records for ARFF personnel, some document this training as required form that is reproduced and completed

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for each covered employee is sufficient, Section 139.305 Paved Areas Paragraph (a) was revised to require and recordkeeping time estimates are Proposal: This section contained that certificate holders ensure runway based on such a system. existing requirements for maintaining safety areas are maintained in Recordkeeping time estimates for paved areas used by air carrier aircraft. accordance with the standards of this newly certificated airports also were All certificate holders were required to section, unless otherwise approved in determined to be eight hours. Since a maintain paved areas, including loading the ACM. Further, paragraph (c) was simple paper system is acceptable for aprons, parking areas, taxiways, and revised to make a general reference to complying with the recordkeeping runways, in a manner that adequately the availability of the AC system. requirements of this section and these supports air carrier aircraft operations. Comment: A commenter recommends airport operators have small staffs, the The FAA proposed few changes to eliminating the clauses in paragraph (a) FAA determined operators of such these requirements. The terms ‘‘full that ‘‘grandfathers’’ nonstandard safety airports would need no more than a day strength’’ and ‘‘shoulder’’ were deleted areas and imposes a deadline for all part to establish such a system. from paragraph (a)(1) to eliminate 139 certificated airports to have at least The time needed to update confusion as to which areas to apply the a 1,000-foot safety area at the end of recordkeeping systems may be further 3-inch abutting surface limitation. Also, each air carrier runway. The commenter reduced by changes made to paragraph language stating specific series numbers also suggests that if land is not available (c) that limit training to personnel that within the AC system was changed to a to achieve the 1,000-foot safety area at enter movement areas. This change may general reference to the AC system. the end of the runway, the FAA should reduce the number of records that need Comment: One commenter require part 139 certificate holders to to be maintained. recommends the FAA expedite the use alternate methods, such as arresting rulemaking for continuous friction materials or declared distances, to Section as Adopted: This section is measuring equipment. Specifically, the achieve a similar level of safety. adopted with changes. As discussed commenter suggests that the FAA FAA Response: The FAA disagrees. above, modifications have been made to publish a supplemental notice of As noted in the proposal (65 FR 38650), paragraph (c). This paragraph now proposed rulemaking so requirements compliance dates listed in paragraphs stipulates that training required under for friction measurements could be (a)(1) and (2) are part of a ‘‘grandfather’’ this section is limited to personnel that included in this final rule. clause to allow existing safety areas that enter movement areas to perform duties. FAA Response: The FAA disagrees. were adopted when part 139 was Additionally, new language has been As noted in the proposal (65 FR 38641), amended in 1987 (52 FR 44276, added to specify the five subject areas this rulemaking intentionally does not November 18, 1987.) Before 1987, many that required training must include and address runway friction measurement airport operators invested resources to to require recurrent training every 12 (both winter and maintenance) as the develop safety areas before standards months. ARAC is already considering this were established. Further, physical Several modifications were made to matter. Issuing a supplemental limitations of airports resulted in paragraph (d) to clarify requirements for rulemaking would unnecessarily delay establishment of some safety areas that training records. Now, only records of this rulemaking. did not meet the standard. training given after the effective date of Section as Adopted: This section is In developing the proposal, the FAA the rule need to be maintained, and adopted with one clarification. A did consider removing these such records must be kept for 24 sentence has been added to paragraph grandfathering clauses but determined consecutive calendar months. (a)(3) clarifying that a pavement crack the most efficient means to ensure all In addition, two new paragraphs have and surface variation must be safety areas at part 139 certificated been added. New paragraph (e) immediately repaired if it produces airports meet current standards is to identifies other new and proposed part loose aggregate or other contaminants. continue to do so through AIP-funded 139 training requirements. New Section 139.307 Unpaved Areas runway/taxiway renovation projects. paragraph (f) clarifies that a certificate Airport operators that accept AIP funds holder can use individuals other than its Proposal: This section contained existing requirements for maintaining for runway or taxiway renovations are own employees to comply with part obligated under grant assurances to 139. unpaved areas used by air carrier aircraft. All certificate holders were ensure that such renovations meet Language from proposed § 139.323(d) required to maintain unpaved areas, current standards, including those for that specified the conditions that a including loading aprons, parking areas, runway safety areas. Since 1988, many certificate holder must meet in order to taxiways, and runways, in a manner that safety areas at part 139 airports have use an independent organization or adequately supports air carrier aircraft been brought up to current standards designee to conduct fuel fire safety operations. through this process. Due to the inspections was moved to new Comment: No comments were advanced age of the remaining runways § 139.303(f) and revised so it is received. and taxiways, similar renovation or applicable to all sections. A certificate Section as Adopted: This section is replacement should occur in the next holder that chooses to use a third party adopted as proposed. few years, and associated safety areas to comply with a part 139 requirement also should be brought up to current is still required to ensure that the third Section 139.309 Safety Areas standards if necessary. Where terrain party’s duties and responsibilities are Proposal: This section contained does not permit a standard safety area, included in the ACM and records are existing requirements for the the FAA will require alternative maintained to show that the third party establishment and maintenance of a methods of compliance, such as those is in compliance with part 139 and the safety area for each runway and taxiway recommended by the commenter, to be ACM. This would include any training available for air carrier use. Except for developed on a case-by-case basis. required under part 139. The certificate minor changes to paragraphs (a) and (c), Section as Adopted: The section is holder using a third party is still fully these requirements remained the same adopted as proposed, except for some responsible for meeting part 139 and were applicable to all part 139 minor administrative language changes requirements. airports. for clarity.

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Section 139.311 Marking, Signs, and small airports be allowed to use objection to retroreflective signs was Lighting retroreflective signs. The other discussed in the proposal (65 FR 38650). In particular, ALPA is concerned that Proposal: This section contained commenter, an operator of a large Class retroreflective signs may not be visible existing requirements for runway and I airport, notes that this requirement to all air carrier pilots because of taxiway markings, signs, and lighting. would have a financial impact but does differences in aircraft configurations This section was retitled, and several not provide financial or operational and the location of taxi lights. The clarifications were made to correspond data. association states that the basis for this to changes made to the certification FAA Response: The FAA agrees that position is ‘‘the collective experience’’ process (proposed § 139.203, Contents there will be costs associated with the of its 58,000 airline pilot members and of airport certification manual) and to requirement to internally illuminate all required signs and has addressed these requests that the FAA provide any separate marking, signs, and lighting information it has to the contrary. ALPA requirements into three distinct costs in the regulatory evaluation. Nonetheless, several factors will help also recommends the FAA conduct tests paragraphs. of retroreflective signs at the FAA’s A change was made to existing mitigate such costs, particularly for operators of small airports. Technical Center in Atlantic City, NJ. marking requirements to clarify FAA Response: The FAA disagrees. standards for taxiway edge markings. In Operators of Class III airports will be required to internally illuminate only Other than ALPA’s comment, the FAA addition, the word ‘‘runway’’ was did not receive any other comment that deleted from the term ‘‘runway holding mandatory holding position signs, thereby reducing the number of signs would support the claim that position markings’’ in this paragraph to retroreflective signs are not visible to permit special aircraft operations that these small airport operators must illuminate. Further, these airport pilots of certain air carrier aircraft, as require holding position markings other requested in the proposal (65 FR 38650). than those located prior to the runway. operators can apply for Federal funds to purchase and install these signs. While Nor did ALPA provide data collected Sign requirements were relocated to a from its membership that identifies the there is no guarantee that Federal funds new paragraph (b) and revised to require aircraft type from which pilots have will be available and airport operators Class I, II, and IV airports operators to experienced problems seeing must still provide matching funds, most internally illuminate all required signs. retroreflective signs or the airports at current part 139 certificate holders Class III airports were required to which these signs are located. internally illuminate only holding installed their current sign systems The FAA has determined that position and instrument landing system using Federal funds. The FAA retroreflective signs provide a (ILS) critical area signs. In addition, anticipates this will be the same for reasonable means for airport operators language was added to provide for those operators of airports who will be newly to install a sign that can be seen in most instances where an airport has a runway certificated under this rule. low-visibility conditions when an without edge or in-pavement lighting Also, as discussed above, the FAA has internally illuminated sign is and thereby does not have a power committed to work with airport impractical or cost prohibitive. Other source to internally illuminate signs. operators to develop alternative means than ALPA’s claim that retroreflective References to 14 CFR part 77 of compliance, including the use of signs are problematic, the FAA has concerning obstructions were deleted, retroreflective signs, until funding is received no other report of problems language pertaining to lowest available to purchase and install with these signs from the industry or minimums authorized for a runway was required signs. In addition, Class III from aircraft operators. Accordingly, the modified, and new language was added airports have an additional 3 years after FAA will allow Class III airports to use to require the certificate holder to the effective date of this final rule to retroreflective signs to identify taxiing comply with this section in a manner comply with sign requirements. As routes. satisfactory to the FAA. In addition, noted in the proposal (65 FR 38651), Comment: In response to the FAA’s expired implementation dates were this additional compliance time will request for comments on whether the deleted and a new compliance date was allow time to develop a sign plan, order installation of unlighted retroreflective proposed for Class III airports. and take delivery of signs, and install signs would provide an adequate sign Comment: One commenter expresses signs. system for Class III airports, a Class III support for revised language that may Operators of small airports that will airport operator provided its opinion on provide relief for airport operators that be classified as either Class I, II, or IV retroreflective markers used at its have runways without a power source airports should already comply with the facility to mark the runway edge. This and are unable to internally illuminate requirements of this section. For the commenter states that such required signs. This commenter past 10 years, the FAA has been funding retroreflective markers ‘‘do not provide commends the FAA’s pledge in the the installation of internally illuminated adequate lighting for aircraft on proposal (65 FR 38650) to work with sign systems at part 139 airports that approach to landing.’’ The commenter such airport operators to develop comply with the requirements of this notes that such markers are only alternative signs until funding is section. Any changes that need to be effective for taxiing aircraft and cannot available to install a power source. The made to these systems as the result of be seen from the air. This commenter commenter states this approach is this rule likewise will be eligible for concludes that retroreflective markers practicable and should accommodate a Federal funding. are dangerous and unsafe during low- variety of equally safe solutions, such as Comment: In response to a request for visibility weather conditions and that retroreflective signs. comments, one commenter states its only lighted runways with lighted signs FAA Response: The FAA agrees. opposition to the use of retroreflective can assure maximum runway usage and Comment: Two commenters state the signs at Class III airports because of improve safety. requirement to illuminate all mandatory concerns that retroreflective signs might FAA Response: While the FAA was signs will have a financial impact on not be visible to all air carrier pilots. not seeking comments on the use of airport operators, particularly on This commenter, the Air Line Pilots retroreflective markers on runway operators of small airports. One of these Association (ALPA), raised this issue as edges, the FAA disagrees with commenters suggests that operators of a member of the ARAC, and its commenter’s conclusion that use of

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retroreflective markers creates an unsafe meeting on June 21, 2001, the ARAC (a). The term ‘‘regularly’’ was deleted condition. During certain visual accepted the working group’s majority and new language added to clarify that conditions and aircraft operations, report on distance remaining signs. The the FAA will determine which airports retroreflective markers are an acceptable majority report recommended that no require snow and ice control plans. In means to mark the edge of pavements. regulation change was needed to require addition, the standard for positioning Further, the commenter incorrectly distance remaining signs as the vast snow off movement areas was modified assumes that retroreflective markers are majority of airport operators have by deleting the term ‘‘full strength.’’ intended to be seen from the air. already installed such signs on their air References to airport condition Retroreflective markers are intended carrier runways. In addition, ARAC reporting requirements also were only to provide visual guidance to a considered ALPA’s minority position updated to correspond to new section pilot operating an aircraft on the that the FAA should publish a notice of numbering, and references to specific ground. Lighting that provides visual proposed rulemaking requiring distance ACs were replaced with a generic decent guidance information to pilots remaining signs. Both the majority and reference. during an approach to the runway is the minority opinions are included in the Comment: A commenter states that by only airport lighting intended to been recommendation forwarded to the FAA. omitting the term ‘‘regularly’’ in seen in the air. This lighting, known as Comment: A commenter recommends paragraph (a) and replacing it with the approach lighting, is never that the final rule require certificate language ‘‘as determined by the retroreflective. holders to install precision approach Administrator,’’ the requirement for a The FAA determines the type of path indicators (PAPI) at the end of each snow and ice control plan would be runway lighting, including approach air carrier runway. A PAPI is a system subject to interpretation absent any lights, to be used based on runway of lights normally installed on the left specific guidelines. takeoff and landing minimums. Runway side of the runway providing visual FAA Response: The FAA disagrees. takeoff and landing minimums are the descent guidance information to pilots The term ‘‘regularly’’ is not currently horizontal and vertical visual distances during an approach to the runway. The defined and is subject to interpretation. the pilot must be able to see during poor commenter believes this is necessary, as The new language allows greater meteorological conditions in order to PAPIs are important visual aids that flexibility for the certificate holder and use the runway. The FAA considers help ensure pilots make stabilized the FAA. As the plan will be specific to many factors in determining takeoff and approaches. each airport, there should be no landing minimums, such as runway FAA Response: The FAA disagrees ambiguity as to what each airport is length and obstructions near the that the final rule should include a requested to do. runway, and these minimums will vary requirement for PAPIs. Requiring the from runway to runway. installation of PAPIs goes beyond the Section as Adopted: This section is While § 139.311 does require the scope of the proposal and would require adopted with changes. An editorial certificate holder to provide and a supplemental notice of proposed change was made to proposed paragraph maintain runway lighting, the standard rulemaking. Further, the use of a PAPI (b)(5) to update a section designation is determined independently of the part is determined by the type of instrument number and another was made to 139 airport certification process. This is approach that the FAA has authorized proposed paragraph (b)(6) to delete the because the FAA authorizes runway for the runway and may not be redundant language ‘‘procedures for takeoff and landing minimums for all appropriate for all runways at part 139 snow and ice control.’’ types of runways, including many airports. Section 139.315 Aircraft Rescue and located at airports that are not Section as Adopted: This section is Firefighting: Index Determination certificated under part 139. In some adopted with minor changes. A instances, the FAA may authorize clarification was made to Proposal: This section contained minimums that would permit a part 139 § 139.311(a)(3). The word ‘‘taxiway’’ has existing criteria for determining the certificate holder to use retroreflective been inserted in front of the words certificate holder’s level of ARFF markers to denote the runway edge. ‘‘edge markings’’ to clarify that the edge coverage, or Index. The levels of ARFF The FAA agrees with the commenter markings required under paragraph coverage are divided into five that lighted runways and signs improve (a)(3) are taxiway edge markings. categories, or Indexes, that are used in safety, but it will not require part 139 Runway edge markings are already other sections to prescribe minimum certificate holders to install runway addressed in paragraph (a)(1). ARFF services and equipment lighting and markings other than those Additionally, paragraph (c)(4) was appropriate to the size of aircraft served. necessary for the authorized takeoff and edited for clarity. This did not change in the proposal. landing minimums. While Index criteria remained the Comment: One commenter, ALPA, Section 139.313 Snow and Ice Control same, a change was made to paragraph recommends the FAA expedite the Proposal: This section contained (c) to clarify which Index is required rulemaking for distance remaining signs existing requirements to develop and when the largest aircraft serving a (signs that are installed every 1,000 feet implement snow and ice control plans. certificated airport has less than the along the runway to advise pilots how These requirements applied to those minimum number of daily aircraft much of the runway remains). Class I, II, and III airports located in an departures. In addition, language was Specifically, ALPA suggests that the area where snow and icing conditions added to emphasize that in all FAA publish a supplemental notice of regularly occur. circumstances, the minimum ARFF proposed rulemaking so requirements No changes were proposed to the Index will be Index A. for distance remaining signs could be existing requirements that snow and ice Comment: Many of the comments included in this final rule. plans include procedures for removal received on this section express FAA Response: The FAA disagrees. and control of snow and ice concerns that the proposal did not As noted in the proposal (65 FR 38641), accumulations, and that notification be update ARFF standards. Some of these this rulemaking intentionally does not provided to air carriers when movement commenters suggest a complete revision address distance remaining signs. This areas are unusable due to snow and ice. of ARFF standards, while others matter was referred to the ARAC. At its Minor changes were made to paragraph recommend changes for specific

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standards, including the criteria used pose a financial burden and the FAA will assist the airport operator for determining Index. detrimentally affect air carrier service at in applying for Federal funds and FAA Response: The FAA agrees that their airports. Some of these provide guidance on acquiring ARFF some part 139 ARFF standards may commenters provide cost and equipment, training events, and the need revisions. However, the proposal operational data to support their availability of regional resources. This did not include any major revision of position. Many state that without may include a local network of ARFF ARFF standards. The FAA has asked Federal funds to cover ARFF costs, they and other firefighting personnel that ARAC to review this matter. The ARAC would consider not serving air carrier provide guidance, training, and other has created an ARFF Working Group to operations covered by part 139, while support to smaller airports. review part 139 ARFF standards and to others request an exemption from ARFF Some commenters also request propose new regulatory language, as requirements should the FAA decide to Federal funds to cover ARFF costs. As appropriate. Comments on this proposal adopt the proposal. discussed previously, safety equipment that address specific ARFF standards Additionally, commenters state that (including ARFF equipment) that is will be forwarded to this ARFF Working airport sponsors will not be able to required under part 139 is eligible for Group for consideration. Otherwise, provide funds needed to comply with AIP funds. However, as of the date of these comments will not be addressed ARFF requirements, particularly if the publication of this final rule, the AIP as they are beyond the scope of the required to hire additional personnel. A authorizing statute does not allow NPRM. few of these commenters also note that Federal funds to be used for ARFF labor Comment: A commenter supports the local laws limit the use of local funds and training costs. FAA’s decision to expand part 139 for Federal mandates or restrict the Comment: Four commenters express requirements to small commuter collection of taxes. Several commenters concerns that the proposal did not airports, noting that without part 139 also question the accuracy of the FAA’s address ARFF coverage for cargo aircraft certification, there is no incentive for cost estimates. operations. One of these commenters these airports ‘‘to meet the minimal FAA Response: The FAA agrees that also states that ARFF requirements lifesaving measures in part 139.’’ The in some instances the costs to comply should apply to ‘‘wide-body aircraft’’ commenter also states that it supports with even minimum ARFF requirements operations as well. the upcoming ARAC review of part 139 may be prohibitive at certain airports. FAA Response: The FAA partly ARFF standards, particularly standards As discussed earlier, the FAA will disagrees. As discussed in section-by- for response times, staffing, and consider requests for relief from ARFF section analysis of § 139.1, 49 U.S.C. extinguishing agent amounts. requirements under 49 U.S.C. 44706 in 44706(a) limits the FAA’s authority to FAA Response: The FAA agrees. such instances where compliance with grant AOCs to those airports serving Comment: A Class I airport operator such requirements would be certain passenger air carrier operations. states that all certificate holders should unreasonably costly, burdensome, or Congress would have to amend this be required to meet at least Index A impractical and alternative compliance statutory authority before the FAA requirements, subject to limited measures have been established for could issue AOCs based solely on air exemptions. The commenter states that Class III airports (see the section-by- cargo operations and then, airport operators should work with local section analysis of § 139.315, Aircraft subsequently, require ARFF coverage firefighting agencies to determine the rescue and firefighting: Index during such operations. most economical and efficient means of determination). However, the FAA already has the complying with ARFF requirements and The operational and cost data authority to certificate airports serving include the resulting agreement in the provided by these commenters is aircraft described as ‘‘wide-body airport’s emergency plan. The addressed in the regulatory evaluation. charters’’ (unscheduled air carrier commenter also notes that employees of In reviewing this data, the FAA noticed operations in aircraft with more than 30 smaller airports should be cross-trained that several commenters assumed that seats). In the proposal, certificate in ARFF duties to minimize the either they would have to provide holders serving both scheduled and financial impact. certain ARFF services not required or unscheduled operations were required FAA Response: The FAA agrees. All comply with ARFF requirements in a to provide ARFF coverage appropriate certificated airports serving both manner that far exceeds what was to the size of aircraft served. This scheduled and unscheduled operations proposed. These issues are addressed requirement has been adopted without are required to comply with at least separately under the appropriate change. Index A ARFF requirements, subject to section. Comment: Two commenters the limited exemption discussed in the The implementation of this rule will recommend that smaller airports be analysis of § 139.111. In addition, require the FAA to either issue new allowed to use alternative methods to alternative compliance measures have certificates or reissue existing provide ARFF coverage. One commenter been established for Class III airports certificates. During this certification suggests the FAA use the majority (see the section-by-section analysis of process, the FAA will work with airport ARAC working group recommendation § 139.315, Aircraft rescue and operators to determine the appropriate to allow airports with a low frequency firefighting: Index determination). level of ARFF. Depending on the of air service to coordinate an Comment: Nine commenters oppose commenter’s existing emergency emergency plan with reasonable the requirement that all certificated services and airport operations, there response times with the local fire airports comply with at least minimum may be several compliance options department. The other commenter Index A requirements. These available that could be tailored to the recommends the FAA reach an commenters, Class II and III airport airport to significantly reduce costs. For agreement with the U.S. Department of operators and sponsors, state that example, existing airport personnel Defense (DOD) to provide ARFF training complying with the requirements of could be crossed-trained to perform or expand the number of federally proposed § 139.315, ARFF: Index ARFF duties, and Federal funds may be funded regional ARFF training centers. determination, § 139.317, ARFF: available to purchase ARFF equipment. This commenter also recommends that Equipment and agents, and § 139.319, In the event that additional ARFF the FAA permit ARFF services to be ARFF: Operational requirements, would equipment and personnel are needed, performed by a tenant air carrier, fixed

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base operator (FBO), or a private The FAA also makes use of DOD staff Comment: Many of the comments on company. Additionally, both and resources wherever possible, this section recommend changes to commenters suggest that smaller particularly at joint-use and shared-use specific standards, including the airports be allowed to house ARFF airports, and routinely coordinates with number of required ARFF vehicles, equipment at a local fire station and DOD on ARFF research projects. equipment carried on these vehicles, train firefighters at that station in ARFF Further, the FAA encourages certificate and the type and quantity of procedures. holders to use federally funded regional extinguishing agent. FAA Response: The FAA agrees in ARFF training facilities. However, the FAA Response: As discussed above, part. As adopted, the final rule allows FAA does not foresee funding the the NPRM did not propose any major Class III airports to either comply with construction of more of these training revision of ARFF standards, and the Index A ARFF requirements or use facilities, as existing facilities are not ARAC has since accepted the task to alternative means to comply with ARFF being used to their full capacity. review part 139 ARFF standards. requirements that provide a comparable Comment: One commenter Comments received that address level of safety, as approved by the recommends that certificate holders use specific ARFF standards in this section Administrator. Such alternate means military surplus ARFF vehicles to help will be forwarded to the ARAC for must be included in the FAA-approved offset ARFF costs. consideration. Otherwise, these ACM and, at a minimum, address four FAA Response: The FAA agrees. For comments will not be addressed as they specific operational items, including many years, airport operators have been are beyond the scope of the NPRM. type of equipment to be provided and acquiring Federal surplus equipment Comment: The National airport familiarization training for through the surplus property programs Transportation Safety Board (NTSB) emergency service providers. of the U.S. General Services comments that it issued Safety Alternative rescue and emergency Administration and the DOD. Recommendation A97–107 following an Section as Adopted: The section is services may be those used to comply aircraft accident in Quincy, IL, on adopted with changes. As discussed with airport emergency plan November 19, 1996 (see 65 FR 38652 for above, a new paragraph (e) has been a summary of this accident). This safety requirements under § 139.325, Airport added to allow certificate holders of a recommendation asked the FAA ‘‘to emergency plan. Class III Airport Operating Certificate to develop ways to fund airports that are Commenters’ recommendations to use alternate means to comply with ARFF served by scheduled passenger non-airport personnel to perform ARFF requirements. The new paragraph operations on aircraft having 10 or more duties are already acceptable under specifies that such alternate means must passenger seats and require these existing FAA policy. Part 139 does not be included in the FAA-approved ACM airports to ensure that ARFF units with require a certificate holder to use only and address four specific operational trained personnel are available during professional firefighters. The certificate items, including type of rescue and commuter flight operations and are holder has the discretion to use firefighting equipment to be provided. capable of timely response.’’ The NTSB whomever it deems appropriate to meet further states that this proposal is an Section 139.317 Aircraft Rescue and ARFF personnel requirements so long as acceptable approach to addressing this Firefighting: Equipment and Agents such individuals are trained in the safety recommendation and that it subject areas specified in § 139.319. Proposal: This section contained supports the proposed revisions that These personnel could include existing standards for ARFF equipment require airport operators to provide personnel from a local fire station, an and fire-extinguishing agents. Several ARFF coverage during scheduled airport tenant, a private company, or modifications were made to these operations of air carrier aircraft with 10 DOD facilities adjoining the airport. standards. The term ‘‘clean agent’’ was or more seats. The NTSB also affirms its This did not change in the proposal. added to describe a new category of fire position that commuter airline The proposal did not limit a extinguishing agents that replace halon passengers are entitled to one level of certificate holder’s ability to make 1211. The phrase ‘‘unless otherwise safety. arrangements with the local fire station authorized by the Administrator’’ was FAA Response: The FAA agrees. to store equipment and provide all or added to provide relief to airports However, comments received from part of required ARFF coverage. The waiting for Federal funds to purchase operators of small airports indicate that FAA allows ARFF equipment to be adequate equipment or to address other they are unable to comply with part 139 housed at the local fire station as long local circumstances that may require in the same manner as large airports. as the equipment purchased with temporary use of alternative equipment The limited number of annual Federal funds is used in compliance or extinguishing agents. enplanements received by these with grant assurances and such an In addition, standards for facilities makes it difficult for them to arrangement allows the certificate extinguishing agent substitutions were collect enough revenue to allow them to holder to comply with part 139 vehicle removed, leaving only the requirement comply with full Index A ARFF readiness and response time that the FAA must authorize the use of requirements. This is particularly the requirements. This also is the case for alternate extinguishing agents. Likewise, case at airports with fewer than 10,000 firefighters based at the local fire station language was deleted that provided annual enplanements. if they are trained and equipped in relief to certain airport certificate As discussed earlier, the FAA plans to accordance with § 139.319. Many holders whose ARFF vehicles were use its exemption authority in instances certificated airports already have made unable to comply with the standards where compliance with part 139 would such arrangements with their local fire required when the regulation was be unduly burdensome, costly, or departments, and the FAA encourages amended in 1987. impractical. Additionally, the FAA will an airport operator that is proposing an All certificate holders were required use its specific authority to grant limited alternate means of compliance under to comply with this section. A 2-year exemptions from ARFF requirements § 139.315(e) or petitioning for relief compliance date was proposed for those under 49 U.S.C. 44706 to require safety from ARFF requirements under airport operators required for the first measures at all airports serving small air § 139.111 to consider such arrangements time to comply with § 139.317 carrier aircraft. Any airport operator that in its petition. (proposed Class II, III, and IV airports). petitions for relief from ARFF

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requirements must provide certain additional year to comply. These airport Section as Adopted: This section is evidence that such requirements are operators now have 3 years from the adopted with changes. As noted in the unreasonably costly, burdensome, or effective date of this rule to comply with August 21, 2000, correction (65 FR impractical. this section or request an exemption 50669), the deletion of proposed Regarding alternative funding sources, under § 139.111. The FAA has paragraph (f) resulted in the re- Congress recently directed the FAA to determined that 3 years is a reasonable designation of § 139.317(g) through (l) as set aside a portion of existing AIP funds period for most airport operators to paragraphs (f) through (k). to assist airport operators in complying apply for and receive Federal funds and For the reasons discussed above, the with the requirements of this rule (see acquire local funds. On a case-by-case quantity of required water in paragraph 49 U.S.C. 47116(e)). Beyond that, the basis, the FAA may consider granting (e)(2) has been corrected to read 6,000 FAA has very limited options for additional time to those airport gallons, and paragraph (f)(3) has been developing new funding mechanisms, operators experiencing budgetary or deleted. Paragraph (k) also has been and Congress would have to appropriate procurement problems. modified to allow Class II, III, and IV any additional Federal funds. Comment: A commenter notes that airport operators an additional year to Comment: Three commenters state the proposal states that the FAA will comply with the requirements of this that the quantity of water required to be consider a time extension for airport section. carried for foam production by Index E operators unable to meet compliance In addition, paragraph (j) has been vehicles under § 139.317(e)(2) was the dates proposed in §§ 139.317(l) and changed. The phrase ‘‘in the 150 series’’ same as the quantity of water required 139.319(m) but does not provide criteria has been deleted and the word for Index D vehicles under by which it would evaluate such ‘‘standards’’ replaced by the word § 139.317(d)(2). They note the current requests. This commenter states that, in ‘‘methods.’’ As discussed in the regulation requires more water for Index contrast, proposed § 139.321 establishes proposal (65 FR 38643), similar changes E vehicles than Index D and asked if this criteria that airports must satisfy before were made throughout the rule to change was a typographical error. the FAA would consider an exemption language referencing advisory circulars FAA Response: The proposed change from some or all of ARFF equipment, and should have been made to this to § 139.317(e)(2) was an error. No extinguishing agent, and operational paragraph as well. change was intended, and this requirements. The commenter requests Section 139.319 Aircraft Rescue and paragraph has been corrected. The total that the FAA make ‘‘clear in the final Firefighting: Operational Requirements quantity of water for foam production rule that it will not grant any extensions still must be 6,000 gallons for Index E of time to the compliance dates, except Proposal: This section contained vehicles. in extraordinary circumstances that existing standards for the training of Comment: A commenter recommends satisfy strict criteria that the FAA sets ARFF personnel; ARFF vehicle marking, eliminating the ‘‘grandfather’’ forth in the final rule.’’ lighting, and readiness; and emergency provisions for ARFF vehicles and to access roads. This section also establish a date certain by which all FAA Response: The FAA partly established criteria for a certificate ARFF vehicles used by certificate agrees. Statements made in the proposal holder for adjusting ARFF coverage to holders must meet the requirements of regarding time extensions for airport correspond to changes in air carrier this section. operators unable to meet ARFF FAA Response: The FAA agrees and compliance dates (65 FR 38653 and 65 operations. had intended to delete paragraph (f) in FR 38654) should have stated that the Changes were proposed to clarify the proposal. A correction was issued FAA would consider granting time training requirements for rescue and on August 21, 2000 (65 FR 50669). extensions to those airport operators firefighting personnel and emergency Proposed paragraph (g)(3) also that petitioned for such relief as medical personnel, including contains a ‘‘grandfather’’ provision for required under § 139.111. The FAA will requirements for training records. In ARFF vehicles. This paragraph has been consider granting exemptions based on addition, all references to specific series deleted to be consistent with the criteria established in this section. numbers within the AC system were removal of paragraph (f). Consequently, As discussed earlier, most of the deleted, and changes were made to as of the effective date of this rule, most ‘‘strict criteria’’ of proposed § 139.321 reflect changes in terminology used to certificate holders are required to use that the commenter referenced has been describe fire-extinguishing agents. ARFF vehicles that comply with the deleted from the rule. All requirements Several changes also were proposed to requirements of this section. Class II, III, for petitions for relief from ARFF require the certificate holder to equip and IV airport operators will have requirements, including compliance ARFF vehicles with guidance material additional time to comply. deadlines, are now contained in for responding to hazardous materials/ Comment: Four commenters § 139.111. dangerous goods incidents. recommend an extension of the The FAA may consider granting time It was proposed that all certificate deadline, ranging from an additional 1 extensions for compliance in situations holders be required to comply with this to 3 years, for Class II, III, and IV airport other than extraordinary circumstances. section. A 2-year compliance date was operators to comply with this section. For example, a certificate holder may proposed for those airports required to These commenters all state that airport petition for relief if it cannot comply comply with this section for the first operators need more time to acquire with certain compliance dates because time (proposed Class II, III, and IV funding, and several noted that local the ARFF vehicle manufacturer has airports). government budget processes would not delayed the delivery of a required Comment: Many of the comments allow these airport operators to secure vehicle for reasons beyond the control received on this section recommend the necessary funds within the proposed of the airport operator. Because every changes to specific standards, including 2-year deadline. petition will be different due to varying training requirements for ARFF and FAA Response: The FAA agrees that airport size, operations, and medical personnel, response times, and additional compliance time is warranted organization, the FAA will consider vehicle readiness. Some of these and has amended paragraph (k) to allow each request for a time extension on its commenters also recommend that these Class II, III, and IV airport operators an merits. standards be reconciled with other

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Federal and industry firefighting with part 139 requirements, to go part 139, but it is an acceptable means standards. beyond what the FAA requires. If local of compliance as long as the tenant or FAA Response: As discussed laws make compliance with part 139 contractor complies with the part 139 previously, the NPRM did not propose requirements unreasonably costly, requirements. If compensation is any major revisions of ARFF standards burdensome, or impractical, the required for such services, it is a matter and the ARAC has since accepted the certificate holder can petition the FAA for the airport operator to negotiate with task to review part 139 ARFF standards. for relief, as specified under § 139.111. the tenant or contractor. Comments received that address In addition, holders of Class III Airport Comment: Three commenters state specific ARFF standards in this section Operating Certificate may propose that the requirement to have on-airport will be forwarded to the ARAC for under § 139.315(e) an alternative means ARFF that must respond within a consideration. Otherwise, these of compliance with ARFF requirements specified time period will be an comments will not be addressed as they that may better address local laws and unreasonable financial burden on a are beyond the scope of the NPRM. ordinances. small town and would adversely affect Comment: Two commenters state that Comment: Several commenters note the air carrier service into such cross training of airport personnel could that the FAA and the U.S. Occupational communities. Depending on the reduce the cost of complying with ARFF Safety and Health Administration location of the aircraft emergency, one requirements. One of these commenters (OSHA) have different standards for the commenter notes that off-airport notes that if an airport operator has number of personnel required for ARFF. emergency personnel might be in a management and maintenance Specifically, commenters questioned the better position to respond, especially if personnel, the actual number of staff applicability of the ‘‘two-in/two-out’’ the incident is located off the airport. required for ARFF would be low. This policy contained in the Respiratory FAA Response: The FAA disagrees. commenter reasons that the FAA’s Protection Standard (29 CFR 1910.134) The requirement of paragraph (a) willingness to be flexible with airport to aircraft firefighting scenarios. This specifies that the certificate holder shall operators currently required to comply standard requires that firefighters provide ARFF services on the airport with Index A requirements, particularly engaged in fighting interior structural during air carrier operations. This does with staffing issues, overcomes the fires work in a buddy system that not require the airport operator to argument made by other commenters requires at least two workers in the ensure such services are on the airport that ARFF requirements are too onerous. structure and at least two workers at all times. Depending on the frequency The commenter also states that small outside in case a rescue of the of air carrier services, an airport airport operators would not be that firefighters is needed. Commenters state operator may, and many do, arrange for much more burdened if they must that this standard would require them to ARFF services with the off-airport fire comply with existing requirements for hire additional personnel. station. This type of arrangement is ARFF response capability during air FAA Response: The FAA disagrees. acceptable so long as off-airport ARFF carrier operations for a defined period The OSHA Respiratory Protection services are on the airport 15 minutes before and after air carrier aircraft Standard does not require certificate prior to and 15 minutes after air carrier operations. Noting that current airport holders to hire more ARFF personnel operations. staff or the local fire department could than normally would be required to As noted in the proposal at 65 FR be used to meet ARFF response comply with part 139. In a legal 38663, certain airport operators that requirements, this commenter believes memorandum developed jointly by the have arranged for the local fire that the annual cost for initial FAA and the OSHA (dated July 7, 1999) department to occasionally come to compliance with ARFF equipment and and placed in the docket, it was their facilities to cover infrequent large training could be less than $20,000, determined that the respiratory standard air carrier aircraft operations will have excluding the staffing costs, and half is applicable only to personnel fighting to arrange for additional ARFF coverage this amount annually thereafter. a fire within a structure and not an for small air carrier aircraft operations. FAA Response: The FAA agrees in outside aircraft fire. As the primary Since small air carrier aircraft part. This section does not require an purpose of ARFF personnel is to operations tend to be more frequent at airport operator to use only professional suppress the external aircraft fire and such airports, ARFF services may be firefighters or limit the duties of establish an escape route for the aircraft needed more often than the local fire personnel used to comply with this crew and passengers, the ‘‘two-in/two- department can provide. section. This section only requires out’’ rule does not apply to ARFF. If the certificate holder and the FAA certificate holders to use personnel to Comment: A commenter states that cannot develop a reasonable alternative perform rescue and firefighting duties neither the FAA nor an airport operator means of compliance, the certificate that have been trained in the subject has the authority to require a private holder may ask the FAA to grant an areas specified in paragraph (i). company to provide ARFF services exemption under § 139.111 or in the Accordingly, the certificate holder could without compensation. case of a Class III airport, propose an choose to train and use existing FAA Response: The commenter alternative means of compliance with employees for ARFF duties, but each misunderstood the provision that allows ARFF requirements under § 139.315(e) airport situation is unique. The FAA an airport operator to use non-airport that may eliminate the need for off- cannot make a general conclusion about personnel to comply with the part 139, airport emergency to comply with a the burdens imposed on any airport including ARFF requirements. The FAA timed response. operator without more information. gives an airport operator the discretion Comment: A commenter states that Comment: Several commenters state to use personnel other than its own part 139 airports should be required to that if they are required to comply with employees to comply with part 139 have annual ARFF training at one of the part 139 ARFF requirements, local laws requirements. Accordingly, an airport regional training facilities funded by the would require them to hire professional operator may decide that the best FAA that use propane fire simulators. firefighters. approach to complying with ARFF The commenter does not support airport FAA Response: The FAA agrees that requirements is to arrange for such a operators using fossil fuel fires for such local laws and ordinances may require service through a tenant or a contractor. training because of the environmental the airport operator, in order to comply This approach is not required under impact and lack of repeatable training

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scenarios needed to develop firefighting addition, the FAA has added language equipment. Many airport operators find skills. The commenter also states that to § 139.315 that allows the holder of a this approach provides better training the cost of ARFF training for airports Class III Airport Operating Certificate to results and is more cost effective. These with less than 500,000 annual comply with ARFF requirements by airport operators use their existing enplanements should be AIP eligible. alternative means that may not require airport personnel, or a combination of FAA Response: The FAA disagrees. the commenter to maintain an airport personnel and those of the local Regional ARFF training centers are only emergency access road (see discussion fire department, to conduct training one option available for complying with under § 139.315(e), Aircraft Rescue and sessions throughout the year. This the fire training requirements of Firefighting: Index determination). minimizes travel costs often associated § 139.319(i)(3). Airport operators may Comment: A commenter states that with one-time training courses, and have other alternatives to comply with proposed training for emergency since training sessions are shorter, it this requirement that are less costly or medical personnel is excessive. This reduces the time personnel are more convenient. commenter points out that such unavailable for ARFF duties. Regarding the funding of ARFF personnel in its State are only required Comment: A commenter requests training costs, Congress would have to to receive 40 hours of training every 3 clarification on the relationship between amend the AIP authorizing statute years. The commenter questions the the response requirements of before AIP funds may be used for ARFF purpose of requiring more training than § 139.319(h) and those proposed in training. As of the date of the what is required by the local § 139.321, ARFF: Exemptions. Referring publication of this final rule, ARFF organization that regulates emergency to prearranged firefighting and basic equipment is AIP-eligible only if such medical personnel. The commenter emergency medical response required as equipment is required under part 139 or requests that the recurrent training a condition for an exemption under if the FAA has determined that it will requirement be the same as required by proposed § 139.321, this commenter contribute significantly to the safety or the local organization. questions how the FAA will inspect for security of persons or property at an FAA Response: The FAA agrees. The the response requirements of paragraph airport. requirement for annual recurrent (h) if the airport operator was granted an Comment: A commenter states that training for emergency medical exemption from ARFF requirements the amount of time to comply with the personnel has been deleted from under proposed § 139.321. requirements of this section should be paragraph (i)(4). Language requiring FAA Response: The FAA agrees. The extended to allow airport operators to such personnel to be trained and remain requirements for requesting an ARFF secure funds, hire personnel, purchase current in basic emergency medical exemption have been moved to equipment, and build facilities. services will remain the same. This will § 139.111 and modifications made to the FAA Response: The FAA agrees ensure emergency medical personnel conditions under which the FAA will additional compliance time is warranted receive recurrent training but at the consider granting an exemption (see and has amended paragraph (m) to same frequency required by the local section-by-section analysis of allow Class II, III, and IV airport regulating organization. § 139.111). operators an additional year to comply. Comment: A Class I airport operator The FAA will not require a certificate These airport operators now have 3 states that while it supports the holder to comply with a part 139 years from the effective date of this rule continuous training of ARFF personnel, requirement if the airport operator has to comply with this section or request the proposal’s statement regarding been granted an exemption from that an exemption under § 139.111(b). On a continuous training will affect how requirement. In granting an exemption case-by-case basis, the FAA may firefighters are trained at other from ARFF requirements, the FAA consider granting additional time to certificated airports. This commenter requires the certificate holder to provide those airport operators that petition explains that the current regulation certain data. The exemption, plus any under § 139.111(a) for additional time. could be interpreted to mean that an conditions, would be included in the Comment: A Class III airport operator airport operator could comply with ACM. During an inspection, the FAA states that the cost of reconstructing the § 139.319(i) by training ARFF personnel will verify that the circumstances that emergency access road required under only once a year. However, the proposal required the exemption are still § 139.319(k) would be unreasonable. states that the FAA would not expect applicable and that the certificate holder This commenter explains that one ARFF personnel to comply with training is complying with any conditions section of the existing emergency access requirements with only a once-a-year required by the exemption. road surrounding the airfield is training course. The commenter notes Comment: A commenter states that impassable for many months of the year that it has a continuous training many of the small communities that due to washouts and drifted snow. The program for its ARFF personnel, but if operate Class III airports rely on commenter states the cost of continuous training is mandated, other volunteer firefighters and the proposed reconstructing the road so it can be airport operators may need more requirements would require these maintained and plowed during winter personnel and equipment. communities to recall volunteers, or to months is estimated at $500,000. FAA Response: The FAA disagrees. supplement regular full-time airport FAA Response: The FAA agrees that Continuous training is not required employees, several times a day to cover it is possible the commenter may have under § 139.319(i). The statement in the air carrier flights. The commenter to renovate its emergency access road to proposal (65 FR 38653) was intended believes this would be ‘‘a significant comply with the requirements of this only to encourage ongoing training. As burden with questionable benefit’’ for section. If the FAA determines such long as ARFF personnel are trained on such airports. As an alternative, the renovation is necessary for the purposes the subject areas specified under commenter suggests modifying required of part 139, 90 percent of the cost would paragraph (i), the certificate holder has ARFF response times for Class III airport be eligible for AIP funds. Should AIP the discretion to provide this training in operators to allow all required ARFF funds not be readily available, or the a manner that best suits its needs. vehicles at such airports to utilize the airport operator does not have matching The FAA disagrees that in all secondary response time specified in funds, the certificate holder could ask instances continuous ARFF training will paragraph (h)(2)(ii) as their primary for an exemption under § 139.111. In require additional personnel and response time.

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FAA Response: The FAA disagrees. operators an additional year to comply regulated under 49 CFR part 171. This The ARFF performance times that the with the requirements of this section. section also required the certificate commenter refers to require at least one Several additional modifications were holder to conduct quarterly inspections mandatory ARFF vehicle to respond to made to this section. A new requirement of certain fueling agents. Generally, the the midpoint of the farthest air carrier for a vehicle communication method proposal did not change these runway within 3 minutes of an alarm has been added to paragraph (e) that requirements, and all classes of airports and within 4 minutes of an alarm for all requires personnel to have contact with were required to comply. other required vehicles. This secondary the common traffic advisory frequency Several minor changes were time is what the commenter suggests when an air traffic control tower is not proposed. The term ‘‘grounded’’ was should be the standard for all in operation or when there is no tower. deleted from paragraph (b)(1), responding ARFF vehicles at Class III This change is consistent with other eliminating the need for fueling agents airports. radio communication requirements to connect aircraft to a static wire during The FAA believes that the contained in part 139. Minor changes fueling operations. Paragraph (b)(6) was requirement for at least one ARFF also were made to paragraphs (e)(1) and modified to delete an implementation vehicle to respond within 3 minutes of (4) for clarity, and the redundant phrase date that has already passed. In its an alarm will not be burdensome for ‘‘if it is located on the airport’’ was place, a new requirement was proposed Class III airport operators. These deleted from paragraph (e)(2). requiring operators of proposed Class III airports typically have simple pavement Additionally, the reference to airports to complete specified training configurations that allow ARFF vehicles proposed § 139.341, Airport condition within 1 year. to reach the midpoint of the farthest reporting, in paragraph (g)(3) has been Existing requirements in paragraph (e) runway within the required time from revised to correspond to revisions made also were modified to include their standby positions. It is from this to the section numbering throughout requirements for recurrency training for standby position that ARFF subpart D. fueling agent supervisors and performance times are measured. Modifications also were made to employees, and paragraph (h) was Instead, Class III airport operators are training requirements contained in deleted to clarify that the requirements more likely to have difficulty arranging paragraph (i). Language has been added of § 139.321 are applicable to air carrier for ARFF coverage to be available at a to paragraph (i)(2)(i) to clarify that fuel storage areas located on the airport. standby location 15 minutes before and airport familiarization training shall Subsequently, existing paragraph (i) after all covered air carrier operations. cover airport signs, marking, and became new paragraph (h). In addition, As discussed previously, an airport lighting. Paragraph (i)(3) was revised to the reference to a specific AC series operator that is unable to comply with clarify that training involving an actual number in existing paragraph (i) (new any ARFF requirement, including fire must be completed prior to initial paragraph (h)) was revised. vehicle readiness or performance times, performance of ARFF duties, and Comment: A commenter states its may petition for an exemption from paragraph (i)(4) was changed to allow an support for the deletion of the such requirements under § 139.111. individual other than the required ARFF grounding requirement. This Comment: A commenter states that personnel to provide basic emergency commenter, the National Fire Protection paragraph (i) that prescribes medical services. Association (NFPA), notes this change requirements for ARFF personnel Finally, a new sentence has been was the result of changes made 10 years contains vague language. This added to paragraph (j) noting that the ago to NFPA 407, Standard for Aircraft commenter recommends removing or certificate holder may contact the FAA’s Fuel Serving. The NFPA recommends clarifying this paragraph. Regional Airports Division Manager the FAA require compliance with NFPA FAA Response: The FAA disagrees. about obtaining a copy of the ‘‘North consensus standards through periodic The language of paragraph (i) ensures American Emergency Response rulemakings to avoid similar delays and that ARFF personnel are trained in Guidebook.’’ The FAA anticipates that provide state-of-the-art safety for the certain subjects and allows some this guidebook will be available in both traveling public. flexibility to address the diversity of hardcopy and electronic form. FAA Response: The FAA partly airports certificated under part 139. agrees. The FAA will continue to review Training ARFF personnel at airports New Section 139.321 Handling and the NFPA standards for possible use as required to comply with Index E ARFF Storing of Hazardous Substances and national standards under part 139. requirements may be more complex Materials (Proposed § 139.323) However, the FAA cannot commit to the than training ARFF personnel at an Proposal: In the proposal, § 139.321, adoption of a particular NFPA (or other) airport that complies with Index A ARFF: Exemptions, contained standard in advance of that review. Not requirements. In addition, this procedures for requesting an exemption all local governments use the NFPA flexibility allows the airport operator to from ARFF requirements. As discussed standards, and the FAA will continue to incorporate training required by the earlier, proposed § 139.321 has been review each NFPA standard for state or local municipality. withdrawn and all requirements for suitability for Federal use. However, the FAA will forward the petitions of exemption are now Comment: A commenter disagrees commenter’s concerns on ARFF training contained in § 139.111. Consequently, with the FAA’s characterization of the requirements to the ARAC. As discussed all following sections have been ARAC working group’s majority opinion earlier, the ARAC has accepted the task redesignated, and comments received regarding compliance with this section. to review part 139 ARFF standards. on these sections are discussed under FAA Response: The FAA disagrees Section as Adopted: This section is the new section numbers. that it has mischaracterized the ARAC adopted with changes. For reasons New § 139.321 (proposed § 139.323) majority opinion. The majority of the discussed above, the requirement for contained existing requirements for ARAC Commuter Airport Certification annual recurrent training for emergency certain airport operators to establish and Working Group recommended that medical personnel has been deleted implement procedures for the safe airports serving small air carrier aircraft from proposed § 139.319(i)(4), and storage and handling of aviation fuel not be required to comply with this paragraph (m) has been modified to and, when the airport operator is acting section (see ARAC Commuter Airport allow Class II, III, and IV airport as a cargo agent, of hazardous materials Certification Working Group Final

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Report, page IV–3). As noted in the The FAA has evaluated available fuel FAA Response: The FAA agrees and proposal (65 FR 38655), the ARAC safety training courses and publishes a has amended paragraph (e) as suggested. majority recommended that the FAA list of approved courses. The FAA Comment: Two commenters state only require smaller facilities to meet periodically evaluates these training their support of changes made to this local fire codes pertaining to storage and courses to ensure they continue to meet section, particularly changes to enhance handling of hazardous substances and certain teaching and testing criteria and, safety of air carrier fuel storage areas. materials. on request, will evaluate new training However, both commenters note that the Comment: A commenter recommends courses. Currently, 12 fuel safety FAA does not hold air carriers deleting requirements for an airport training courses are acceptable to the accountable for the safety of their fuel operator to oversee fueling operations, FAA, including several courses storage areas and recommend that the unless the airport operator is the fueling sponsored by airport operators. FAA require air carriers to inspect and agent. Fueling operations at this Comment: A commenter states that maintain these areas. commenter’s airport are provided by the the industry should assist the FAA in FAA Response: The FAA agrees that FBO and the commenter states that the developing guidance for recurrent air carrier fuel storage areas should be airport staff are not trained in the training for fueling personnel to ensure safe. Under this revised section, the operation and maintenance of fueling such training does not become an FAA holds the airport certificate holder facilities or in aircraft fueling unnecessary burden on fueling responsible through its relationship operations. This commenter also notes operations. with its tenant air carriers, for protecting that the proposal contained no FAA Response: As noted in the against fire and explosion in air carrier justification for airport operators to proposal (65 FR 38655), fuel fire safety fuel storage facilities. Rather than have separate fuel storage inspect fueling operations, and the cost standards were developed as a result of requirements for air carriers and airport to comply outweighs the benefit. a cooperative effort between the FAA, operators, the FAA has determined that FAA Response: The FAA disagrees. airport operators, and FBOs. If advisory existing part 139 fuel storage safety and Airport operators certificated under part material is needed during the 139 already comply with the inspection standards can be applied at implementation of new training requirements of this section and have all such storage facilities located at part requirements of this section, the FAA not reported it to be burdensome or 139 airports. This approach will ensure anticipates developing such materials in costly. As discussed in the proposal (65 that all fuel storage facilities at part 139 much the same manner. FR 38655), the requirements of this airports are inspected in the same However, the FAA does not anticipate section are common safety measures manner and held to the same standards. that compliance with recurrent training and were developed as a result of a Comment: A commenter recommends cooperative effort between the FAA, requirements will be so complex as to that the FAA should consider airport operators, and FBO’s, and have require advisory materials. As required compliance with local fire codes and been successfully used for many years under paragraph (b), recurrent training NFPA standards by fuel service by airport operators and aircraft fuelers need only cover the same subject areas providers as an alternate method of nationwide. as initial training. This would include compliance. This commenter also It is not necessary for airport any changes to fuel fire safety standards recommends that the FAA should personnel who conduct inspections of and procedures that have occurred since consider the role of the local fire tenant fueling operations to be trained the individual’s initial training. marshal in performing inspections. in fueling operations or maintenance. Comment: A commenter requests the FAA Response: The FAA agrees. The Such personnel need only to be familiar FAA change the requirement for FAA already allows for these methods with the airport operator’s standards for recurrent training for employees who of compliance. Under paragraph (b), the fuel fire safety. Such standards tend to handle fueling operations to every 24 airport operator is required to be common housekeeping practices that consecutive calendar months rather the incorporate the local fire code in its airport personnel should already be 12-month requirement proposed. This standards for protecting against fuel familiar with as they are required by commenter states that there is no fires. If local fire codes do not address local fire codes and are often required justification for a more restrictive the subject areas specified in paragraph by liability insurance carriers. For requirement than that imposed on the (b), the airport operator will have to example, such standards could require fueling supervisor and would be more develop additional procedures. The fuel storage areas to be kept clean of consistent with other FAA requirements airport operator may develop litter, vegetation, and other for private pilots and mechanics. procedures unique to its facility or combustibles and fire extinguishers to FAA Response: The FAA agrees and adopt industry standards, such as NFPA be fully charged. has amended paragraph (e)(2) to require standards. Comment: A commenter states that recurrent training every 24 months In addition, the airport operator has additional training costs will be rather than every 12 months. the discretion to use either its own incurred for FBO personnel if the FBO’s Comment: A commenter recommends personnel to conduct inspections or an existing training does not comply with that the FAA amend the last sentence of independent organization or person, proposed training requirements. paragraph (e)(1) to include the phrase such as the fire marshal. At some part FAA Response: The FAA agrees that ‘‘or enrolled in an authorized aviation 139 airports, the local fire department is a few airport operators may have to fuel training course that will be actively involved in aircraft fuel fire reimburse their tenants for training completed within 90 days.’’ The safety and has arranged for ARFF costs. The responsibility for such commenter states that the proposed personnel to conduct fuel fire safety training costs will depend on the lease supervisor training requirement would inspections and to provide fire safety agreement between the airport operator not allow for loss of a trained supervisor training for fueling and airport and the FBO. Such agreements typically due to normal attrition. The commenter personnel. contain provisions that the FBO will reasons this modification would allow Section as Adopted: This section has ensure its employees are trained. fueling operations to continue been adopted with changes. As Most FBOs already use training uninterrupted until a new supervisor discussed earlier, proposed § 139.321 programs that are approved by the FAA. could be trained. has been deleted and the proposed

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§ 139.323 has been redesignated as Comment: Two commenters note a New Section 139.325 Airport § 139.321. In addition, paragraphs (e)(1) discrepancy between this section’s Emergency Plan (Proposed § 139.327) and (2) have been modified to allow criteria that determine if a certificate Proposal: This section contained additional time for training of fueling holder must light a wind direction existing standards for the development, personnel. Fueling agent supervisors indicator and the requirements of implementation, and testing of an now have 90 days to complete initial proposed § 139.311, Marking, signs, and airport emergency plan. Requirements training, and fueling personnel need lighting, for a lighting system. These for Class I airport operators remained only to complete recurrent training commenters state that proposed relatively unchanged. New requirements every 24 months rather than every 12 § 139.311 requires a lighting system for were proposed for Class II, III, and IV months. air carriers during times when the airport operators that would be required To clarify that the requirements of airport is open at night while proposed for the first time to develop and test an this section pertain to aircraft fueling airport emergency plan. operations, the words ‘‘lubricants’’ and § 139.325, Traffic and wind direction indicators, requires the lighting of wind Changes were made to update ‘‘oxygen’’ have been deleted from emergency response requirements to paragraph (b). In addition, a direction indicators during hours of darkness. include large fuel fires and hazardous requirement for using an independent materials incidents and to ensure that organization to perform inspections has FAA Response: The FAA agrees. The all response measures accommodate the been moved to § 139.303, Personnel, term ‘‘night’’ will be used in both largest air carrier aircraft serving an and a new sentence was added to sections, as defined in 14 CFR part 1. airport. In addition, an alternative for an paragraph (f). This new sentence Section 139.323(a) has been amended to emergency alarm system was proposed, clarifies how long the certificate holder specify that if the airport is open for air and clarifications were made to is required to maintain fueling agents’ carrier operations at night, rather than requirements pertaining to water rescue training records. during hours of darkness, then wind situations and coordination with the air New Section 139.323 Traffic and Wind direction indicators must be lighted. traffic control tower. Direction Indicators (Proposed Section as Adopted: This section is Testing requirements for Class I airport operators remained the same. § 139.325) adopted with changes, and the section New testing requirements were number was changed back to § 139.323. Proposal: This section prescribed proposed for Class II, III, and IV airport conditions that require a certificate For the reason discussed above, the operators that did not require a triennial holder to provide a wind cone, a traffic phrase ‘‘during hours of darkness’’ has emergency exercise. pattern indicator, and the standards for been replaced by the term ‘‘night.’’ In A new requirement was also proposed these devices. While changes were addition, the first sentence of this to allow Class II, III, and IV airport proposed to these standards, a paragraph has been reordered, and the operators 1 year from the effective date certificate holder was still required to phrase ‘‘available for air carrier use’’ has of the rule to submit their emergency provide traffic and wind indicators been included to clarify that the plans to the FAA for approval. (such as windsocks) at specific locations requirements of this paragraph are Additionally, the section number was on the airport and for certain night and applicable only to runways used by air changed to new § 139.325 from uncontrolled traffic operations. carriers. The term ‘‘maintain’’ also has proposed § 139.327, and references to Operators of all proposed airport classes been added to the first sentence of this advisory circulars were revised. were required to comply with this section to ensure consistency with the On July 17, 2001, the FAA published proposed section. wording of paragraph (c). a final rule revising 14 CFR part 107, References to Class B airspace were Airport Security (66 FR 37274). This Further, paragraph (b) has been deleted and replaced by language final rule became effective November requiring all certificate holders to install modified. The last sentence of this 14, 2001. The part 107 final rule supplemental wind cones adjacent to paragraph was proposed in an effort to contained a minor revision to current runway ends where the primary wind align part 139 requirements with the § 139.325, Airport emergency plan. cone is not visible to a pilot on final existing FAA guidance provided to The part 107 final rule added a new approach or during takeoff. In addition, pilots on visual indicators at airports paragraph (h) to § 139.325 and the standards for segmented circles and without control towers. However, this existing paragraph (h) was redesignated supplemental wind cones were revised, change would have inadvertently as paragraph (i). This revision ensures as well as standards for traffic indicators required some airport operators to move that emergency response procedures to at airports without a control tower. their primary windsock if it was not hijack and sabotage incidents contained Changes also were proposed to clarify located at the end of a runway. This was in the airport emergency plan are that airport operators must comply with not intended. To correct this error, the consistent with the approved airport the requirements of this section in a last sentence of paragraph (b) has been security program required under part manner satisfactory to the FAA and that deleted and the phrase ‘‘around a wind 107. Comments on this revision were ACs contain methods of compliance that cone’’ has been added to the first addressed in the part 107 final rule (66 are acceptable to the Administrator. sentence. This addition will ensure the FR 37308). [Note: Part 107 has been Finally, the section number was required landing strip and traffic pattern transferred to Transportation Security changed to new § 139.325 from indicator will be located around a wind Administration (TSA) regulations under proposed § 139.323. cone, wherever that wind cone may be 49 CFR 1500 et seq.] Comment: Several commenters located. Comment: Five commenters support support the changes to this section. One changes made to this section, of these commenters fully supports the A change also has been made to particularly revisions requiring a proposal for supplemental wind cones paragraph (c). The term ‘‘standards’’ has response to large fuel fires and to be installed at runway ends at all been replaced by the term ‘‘procedures.’’ hazardous materials incidents. certificated airports, rather than just at This change corresponds to changes FAA Response: The FAA agrees. airports located within Class B airspace. made throughout the regulation to Comment: An airport association FAA Response: The FAA agrees. adjust language referring to ACs. comments that the flexibility offered in

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this section allows smaller airports the requirements are consistent throughout Regulatory Evaluation). This evaluation opportunity to develop and maintain an part 139. also assumed that all Class II, III, and IV airport emergency plan that will be Comment: One commenter states airport operators would have no existing appropriate to the type of air carrier support for the ARAC Commuter emergency plan from which to develop operations served. Airport Certification Working Group their own emergency plan. FAA Response: The FAA agrees. recommendation that Class II, III, and IV Building upon an existing emergency Comment: A commenter states it is airport operators include in their annual preparedness plan will considerably reasonable to require Class II, III, and IV tabletop review discussions of staging reduce the time it takes to create an airport operators to conduct only annual areas and perimeter security that will be airport emergency plan. Further, such a tabletop reviews of their airport used during emergency situations and to revised plan does not need to conform emergency plans. This commenter notes conduct an airfield tour. to AC 150/5200–31. This AC merely that ‘‘many small airports with limited FAA Response: The FAA agrees that provides guidance on the development funding appreciate recognition by the staging areas and perimeter security of an airport emergency plan using FAA and Air Transport Association that should be discussed during an annual Federal Emergency Management the cost of conducting triennial a full- tabletop review. In most instances, Administration’s guidelines for scale exercise can be unduly airport operators must designate a emergency preparedness. Neither is burdensome.’’ staging area and arrange for perimeter mandatory. As long as such a revised FAA Response: While the FAA agrees security in order to comply with the community plan meets the requirements with the commenter’s statement requirements to paragraph (c). of this section, the airport operator may regarding annual tabletop reviews, it Accordingly, these issues are reviewed develop its plan in any manner that it does not agree that triennial full-scale during both the annual review and, as chooses. exercises are unduly burdensome for all appropriate, the triennial full-scale Additionally, the FAA is not requiring small airport operators. emergency exercise. an airport operator to use a consultant Comment: Four commenters request Similarly, a field tour may be to develop its airport emergency plan. If that all certificate holders be required to accomplished, although not specifically an airport operator decides to develop hold triennial full-scale emergency required, during an annual review. its own emergency plan, FAA resources exercises. One of these commenters, the Paragraph (g)(4) requires the certificate are available to simplify this process. American Association of Airport holder to review its emergency plan The FAA airport certification and safety Executives, states that ‘‘an emergency with all involved parties to ensure they inspectors are available via telephone or plan exercise every 36-months is a know their responsibilities under the e-mail to provide guidance on the reasonable expectation in the testing of plan. A field tour may be one means of development and testing of an airport an airport emergency plan.’’ Another compliance used by the certificate emergency plan, and they have samples commenter suggests that the FAA holder to ensure that certain parties who of approved plans. For many years, require Class II, III, and IV airports to would be required in an emergency to these inspectors have assisted Class I conduct full-scale emergency exercises drive on the airport or respond to a airport operators in the development every 5 years and tabletop reviews every predesignated staging area understand and testing of their emergency plans and 2 years. This commenter states that their responsibilities. have often served as evaluators during annual reviews alone cannot satisfy Comment: Two commenters, both triennial full-scale emergency exercises. emergency coordination and response. Class III airport operators, state that it In addition, many states and local FAA Response: The FAA agrees that may be difficult to comply with the municipalities have emergency triennial full-scale emergency exercises requirements of this section. One of coordinators that may be able to assist are beneficial, but disagrees that all these commenters explains that the airport operators develop their plans. certificate holders should be required to local community has an emergency Section as Adopted: This section is hold such exercises. The cost of such preparedness plan, but the plan is not adopted with changes. As discussed exercises for smaller airports, and the airport specific. If the requirements of above, § 139.325(a)(3) has been local community that participate in this section and AC 150/5200–31, modified. The phrase ‘‘that the airport these exercises, must be considered in Airport Emergency Plan, require more reasonably can be expected to serve’’ evaluating the benefit. than a modest update, this commenter has been changed to ‘‘in the Index Comment: A Class I airport operator estimates it would cost $3,000 to $5,000 required under § 139.315.’’ In addition, recommends that certificate holders to rewrite the plan. The other the time allowed for compliance in should be required to include in their commenter states that without outside paragraph (j) has been extended from 12 water rescue plans provisions for rescue help or additional airport staff, the months to 24 months. The section vehicles that have a combined capacity airport emergency plan required under number also has been changed to new for handling the maximum number of this section and AC 150/5200–31 would § 139.325 from proposed § 139.327, and passengers on the largest aircraft serving be difficult to develop, maintain, and several administrative edits have been the airport. exercise. made throughout the section. FAA Response: The FAA agrees. FAA Response: The FAA partly As discussed earlier, a new paragraph Paragraph (a)(3) was proposed to ensure agrees. Revising a local emergency has been added to incorporate an that all emergency procedures, preparedness plan may take some time, amendment made to part 139 in the including water rescue, are appropriate particularly to coordinate mutual aid final rule revising 14 CFR part 107, to the largest air carrier aircraft the agreements with local emergency and Airport Security (66 FR 37274). This airport operator could be reasonably medical services. Likewise, staff time new paragraph is designated as expected to serve. However, this will be required to annually review the paragraph (i) and references in the paragraph will be revised to use ARFF plan. How much time will, of course, amendment to paragraph (b) that refer to Index as the criteria for determining vary from airport to airport and will hijack and sabotage incidents have been emergency response capability rather depend on the availability of local updated to reflect the changes made to than the largest aircraft that could be emergency services. Such paragraph (b). Subsequent proposed served. This change will ensure that considerations were evaluated in the paragraphs (i) and (j) have been emergency planning and response proposal’s cost evaluation (see the redesignated as new paragraphs (j) and

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(k). In addition, references to 14 CFR This new paragraph in § 139.303 still inspection training and recordkeeping part 107 have been revised to reflect requires that the FAA approve any such requirements will be burdensome and changes made to FAA security arrangement. In addition, the certificate unnecessary. The FAA believes most regulations and the creation of the holder is required to ensure that the certificate holders already comply with Transportation Security Administration. third party’s duties and responsibilities this section and need only document are included in the ACM and that existing training procedures. New Section 139.327 Self-inspection records are maintained to document the Also, similar to § 139.303, training Program (Proposed § 139.329) third party’s compliance with part 139 required under this section does not Proposal: This section contained and the ACM, including training have to be ‘‘formalized.’’ Paragraph existing requirements for certificate activities. (b)(3) does not specify how training holders to conduct daily inspections of Comment: A commenter states that must be conducted. This is intended to the movement area to ensure the airport paragraph (b)(3) detailing training allow the certificate holder some remains in compliance with part 139. subject areas is too vague and requires flexibility in complying with training Changes were made to how the clarification. Specifically, the requirements in a manner best suited for certificate holder notifies air carriers of commenter is unclear if this paragraph local circumstances. As long as training field conditions and document requires additional training for airport covers the subject areas specified in inspections. In addition, training operations staff and recommends paragraph (b), it could consist of on-the- requirements for individuals conducting additional clarification of recurrent job training, formal classroom lectures, airport inspections were revised, and training standards. an industry training conference, or some language was added to permit airport FAA Response: The FAA agrees that combination thereof. inspections to be conducted by some training required under this Section as Adopted: This section is individuals other than employees of the section is redundant to training required adopted with changes. The section airport operator. The section number under § 139.303. This overlap is number has been changed back to also was redesignated from § 139.327 to intentional so that all requirements for § 139.327, and for the reasons discussed § 139.329, and language that was no conducting self-inspections are above, the term ‘‘designee’’ has been longer applicable was deleted. contained in one section. Training deleted from paragraph (a), and All proposed airport classes were completed to comply with § 139.303 can paragraph (b) has been modified to required to comply with this revised be used to meet this section’s training clarify that personnel must receive both section. Class I, II, and IV airport requirements. initial training and annual recurrent In addition, the FAA agrees that operators were required to update training. changes are needed to clarify the Several other changes were made existing self-inspection programs, and frequency of training. Modifications throughout the section. Paragraph (b)(2) operators of proposed Class III airports have been made to paragraph (b) to has been edited for clarity. Paragraph were required to develop and clarify that personnel must receive both (b)(3)(iv) has been revised to reflect implement a self-inspection program. initial and recurrent training in the changes made to the title of § 139.329, Comment: Two commenters support specified subject areas and that and paragraphs (b)(3)(i) and (vi) have training requirements for personnel recurrent training is required every 12 been combined. In addition, language conducting self-inspections. months. deleted in the proposal was replaced in FAA Response: The FAA agrees. Comment: A commenter notes that paragraph (b)(3). This language specifies Comment: Two commenters support the recurrent training required for that only qualified personnel can changes that will allow an airport personnel conducting self-inspections is perform inspections and was operator to designate a third party to redundant for duties that its operations unintentionally deleted. conduct inspections. One of these staff completes on a daily basis. Changes were made to paragraph (c). commenters notes that neither this FAA Response: The FAA disagrees. New language was added that requires section nor proposed § 139.303, As discussed in section-by-section the certificate holder to maintain Personnel, provides guidance on using a analysis of § 139.303, the FAA believes records for 24 months of training third party. personnel that perform their duties on a required under paragraph (b)(3). While FAA Response: The FAA agrees. daily basis can benefit from recurrent this requirement was not discussed in Since the certificate holder can use a training. Recurrent training helps ensure the proposal, other similar third party to comply with most part that all employees continue to perform recordkeeping requirements were, and 139 requirements, a new paragraph has their duties correctly and safely. this addition to paragraph (c) mirrors been added to § 139.303 that details the Comment: A commenter opposes new these requirements and is a logical requirements a certificate holder must requirements for formalized training outgrowth of what was proposed. meet in order to use a third party (see and recordkeeping, stating that these Further, the FAA has determined that section-by-section analysis of requirements are unnecessary and records of self-inspections should be § 139.303). This new paragraph contains burdensome. This commenter states that retained in the same manner as airport a requirement, found in existing the regulation already requires the condition reports, as required under § 139.321, Handling and storage of certificate holder to ensure it remains § 139.339. Therefore, the time airport hazardous substances and materials, compliant with the part 139 and the operators must maintain self-inspection paragraph (d), that specifies that the ACM. The commenter believes this records has increased from 6 months to certificate holder can use an requirement alone will ensure self- 12 months. Although not proposed, this independent organization to conduct inspections are done correctly. In change will ensure the recordkeeping inspections of tenant fueling facilities. addition, this commenter believes that requirements in the two sections are This paragraph has been moved to annual FAA inspections ensure consistent. § 139.303 and has been modified so that compliance without the need for In addition, the text ‘‘make available it now applies to any part 139 burdensome recordkeeping and for inspection by the Administrator on requirement. Consequently, the term recurrent training programs. request’’ has been deleted from ‘‘designee’’ has been deleted from FAA Response: The FAA disagrees paragraph (c). This requirement is § 139.327(a). with the commenter that new self- redundant to the new recordkeeping

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requirements of § 139.301 that specify in decreasing the hazards of runway methods of compliance that are the certificate holder shall furnish, upon incursions. acceptable to the Administrator. All request by the FAA, all records required FAA Response: The FAA agrees. Data certificated airports serving scheduled to be maintained under this part. collected by the FAA on runway air carrier operations (proposed Class I, incursions show that ground vehicles II, and III airports) were required to New Section 139.329 Pedestrians and and pedestrians in movement and safety comply with this revised section. Also, Ground Vehicles (Proposed § 139.331) areas continue to be a cause of both a change to the section number, from Proposal: This section contained runway incursions and surface § 139.331 to § 139.333, was proposed. requirements for the certificate holder to incidents. To heighten awareness of this Comment: No comments were limit access to movement areas to those important safety matter, the FAA received on this section. ground vehicles necessary for airport supports the commenter’s Section as Adopted: The section operations. This section also required recommendation and has modified number has been changed to new the certificate holder to ensure that paragraphs (e) and (f) to specify training, § 139.331 from proposed § 139.333. In employees, tenants, or contractors who rather than just familiarization, on addition, references to the terms operate ground vehicles in the procedures for the safe and orderly ‘‘imaginary surfaces’’ and ‘‘part 77’’ movement area are familiar with access to and operation in the have been replaced by the phrase established ground vehicle operating movement area and to require records of ‘‘determined by the FAA to be an procedures. such training. Additionally, this section obstruction.’’ As noted in the proposal The requirements of this section has been expanded to included safety (65 FR 38650), references to 14 CFR part remained relatively the same. Only areas and pedestrian activity to ensure 77 should have been deleted throughout minor modifications were proposed to a comprehensive approach to part 139 as part 77 is being revised and clarify that the requirements of this preventing runway incursions and may be reorganized. Accordingly, section are implemented in a manner surface incidents. references to part 77 in this section have satisfactory to the FAA. All certificated Section as Adopted: This section is been replaced with a general statement airports serving scheduled air carrier adopted with changes. The section that the FAA will determine if an object operations (proposed Class I, II, and III number has been changed back to is an obstruction. Also, the first and airports) were required to comply with § 139.329, and for the reasons discussed second sentence of this section have this section. The section number was above, paragraph (e) has been modified been combined for clarity. changed from § 139.329 to proposed to specify training on procedures for the safe and orderly access to and operation New Section 139.333 Protection of § 139.331. NAVAIDS (Proposed § 139.335) Comment: A commenter supports the in movement areas and safety areas. implementation of this section at Correspondingly, paragraph (f) has been Proposal: This section contained smaller airports with the FAA’s changed to require records of such standards for the protection of acknowledgement that existing training and that these records be navigational aids (NAVAIDS). Except § 139.329, Ground vehicles, paragraph maintained for 24 months. for a change to the section number, the As discussed previously, the words (c) is only applicable at airports where requirements of this section remained ‘‘pedestrian’’ and ‘‘safety area’’ have an air traffic control tower is substantially the same and required the been added throughout the section and operational. certificate holder to protect against the to the section title. This change now FAA Response: The FAA agrees that derogation of electronic or visual requires the certificate holder to existing § 139.329(c) is applicable only navigational equipment and air traffic establish and implement procedures for at airports where an air traffic control control facilities located on the airport. access to, and operation on, movement tower is operational. This criteria is This included protection against areas and safety areas by both stated in the first sentence of paragraph vandalism, theft, and construction that pedestrians and ground vehicles. (c) and did not change in the proposal. may cause interference. To clarify requirements for vehicle Changes were proposed to clarify that However, the commenter’s statement and pedestrian control at airports the requirements of this section must be seems to imply that there is confusion without control towers, paragraph (d) implemented in a manner satisfactory to regarding the requirements for two-way also has been modified to include the the FAA and that ACs contain some radio communications at airports phrase ‘‘or there is no air traffic control’’ methods of compliance that are without control towers or during times and ‘‘two-way radio communications.’’ acceptable to the Administrator. All when the control tower in not certificated airports serving scheduled operational. To clarify that in either New Section 139.331 Obstructions (Proposed § 139.333) air carrier operations (proposed Class I, instance prearranged signs or signals II, and III airports) were required to can be used in lieu of two-way radio Proposal: This section contained comply with this revised section. communications, the first sentence of requirements for the lighting, marking, In addition, a change to the section paragraph (d) has been modified to or removal of obstructions. Except for a number, from § 139.333 to § 139.335, include the phrase ‘‘or there is no air change to the section number, the was proposed. traffic control.’’ The phrase ‘‘two-way requirements of this section remained Comment: No comments were radio communications’’ also has been substantially the same. Certificate received on this section. added to this paragraph to clarify that holders were still required to ensure Section as Adopted: The section operators of such airports have the that each object within its area of number has been changed to new choice of using either two-way radios or authority that penetrates imaginary § 139.333 from § 139.335. Otherwise, the prearranged signs or signals. surfaces, as provided in part 77, Objects section is adopted as proposed. Comment: A commenter recommends Affecting Navigable Airspace, is revising paragraph (e) to require ground removed, marked, or lighted. New Section 139.335 Public Protection vehicle training that includes runway Changes were proposed to clarify that (Proposed § 139.337) incursion prevention awareness. This the requirements of this section must be Proposal: This section contained commenter states that safe airside implemented in a manner satisfactory to existing requirements for a certificate vehicle operations play a significant role the FAA and that ACs contain some holder to prevent the inadvertent entry

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of persons or vehicles to the movement law enforcement personnel all combine The section number has been changed area and to provide reasonable to increase cost. This commenter back to § 139.335, and paragraph (b) has protection of persons and property from provides two pages of justification why been edited for clarity. In addition, aircraft blast. All certificated airports the FAA should not require certificate references to 14 CFR part 107 have been serving scheduled air carrier operations holders, particularly at Class III airports, revised to reflect changes made to FAA (Class I, II, and III airports) were to comply with the requirements of 14 security regulations and the creation of required to comply with this section. CFR part 107, Airport Security. the Transportation Security Comment: A commenter requests FAA Response: This section does not Administration. additional time for Class III airports to require the certificate holder to comply comply with this section. The with part 107 nor does it require the New Section 139.337 Wildlife Hazard commenter recommends that these certificate holder to use any physical or Management (Proposed § 139.339) airports be allowed 3 years after the personnel security measures to protect Proposal: This section contained effective date of the rule to comply against criminal and terrorist acts. existing requirements for the certificate because the cost of implementing this As noted above, this section only holder to respond to wildlife hazards, section will be high in small rural requires the certificate holder to have including criteria for when a certificate communities. No operational or appropriated safeguards against holder is required to develop and financial data is provided to inadvertent entry to movement areas by implement a wildlife hazard substantiate this claim. unauthorized persons or vehicles. These management plan. The proposal made FAA Response: The FAA disagrees. safeguards may consist of a combination several changes to these requirements The requirements of the section are of natural barriers, fencing, and warning and clarified what is expected of the intended to prevent the inadvertent signs, which suffice to deter personnel certificate holder when developing a access by the public, which can be done or vehicles from accidentally entering wildlife hazard management plan. All quickly and for a relatively small cost. the movement area. operators of certificated airports serving The FAA is unaware of any current The reference to part 107 (new 49 CFR scheduled air carrier operations were certificate holders experiencing part 1542, Airport Security) in required to comply with this section. problems meeting this requirement, and paragraph (b) may have caused Existing § 139.337 was redesignated the commenter did not provide any confusion. This reference merely alerts as proposed § 139.339. Existing operational or cost data to suggest the certificate holder that any fencing paragraph (f) was moved to the otherwise. used to comply with part 107 will beginning of this section and became Elaborate fencing, automated access automatically meet the requirements of new paragraph (a). This paragraph control points, closed-circuit cameras, this section. This is because any fencing required that an airport operator take guards, etc. are not required to comply used to comply with part 107 far immediate action to alleviate wildlife with this section. Existing measures, exceeds the public protection hazards. All other paragraph used by airport operators for theft and requirements of part 139. designations were changed accordingly. liability purposes, to keep the public out Comment: One commenter requests Several changes were made to wildlife of movement areas will usually suffice. the FAA examine the impact of this hazard assessment requirements. A new For example, if a public road dead-ends section on smaller airports. This requirement was proposed specifying at the airport, the certificate holder commenter, the American Association that a wildlife hazard assessment must could use a sign and wood barricade to of Airport Executives, states that the be conducted by a wildlife damage alert the public not to enter. fencing requirement alone could be very management biologist who meets In addition, some airport operators expensive and one of its airport certain education and experience that have accepted Federal funds may members claims it would have to install qualifications. Another new have obligations under their grant 18 linear miles of fence to comply with requirement was proposed mandating assurances to control the use of the this section. that any recommended actions for airport in a manner that will eliminate FAA Response: The FAA disagrees. It reducing the wildlife hazard made by hazards to aircraft and to people on the is difficult to respond to this comment, the wildlife damage management ground. Grant assurances require ‘‘an as the FAA is not familiar with the biologist be included in the assessment. owner of an airport developed with referenced airport operator’s situation. In addition, the existing requirement Federal assistance to provide adequate However, based on experience with that an assessment include an analysis controls such as fencing and other current certificate holders, the FAA of the events prompting the assessment facilities to keep motorist, cyclists, does not agree that an airport operator was modified to include an analysis of pedestrians, and animals from would need to purchase new fencing to any circumstances that may have inadvertently wandering onto the encompass the entire airport property in prompted the assessment as well. landing area or areas designated for order to comply with this section. Most Several modifications were made to aircraft for aircraft maneuvering.’’ likely the airport operator’s existing the requirement to submit a wildlife Comment: Several commenters fencing or safeguards to keep the public hazard assessment for FAA approval. disagree with the FAA’s statement that out of movement areas will be These changes included a new there will be minimal or no incremental acceptable. requirement for the FAA to take into compliance cost for this section. One of Again, the reference to fencing consideration any actions recommended these commenters states that it would meeting access control requirements of by the wildlife hazard assessment in cost $150,000 to comply with this part 107 in paragraph (b) may have determining the need for a certificate section. This would include the cost to caused confusion. As noted above, holder to have a wildlife hazard develop personnel identification media, paragraph (b) does not require fencing, management plan. In addition, changes provide personnel with security but merely alerts the certificate holder were made to requirements for the training, and install passenger-screening that any fencing used to comply with wildlife hazard management plan. A equipment in the terminal building. part 107 will automatically meet the new requirement was added that directs Another commenter states that requirements of this section. the certificate holder to annually review security is expensive and that fences, Section as Adopted: The section is the plan. Also, existing language from access gates, background checks, and adopted with minor editorial changes. Subpart C, Airport Certification Manual,

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was added to require that an approved serving small air carrier aircraft comply strikes or an engine ingestion of wildlife hazard management plan be with all requirements of this section. wildlife. included in the airport operator’s ACM. This minority position, submitted by the To clarify what is required of the Finally, specific references to AC Air Line Pilots Association (ALPA), certificate holder if an air carrier aircraft series numbers were deleted, and stated that airport personnel ‘‘often do experiences a strike by a single bird, several terms used throughout the not have the expertise to develop paragraph (b)(2) also has been modified. section were revised, including the term effective measures for mitigating In the proposal, this paragraph required ‘‘ecological study.’’ A new paragraph wildlife hazards.’’ ALPA noted that the certificate holder to conduct a was added to allow proposed Class II wildlife hazards to aviation are a wildlife hazard assessment if an air and III airports to implement less than difficult and growing issue that should carrier aircraft experiences a ‘‘damaging full wildlife mitigation procedures if air be taken seriously by all small airport collision’’ with wildlife other than carrier operations at these airports are so operators and by requiring small airport birds. This has been modified to require few or infrequent that any large operators to comply with this section it an assessment if an air carrier aircraft expenditure would be unduly would ‘‘help ensure that professional experiences substantial damage from burdensome or costly. wildlife management techniques are striking any wildlife, and the term Comment: Three commenters support utilized to control wildlife problems at ‘‘substantial damage’’ has been defined. the changes to this section. One of these affected airports.’’ Consequently, the need for an commenters believes that such changes The FAA partly agrees with the assessment is now based on the type of will reduce wildlife aircraft strikes at working group’s minority position and damage sustained from a wildlife strike, FAA-regulated airports. determined that all airports serving rather than the type or numbers of FAA Response: The FAA agrees. scheduled operations (Class I, II, and III wildlife strikes. Comment: A commenter notes that airports) will comply with revised This change also mirrors how wildlife the proposal did not mention the ARAC wildlife hazard management strikes are reported on FAA Form 5200– Commuter Airport Certification requirements. At airports that only serve 7, Bird/Other Wildlife Strike Report. Working Group’s majority view on unscheduled air carrier operations This form is used by pilots and air wildlife hazard management. This (Class IV airports), the FAA believes traffic controllers to report wildlife commenter requests that the FAA that compliance with wildlife mitigation strikes to the FAA. The information review and consider these requirements would be unduly from Form 5200–7 is compiled into a recommendations before issuing a final burdensome since these airports serve national database to assist the FAA and rule. covered air carrier operations on an other safety and wildlife organizations FAA Response: The FAA agrees that infrequent basis. Changes to paragraph in learning more about the wildlife/ the proposal did not discuss the ARAC (d)(3) also allow the FAA to consider aircraft strike problem. The database Commuter Airport Certification frequency and size of air carrier aircraft helps provide information about Working Group’s majority view on served in determining the need for Class wildlife strike risk factors and possible wildlife hazard management. This I, II, and III airport operators to comply risk reduction measures and to evaluate omission was not intentional, and the with certain wildlife hazard the effectiveness of these measures. The FAA did consider both the working management requirements. FAA and the U.S. Department of group’s majority and minority views on Comment: A commenter supports the Agriculture (USDA) annually analyze this issue. proposed change to replace the term this data and publish a report of their The working group’s majority opinion ‘‘ecological study’’ in paragraph (b) with findings. This report, the national stated that existing part 139 wildlife the term ‘‘wildlife hazard assessment.’’ wildlife strike database, and FAA Form hazard management requirements FAA Response: The FAA agrees. 5200–7 are available at the FAA’s would be economically burdensome for Comment: Two commenters Internet site at http://wildlife- airports serving smaller air carrier recommend modifying the events mitigation.tc.faa.gov or by calling (202) operations. It recommended that such described in paragraph (b) that trigger 267–3389. airport operators be required only to the requirement for a wildlife hazard Comment: A commenter recommends take immediate measures to alleviate assessment. These commenters suggest that proposed paragraph (f) be revised to wildlife hazards whenever detected and that the term ‘‘damaging bird strike’’ be require the certificate holder to include not be required to conduct an added to paragraph (b)(1). One of these in its wildlife hazard management plan assessment and develop a wildlife commenters notes that the current procedures for maintaining records of hazard management plan. language of paragraph (b)(1) does not all reported wildlife strikes and all The working group’s majority stated require a wildlife hazard assessment if wildlife carcasses found within 200 feet the opinion that many airports serving an aircraft experiences a single bird of a runway. The commenter also small air carrier operations do not have strike. This commenter states that a suggests that the certificate holder use complete perimeter fences or other single bird strike should trigger an this information to periodically evaluate measures to deter wildlife access to the assessment because a single bird strike its wildlife hazard management plan movement area. Its opinion was that can be just as hazardous as some of the and revise it if needed. The commenter such airport operators do not have the minor aircraft strikes involving notes that the maintenance of a local financial resources to hire a consultant mammals. wildlife strike database is an essential to study a potential wildlife hazard, and FAA Response: The FAA agrees that part of the wildlife hazard management it would be too costly to require these language in paragraph (b) is unclear plan of any airport and that NTSB airport operators to establish priorities regarding aircraft strikes by a single bird recommends that bird strike reporting for habitat modification. However, the or engine ingestion of wildlife other be mandatory. ARAC majority did state that it is than birds. To clarify, proposed FAA Response: The FAA disagrees essential for the airport operator to have paragraph (b)(1) has been broken into with the recommendation to require a plan to remove a wildlife hazard when two subparagraphs in the final rule that airport operators to document all detected. specify that a wildlife hazard wildlife strikes. Airport operators In contrast, the working group’s assessment is required if an air carrier already are required to document minority recommended that airports aircraft experiences either multiple bird wildlife hazards and strikes under self-

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inspection requirements and to take wildlife assessment within a few days and an additional 6 months to prepare appropriate action. Further, an airport for a nominal cost. a wildlife hazard management plan. operator may not know of all wildlife The services of the FAA, the USDA, FAA Response: The FAA disagrees. strike reports as such reports are and local sources are readily available, No compliance dates were proposed in typically made by pilots and air traffic often free of charge, to airport operators this section because not all certificated controllers and sent directly to the FAA. initially seeking to mitigate wildlife airports have experienced the triggering However, the FAA agrees in part that issues. Wildlife biologists at both the events that require an assessment, and airport operators should use wildlife FAA and the USDA offer free telephone for those required to conduct an strike reports to periodically evaluate consultations, guidance material and assessment, there are many variables and revise their wildlife hazard literature, on-site preliminary involved. management plan. Airport operators can evaluations and suggested remedies. At airports where a triggering event access wildlife strike reports submitted These experts work jointly to track has occurred, the time to conduct an to the FAA by calling the FAA at (202) airport wildlife problems and assessment will vary for each airport 267–3389. Similarly, the FAA resolutions and serve as a clearing- operator. The length of time needed to inspectors will use both the FAA house for such information. Further, complete a wildlife hazard assessment wildlife strike database and an airport’s they can direct airport operators to local will depend on the complexity of the self-inspection log to determine the help, including game wardens, animal wildlife hazard and the circumstances need for a wildlife hazard assessment or control personnel, extension agencies, that triggered the assessment. An to assess the effectiveness of an existing and college/university resources, as well assessment also may reveal that a wildlife hazard management plan. as provide information on airport wildlife hazard management plan is not Comment: Several commenters operators that have pooled their needed. Similarly, the time to complete express concerns over the potential cost resources and share a wildlife biologist. a wildlife hazard management plan will for small airport operators to conduct a Most of the remaining airport be different for each airport operator. wildlife hazard assessment. These operators required to conduct an If the FAA determines there is a need commenters state that the cost to assessment may need a few additional for a wildlife hazard assessment or conduct an assessment at a small airport days to complete their wildlife management plan, it will consult with could mean a significant long-term cost assessments. These airports have more the airport operator to determine a and an increase in personnel. One of complex wildlife issues, and the FAA reasonable completion date. these commenters remarks that the and the USDA estimate that in all but Comment: A commenter notes that expense of a wildlife hazard assessment a few cases, assessments at these there are several typographical errors in is not warranted unless there has been airports could be completed in 5 to 7 paragraphs (c), (d), and (f). a strike or aircraft damage, as outlined days. In such instances, the FAA and FAA Response: The FAA agrees. in existing § 139.337. Another the USDA would probably require the These errors have been corrected. commenter, a Class III airport operator, airport operator to reimburse the cost of Comment: A commenter questions states that it has received an estimate a biologist’s wages, plus travel and whether the phrase ‘‘near the airport’’ in from an environmental contractor to expenses. If a consulting firm is used, paragraph (b) should be more narrowly conduct an assessment. Assuming no the FAA estimates that the average cost defined. significant wildlife hazard, this for a consultant to conduct an FAA Response: The term ‘‘near the contractor estimates the cost of an assessment at such airports is airport’’ is not defined in paragraph (b). assessment at $8,000. approximately $3,500 (based on the The conditions attracting wildlife to an FAA Response: The FAA agrees that average cost of $105 per staff hour). airport are so varied that it is difficult a wildlife hazard assessment is only In a few instances, an assessment to assign a specified distance from the required under the conditions specified would take longer than a week due to airport within which the presence of a in paragraph (b). the magnitude or complexity of the wildlife hazard would require an airport In addition, the FAA agrees that an wildlife problem. For example, a study operator to conduct an assessment. The assessment could mean a long-term cost of migratory birds may require a only defined distances are those for an airport operator. The cost for an yearlong study. The average cost for a 1- specified by statute for the siting of assessment will vary depending on the year study involving monthly surveys is landfills near certain public airports. In wildlife concerns at each airport. $50,000 and a 1-year study requiring addition, other recommended distances Typically, a survey of the airport and its quarterly surveys costs approximately for wildlife attractants are contained in surroundings should reveal that the $25,000. These fees usually include the AC 150/5200–33, Hazardous Wildlife cause of the wildlife hazard may be cost to conduct a wildlife census, Attractants On or Near Airports. relatively simple to fix, such as exposed evaluate habitat, develop a wildlife As is currently the case, the FAA will rafters in an aircraft hangar or a poorly hazard management plan, and train staff work with each airport operator to maintained perimeter fence. There may in wildlife control techniques. determine if a wildlife hazard is close be airports where an assessment could While a wildlife hazard management enough to aircraft traffic patterns and take longer, particularly if a wildlife plan may be eligible for AIP funding if the airport to trigger a wildlife hazard census is needed or migratory patterns it results in capital improvements to the assessment. must be monitored. airport, some airport operators may not Comment: Four commenters express Based on the wildlife aircraft strike be able to comply with this section if a concerns over the proposed requirement data received from FAA Form 5200–7, complex assessment is required. In such to use a qualified wildlife damage the FAA has determined that 40 percent cases, airport operators may petition for management biologist. Some of these of those airports required to comply an exemption under § 139.111. commenters state that the required use with this section for the first time (Class Comment: A commenter requests that of such a biologist would be cost II and Class III airports) will be required Class III airports be allowed additional prohibitive because it would require to conduct a wildlife hazard assessment. time to comply with this section. many airport operators to hire Biologists at the FAA and the USDA Specifically, the commenter requests additional personnel or overburden Wildlife Services estimate that half of that these airports be allowed 12 months USDA with requests for a qualified these airports could readily complete a to prepare a wildlife hazard assessment biologist. Another commenter suggests

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that this section be modified to allow an hazard. This commenter believes a ‘‘qualified’’ means when used in airport operator to conduct an biologist would be unfamiliar with connection with the term ‘‘wildlife assessment according to a methodology airport operations and may make damage management biologist.’’ prepared by a wildlife damage recommendations that would ‘‘not be FAA Response: A qualified wildlife management biologist. The commenter feasible and therefore not necessary to damage management biologist is a argues that this approach would permit include in the assessment.’’ biologist that has qualifications airport operators in the same geographic FAA Response: The FAA disagrees. specified under § 139.337(c), as area to reduce costs by jointly The specialized training and experience adopted. contracting for the services of a that is required of a qualified biologist Comment: A commenter questions the qualified biologist. under part 139 should result in wildlife deletion of the term ‘‘observed’’ from FAA Response: The FAA agrees in hazard management recommendations paragraph (b)(3). The commenter states part. The language of paragraph (c) has that consider airport operations. that the change from ‘‘is observed to been modified so that the qualifications Further, the FAA’s review and approval have access to any airport flight pattern for a wildlife damage management of the assessment will determine the or aircraft movement area’’ to ‘‘has biologist are not as restrictive. While the feasibility of such recommendations and access to any airport flight pattern or wildlife hazard assessment still must be ensure that they are appropriate for the aircraft movement area’’ would require conducted by a wildlife damage type of air carrier operations served. all airport operators to conduct a management biologist, the requirement Comment: One commenter wildlife hazard assessment, rather than for this individual to have a Bachelor of recommends that paragraph (f)(7) be just those airport operators that observe Science degree has been deleted. The changed to allow airport personnel to be wildlife of a size or in numbers capable required biologist need only have trained by an individual other than the of causing an aircraft strike or engine professional training or experience in biologist required under paragraph (c). ingestion. wildlife hazards at airports. This change This commenter suggests that initial FAA Response: The FAA agrees the will give airport operators greater training of airport personnel be term ‘‘observed’’ should be replaced in flexibility in selecting a qualified conducted by the required biologist paragraph (b)(3). The original text of biologist. using a ‘‘train-the-trainer’’ approach. paragraph (b)(3) has been restored. The FAA disagrees with the The commenter believes this will allow Comment: A commenter states that recommendation that an airport airport personnel to conduct any paragraph (b)(3) ‘‘appears to be a operator be allowed to conduct its subsequent training. catchall justification subject to the assessment under the guidance of a FAA Response: The FAA agrees. interpretation of an inspector not qualified biologist. As discussed in the Paragraph (f)(7) does not prohibit the qualified in wildlife assessment.’’ This proposal (65 FR 38659), the FAA has ‘‘train-the-trainer’’ approach so long as commenter recommends a ‘‘low-cost, determined that the potential for loss of the required biologist conducts the initial overview validation’’ conducted life and equipment resulting from initial training. by a qualified individual to determine if wildlife aircraft strikes requires persons Comment: A commenter recommends a hazard exists and the need for an who conduct wildlife hazard that paragraph (c) be revised to include assessment. assessments to have the education, provisions to assist airport operators in FAA Response: As discussed above, training, and experience in conducting contacting and working with USDA. the restoration of the original text of such assessments. However, this section This commenter noted that USDA’s paragraph (b)(3) narrows its scope. does not prohibit airport operators from expertise and resources in assessing, However, the FAA does not agree with pooling resources and jointly monitoring, and mitigating wildlife the recommended alternative to a contracting for the services of a hazards at airports is extensive and wildlife hazard assessment. As qualified biologist. In addition, airport ‘‘constitutes the foundation upon which previously noted, many wildlife hazard personnel can be used to assist the the FAA bases its expertise in the assessments are the low-cost initial qualified biologist in conducting the subject area.’’ This commenter also overview recommended by the assessment. suggests that the FAA ‘‘recognize the commenter. Further, FAA airport Regarding commenters’ concerns that expertise and consider the resources of certification safety inspectors are USDA will not be able to comply with state wildlife agencies in meeting’’ the qualified to determine if an assessment additional requests for a qualified requirements of this section. The is needed. The FAA trains these biologist to conduct assessments, the commenter believes this change would inspectors to determine if a potential FAA disagrees that the USDA will be provide airport operators a cost-cutting wildlife hazard exists. The FAA’s overburdened to a point that it will not alternative to hiring the services of a wildlife biologist also consults regularly be able to provide such services. The qualified wildlife damage management with these inspectors, as well as with FAA works closely with USDA to biologist. airport operators. ensure biologists are available for part FAA Response: The FAA disagrees Comment: A commenter recommends 139 wildlife hazard assessments and has that paragraph (c) should include that paragraph (h) include the following coordinated this rulemaking with them. information on using Federal or State sentence: ‘‘Certificate holders are The FAA does not anticipate that its wildlife services. The availability of encouraged to discuss potential use of biologist, or USDA’s biologists, will be State and local agencies varies from new or innovative wildlife hazard overburdened due to the additional State to State, and information on these management methods with the airport operators needing to conduct an agencies would require frequent updates Administrator, and to share results of assessment because of changes to part to keep it current. Therefore, it would be experimental methods, in the interest of 139. impractical to place this information in increasing public safety and wildlife Comment: A commenter disagrees the regulation. As noted above, airport hazard management efficiency.’’ with proposed new paragraph (c)(5) that operators can contact the FAA for this FAA Response: The FAA disagrees. would require an airport operator to information. Such discussion of new or innovative include in its wildlife hazard Comment: A commenter notes that wildlife hazard management methods assessment recommendations made by a there is no definition included in this already occurs when the FAA reviews qualified biologist for reducing wildlife section that accurately describes what wildlife hazard assessments or wildlife

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hazard management plans. New Section 139.339 Airport signs. These signs are periodically Additionally, the FAA’s staff wildlife Condition Reporting (Proposed inoperative, mainly due to burned out biologist participates with other § 139.341) lights. Because of their large number, professional wildlife managers in Proposal: This section contained particularly at Class I airports, a developing and revising wildlife hazard existing requirements for reporting certificate holder frequently finds these management standards and finding changed airfield conditions to air signs inoperative during daily self- resolutions to aviation wildlife carriers. Except for a change to the inspections and is required under problems. This ongoing effort is section number, the requirements of this § 139.311 to repair them promptly. However, reporting a malfunctioning discussed on the FAA Internet site at section remained substantially the same. mandatory instruction sign to air http://wildlife-mitigation.tc.faa.gov. Certificate holders were still required to carriers is another matter. These signs, Comment: Two commenters express collect and disseminate information on concerns over proposed paragraph (f)(6), holding position signs and ILS critical the conditions of the airport, including area signs, convey critical safety which would require an airport operator any construction or maintenance to annually review its wildlife hazard information, including where an aircraft activities, weather or animal hazards, should stop before entering an active management plan. One commenter and nonfunctional equipment and runway and areas where an aircraft states that the annual review is services. All certificated airports were could block the transmission of excessive, especially since it could take required to comply with this section. navigational information to other more than a year to develop. The other While reporting requirements aircraft. Accordingly, paragraph (c)(6) commenter requests clarification on remained the same, a minor change was has been revised to require certificate whether an airport operator is allowed made to clarify that a certificate holder holders to report to air carrier tenants to conduct its own annual review rather can use notification systems other than the malfunction of holding position than the qualified biologist. the FAA’s pilot notification system, the signs or ILS critical area signs. This FAA Response: Paragraph (f)(6) Notices to Airmen (NOTAM) System. change will ensure that air carriers are requires that the wildlife hazard Also, the term ‘‘safety area’’ was added informed of either an individual or a management plan include procedures to paragraph (c)(2) to ensure that airport systemic failure of these signs. for an annual review of the plan. These users are notified of irregularities in the Section as Adopted: This section is procedures will not become effective safety area, in addition to those in the adopted with changes. For the reasons until the plan is completed and movement area, loading ramps, and discussed above, proposed approved by the FAA. Accordingly, an parking areas. § 139.341(c)(6) (new § 139.339(c)(6)) has annual review will not be necessary References to other section numbers been revised to limit the type of signs until 1 year after the FAA has approved and the term ‘‘Airport Certification that a certificate holder must report if the plan. Specifications’’ were changed to reflect found malfunctioning. The word ‘‘sign’’ The annual review of the wildlife proposed certification changes. Minor has been replaced by the terms ‘‘holding hazard management plan must be clarifications were proposed to clarify position signs’’ and ‘‘ILS critical area conducted in the manner specified in that the requirements of this section signs.’’ The section number also has the plan and as approved by the FAA. must be met in a manner satisfactory to been changed to new § 139.339 from Approved procedures to conduct this the FAA and that the ACs contain some proposed § 139.341, and the reference to review will depend on the complexity methods of compliance that are proposed § 139.321, ARFF: Exemptions, of the wildlife hazard and mitigation acceptable to the Administrator. In in paragraph (c)(8) has been deleted. measures. In most instances, the FAA addition, the section number was In addition, a new paragraph (d) has would permit the airport operator to changed to proposed § 139.341 from been added requiring certificate holders conduct its own review. However, a § 139.339. to maintain a record, for at least 12 qualified biologist may be required to Comment: A commenter, a Class I consecutive months, of each airport review and evaluate certain aspects of airport operator, states that it supports condition report. While this the wildlife hazard assessment. the changes to this section. requirement was not discussed in the FAA Response: The FAA agrees. proposal, other similar recordkeeping Section as Adopted: This section is Comment: A commenter states that requirements were, and new paragraph adopted with changes. For the reasons the wording of proposed § 139.341(c)(6) (d) mirrors these requirements. discussed above, the events triggering a could be interpreted to mean that the The FAA has determined that records wildlife hazard assessment in certificate holder must issue a NOTAM of airport condition reports should be § 139.337(b) have been revised. Editorial for each individual runway and taxiway retained in the same manner as the changes have been made to paragraph sign that is found inoperative. The records of self-inspections, as required (c), and some of the requirements for a commenter notes that this is unrealistic under § 139.327. Although not wildlife damage management biologist and would place a burden on the proposed, this change is the logical have been deleted. Similarly, editorial NOTAM System and air traffic control outgrowth of similar recordkeeping changes have been made to paragraphs personnel. requirements. Airport condition reports (d), (e), and (f). FAA Response: The FAA agrees that are typically the result of conditions In addition, paragraph (g) has been the language of paragraph (c)(6) is found during a self-inspection, and this deleted and the stipulation that the FAA unclear. It could be interpreted to mean change will ensure the recordkeeping will consider the frequency and size of the certificate holder must report either requirements in the two sections are air carrier aircraft in determining the the malfunction of any sign required consistent. need for a wildlife hazard plan has been under § 139.311 or the malfunction of In accordance with AC 150/5200–28, added to paragraph (d)(3) and now the entire sign system. Notices to Airmen (NOTAMS) for applies to all airport classes. The reporting of the malfunction of Airport Operators, most certificate Subsequently, paragraph (h) has been any required sign would quickly holders already keep airport condition redesignated as paragraph (g). Finally, overwhelm the notification system. The report records and have incorporated the section number has been changed to vast majority of signs required under them into the follow-up process used to new § 139.337 from proposed § 139.339. § 139.311 are location and direction address discrepancies found during self-

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inspections. Accordingly, the FAA § 139.343 from proposed § 139.345. requirements of part 139. Airport already included the cost and hours to Otherwise, the section is adopted as operators that currently hold an AOC comply with this recordkeeping proposed. already have an ACM. Airport operators requirement in its estimate of initial and that currently hold a limited AOC have Final Rule Compliance annual recordkeeping burden required a modified version of an ACM, known under the Paperwork Reduction Act. This final rule becomes effective 120 as an airport certification specification days after its publication in the Federal (ACS). Under the final rule, all ACSs New Section 139.341 Identifying, Register. must be converted to ACMs. Marking, and Lighting Construction and Depending on existing operational Section 121.590 Compliance Other Unserviceable Areas (Proposed procedures and emergency services, § 139.343) In the conduct of operations at part every ACM/ACS will be in varying Proposal: This section prescribed 139 certificated airports, air carriers, stages of compliance with the final rule. existing standards for the marking and and the pilots used by them, may Some airport operators may need only lighting of construction and other continue to operate into part 139 to document existing operational unserviceable areas of the airfield. airports until these airports have procedures to comply with the new Except for a change to the section obtained new or revised AOCs, as requirements. This is the case for many number, the requirements of this section required under new § 139.101, General Class I airport operators. Newly remained the same. Certificate holders requirements. However, at specified certificated airport operators (Class III) were still required to light and mark any dates after the effective date of the rule, may also have to develop and document construction or unserviceable areas and air carriers and their pilots can only use new operational and emergency associated equipment that may create a those airports that have been certificated procedures to comply with the new hazard. All certificated airports serving under new part 139. requirements. Class II and IV airport scheduled air carrier operations As specified in new § 121.590(a), air operators may be required to do both. (proposed Class I, II, and III airports) carriers and their pilots will be Once an airport operator submits its were required to comply with this prohibited from operating at Class I revised or new ACM, the FAA will work section. airports 12 months after the effective with the airport operator to tailor the References to other section numbers date of the rule and at Class II, III, and document to ensure compliance with and the term ‘‘Airport Certification IV airports 18 months after the effective the final rule and may conduct an Specifications’’ were changed to reflect date of the rule if the operators of these inspection of the airport to verify that proposed certification changes. Minor airports have not obtained a new or the ACM reflects actual airport clarifications were proposed to clarify revised part 139 AOC. To assist air conditions. The FAA also may request that the requirements of this section carriers in determining which airports changes to the ACM and any procedures must be met in a manner satisfactory to have obtained a new or revised AOC, it describes. the FAA and that ACs contain some the FAA’s Airport Safety and Airport operators may continue to methods of compliance that are Operations Division (AAS–300) will serve air carrier operations as they acceptable to the Administrator. In provide information on the certification currently do until the deadline for addition, the section number was status of part 139 airports on its Web submitting new or revised ACM’s to the changed from § 139.341 to proposed site at http://www.faa.gov/arp/. FAA. After this date, airport operators that have not submitted their ACM for § 139.343. Part 139 Compliance Comment: No comments were approval will no longer be able to serve received on this section. Any airport operator that desires to applicable air carrier operations. Airport Section as Adopted: This section is serve applicable air carrier operations operators that have submitted either a adopted with two minor changes. The must comply with the requirements of new ACM or an update will be word ‘‘reporting’’ in the section title has this final rule. The action required by an contacted by the FAA to determine if been changed to ‘‘lighting’’ to more airport operator to comply will vary additional action is needed and to what accurately reflect the requirements of depending on the type of air carrier extent they can continue to serve air this section. In addition, the section operations served and whether the carrier operations until a new certificate number was changed to new § 139.341 airport operator currently holds a part is issued. from proposed § 139.343. 139 AOC, as well as the individual airport’s ACM. Currently Certificated Airports New Section 139.343 Noncomplying Operators of currently certificated All airport operators that hold an Conditions (Proposed § 139.345) airports are not required to reapply for existing AOC will be reclassified as Proposal: This section contained an AOC. The FAA will issue new part Class I airports (airports serving existing requirements for certificate 139 AOCs to all current certificate scheduled operations of large air carrier holders to restrict air carrier operations holders, as appropriate. For most aircraft). These airport operators have 6 in those areas of the airport that have current certificate holders, this will months from the effective date of this become unsafe and no longer comply involve updating their existing ACM to final rule to submit revisions to their with the requirements of subpart D of incorporate several new elements. The ACM’s for FAA approval. part 139. Operators of all proposed remaining certificate holders may be All airport operators that hold an airport classes were required to comply required to comply with certain existing Limited Airport Operating with this section. Except for a change to requirements for the first time or to Certificate will be reclassified either as the section number, the requirements of extend existing part 139 services to Class II airports (airports serving this section remained the same. The cover additional air carrier operations. scheduled operations of small air carrier section number was redesignated from The final rule requires all covered aircraft and unscheduled operations of § 139.343 to proposed § 139.345. airport operators to submit an ACM large air carrier aircraft) or Class IV Comment: No comments were tailored to each airport for the FAA’s airports (airports serving unscheduled received on this section. approval. The ACM is a written operations of large air carrier aircraft). Section as Adopted: The section document that details how the airport The operators of these airports will have number has been changed to new operator will comply with the to convert their existing ACS into an

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ACM. They will have 12 months from Paperwork Reduction Act 37 airports, serve scheduled operations the effective date of this final rule to As required by the Paperwork of air carrier aircraft designed for more submit the revised document to the Reduction Act of 1995 (44 U.S.C. than 9 passenger seats but less than 30 FAA for approval. In addition, operators 3507(d)), the FAA has submitted a copy passenger seats. of Class II and IV airports have of these sections to the Office of While many part 139 reporting and additional time to comply with new Management and Budget for its review. recordkeeping requirements remain sign, ARFF, and emergency planning The collection of information was substantially unchanged, additional requirements and may request approved and assigned OMB Control information collections have been additional compliance time. Number 2120–0675. adopted in this final rule. Both existing and new requirements are necessary to Uncertificated Airports This final rule revises current airport certification requirements in 14 CFR allow the FAA to verify compliance Airports serving scheduled operations part 139 and establishes certification with proposed part 139 safety and of small air carrier aircraft will be newly requirements for airports serving operational requirements. certificated as the result of this final scheduled air carrier operations in This final rule constitutes a rule. Operators of these airports, aircraft with more than 9 passenger recordkeeping and reporting burden for designated as Class III airports, that seats but less than 31 passenger seats. operators of airports certificated under want to continue to serve such air The final rule also clarifies existing part 139 because the FAA will continue carrier operations are now required to requirements, incorporates existing to require operators of certificated have an AOC and must initiate the industry practices, and responds to an airports to comply with certain safety application process as prescribed in outstanding petition for rulemaking and requirements prior to serving certain air § 139.103. This process is explained in certain NTSB recommendations. carrier aircraft. When an airport more depth in the proposal (65 FR Similar to how the FAA currently satisfactorily complies with these 38637). Operators of Class III airports certificates airports, this final rule requirements, the FAA issues to that have 12 months from the effective date requires airport operators that choose to facility an AOC that permits an airport of this final rule to submit their new be certificated under part 139 to to serve large air carriers. The FAA ACM to the FAA for approval. Similar document and implement procedures periodically inspects these airports to to Class II and IV airport operators, for complying with part 139 safety and ensure continued compliance safety Class III airport operators have operational requirements. To requirements, including the maintenance of specified records. Both additional time to comply with new accommodate variations in airport the application for an AOC and sign, ARFF, and emergency planning layout, operations, air carrier service, compliance inspections (typically requirements and may request and other local considerations, conducted on an annual basis) require additional compliance time. compliance procedures will be tailored to each airport operator when regulated airport operators to collect Airports Located in the State of Alaska complying with more burdensome and report certain operational requirements. information. The statutory authority covering the Several sections of the proposal had In addition, this final rule requires certification of airports that serve recordkeeping and reporting operators of certificated airports to scheduled operations of small air carrier requirements. Comments received on develop and comply with a FAA- aircraft is not applicable to Alaskan these requirements are addressed approved ACM, in manner similar to airports. As noted in the proposal (65 previously in the appropriate section- what was previously required. The ACM FR 38639), airports in the State of by-section analysis. Several details how an airport complies with the Alaska that serve large air carrier modifications were made to requirements of part 139 and includes operations will continue to be recordkeeping and reporting other instructions and procedures to certificated under part 139 as Class I or requirements in the final rule as the assist airport personnel in performing IV airports. Accordingly, the result of comments received. As a result, their duties and responsibilities. compliance dates in the final rule for the annual and recurring recordkeeping Under this rule, the FAA continues to these airport classifications will apply. and reporting burdens have been require that the AOC remain in effect as Otherwise, there are no part 139 adjusted accordingly. long as the need exists and the operator applications for those airports in the The NPRM estimate of respondents complies with the terms of the AOC and State of Alaska that only serve has changed slightly from 606 airport the ACM. Certain changes in the scheduled operations of small air carrier operators to 603 airport operators. The operation of the airport must be aircraft. likely respondents to recordkeeping and reported to the FAA for information or Airports Operated by the U.S. reporting requirements contained in the approval. If the airport operator believes Government final rule are those civilian U.S. airport that an exemption is needed to certificate holders who operate airports commence airport operations, Airports operated by the U.S. that serve scheduled and unscheduled justification for and the FAA’s approval Government will no longer be operations of air carrier aircraft with of the exemption is required for certificated under part 139. However, more than 30 passenger seats issuance of the AOC. The operator may they may still continue to serve air (approximately 566 airports). These request the FAA’s approval of changes carriers operations, as set out in airport operators already hold a part 139 to the AOC or ACM, or an exemption § 121.590. As stated in the proposal (65 AOC and comply with most of the from part 139 requirements, by FR 38641), the FAA does not have the information collection requirements submitting justification and statutory authority to regulate airports required in the final rule. Certain airport documentation. Also, the FAA operated by U.S. Government agencies, operators not currently certificated by Administrator may propose changes to and corresponding changes to § 121.590 the FAA also will be required to apply the AOC or ACM, and the airport will now permit air carriers to use U.S. for a certificate under this rule if they operator may submit contrary evidence Government operated airports that are want to continue to serve certain air of argument concerning the proposed not certificated under part 139. carriers. These airports, approximately changes.

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The frequency of collection would The FAA refined its NPRM estimate hold a part 139 AOC and for those vary depending on the type of of initial and annual hourly burden to airports that will be newly certificated: information collected, the size of the respondents, as detailed in the respondent’s airport, and the type of air following table. Burden hours are listed carrier operations served. separately for airports that currently

Initial reporting Initial recordkeeping Annual reporting Annual recordkeeping hours hours hours hours New part 139 sections Currently Newly Currently Newly Currently Newly Currently Newly certificated certificated certificated certificated Certificated certificated certificated certificated

139.103 ...... 0 296 0 0 0 16 0 0 139.111 ...... 0 0 0 0 0 32 0 0 139.113 ...... 0 0 0 0 0 5 0 0 139.201 ...... 0 0 0 0 0 592 0 592 139.203 ...... 0 1,480 0 0 0 0 0 0 139.205 ...... 22,640 0 0 0 0 1,184 0 0 139.303 ...... 0 0 9,056 592 0 0 13,569 340 139.313 ...... 1,560 648 0 0 0 0 520 216 139.317 ...... 0 0 0 0 0 0 0 2,035 139.319 ...... 0 0 0 888 0 0 0 555 139.321 ...... 0 0 260 296 0 0 2,264 148 139.325 ...... 0 0 5,200 1,480 0 0 3,120 888 139.327 ...... 0 0 2,080 592 0 0 13,520 3,848 139.329 ...... 0 0 8,960 2,960 0 0 560 185 139.337 ...... 0 0 0 0 16 16 3,424 1,173 139.339 ...... 0 0 520 148 0 0 3,250 925

Subtotal ...... 24,200 2,424 26,076 6,956 16 1,845 40,227 10,905

Totals ...... 26,624 33,032 1,861 51,132

59,656 52,993

The estimate of the total initial unless it displays a currently valid OMB of 1980, as amended, requires agencies reporting and recordkeeping hourly control number. to analyze the economic impact of burden for the final rule is 59,656 (an regulatory changes on small entities. International Compatibility increase of 15,296 hours from the NPRM Third, the Trade Agreements Act (19 estimate). The annual hourly burden is In keeping with U.S. obligations U.S.C. 2531–2533) prohibits agencies 52,993 (an increase of 223 hours from under the Convention on International from setting standards that create the NPRM estimate). Burden hours are Civil Aviation, it is the FAA policy to unnecessary obstacles to the foreign estimated as the number of reports and comply with International Civil commerce of the United States. In records made by each respondent. This Aviation Organization (ICAO) Standards developing U.S. standards, this Trade figure varies yearly, as does the average and Recommended Practices to the Act also requires agencies to consider time per response. These variations are maximum extent practicable. The FAA international standards and, where largely due to disparities in airport size determined that there are no ICAO appropriate, use them as the basis of and aircraft operations served. The labor Standards and Recommended Practices U.S. standards. And fourth, the burden is estimated on an annual basis. that correspond to these regulations. Unfunded Mandates Reform Act of 1995 The Joint Aviation Authorities, an Operations/maintenance labor requires agencies to prepare a written associated body of the European Civil assessment of the costs, benefits, and accounts for an estimated 70 percent of Aviation Conference, develop Joint the hours, and clerical labor makes up other effects of proposed or final rules Aviation Requirements (JAR) in aircraft that include a Federal mandate likely to the other 30 percent. Cost per hour is design, manufacture, maintenance, and result in the expenditure by State, local, estimated at $26 for operations/ operations for adoption by participating or tribal governments, in the aggregate, maintenance labor and $14 for clerical member civil aviation authorities. The or by the private sector, of $100 million labor. Other expenses, such as general JAR does not address airport or more annually (adjusted for and administrative costs, overhead certification. costs, and other indirect costs are inflation). estimated at approximately 15 percent Regulatory Evaluation, Regulatory In conducting these analyses, the FAA of the direct labor costs. The estimate of Flexibility Determination, International has determined that the economic the total initial reporting and Trade Impact Assessment, Federalism, impact of this rule will generate benefits recordkeeping cost burden for the final and Unfunded Mandates Assessment that justify its costs, does meet the rule is $1,536,738 (an increase of Changes to Federal regulations must standards for a ‘‘significant regulatory $394,025 from the NPRM estimate). The undergo several economic analyses. action’’ as defined in the Executive annual cost burden is $1,356,098 (an First, Executive Order 12866 directs that Order, and is significant as defined by increase of $5,743 from the NPRM each Federal agency shall propose or the Department of Transportation’s estimate). adopt a regulation only upon a reasoned Regulatory Policies and Procedures. The An agency may not conduct or determination that the benefits of the rule, therefore, is subject to review by sponsor and a person is not required to intended regulation justify its costs. OMB. The FAA has determined that this respond to a collection of information Second, the Regulatory Flexibility Act rule will not constitute a barrier to

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international trade and does not contain improvements are expected. These emergencies, including aircraft a significant intergovernmental or involve the: accidents, medical emergencies in the private sector mandate. The agency has (1) Prevention of accidents or terminal building and aircraft fueling concluded that the rule will have a collisions because of nonstandard or fires or spills. significant impact on a substantial inadequate signs, markings, and lighting Part 139 accident mitigation number of small entities and has and traffic and wind direction requirements provide a comprehensive prepared a final regulatory flexibility indicators; response to aircraft accidents, and other analysis. These analyses, available in (2) Mitigation of accident damages by emergencies. For example, required the docket, are summarized below. improving runway safety areas at certain alarm and communication systems In 1995, the FAA issued regulations airports; ensure that both ARFF and airport aimed at ensuring safety in scheduled (3) Mitigation of accidents as a result personnel are notified promptly of an air carrier operations in aircraft with 10 of expanding ARFF coverage to accident, and alert other necessary or more passenger seats. Since then, additional air carrier operations; emergency service providers in the local Congress has authorized the FAA to (4) Prevention and mitigation of fires community (i.e., paramedic, police, certificate airports serving scheduled air at airport fuel farms; ambulance service and hospitals). carrier operations, conducted in small (5) Prevention and mitigation of Similarly, accident mitigation measures aircraft. In 2000, the FAA issued an accidents caused by snow and ice ensure other needed emergency services NPRM to revise the airport certification accumulation; and are provided, including security and process and to establish certification (6) Prevention and mitigation of crowd control, removal of disabled requirements for these airports. wildlife problems as a result of aircraft and other debris from movement improved procedures for wildlife hazard Under this revised certification areas, transportation and facilities for management. process, certificated airports will be uninjured and injured persons, and A brief discussion of benefits is reclassified into four new classes, Class storage of deceased persons. All of these included below. A more extensive I–IV, based on the type of air carrier measures contribute to a comprehensive discussion is contained in the full operations served. Class I, II, and IV emergency response that mitigates the regulatory evaluation in the docket. airports will be those airports that loss of passenger lives and property, prevents injury to responding currently hold AOCs, and Class III Runway Safety Areas personnel, and protects air carrier airports will be those airports being This rule will require that Class III aircraft and the public from unsafe newly certificated. As specified in the airports meet safety area requirements conditions. authorizing statute, airport certification for the first time. These airports have There is ample evidence that part 139 requirements will not be applicable to been encouraged to install safety areas accident mitigation requirements can airports located in the State of Alaska for over 10 years, and many have done save lives and reduce injuries. Perhaps that only serve scheduled operation of so through Federal airport funding the clearest example of that was an small air carrier aircraft. programs. Although the rule will not accident that occurred at Los Angeles Similar to how the FAA currently require immediate installation of these International Airport on February 1, certificates airports, the rule requires safety facilities at any class of airports, 1991. This tragedy involved the airport operators choosing to be over time the eventual installation of collision of a U.S. AIR 737–300 and a certificated under part 139 to document safety areas at certificated airports will Skywest Metro on Runway 24L. The and implement procedures for result in more safety in air crew and 10 passengers on the Metro complying with part 139 safety and transportation. were killed, as were some of the crew operational requirements. To The following is a good example of and 20 passengers on the 737–300. accommodate variations in airport the potential benefits from runway However, the NTSB credited the part layout, operations, air carrier service, safety areas. On May 8, 1999, a SAAB 139-required emergency response for and other local considerations, the rule 340 aircraft overran a runway at New saving lives. requires that compliance procedures be York’s John F. Kennedy International A major safety provision of the final tailored to each airport operator when Airport. The airport had recently rule is that it will extend the required complying with the more burdensome installed arresting material in availability of emergency response requirements. compliance with part 139 safety area services and equipment at every landing Benefits requirements that resulted in the and takeoff of scheduled air carrier airplane stopping 50 feet short of aircraft with 10 to 30 seats. This The expected benefits of this rule Thurston Bay. The incident resulted in capability is required now for air carrier include reducing fatalities, injuries, and very little damage to the aircraft and one operators with more than 30 seats, and, property damage at airports with certain minor passenger injury. In sharp as discussed earlier, there is evidence scheduled and unscheduled air carrier contrast, an accident occurred on the that lives have been saved and injuries operations. This is expected to be same runway in 1984, before the prevented or reduced as a result. In particularly true at airports serving arresting material was installed, resulted some cases, this protection may not scheduled air carrier operations in an SAS DC–10 aircraft running into currently be available for small aircraft conducted in common carrier aircraft the bay. This accident resulted in operations at airports served by large air designed for more than 9 passenger multiple passenger injuries and carrier aircraft. For example, an accident seats but less than 31 passenger seats extensive airplane damage. that occurred at Quincy, Illinois (a Class (smaller aircraft). I airport) on November 19, 1996 might This rule affects all currently Emergency Response Services and have been mitigated had ARFF been on certificated airports and an estimated 37 Equipment site during the departure of a small air additional airports that are currently An important safety benefit of this carrier aircraft. uncertificated. Accordingly, benefits are final rule is more widespread This accident involved the collision expected to accrue at all four classes of availability of emergency response of a United Express Beech 1900C (a certificated airports created under this services and equipment. These services small aircraft) and a Beech King Air (a rule. Several different types of safety are used to respond to airport general aviation aircraft) during the

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ground operations of the two aircraft. at the Stapleton International Airport in management plan. The expansion of These aircraft collided at the Denver, CO, on November 25, 1990. wildlife hazard management intersection of two runways. At the time That fire erupted on a fuel farm about requirements to these airports is of the accident, there were no large air 1.8 miles from the main terminal and intended to ensure that all airport carrier aircraft operations in progress or burned for 48 hours, destroying about 3 certificate holders serving scheduled air imminent, and, consequently, the million gallons of fuel. Flight operations carriers address wildlife hazards in a airport operator was not required to of a major air carrier were disrupted due consistent and effective manner. provide emergency response services, to the lack of fuel, and the air carrier Accordingly, the FAA expects to reduce and these services were not on the site. estimated total damage to have reached the number of wildlife strikes that will When required, emergency response between $15 and $20 million. otherwise occur. services, including ARFF, were The NTSB concluded that the City At Class III airports between 1991 and provided by the fire department, whose and County of Denver (the airport 1997, there were 10 reported wildlife personnel would come to the airport certificate holder) and the fire strikes involving 19-passenger seat from an offsite location to staff department, in particular, apparently Beech-1900 aircraft (22 potential total emergency equipment during the had not considered the possibility of a occupants). The FAA values each operations of large air carrier aircraft. fire of this type since no procedures or prevented fatality to be $3 million. FAA All 10 passengers and 2 crew members contingency plans were in place. The cost estimates for injuries range from aboard the United Express Beech 1900C FAA has determined that contingency $38,500 for a minor injury to $521,800 and the two occupants aboard the King plans that cover the possibility of a for a serious injury. It is likely that Air were killed as a result of post crash major fuel farm fire could result in without mitigation the past 10 or more fires. similar fires being extinguished much wildlife strikes to aircraft will reoccur at The NTSB found that the speed with sooner, perhaps resulting in Class III airports, affecting 10 to 130 which the fire enveloped the King Air, considerably less damage. aircraft occupants. It is not unreasonable and the intensity of the fire, precluded to expect that 10 percent of these Snow and Ice Control the survivability of the occupants. occupants will incur minor to serious However, the occupants of the Beech Another safety benefit is expected injury and that several may die as result 1900C did have the opportunity to from improved snow and ice control, of a wildlife strike. The FAA estimates escape, but could not open external which will reduce the potential for that the minimum potential averted cost doors. The NTSB concluded, ‘‘if on- snow- and ice-related accidents. On is several hundred thousand dollars; yet airport ARFF protection had been March 17, 1993, a BAC–BA-Jetstream just one fatal accident raises the required for this operation at Quincy 3101 aircraft was making a night preventable cost to $3 million. Airport, lives might have been saved.’’ instrument approach to Raleigh County With the structured approach of the (NTSB Aircraft Accident Report— Memorial Airport in Beckley, WV. final rule to resolving wildlife strikes to Runway Collision United Express Flight Because the runway was not properly aircraft, it is very reasonable to expect 5925 and Beechcraft King Air A90— plowed, and berms of snow concealed that each airport solution will be one Quincy Municipal Airport, Illinois— the runway lights at ground level, the where the benefits exceed the costs, and November 19, 1996—NTSB AAR–97/04, captain lost control after touchdown, in some cases, the net benefit may be P.51.) and the airplane sustained substantial substantial. Airport improvements to Based on this accident history, a risk damage. reduce wildlife hazards will ultimately assessment provides a reasonable This rule will require Class II and III provide a safer environment for all civil quantified estimate of the potential airports to develop tailored snow and aircraft operations. Given the growing value of part 139 emergency response ice control plans. Class I airports are population of certain wildlife, the requirements. The final rule will extend already required to have such plans, and increasing number of aircraft operations these emergency services to passengers Class IV airports are not required to and the history of reported wildlife traveling in air carrier aircraft with 10 have such plans. Although many of strikes, potential benefits for just the to 30 passenger seats. For an accident in these classes of airports already have newly certificated airports (37 Class III a 30 passenger seat aircraft occupied at procedures for snow and ice removal, airports) range from a low of several 60 percent of capacity (the industry this rule will formalize consistent plans million dollars (from damage and average), the expected benefits equal across all airports with scheduled air injuries avoided) to an estimate in $63 million based on 21 potentially carrier services. The FAA concludes excess of $10 million. prevented fatalities (18 passengers and that this low-cost requirement to The benefits of the wildlife strike three crew members) multiplied by $3 standardize responses to snow and ice provision of the final rule extend million per prevented fatality. While conditions at certificated airports will beyond all Class III airports to all $63 million is the expected benefit over significantly help prevent the kind of certificated airports. However, the wide a ten year horizon, using the Poisson accident discussed above. range of possible compliance methods distribution with a mean of one accident forestall a reasonable range estimate of Wildlife Hazard Management over a ten-year period, there is a 26 net benefits. It is very reasonable to percent chance of two or more such The expected benefit of this section of expect that wildlife preventative action accidents with a value in excess of $100 this final rule is the reduction of at each certificated airport will have million. wildlife hazards to air carrier benefits in excess of costs with system- operations. Airports not currently wide benefits in the millions. Fuel Storage Fires certificated by the FAA are not required Another expected benefit of this rule to meet part 139 wildlife hazard Costs is prevention/mitigation of fuel storage management requirements. At some of Some of the requirements of this rule fires. The rule requires all classes of these airports, wildlife hazards already that will impose costs—such as airports to address fuel storage fires in exist that under the final rule will improved snow and ice control; their disaster plans. This will better require the airport operator to conduct marking, signs, and lighting; and prepare airports to prevent and/or a wildlife assessment and possibly the wildlife hazard management—are extinguish the kind of fire that occurred implementation of a wildlife hazard intended to prevent accidents. Other

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requirements, such as emergency value of the 10-year costs of the newly certificated as a result of this planning and improved emergency proposed rule was about $46 million. rule. response capability, are intended to Based on the comments received, the The major items of this rule that are mitigate accidents should they occur. FAA increased the estimated costs for expected to impose costs are When the FAA published the NPRM the final rule, primarily to allow for summarized below: the agency estimated that the present ARFF costs at airports that will be

Initial/capital Annual recurring Major cost items costs costs

Risk Reduction Items (Subpart D—Operations): Personnel; Records; Marking, Signs, and Lighting; Snow and Ice Control; Handling and Storing of Hazardous Substances and Materials; Traffic and Wind Direction Indicators; Self-Inspection Program; Access to Movement Areas and Safety Areas; Wildlife Hazard Management ...... $1,495,316 $1,447,215 Mitigation Items (ARFF, Airport Emergency Plan) ...... 2,719,242 8,405,105

Program Total—Current Dollars ...... $4,214,558 $9,852,320

The FAA estimates that the present airport operators to obtain additional of future accidents and mitigate loss if value of the 10-year cost of this rule is Federal funds, as appropriate. Third, at another accident occurs. As noted $73.4 million. A more detailed approximately two-thirds of these newly above, the total cost estimate is description of how these costs were certificated airports (Class III airports), conservative and does not include a estimated is contained in the full air carriers also receive federal EAS host of policies and available funding regulatory evaluation. subsidies, so the Federal government designed to reduce the compliance cost The FAA has made an effort not to will probably absorb most, if not all of of the final rule. Consequently, in view underestimate costs. As a result, the the cost of the rule through increased of the moderate costs and potential estimated costs of this rule may be high subsidies to air carriers. Fourth, if benefits, the FAA concludes that the because it is largely based on assumed Federal, state and local funding is not benefits of the final rule justify the average costs being applicable to all adequate, the FAA will seek alternative costs. airports in each class, when in actuality means of compliance with part 139 each airport will have requirements requirements or will use its statutory Final Regulatory Flexibility Analysis tailored to its individual situation. In authority to grant exemptions from (FRFA) requirements that would be too costly, the application of this rule, each airport The Regulatory Flexibility Act of 1980 burdensome, or impractical. (particularly the new Class III airports) (RFA) establishes ‘‘as a principle of The FAA estimates that one or more may have already complied with this regulatory issuance that agencies shall accidents that will be mitigated by rule, or may receive relief from certain endeavor, consistent with the objective compliance with emergency response aspects of this rule under the exemption of the rule and of applicable statutes, to provisions. requirements of the final rule will result fit regulatory and informational in an estimated benefit ranging from $63 Benefit-Cost Comparison requirements to the scale of the million to well in excess of $100 business, organizations, and The estimated benefits and costs million. The FAA is not providing a governmental jurisdictions subject to herein assume that the average airport single dollar value for the total benefits regulation.’’ To achieve that principle, incurs the full compliance cost and that of the final rule because the range of the the RFA requires agencies to solicit and the traveling public and society receives possible compliance methods is too consider flexible regulatory proposals the associated benefit. Much of the great and complying with risk reduction and to consider the rationale for their difficulty to accurately assess the and accident mitigation requirements expected benefit and cost of this may require multiple actions. The FAA actions. The RFA covers a wide range of regulation is the complex nature of does note that the benefits estimate is small entities, including small compliance with part 139 requirements. conservative and the potential error in businesses, not-for-profit organizations, Each airport is unique with potentially assessing the benefits will be to and small governmental jurisdictions. different methods used by the airport underestimate total benefits. Agencies must perform a review to operator to comply with part 139 The FAA estimates that the present determine whether a proposed or final requirements. Further, there are very value of the 10-year cost of this final rule will have a significant economic significant Federal policies in place to rule is about $73.4 million. This impact on a substantial number of small mitigate the economic impact of the estimate is likely to be high because it entities. If the determination is that it final rule. These policies are discussed is based on assumed average costs will have such an impact, the agency in length in a separate Report to across all airports in each airport class. must prepare a regulatory flexibility Congress. This Report discusses the In the application of this rule, each analysis as described in the RFA. economic impact of the final rule on air airport may already be in compliance However, if an agency determines that service to Class III airports. with all or certain requirements of this a proposed, or final, rule is not expected As discussed in the Report to final rule, or may receive relief from to have a significant economic impact Congress, several factors may help to certain aspects of the rule through on a substantial number of small mitigate part 139 compliance costs. alternate means of compliance or the entities, section 605(b) of the 1980 RFA First, Congress has directed the FAA to exemption process. provides that the head of the agency set aside $15 million of AIP funds for Thus, the FAA believes that may so certify and a regulatory certain capital expenditures that may be numerous safety benefits will result flexibility analysis is not required. The required by the final rule for four fiscal from the multiple provisions in the final certification must include a statement years. Second, the FAA will assist rule. These benefits will reduce the risk providing the factual basis for this

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determination, and the reasoning should and a statement of any changes made in maintenance personnel, and clerical be clear. the proposed rule as a result of such staff. For each small entity, the FAA This rule will affect publicly owned comments. There were a substantial estimates the average initial hours airports. When the population of a number of comments received from required to set up a recordkeeping public airport-owning entity is less than operators of airports serving small air system will be 70 hours and expects a 50,000, it is considered a small entity. carrier operations concerned about the continuing additional paperwork Based upon the above review, the FAA financial burden that the proposed rule requirement of about 90 hours annually. concludes that this final rule will have would place on them. In particular these (5) A description of the steps the a significant economic impact on a commenters are concerned about agency has taken to minimize the substantial number of small entities. personnel costs to comply with significant economic impact on small Accordingly, the following final proposed ARFF requirements. entities consistent with the stated regulatory flexibility assessment was In response to public comments, objectives of applicable statutes, prepared as required by the RFA. several changes were made to the final including a statement of the factual, rule. A primary change is that the policy, and legal reasons for selecting Issues To Be Addressed in a Final sections of the proposed rule that dealt the alternative adopted in the final rule, Regulatory Flexibility Analysis with obtaining an exemption from the and why each one of the other The central focus of a final regulatory ARFF requirements have been clarified significant alternatives to the rule flexibility analysis, like the initial for the final rule. The final rule is more considered by the agency that affect the regulatory flexibility analysis (IRFA), is explicit in describing how to apply for impact on small entities was rejected. the requirement that agencies evaluate an exemption. The FAA believes that The FAA extensively considered several the impact of a rule on small entities the exemption provision will result in alternatives, described in the IRFA, and and analyze regulatory alternatives that actual compliance costs that are determined that the alternative chosen minimize the impact when there will be substantially less than those estimated for the NPRM was the only alternative a significant economic impact on a in the final regulatory evaluation. The that was relatively affordable and substantial number of small entities. agency was not able to quantify the achieved the safety objectives of the The five requirements, outlined in reduction in compliance costs resulting proposed rule. This initial alternative section 604(a)(1–5) of the 1980 RFA, are from possible exemptions. However, it was subjected to public scrutiny during listed and discussed below: should be noted that all requirements of the comment period of the NPRM (1) A succinct statement of the need part 139 will be tailored to each airport process. The comments received were for, and objectives of, the rule. Before through the ACM. In addition, the time responded to, as described above, and 1996, the FAA’s statutory authority to period to accomplish some this final rule is the selected alternative. certificate airports was limited to those requirements, such as the preparation of Extended Discussion of the Rule airports serving air carrier operations the ACM, was extended, especially for Comments on Affordability and Safety using aircraft with more than 30 the smaller airports. passenger seats. However, this authority (3) A description of, and an estimate The last major revision of part 139 (49 U.S.C. 44706) was broadened by the of the number of, small entities to which occurred in November 1987. Since then, Federal Aviation Administration the rule will apply or an explanation of industry practices and technology have Reauthorization Act of 1996 to allow the why no such estimate is available. The changed significantly. Subsequently, the FAA to certificate airports, with the Small Business Administration (SBA) FAA monitored the effectiveness of part exception of those located in the State classifies all airports that are operated 139 and has taken this opportunity to of Alaska, that serve any scheduled under the airport ownership of a public update part 139 requirements. passenger operation of an air carrier entity with a population of 50,000 or The FAA initiated this rulemaking to operating aircraft designed for more less as small entities. Using the SBA’s ensure safety in air transportation at than 9 passenger seats but less than 31 definition of a ‘‘small’’ public entity, airports serving small air carrier passenger seats. The FAA’s existing there are more than 200 small entity operations, fully appreciating the authority to certificate airports serving airports that will be affected by this financial limitations of these airports. In air carrier operations conducted in rule. Most of the small entities are 1996, Congress authorized the FAA to aircraft with more than 30 seats expected to be Class I airports (more certificate airports serving small air remained unchanged. than 100 are small entities), which are carrier operations to ensure further With this rule, the FAA intends to already certificated under part 139. The safety at airports providing scheduled extend airport certification standards to largest economic impact is expected to air service. This was the same year that airports serving scheduled air carrier occur to the Class III airports all occupants died in a collision of a operations conducted in aircraft (approximately 25 are small entities), United Express Beech 1900C (under 30 designed for more than 9 passenger which would be newly certificated seat air carrier aircraft) and a Beech seats but less than 31 passenger seats. under the final rule. King Air (a general aviation aircraft). The primary objective of this final (4) A description of the projected The NTSB concluded that ‘‘* * * if on- rule is to ensure safety in air reporting, recordkeeping, and other airport ARFF protection had been transportation by regulating the compliance requirements of the rule, required for this operation at Quincy operation and maintenance of airports including an estimate of the classes of Regional Airport, lives might have been serving certain scheduled air carrier small entities that will be subject to the saved.’’ operations. The rule is necessary to requirement and the type of professional An industry/FAA evaluation of prevent future accidents similar to those skills necessary for preparation of the possible regulatory alternatives for the that have recently occurred and to report or record. The final rule will certification of airports serving small air mitigate fatalities and injuries when create additional reporting or carrier aircraft concluded that there accidents do occur. recordkeeping requirements beyond exists a need to require at least some (2) A summary of the significant those already specified in existing part minimum level of both risk reduction issues raised by the public comments in 139. For each airport, the preparation of and accident mitigation measures at response to the IRFA, a summary of the this documentation may involve the airports during operations of smaller air assessment of the agency of such issues, airport manager, operations and carrier airplanes.

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The FAA recognizes the need to part 139 requirements. This will allow compliance with this rule low compared provide some flexibility in the the most cost effective and flexible with the resources available to the implementation of certain safety method of ensuring safety to be airports. Before issuing the NPRM measures at airports with infrequent air employed at all covered airports while leading to this rule, the FAA consulted carrier service or where local resources providing for the special needs of small with representatives of the airports are severely limited. Airports in smaller entities. through its ARAC. The FAA also communities do not always have the consulted with the States through International Trade Impact Assessment resources to support their airports at the various national associations of state same level as large metropolitan areas The Trade Agreement Act of 1979 and local governments. In consulting without adversely affecting other prohibits Federal agencies from with state governments, the FAA community services and infrastructure. engaging in any standards or related provided the opportunity for them to There are other mitigating factors. The activities that create unnecessary comment on the NPRM leading to this FAA permits alternate means of obstacles to the foreign commerce of the rule. compliance to accommodate local United States. Legitimate domestic After due consideration of comments conditions and uses its statutory objectives, such as safety, are not received, the FAA has determined that authority to grant exemptions from part considered unnecessary obstacles. The this action would not have a substantial 139 requirements, as appropriate. This statute also requires consideration of direct effect on the States, on the statutory authority requires the FAA to international standards and, where relationship between the Federal ensure that an airport it certificates appropriate, that they be the basis for Government and the States, or on the provides for the operation and U.S. standards. distribution of power and maintenance of adequate safety In accordance with the above statute, responsibilities among the various equipment. the FAA has assessed the potential levels of government. Therefore, the There are several methods available to effect of this final rule and has FAA has determined that this action small-entity airports to mitigate the determined that it will have only a does not have federalism implications. economic impact of this rule. One is domestic impact and therefore create no that the Airport Improvement Program obstacles to the foreign commerce of the Environmental Analysis (AIP) funding (often supplemented by United States. state grants) is available for certain FAA Order 1050.1D defines the FAA capital expenditures that may be Unfunded Mandates Reform Act actions that may be categorically required by the rule such as firefighting The Unfunded Mandates Reform Act excluded from preparation of a National equipment, airport marking and signs. of 1995 (2 U.S.C. 1532–1538) is Environmental Policy Act (NEPA) Another avenue is the Essential Air intended, among other things, to curb environmental impact statement. In Service (EAS) Program. For Class III the practice of imposing unfunded accordance with FAA Order 1050.1D, airports that are owned by small Federal mandates on State, local, and appendix 4, paragraph 4(j), this communities, serve a limited number of tribal governments. rulemaking action qualifies for a passengers, and operate at a loss, it is Title II of the Act requires each categorical exclusion. likely that much of the final actual costs Federal agency to prepare a written Regulations That Significantly Affect to the airport would be passed on to the statement assessing the effects of any Energy Supply, Distribution, or Use air carriers. At airports where carriers Federal mandate in a proposed or final receive EAS subsidies (approximately agency rule that may result in the The FAA has analyzed this NPRM two-thirds of all Class III airports) the expenditure of $100 million or more under Executive Order 13211, Actions Federal Government will probably (adjusted annually for inflation in any Concerning Regulations that absorb most, if not all, of the cost of the one year) by State, local, and tribal Significantly Affect Energy Supply, rule through increased subsidies. governments (in the aggregate) or by the Distribution, or Use (May 18, 2001). We By tailoring compliance to private sector. Such a mandate is have determined that it is not a accommodate local conditions, and/or deemed to be a ‘‘significant regulatory ‘‘significant energy action’’ under the making use of the statutory exemption, action.’’ executive order because it is not a the FAA will maintain the necessary This final rule does not contain such ‘‘significant regulatory action’’ under oversight of ARFF, while ensuring that a mandate. Therefore, the requirements Executive Order 12866, and it is not the ARFF requirements are appropriate of Title II of the Unfunded Mandates likely to have a significant adverse effect for the airport size and type of air carrier Reform Act of 1995 do not apply. on the supply, distribution, or use of operations. There will not be a blanket energy. Executive Order 3132, Federalism exemption for airports with infrequent List of Subjects or smaller air carrier operations, nor The FAA has analyzed this final rule will the agency relieve an airport from under the principles and criteria of 14 CFR Part 121 the obligation to provide some level of Executive Order 13132, Federalism. Air carriers, Aircraft, Aviation safety, ARFF coverage. Most airports subject to this rule are owned, operated, or regulated by a local Charter flights, Safety, Transportation. Summary governmental body (such as a city or 14 CFR Part 139 After considering the alternatives for county government), which is either the certification of airports serving small incorporated by or part of a State. In a Air carriers, Airports, Aviation safety, air carrier operations and alternatives few cases, the airports are operated Reporting and recordkeeping for updating part 139 (as specified in the directly by the States. The FAA has requirements. IFRA), the FAA determined that this determined that this rule would have The Amendment rule is necessary to ensure safety in air minimal direct effect on the States and transportation. However, to would not alter the relationship ■ In consideration of the foregoing, the accommodate variations in airport size established by law between the airport Federal Aviation Administration and operation, the FAA may allow certificate holders and the FAA. The amends Chapter I of Title 14, Code of alternative means of compliance with FAA considers the annual costs of Federal Regulations as follows:

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PART 121—OPERATING is not a domestic type operation, a flag competent civil aviation authority) at REQUIREMENTS: DOMESTIC, FLAG, type operation, or a supplemental type any land airport in any State of the AND SUPPLEMENTAL OPERATIONS operation—may operate at a land airport United States, the District of Columbia, not certificated under part 139 of this or any territory or possession of the ■ 1. The authority citation for part 121 chapter only when the following United States; or continues to read as follows: conditions are met: (2) An airplane designed for more Authority: 49 U.S.C. 106(g), 40113, 40119, (1) The airport is adequate for the than 9 passenger seats but less than 31 41706, 44101, 44701–44702, 44705, 44709– proposed operation, considering such passenger seats (as determined by the 44711, 44713, 44716–44717, 44722, 44901, items as size, surface, obstructions, and aircraft type certificate issued by a 44903–44904, 44912, 46105. lighting. competent civil aviation authority) at ■ 2. Revise § 121.590 to read as follows: (2) For an airplane carrying any land airport in any State of the passengers at night, the pilot may not United States (except Alaska), the § 121.590 Use of certificated land airports in the United States. take off from, or land at, an airport District of Columbia, or any territory or unless— possession of the United States. (a) Except as provided in paragraphs (i) The pilot has determined the wind Supplemental type operation means (b) or (c) of this section, or unless direction from an illuminated wind any supplemental operation (except an authorized by the Administrator under direction indicator or local ground all-cargo operation) conducted with an 49 U.S.C. 44706(c), no air carrier and no communications or, in the case of airplane designed for at least 31 pilot being used by an air carrier may takeoff, that pilot’s personal passenger seats (as determined by the operate, in the conduct of a domestic observations; and aircraft type certificate issued by a type operation, flag type operation, or (ii) The limits of the area to be used competent civil aviation authority) at supplemental type operation, an for landing or takeoff are clearly shown any land airport in any State of the airplane at a land airport in any State of by boundary or runway marker lights. If United States, the District of Columbia, the United States, the District of the area to be used for takeoff or landing or any territory or possession of the Columbia, or any territory or possession is marked by flare pots or lanterns, their United States. of the United States unless that airport use must be authorized by the United States means the States of the is certificated under part 139 of this Administrator. United States, the District of Columbia, chapter. Further, after June 9, 2005 for (e) A commercial operator and a pilot and the territories and possessions of Class I airports and after December 9, used by the commercial operator in the United States. 2005 for Class II, III, and IV airports, conducting a domestic type operation, when an air carrier and a pilot being Note: Special Statutory Requirement to flag type operation, or supplemental Operate to or From a Part 139 Airport. Each used by the air carrier are required to type operation may operate an airplane air carrier that provides—in an aircraft (e.g., operate at an airport certificated under at an airport operated by the U.S. airplane, rotorcraft, etc.) designed for more part 139 of this chapter, the air carrier Government that is not certificated than 9 passenger seats—regularly scheduled and the pilot may only operate at that under part 139 of this chapter only if charter air transportation for which the airport if the airport is classified under that airport meets the equivalent— public is provided in advance a schedule part 139 to serve the type airplane to be (1) Safety standards for airports containing the departure location, departure operated and the type of operation to be certificated under part 139 of this time, and arrival location of the flight must operate to and from an airport certificated conducted. chapter; and (b) An air carrier and a pilot being under part 139 of this chapter in accordance (2) Airport classification requirements with 49 U.S.C. 41104(b). That statutory used by the air carrier in the conduct of under part 139 of this chapter to serve provision contains stand-alone requirements a domestic type operation, flag type the type airplane to be operated and the for such air carriers and special exceptions operation, or supplemental type type of operation to be conducted. for operations in Alaska and outside the operation may designate and use as a (f) For the purpose of this section, the United States. Nothing in § 121.590 exempts required alternate airport for departure terms— the air carriers described in this note from or destination an airport that is not Domestic type operation means any the requirements of 49 U.S.C. 41104(b). certificated under part 139 of this domestic operation conducted with— Certain operations by air carriers that chapter. (1) An airplane designed for at least conduct public charter operations under 14 (c) An air carrier and a pilot used by 31 passenger seats (as determined by the CFR part 380 are covered by the statutory the air carrier in conducting a domestic requirements to operate to and from part 139 aircraft type certificate issued by a airports. See 49 U.S.C. 41104(b). type operation, flag type operation, or competent civil aviation authority) at supplemental type operation may any land airport in any State of the ■ 3. Revise part 139 to read as follows: operate an airplane at an airport United States, the District of Columbia, operated by the U.S. Government that is or any territory or possession of the PART 139—CERTIFICATION OF not certificated under part 139 of this United States; or AIRPORTS chapter, only if that airport meets the (2) An airplane designed for more Subpart A—General equivalent— than 9 passenger seats but less than 31 (1) Safety standards for airports passenger seats (as determined by the Sec. certificated under part 139 of this aircraft type certificate issued by a 139.1 Applicability. chapter; and competent civil aviation authority) at 139.3 Delegation of authority. (2) Airport classification requirements any land airport in any State of the 139.5 Definitions. under part 139 to serve the type airplane United States (except Alaska), the 139.7 Methods and procedures for to be operated and the type of operation District of Columbia, or any territory or compliance. to be conducted. possession of the United States. Subpart B—Certification (d) An air carrier, a commercial Flag type operation means any flag 139.101 General requirements. operator, and a pilot being used by the operation conducted with— 139.103 Application for certificate. air carrier or the commercial operator— (1) An airplane designed for at least 139.105 Inspection authority. when conducting a passenger-carrying 31 passenger seats (as determined by the 139.107 Issuance of certificate. airplane operation under this part that aircraft type certificate issued by a 139.109 Duration of certificate.

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139.111 Exemptions. (2) Airports operated by the United operations of large air carrier aircraft 139.113 Deviations. States; that can also serve unscheduled Subpart C—Airport Certification Manual (3) Airports located in the State of passenger operations of large air carrier 139.201 General requirements. Alaska that only serve scheduled aircraft and/or scheduled operations of 139.203 Contents of Airport Certification operations of small air carrier aircraft small air carrier aircraft. Manual. and do not serve scheduled or Class II airport means an airport 139.205 Amendment of Airport unscheduled operations of large air certificated to serve scheduled Certification Manual. carrier aircraft; operations of small air carrier aircraft Subpart D—Operations (4) Airports located in the State of and the unscheduled passenger Alaska during periods of time when not operations of large air carrier aircraft. A 139.301 Records. 139.303 Personnel. serving operations of large air carrier Class II airport cannot serve scheduled 139.305 Paved areas. aircraft; or large air carrier aircraft. 139.307 Unpaved areas. (5) Heliports. Class III airport means an airport 139.309 Safety areas. certificated to serve scheduled 139.311 Marking, signs, and lighting. § 139.3 Delegation of authority. operations of small air carrier aircraft. A 139.313 Snow and ice control. The authority of the Administrator to Class III airport cannot serve scheduled 139.315 Aircraft rescue and firefighting: issue, deny, and revoke Airport or unscheduled large air carrier aircraft. Index determination. Operating Certificates is delegated to the Class IV airport means an airport 139.317 Aircraft rescue and firefighting: Associate Administrator for Airports, certificated to serve unscheduled Equipment and agents. Director of Airport Safety and 139.319 Aircraft rescue and firefighting: passenger operations of large air carrier Operational requirements. Standards, and Regional Airports aircraft. A Class IV airport cannot serve 139.321 Handling and storing of hazardous Division Managers. scheduled large or small air carrier substances and materials. aircraft. 139.323 Traffic and wind direction § 139.5 Definitions. Clean agent means an electrically indicators. The following are definitions of terms nonconducting volatile or gaseous fire 139.325 Airport emergency plan. used in this part: extinguishing agent that does not leave 139.327 Self-inspection program. AFFF means aqueous film forming a residue upon evaporation and has 139.329 Pedestrians and Ground Vehicles. foam agent. been shown to provide extinguishing 139.331 Obstructions. Air carrier aircraft means an aircraft 139.333 Protection of NAVAIDS. action equivalent to halon 1211 under 139.335 Public protection. that is being operated by an air carrier test protocols of FAA Technical Report 139.337 Wildlife hazard management. and is categorized as either a large air DOT/FAA/AR–95/87. 139.339 Airport condition reporting. carrier aircraft if designed for at least 31 Heliport means an airport, or an area 139.341 Identifying, marking, and lighting passenger seats or a small air carrier of an airport, used or intended to be construction and other unserviceable aircraft if designed for more than 9 used for the landing and takeoff of areas. passenger seats but less than 31 helicopters. 139.343 Noncomplying conditions. passenger seats, as determined by the Index means the type of aircraft Authority: 49 U.S.C. 106(g), 40113, 44701– aircraft type certificate issued by a rescue and firefighting equipment and 44706, 44709, 44719 competent civil aviation authority. quantity of fire extinguishing agent that Air carrier operation means the Subpart A—General the certificate holder must provide in takeoff or landing of an air carrier accordance with § 139.315. § 139.1 Applicability. aircraft and includes the period of time Joint-use airport means an airport (a) This part prescribes rules from 15 minutes before until 15 minutes owned by the United States that leases governing the certification and after the takeoff or landing. a portion of the airport to a person operation of airports in any State of the Airport means an area of land or other operating an airport specified under United States, the District of Columbia, hard surface, excluding water, that is § 139.1(a). or any territory or possession of the used or intended to be used for the Movement area means the runways, United States serving any— landing and takeoff of aircraft, including taxiways, and other areas of an airport (1) Scheduled passenger-carrying any buildings and facilities. that are used for taxiing, takeoff, and operations of an air carrier operating Airport Operating Certificate means a landing of aircraft, exclusive of loading aircraft designed for more than 9 certificate, issued under this part, for ramps and aircraft parking areas. passenger seats, as determined by the operation of a Class I, II, III, or IV Regional Airports Division Manager aircraft type certificate issued by a airport. means the airports division manager for competent civil aviation authority; and Average daily departures means the the FAA region in which the airport is (2) Unscheduled passenger-carrying average number of scheduled departures located. operations of an air carrier operating per day of air carrier aircraft computed Safety area means a defined area aircraft designed for at least 31 on the basis of the busiest 3 consecutive comprised of either a runway or taxiway passenger seats, as determined by the calendar months of the immediately and the surrounding surfaces that is aircraft type certificate issued by a preceding 12 consecutive calendar prepared or suitable for reducing the competent civil aviation authority. months. However, if the average daily risk of damage to aircraft in the event of (b) This part applies to those portions departures are expected to increase, an undershoot, overshoot, or excursion of a joint-use or shared-use airport that then ‘‘average daily departures’’ may be from a runway or the unintentional are within the authority of a person determined by planned rather than departure from a taxiway. serving passenger-carrying operations current activity, in a manner authorized Scheduled operation means any defined in paragraphs (a)(1) and (a)(2) of by the Administrator. common carriage passenger-carrying this section. Certificate holder means the holder of operation for compensation or hire (c) This part does not apply to— an Airport Operating Certificate issued conducted by an air carrier for which (1) Airports serving scheduled air under this part. the air carrier or its representatives carrier operations only by reason of Class I airport means an airport offers in advance the departure location, being designated as an alternate airport; certificated to serve scheduled departure time, and arrival location. It

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does not include any operation that is that certificate, the applicable § 139.111 Exemptions. conducted as a supplemental operation provisions, or the approved Airport (a) An applicant or a certificate holder under 14 CFR part 121 or public charter Certification Manual. may petition the Administrator under operations under 14 CFR part 380. (b) Each certificate holder shall adopt 14 CFR part 11, General Rulemaking Shared-use airport means a U.S. and comply with an Airport Procedures, of this chapter for an Government-owned airport that is co- Certification Manual as required under exemption from any requirement of this located with an airport specified under § 139.203. part. § 139.1(a) and at which portions of the (c) Persons required to have an (b) Under 49 U.S.C. 44706(c), the movement areas and safety areas are Airport Operating Certificate under this Administrator may exempt an applicant shared by both parties. part shall submit their Airport or a certificate holder that enplanes Unscheduled operation means any Certification Manual to the FAA for annually less than one-quarter of 1 common carriage passenger-carrying approval, in accordance with the percent of the total number of operation for compensation or hire, following schedule: passengers enplaned at all air carrier using aircraft designed for at least 31 (1) Class I airports—6 months after airports from all, or part, of the aircraft passenger seats, conducted by an air June 9, 2004. rescue and firefighting equipment carrier for which the departure time, (2) Class II, III, and IV airports—12 requirements of this part on the grounds departure location, and arrival location months after June 9, 2004. that compliance with those are specifically negotiated with the § 139.103 Application for certificate. requirements is, or would be, customer or the customer’s unreasonably costly, burdensome, or representative. It includes any Each applicant for an Airport Operating Certificate shall— impractical. passenger-carrying supplemental (1) Each petition filed under this operation conducted under 14 CFR part (a) Prepare and submit an application, in a form and in the manner prescribed paragraph must— 121 and any passenger-carrying public (i) Be submitted in writing at least 120 charter operation conducted under 14 by the Administrator, to the Regional Airports Division Manager. days before the proposed effective date CFR part 380. of the exemption; Wildlife hazard means a potential for (b) Submit with the application, two copies of an Airport Certification (ii) Set forth the text of §§ 139.317 or a damaging aircraft collision with 139.319 from which the exemption is wildlife on or near an airport. As used Manual prepared in accordance with subpart C of this part. sought; in this part, ‘‘wildlife’’ includes feral (iii) Explain the interest of the animals and domestic animals out of the § 139.105 Inspection authority. certificate holder in the action control of their owners. Each applicant for, or holder of, an requested, including the nature and Note: Special Statutory Requirement To Airport Operating Certificate shall allow extent of relief sought; and Operate to or From a Part 139 Airport. Each the Administrator to make any (iv) Contain information, views, or air carrier that provides—in an aircraft inspections, including unannounced arguments that demonstrate that the designed for more than 9 passenger seats— regularly scheduled charter air transportation inspections, or tests to determine requirements of §§ 139.317 or 139.319 for which the public is provided in advance compliance with 49 U.S.C. 44706 and would be unreasonably costly, a schedule containing the departure location, the requirements of this part. burdensome, or impractical. departure time, and arrival location of the (2) Information, views, or arguments § 139.107 Issuance of certificate. flight must operate to and from an airport provided under paragraph (b)(1) of this certificated under part 139 of this chapter in An applicant for an Airport Operating section shall include the following accordance with 49 U.S.C. 41104(b). That Certificate is entitled to a certificate if— information pertaining to the airport for statutory provision contains stand-alone (a) The applicant provides written which the Airport Operating Certificate requirements for such air carriers and special documentation that air carrier service exceptions for operations in Alaska and is held: will begin on a date certain. (i) An itemized cost to comply with outside the United States. Certain operations (b) The applicant meets the provisions by air carriers that conduct public charter the requirement from which the operations under 14 CFR part 380 are of § 139.103. exemption is sought; (c) The Administrator, after covered by the statutory requirements to (ii) Current staffing levels; investigation, finds the applicant is operate to and from part 139 airports. See 49 (iii) The current annual financial U.S.C. 41104(b). properly and adequately equipped and report, such as a single audit report or able to provide a safe airport operating FAA Form 5100–127, Operating and § 139.7 Methods and procedures for environment in accordance with— compliance. (1) Any limitation that the Financial Summary; (iv) Annual passenger enplanement Certificate holders shall comply with Administrator finds necessary to ensure data for the previous 12 calendar requirements prescribed by subparts C safety in air transportation. months; and D of this part in a manner (2) The requirements of the Airport (v) The type and frequency of air authorized by the Administrator. FAA Certification Manual, as specified under carrier operations served; Advisory Circulars contain methods and § 139.203. (vi) A history of air carrier service; procedures for compliance with this (3) Any other provisions of this part (vii) Anticipated changes to air carrier part that are acceptable to the that the Administrator finds necessary service; Administrator. to ensure safety in air transportation. (d) The Administrator approves the (c) Each petition filed under this Subpart B—Certification Airport Certification Manual. section must be submitted in duplicate to the— § 139.101 General requirements. § 139.109 Duration of certificate. (1) Regional Airports Division (a) Except as otherwise authorized by An Airport Operating Certificate Manager and the Administrator, no person may issued under this part is effective until (2) U.S. Department of operate an airport specified under the certificate holder surrenders it or the Transportation’s Docket Management § 139.1 of this part without an Airport certificate is suspended or revoked by System, as specified under 14 CFR part Operating Certificate or in violation of the Administrator. 11.

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§ 139.113 Deviations. (2) Contains only those items Manager is provided a complete copy of In emergency conditions requiring authorized by the Administrator; its most current approved Airport (3) Is in printed form and signed by immediate action for the protection of Certification Manual, as specified under the certificate holder acknowledging the life or property, the certificate holder paragraph (b)(2) of this section, certificate holder’s responsibility to may deviate from any requirement of including any amendments approved operate the airport in compliance with subpart D of this part, or the Airport under § 139.205. the Airport Certification Manual Certification Manual, to the extent (d) FAA Advisory Circulars contain approved by the Administrator; and required to meet that emergency. Each methods and procedures for the (4) Is in a form that is easy to revise certificate holder who deviates from a development of Airport Certification and organized in a manner helpful to requirement under this section shall, Manuals that are acceptable to the the preparation, review, and approval within 14 days after the emergency, Administrator. processes, including a revision log. In notify the Regional Airports Division addition, each page or attachment must § 139.203 Contents of Airport Certification Manager of the nature, extent, and include the date of the Administrator’s Manual. duration of the deviation. When initial approval or approval of the latest (a) Except as otherwise authorized by requested by the Regional Airports revision. the Administrator, each certificate Division Manager, the certificate holder (b) Each holder of an Airport holder shall include in the Airport shall provide this notification in Operating Certificate shall— Certification Manual a description of writing. (1) Keep its Airport Certification operating procedures, facilities and equipment, responsibility assignments, Subpart C—Airport Certification Manual current at all times; and any other information needed by Manual (2) Maintain at least one complete and current copy of its approved Airport personnel concerned with operating the § 139.201 General requirements. Certification Manual on the airport, airport in order to comply with which will be available for inspection applicable provisions of subpart D of (a) No person may operate an airport by the Administrator; and this part and paragraph (b) of this subject to this part unless that person (3) Furnish the applicable portions of section. adopts and complies with an Airport the approved Airport Certification (b) Except as otherwise authorized by Certification Manual, as required under Manual to airport personnel responsible the Administrator, the certificate holder this part, that— for its implementation. shall include in the Airport Certification (1) Has been approved by the (c) Each certificate holder shall ensure Manual the following elements, as Administrator; that the Regional Airports Division appropriate for its class:

REQUIRED AIRPORT CERTIFICATION MANUAL ELEMENTS

Airport certificate class Manual elements Class I Class II Class III Class IV

1. Lines of succession of airport operational responsibility ...... XXXX 2. Each current exemption issued to the airport from the requirements of this part ...... XXXX 3. Any limitations imposed by the Administrator ...... XXXX 4. A grid map or other means of identifying locations and terrain features on and around the airport that are significant to emergency operations ...... XXXX 5. The location of each obstruction required to be lighted or marked within the airport’s area of authority ...... XXXX 6. A description of each movement area available for air carriers and its safety areas, and each road described in § 139.319(k) that serves it ...... XXXX 7. Procedures for avoidance of interruption or failure during construction work of utilities serving facilities or NAVAIDS that support air carrier oper- ations ...... X X X 8. A description of the system for maintaining records, as required under § 139.301 ...... XXXX 9. A description of personnel training, as required under § 139.303 ...... XXXX 10. Procedures for maintaining the paved areas, as required under § 139.305 ...... XXXX 11. Procedures for maintaining the unpaved areas, as required under § 139.307 ...... XXXX 12. Procedures for maintaining the safety areas, as required under § 139.309 ...... XXXX 13. A plan showing the runway and taxiway identification system, including the location and inscription of signs, runway markings, and holding posi- tion markings, as required under § 139.311 ...... XXXX 14. A description of, and procedures for maintaining, the marking, signs, and lighting systems, as required under § 139.311 ...... XXXX 15. A snow and ice control plan, as required under § 139.313 ...... X X X 16. A description of the facilities, equipment, personnel, and procedures for meeting the aircraft rescue and firefighting requirements, in accordance with §§ 139.315, 139.317 and 139.319 ...... XXXX 17. A description of any approved exemption to aircraft rescue and fire- fighting requirements, as authorized under § 139.111 ...... XXXX

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REQUIRED AIRPORT CERTIFICATION MANUAL ELEMENTS—Continued

Airport certificate class Manual elements Class I Class II Class III Class IV

18. Procedures for protecting persons and property during the storing, dis- pensing, and handling of fuel and other hazardous substances and mate- rials, as required under § 139.321 ...... XXXX 19. A description of, and procedures for maintaining, the traffic and wind di- rection indicators, as required under § 139.323 ...... XXXX 20. An emergency plan as required under § 139.325 ...... XXXX 21. Procedures for conducting the self-inspection program, as required under § 139.327 ...... XXXX 22. Procedures for controlling pedestrians and ground vehicles in move- ment areas and safety areas, as required under § 139.329 ...... X X X 23. Procedures for obstruction removal, marking, or lighting, as required under § 139.331 ...... X X X 24. Procedures for protection of NAVAIDS, as required under § 139.333 ..... X X X 25. A description of public protection, as required under § 139.335 ...... X X X 26. Procedures for wildlife hazard management, as required under § 139.337 ...... X X X 27. Procedures for airport condition reporting, as required under § 139.339 XXXX 28. Procedures for identifying, marking, and lighting construction and other unserviceable areas, as required under § 139.341 ...... X X X 29. Any other item that the Administrator finds is necessary to ensure safe- ty in air transportation ...... XXXX

§ 139.205 Amendment of Airport becomes effective not less than 30 days (b) Maintain records required under Certification Manual. after the certificate holder receives this part as follows: (a) Under § 139.3, the Regional notice of it, except that, prior to the (1) Personnel training. Twenty-four Airports Division Manager may amend effective date, the certificate holder may consecutive calendar months for any Airport Certification Manual petition the Associate Administrator for personnel training records, as required approved under this part, either— Airports to reconsider the amendment, under §§ 139.303 and 139.327. (1) Upon application by the certificate in which case its effective date is stayed (2) Emergency personnel training. holder or pending a decision by the Associate Twenty-four consecutive calendar (2) On the Regional Airports Division Administrator for Airports. months for aircraft rescue and Manager’s own initiative, if the Regional (e) Notwithstanding the provisions of firefighting and emergency medical Airports Division Manager determines paragraph (d) of this section, if the service personnel training records, as that safety in air transportation requires Regional Airports Division Manager required under § 139.319. the amendment. finds there is an emergency requiring (3) Airport fueling agent inspection. (b) A certificate holder shall submit in immediate action with respect to safety Twelve consecutive calendar months for writing a proposed amendment to its in air transportation, the Regional records of inspection of airport fueling Airport Certification Manual to the Airports Division Manager may issue an agents, as required under § 139.321. Regional Airports Division Manager at amendment, effective without stay on (4) Fueling personnel training. Twelve least 30 days before the proposed the date the certificate holder receives consecutive calendar months for effective date of the amendment, unless notice of it. In such a case, the Regional training records of fueling personnel, as a shorter filing period is allowed by the Airports Division Manager incorporates required under § 139.321. Regional Airports Division Manager. the finding of the emergency and a brief (5) Self-inspection. Twelve (c) At any time within 30 days after statement of the reasons for the finding consecutive calendar months for self- receiving a notice of refusal to approve in the notice of the amendment. Within inspection records, as required under the application for amendment, the 30 days after the issuance of such an § 139.327. certificate holder may petition the emergency amendment, the certificate (6) Movement areas and safety areas Associate Administrator for Airports to holder may petition the Associate training. Twenty-four consecutive reconsider the refusal to amend. Administrator for Airports to reconsider calendar months for records of training (d) In the case of amendments either the finding of an emergency, the given to pedestrians and ground vehicle initiated by the FAA, the Regional amendment itself, or both. This petition operators with access to movement Airports Division Manager notifies the does not automatically stay the areas and safety areas, as required under certificate holder of the proposed effectiveness of the emergency § 139.329. amendment, in writing, fixing a amendment. (7) Accident and incident. Twelve reasonable period (but not less than 7 consecutive calendar months for each days) within which the certificate Subpart D—Operations accident or incident in movement areas holder may submit written information, and safety areas involving an air carrier views, and arguments on the § 139.301 Records. aircraft and/or ground vehicle, as amendment. After considering all In a manner authorized by the required under § 139.329. relevant material presented, the Administrator, each certificate holder (8) Airport condition. Twelve Regional Airports Division Manager shall— consecutive calendar months for records notifies the certificate holder within 30 (a) Furnish upon request by the of airport condition information days of any amendment adopted or Administrator all records required to be dissemination, as required under rescinds the notice. The amendment maintained under this part. § 139.339.

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(c) Make and maintain any additional (v) § 139.337, Wildlife hazard accumulations and their control, records required by the Administrator, management; and including the associated use of this part, and the Airport Certification (vi) § 139.339, Airport condition materials, such as sand and deicing Manual. reporting. solutions. (f) Use an independent organization, (c) FAA Advisory Circulars contain § 139.303 Personnel. or designee, to comply with the methods and procedures for the In a manner authorized by the requirements of its Airport Certification maintenance and configuration of paved Administrator, each certificate holder Manual and the requirements of this areas that are acceptable to the shall— part only if— Administrator. (a) Provide sufficient and qualified (1) Such an arrangement is authorized personnel to comply with the by the Administrator; § 139.307 Unpaved areas. requirements of its Airport Certification (2) A description of responsibilities (a) In a manner authorized by the Manual and the requirements of this and duties that will be assumed by an Administrator, each certificate holder part. independent organization or designee is shall maintain and promptly repair the (b) Equip personnel with sufficient specified in the Airport Certification surface of each gravel, turf, or other resources needed to comply with the Manual; and unpaved runway, taxiway, or loading requirements of this part. (3) The independent organization or ramp and parking area on the airport (c) Train all personnel who access designee prepares records required that is available for air carrier use as movement areas and safety areas and under this part in sufficient detail to follows: perform duties in compliance with the assure the certificate holder and the (1) No slope from the edge of the full- requirements of the Airport Certification Administrator of adequate compliance strength surfaces downward to the Manual and the requirements of this with the Airport Certification Manual existing terrain shall be steeper than 2:1. part. This training shall be completed and the requirements of this part. (2) The full-strength surfaces shall prior to the initial performance of such § 139.305 Paved areas. have adequate crown or grade to assure duties and at least once every 12 sufficient drainage to prevent ponding. (a) In a manner authorized by the consecutive calendar months. The (3) The full-strength surfaces shall be Administrator, each certificate holder curriculum for initial and recurrent adequately compacted and sufficiently shall maintain, and promptly repair the training shall include at least the stable to prevent rutting by aircraft or pavement of, each runway, taxiway, following areas: the loosening or build-up of surface loading ramp, and parking area on the (1) Airport familiarization, including airport that is available for air carrier material, which could impair airport marking, lighting, and signs use as follows: directional control of aircraft or system. (1) The pavement edges shall not drainage. (2) Procedures for access to, and exceed 3 inches difference in elevation (4) The full-strength surfaces must operation in, movement areas and safety between abutting pavement sections and have no holes or depressions that areas, as specified under § 139.329. between pavement and abutting areas. exceed 3 inches in depth and are of a (3) Airport communications, (2) The pavement shall have no hole breadth capable of impairing directional including radio communication exceeding 3 inches in depth nor any control or causing damage to an aircraft. between the air traffic control tower and hole the slope of which from any point (5) Debris and foreign objects shall be personnel, use of the common traffic in the hole to the nearest point at the lip promptly removed from the surface. advisory frequency if there is no air of the hole is 45 degrees or greater, as (b) FAA Advisory Circulars contain traffic control tower or the tower is not measured from the pavement surface methods and procedures for the in operation, and procedures for plane, unless, in either case, the entire maintenance and configuration of reporting unsafe airport conditions. area of the hole can be covered by a 5- unpaved areas that are acceptable to the (4) Duties required under the Airport inch diameter circle. Administrator. Certification Manual and the (3) The pavement shall be free of § 139.309 Safety areas. requirements of this part. cracks and surface variations that could (5) Any additional subject areas impair directional control of air carrier (a) In a manner authorized by the required under §§ 139.319, 139.321, aircraft. Any pavement crack or surface Administrator, each certificate holder 139.327, 139.329, 139.337, and 139.339, deterioration that produces loose shall provide and maintain, for each as appropriate. aggregate or other contaminants shall be runway and taxiway that is available for (d) Make a record of all training immediately repaired. air carrier use, a safety area of at least completed after June 9, 2004 by each (4) Except as provided in paragraph the dimensions that— individual in compliance with this (b) of this section, mud, dirt, sand, loose (1) Existed on December 31, 1987, if section that includes, at a minimum, a aggregate, debris, foreign objects, rubber the runway or taxiway had a safety area description and date of training deposits, and other contaminants shall on December 31, 1987, and if no received. Such records shall be be removed promptly and as completely reconstruction or significant expansion maintained for 24 consecutive calendar as practicable. of the runway or taxiway was begun on months after completion of training. (5) Except as provided in paragraph or after January 1, 1988; or (e) As appropriate, comply with the (b) of this section, any chemical solvent (2) Are authorized by the following training requirements of this that is used to clean any pavement area Administrator at the time the part: shall be removed as soon as possible, construction, reconstruction, or (i) § 139.319, Aircraft rescue and consistent with the instructions of the expansion began if construction, firefighting: Operational requirements; manufacturer of the solvent. reconstruction, or significant expansion (ii) § 139.321, Handling and storage of (6) The pavement shall be sufficiently of the runway or taxiway began on or hazardous substances and materials; drained and free of depressions to after January 1, 1988. (iii) § 139.327, Self-inspection prevent ponding that obscures markings (b) Each certificate holder shall program; or impairs safe aircraft operations. maintain its safety areas as follows: (iv) § 139.329, Pedestrians and (b) Paragraphs (a)(4) and (a)(5) of this (1) Each safety area shall be cleared Ground Vehicles; section do not apply to snow and ice and graded and have no potentially

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hazardous ruts, humps, depressions, or object cannot be seen from a distance of a minimum, instructions and other surface variations. 3 statute miles or the sun is more than procedures for— (2) Each safety area shall be drained six degrees below the horizon. These (1) Prompt removal or control, as by grading or storm sewers to prevent lighting systems shall be authorized by completely as practical, of snow, ice, water accumulation. the Administrator and consist of at least and slush on each movement area; (3) Each safety area shall be capable the following: (2) Positioning snow off the under dry conditions of supporting (1) Runway lighting that meets the movement area surfaces so all air carrier snow removal and aircraft rescue and specifications for takeoff and landing aircraft propellers, engine pods, rotors, firefighting equipment and of minimums, as authorized by the and wing tips will clear any snowdrift supporting the occasional passage of Administrator, for each runway. and snowbank as the aircraft’s landing aircraft without causing major damage (2) One of the following taxiway gear traverses any portion of the to the aircraft. lighting systems: movement area; (4) No objects may be located in any (i) Centerline lights. (3) Selection and application of safety area, except for objects that need (ii) Centerline reflectors. authorized materials for snow and ice to be located in a safety area because of (iii) Edge lights. control to ensure that they adhere to their function. These objects shall be (iv) Edge reflectors. snow and ice sufficiently to minimize constructed, to the extent practical, on (3) An airport beacon. engine ingestion; frangibly mounted structures of the (4) Approach lighting that meets the (4) Timely commencement of snow lowest practical height, with the specifications for takeoff and landing and ice control operations; and frangible point no higher than 3 inches minimums, as authorized by the (5) Prompt notification, in accordance above grade. Administrator, for each runway, unless with § 139.339, of all air carriers using (c) FAA Advisory Circulars contain provided and/or maintained by an the airport when any portion of the methods and procedures for the entity other than the certificate holder. movement area normally available to configuration and maintenance of safety (5) Obstruction marking and lighting, them is less than satisfactorily cleared areas acceptable to the Administrator. as appropriate, on each object within its for safe operation by their aircraft. authority that has been determined by (c) FAA Advisory Circulars contain § 139.311 Marking, signs, and lighting. the FAA to be an obstruction. methods and procedures for snow and (a) Marking. Each certificate holder (d) Maintenance. Each certificate ice control equipment, materials, and shall provide and maintain marking holder shall properly maintain each removal that are acceptable to the systems for air carrier operations on the marking, sign, or lighting system Administrator. airport that are authorized by the installed and operated on the airport. As § 139.315 Aircraft rescue and firefighting: Administrator and consist of at least the used in this section, to ‘‘properly Index determination. following: maintain’’ includes cleaning, replacing, (a) An index is required by paragraph (1) Runway markings meeting the or repairing any faded, missing, or (c) of this section for each certificate specifications for takeoff and landing nonfunctional item; keeping each item holder. The Index is determined by a minimums for each runway. unobscured and clearly visible; and combination of— (2) A taxiway centerline. ensuring that each item provides an (1) The length of air carrier aircraft (3) Taxiway edge markings, as accurate reference to the user. and appropriate. (e) Lighting interference. Each (2) Average daily departures of air (4) Holding position markings. certificate holder shall ensure that all carrier aircraft. (5) Instrument landing system (ILS) lighting on the airport, including that (b) For the purpose of Index critical area markings. for aprons, vehicle parking areas, determination, air carrier aircraft (b) Signs. (1) Each certificate holder roadways, fuel storage areas, and lengths are grouped as follows: shall provide and maintain sign systems buildings, is adequately adjusted or (1) Index A includes aircraft less than for air carrier operations on the airport shielded to prevent interference with air 90 feet in length. that are authorized by the Administrator traffic control and aircraft operations. (2) Index B includes aircraft at least and consist of at least the following: (f) Standards. FAA Advisory Circulars 90 feet but less than 126 feet in length. (i) Signs identifying taxiing routes on contain methods and procedures for the (3) Index C includes aircraft at least the movement area. equipment, material, installation, and 126 feet but less than 159 feet in length. (ii) Holding position signs. maintenance of marking, sign, and (4) Index D includes aircraft at least (iii) Instrument landing system (ILS) lighting systems listed in this section 159 feet but less than 200 feet in length. critical area signs. that are acceptable to the Administrator. (5) Index E includes aircraft at least (2) Unless otherwise authorized by (g) Implementation. The sign systems 200 feet in length. the Administrator, the signs required by required under paragraph (b)(3) of this (c) Except as provided in § 139.319(c), paragraph (b)(1) of this section shall be section shall be implemented by each if there are five or more average daily internally illuminated at each Class I, II, holder of a Class III Airport Operating departures of air carrier aircraft in a and IV airport. Certificate not later than 36 consecutive single Index group serving that airport, (3) Unless otherwise authorized by calendar months after June 9, 2004. the longest aircraft with an average of the Administrator, the signs required by five or more daily departures paragraphs (b)(1)(ii) and (b)(1)(iii) of this § 139.313 Snow and ice control. determines the Index required for the section shall be internally illuminated at (a) As determined by the airport. When there are fewer than five each Class III airport. Administrator, each certificate holder average daily departures of the longest (c) Lighting. Each certificate holder whose airport is located where snow air carrier aircraft serving the airport, shall provide and maintain lighting and icing conditions occur shall the Index required for the airport will be systems for air carrier operations when prepare, maintain, and carry out a snow the next lower Index group than the the airport is open at night, during and ice control plan in a manner Index group prescribed for the longest conditions below visual flight rules authorized by the Administrator. aircraft. (VFR) minimums, or in Alaska, during (b) The snow and ice control plan (d) The minimum designated index periods in which a prominent unlighted required by this section shall include, at shall be Index A.

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(e) A holder of a Class III Airport the total quantity of water for foam the water required to be carried by the Operating Certificate may comply with production carried by both vehicles is at vehicle. this section by providing a level of least 3,000 gallons. (j) Methods and procedures. FAA safety comparable to Index A that is (d) Index D. Three vehicles— Advisory Circulars contain methods and approved by the Administrator. Such (1) One vehicle carrying the procedures for ARFF equipment and alternate compliance must be described extinguishing agents as specified in extinguishing agents that are acceptable in the ACM and must include: paragraphs (a)(1) or (a)(2) of this section; to the Administrator. (i) Pre-arranged firefighting and and (k) Implementation. Each holder of a emergency medical response (2) Two vehicles carrying an amount Class II, III, or IV Airport Operating procedures, including agreements with of water and the commensurate quantity Certificate shall implement the responding services. of AFFF so the total quantity of water requirements of this section no later (ii) Means for alerting firefighting and for foam production carried by all three than 36 consecutive calendar months emergency medical response personnel. vehicles is at least 4,000 gallons. after . (iii) Type of rescue and firefighting (e) Index E. Three vehicles— equipment to be provided. § 139.319 Aircraft rescue and firefighting: (1) One vehicle carrying the Operational requirements. (iv) Training of responding extinguishing agents as specified in (a) Rescue and firefighting capability. firefighting and emergency medical paragraphs (a)(1) or (a)(2) of this section; Except as provided in paragraph (c) of personnel on airport familiarization and and communications. this section, each certificate holder shall (2) Two vehicles carrying an amount provide on the airport, during air carrier § 139.317 Aircraft rescue and firefighting: of water and the commensurate quantity operations at the airport, at least the Equipment and agents. of AFFF so the total quantity of water rescue and firefighting capability Unless otherwise authorized by the for foam production carried by all three specified for the Index required by Administrator, the following rescue and vehicles is at least 6,000 gallons. § 139.317 in a manner authorized by the firefighting equipment and agents are (f) Foam discharge capacity. Each Administrator. the minimum required for the Indexes aircraft rescue and firefighting vehicle (b) Increase in Index. Except as referred to in § 139.315: used to comply with Index B, C, D, or provided in paragraph (c) of this (a) Index A. One vehicle carrying at E requirements with a capacity of at section, if an increase in the average least— least 500 gallons of water for foam daily departures or the length of air (1) 500 pounds of sodium-based dry production shall be equipped with a carrier aircraft results in an increase in chemical, halon 1211, or clean agent; or turret. Vehicle turret discharge capacity the Index required by paragraph (a) of (2) 450 pounds of potassium-based shall be as follows: this section, the certificate holder shall dry chemical and water with a (1) Each vehicle with a minimum- comply with the increased commensurate quantity of AFFF to total rated vehicle water tank capacity of at requirements. 100 gallons for simultaneous dry least 500 gallons, but less than 2,000 (c) Reduction in rescue and chemical and AFFF application. gallons, shall have a turret discharge firefighting. During air carrier operations (b) Index B. Either of the following: rate of at least 500 gallons per minute, with only aircraft shorter than the Index (1) One vehicle carrying at least 500 but not more than 1,000 gallons per aircraft group required by paragraph (a) pounds of sodium-based dry chemical, minute. of this section, the certificate holder halon 1211, or clean agent and 1,500 (2) Each vehicle with a minimum- may reduce the rescue and firefighting gallons of water and the commensurate rated vehicle water tank capacity of at to a lower level corresponding to the quantity of AFFF for foam production. least 2,000 gallons shall have a turret Index group of the longest air carrier (2) Two vehicles— discharge rate of at least 600 gallons per aircraft being operated. (i) One vehicle carrying the minute, but not more than 1,200 gallons (d) Procedures for reduction in extinguishing agents as specified in per minute. capability. Any reduction in the rescue paragraphs (a)(1) or (a)(2) of this section; (g) Agent discharge capacity. Each and firefighting capability from the and aircraft rescue and firefighting vehicle Index required by paragraph (a) of this (ii) One vehicle carrying an amount of that is required to carry dry chemical, section, in accordance with paragraph water and the commensurate quantity of halon 1211, or clean agent for (c) of this section, shall be subject to the AFFF so the total quantity of water for compliance with the Index requirements following conditions: foam production carried by both of this section must meet one of the (1) Procedures for, and the persons vehicles is at least 1,500 gallons. following minimum discharge rates for having the authority to implement, the (c) Index C. Either of the following: the equipment installed: reductions must be included in the (1) Three vehicles— (1) Dry chemical, halon 1211, or clean Airport Certification Manual. (i) One vehicle carrying the agent through a hand line—5 pounds (2) A system and procedures for recall extinguishing agents as specified in per second. of the full aircraft rescue and firefighting paragraph (a)(1) or (a)(2) of this section; (2) Dry chemical, halon 1211, or clean capability must be included in the and agent through a turret—16 pounds per Airport Certification Manual. (ii) Two vehicles carrying an amount second. (3) The reductions may not be of water and the commensurate quantity (h) Extinguishing agent substitutions. implemented unless notification to air of AFFF so the total quantity of water Other extinguishing agent substitutions carriers is provided in the Airport/ for foam production carried by all three authorized by the Administrator may be Facility Directory or Notices to Airmen vehicles is at least 3,000 gallons. made in amounts that provide (NOTAM), as appropriate, and by direct (2) Two vehicles— equivalent firefighting capability. notification of local air carriers. (i) One vehicle carrying the (i) AFFF quantity requirements. In (e) Vehicle communications. Each extinguishing agents as specified in addition to the quantity of water vehicle required under § 139.317 shall paragraph (b)(1) of this section; and required, each vehicle required to carry be equipped with two-way voice radio (ii) One vehicle carrying water and AFFF shall carry AFFF in an communications that provide for the commensurate quantity of AFFF so appropriate amount to mix with twice contact with at least—

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(1) All other required emergency (i) Within 3 minutes from the time of during air carrier operations. This vehicles; the alarm, at least one required aircraft individual shall be trained prior to (2) The air traffic control tower; rescue and firefighting vehicle shall initial performance of emergency (3) The common traffic advisory reach the midpoint of the farthest medical services. Training shall be at a frequency when an air traffic control runway serving air carrier aircraft from minimum 40 hours in length and cover tower is not in operation or there is no its assigned post or reach any other the following topics: air traffic control tower, and specified point of comparable distance (i) Bleeding. (4) Fire stations, as specified in the on the movement area that is available (ii) Cardiopulmonary resuscitation. airport emergency plan. to air carriers, and begin application of (iii) Shock. (iv) Primary patient survey. (f) Vehicle marking and lighting. Each extinguishing agent. (v) Injuries to the skull, spine, chest, vehicle required under § 139.317 shall— (ii) Within 4 minutes from the time of alarm, all other required vehicles shall and extremities. (1) Have a flashing or rotating beacon (vi) Internal injuries. and reach the point specified in paragraph (vii) Moving patients. (2) Be painted or marked in colors to (h)(2)(i) of this section from their (viii) Burns. enhance contrast with the background assigned posts and begin application of (ix) Triage. environment and optimize daytime and an extinguishing agent. (5) A record is maintained of all nighttime visibility and identification. (i) Personnel. Each certificate holder training given to each individual under (g) Vehicle readiness. Each vehicle shall ensure the following: this section for 24 consecutive calendar required under § 139.317 shall be (1) All rescue and firefighting months after completion of training. maintained as follows: personnel are equipped in a manner Such records shall include, at a (1) The vehicle and its systems shall authorized by the Administrator with minimum, a description and date of be maintained so as to be operationally protective clothing and equipment training received. capable of performing the functions needed to perform their duties. (6) Sufficient rescue and firefighting required by this subpart during all air (2) All rescue and firefighting personnel are available during all air carrier operations. personnel are properly trained to carrier operations to operate the (2) If the airport is located in a perform their duties in a manner vehicles, meet the response times, and geographical area subject to prolonged authorized by the Administrator. Such meet the minimum agent discharge rates temperatures below 33 degrees personnel shall be trained prior to required by this part. Fahrenheit, the vehicles shall be initial performance of rescue and (7) Procedures and equipment are provided with cover or other means to firefighting duties and receive recurrent established and maintained for alerting ensure equipment operation and instruction every 12 consecutive rescue and firefighting personnel by discharge under freezing conditions. calendar months. The curriculum for siren, alarm, or other means authorized (3) Any required vehicle that becomes initial and recurrent training shall by the Administrator to any existing or inoperative to the extent that it cannot include at least the following areas: impending emergency requiring their perform as required by paragraph (h)(1) (i) Airport familiarization, including assistance. of this section shall be replaced airport signs, marking, and lighting. (j) Hazardous materials guidance. (ii) Aircraft familiarization. immediately with equipment having at Each aircraft rescue and firefighting (iii) Rescue and firefighting personnel vehicle responding to an emergency on least equal capabilities. If replacement safety. the airport shall be equipped with, or equipment is not available immediately, (iv) Emergency communications have available through a direct the certificate holder shall so notify the systems on the airport, including fire communications link, the ‘‘North Regional Airports Division Manager and alarms. American Emergency Response each air carrier using the airport in (v) Use of the fire hoses, nozzles, Guidebook’’ published by the U.S. accordance with § 139.339. If the turrets, and other appliances required Department of Transportation or similar required Index level of capability is not for compliance with this part. response guidance to hazardous restored within 48 hours, the airport (vi) Application of the types of materials/dangerous goods incidents. operator, unless otherwise authorized extinguishing agents required for Information on obtaining the ‘‘North by the Administrator, shall limit air compliance with this part. American Emergency Response carrier operations on the airport to those (vii) Emergency aircraft evacuation Guidebook’’ is available from the compatible with the Index assistance. Regional Airports Division Manager. corresponding to the remaining (viii) Firefighting operations. (k) Emergency access roads. Each operative rescue and firefighting (ix) Adapting and using structural certificate holder shall ensure that roads equipment. rescue and firefighting equipment for designated for use as emergency access (h) Response requirements. (1) With aircraft rescue and firefighting. roads for aircraft rescue and firefighting the aircraft rescue and firefighting (x) Aircraft cargo hazards, including vehicles are maintained in a condition equipment required under this part and hazardous materials/dangerous goods that will support those vehicles during the number of trained personnel that incidents. all-weather conditions. will assure an effective operation, each (xi) Familiarization with firefighters’ (l) Methods and procedures. FAA certificate holder shall— duties under the airport emergency Advisory Circulars contain methods and (i) Respond to each emergency during plan. procedures for aircraft rescue and periods of air carrier operations; and (3) All rescue and firefighting firefighting and emergency medical (ii) When requested by the personnel shall participate in at least equipment and training that are Administrator, demonstrate compliance one live-fire drill prior to initial acceptable to the Administrator. with the response requirements performance of rescue and firefighting (m) Implementation. Each holder of a specified in this section. duties and every 12 consecutive Class II, III, or IV Airport Operating (2) The response required by calendar months thereafter. Certificate shall implement the paragraph (h)(1)(ii) of this section shall (4) At least one individual, who has requirements of this section no later achieve the following performance been trained and is current in basic than 36 consecutive calendar months criteria: emergency medical services, is available after June 9, 2004.

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§ 139.321 Handling and storing of (1) At least one supervisor with each (b) For airports serving any air carrier hazardous substances and materials. fueling agent shall have completed an operation when there is no control (a) Each certificate holder who acts as aviation fuel training course in fire tower operating, a segmented circle, a a cargo handling agent shall establish safety that is authorized by the landing strip indicator and a traffic and maintain procedures for the Administrator. Such an individual shall pattern indicator must be installed protection of persons and property on be trained prior to initial performance of around a wind cone for each runway the airport during the handling and duties, or enrolled in an authorized with a right-hand traffic pattern. storing of any material regulated by the aviation fuel training course that will be (c) FAA Advisory Circulars contain Hazardous Materials Regulations (49 completed within 90 days of initiating methods and procedures for the CFR 171 through 180) that is, or is duties, and receive recurrent instruction installation, lighting, and maintenance intended to be, transported by air. These at least every 24 consecutive calendar of traffic and wind indicators that are procedures shall provide for at least the months. acceptable to the Administrator. following: (2) All other employees who fuel § 139.325 Airport emergency plan. (1) Designated personnel to receive aircraft, accept fuel shipments, or (a) In a manner authorized by the and handle hazardous substances and otherwise handle fuel shall receive at materials. Administrator, each certificate holder least initial on-the-job training and shall develop and maintain an airport (2) Assurance from the shipper that recurrent instruction every 24 the cargo can be handled safely, emergency plan designed to minimize consecutive calendar months in fire the possibility and extent of personal including any special handling safety from the supervisor trained in procedures required for safety. injury and property damage on the accordance with paragraph (e)(1) of this airport in an emergency. The plan (3) Special areas for storage of section. hazardous materials while on the shall— (f) Each certificate holder shall obtain (1) Include procedures for prompt airport. a written confirmation once every 12 (b) Each certificate holder shall response to all emergencies listed in consecutive calendar months from each establish and maintain standards paragraph (b) of this section, including airport tenant fueling agent that the authorized by the Administrator for a communications network; training required by paragraph (e) of this protecting against fire and explosions in (2) Contain sufficient detail to provide section has been accomplished. This storing, dispensing, and otherwise adequate guidance to each person who written confirmation shall be handling fuel (other than articles and must implement these procedures; and maintained for 12 consecutive calendar (3) To the extent practicable, provide materials that are, or are intended to be, months. for an emergency response for the aircraft cargo) on the airport. These largest air carrier aircraft in the Index standards shall cover facilities, (g) Unless otherwise authorized by the group required under § 139.315. procedures, and personnel training and Administrator, each certificate holder (b) The plan required by this section shall address at least the following: shall require each tenant fueling agent must contain instructions for response (1) Bonding. to take immediate corrective action (2) Public protection. whenever the certificate holder becomes to— (1) Aircraft incidents and accidents; (3) Control of access to storage areas. aware of noncompliance with a (2) Bomb incidents, including (4) Fire safety in fuel farm and storage standard required by paragraph (b) of designation of parking areas for the areas. this section. The certificate holder shall aircraft involved; (5) Fire safety in mobile fuelers, notify the appropriate FAA Regional Airports Division Manager immediately (3) Structural fires; fueling pits, and fueling cabinets. (4) Fires at fuel farms or fuel storage (6) Training of fueling personnel in when noncompliance is discovered and corrective action cannot be areas; fire safety in accordance with paragraph (5) Natural disaster; (e) of this section. Such training at Class accomplished within a reasonable (6) Hazardous materials/dangerous III airports must be completed within 12 period of time. goods incidents; consecutive calendar months after June (h) FAA Advisory Circulars contain (7) Sabotage, hijack incidents, and 9, 2004. methods and procedures for the other unlawful interference with (7) The fire code of the public body handling and storage of hazardous operations; having jurisdiction over the airport. substances and materials that are (8) Failure of power for movement (c) Each certificate holder shall, as a acceptable to the Administrator. area lighting; and fueling agent, comply with, and require (9) Water rescue situations, as all other fueling agents operating on the § 139.323 Traffic and wind direction indicators. appropriate. airport to comply with, the standards (c) The plan required by this section established under paragraph (b) of this In a manner authorized by the must address or include— section and shall perform reasonable Administrator, each certificate holder (1) To the extent practicable, surveillance of all fueling activities on shall provide and maintain the provisions for medical services, the airport with respect to those following on its airport: including transportation and medical standards. (a) A wind cone that visually provides assistance for the maximum number of (d) Each certificate holder shall surface wind direction information to persons that can be carried on the inspect the physical facilities of each pilots. For each runway available for air largest air carrier aircraft that the airport airport tenant fueling agent at least once carrier use, a supplemental wind cone reasonably can be expected to serve; every 3 consecutive months for must be installed at the end of the (2) The name, location, telephone compliance with paragraph (b) of this runway or at least at one point visible number, and emergency capability of section and maintain a record of that to the pilot while on final approach and each hospital and other medical facility inspection for at least 12 consecutive prior to takeoff. If the airport is open for and the business address and telephone calendar months. air carrier operations at night, the wind number of medical personnel on the (e) The training required in paragraph direction indicators, including the airport or in the communities it serves (b)(6) of this section shall include at required supplemental indicators, must who have agreed to provide medical least the following: be lighted. assistance or transportation;

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(3) The name, location, and telephone carrier aircraft in the Index group (1) Equipment for use in conducting number of each rescue squad, required under § 139.315. safety inspections of the airport; ambulance service, military installation, (g) Each certificate holder shall— (2) Procedures, facilities, and and government agency on the airport or (1) Coordinate the plan with law equipment for reliable and rapid in the communities it serves that agrees enforcement agencies, rescue and dissemination of information between to provide medical assistance or firefighting agencies, medical personnel the certificate holder’s personnel and air transportation; and organizations, the principal tenants carriers; and (4) An inventory of surface vehicles at the airport, and all other persons who (3) Procedures to ensure qualified and aircraft that the facilities, agencies, have responsibilities under the plan; personnel perform the inspections. Such and personnel included in the plan (2) To the extent practicable, provide procedures shall ensure personnel are under paragraphs (c)(2) and (3) of this for participation by all facilities, trained, as specified under § 139.303, section will provide to transport injured agencies, and personnel specified in and receive initial and recurrent and deceased persons to locations on paragraph (g)(1) of this section in the instruction every 12 consecutive the airport and in the communities it development of the plan; calendar months in at least the serves; (3) Ensure that all airport personnel following areas: (5) A list of each hangar or other having duties and responsibilities under (i) Airport familiarization, including building on the airport or in the the plan are familiar with their airport signs, marking and lighting. communities it serves that will be used assignments and are properly trained; (ii) Airport emergency plan. to accommodate uninjured, injured, and and (iii) Notice to Airmen (NOTAM) deceased persons; (4) At least once every 12 consecutive notification procedures. (6) Plans for crowd control, including calendar months, review the plan with (iv) Procedures for pedestrians and the name and location of each safety or all of the parties with whom the plan is ground vehicles in movement areas and security agency that agrees to provide coordinated, as specified in paragraph safety areas. (v) Discrepancy reporting procedures; assistance for the control of crowds in (g)(1) of this section, to ensure that all and the event of an emergency on the parties know their responsibilities and (4) A reporting system to ensure airport; and that all of the information in the plan is prompt correction of unsafe airport (7) Procedures for removing disabled current. conditions noted during the inspection, aircraft, including, to the extent (h) Each holder of a Class I Airport including wildlife strikes. practical, the name, location, and Operating Certificate shall hold a full- (c) Each certificate holder shall— telephone numbers of agencies with scale airport emergency plan exercise at (1) Prepare, and maintain for at least aircraft removal responsibilities or least once every 36 consecutive calendar 12 consecutive calendar months, a capabilities. months. record of each inspection prescribed by (d) The plan required by this section (i) Each airport subject to applicable this section, showing the conditions must provide for— FAA and Transportation Security found and all corrective actions taken. (1) The marshalling, transportation, Administration security regulations (2) Prepare records of all training and care of ambulatory injured and shall ensure that instructions for given after June 9, 2004 to each uninjured accident survivors; response to paragraphs (b)(2) and (b)(7) individual in compliance with this (2) The removal of disabled aircraft; of this section in the airport emergency section that includes, at a minimum, a (3) Emergency alarm or notification plan are consistent with its approved description and date of training systems; and airport security program. received. Such records shall be (4) Coordination of airport and control (j) FAA Advisory Circulars contain tower functions relating to emergency maintained for 24 consecutive calendar methods and procedures for the months after completion of training. actions, as appropriate. development of an airport emergency (e) The plan required by this section (d) FAA Advisory Circulars contain plan that are acceptable to the methods and procedures for the conduct shall contain procedures for notifying Administrator. the facilities, agencies, and personnel of airport self-inspections that are (k) The emergency plan required by acceptable to the Administrator. who have responsibilities under the this section shall be submitted by each plan of the location of an aircraft holder of a Class II, III, or IV Airport § 139.329 Pedestrians and ground accident, the number of persons Operating Certificate no later than 24 vehicles. involved in that accident, or any other consecutive calendar months after June In a manner authorized by the information necessary to carry out their 9, 2004. Administrator, each certificate holder responsibilities, as soon as that shall— information becomes available. § 139.327 Self-inspection program. (a) Limit access to movement areas (f) The plan required by this section (a) In a manner authorized by the and safety areas only to those shall contain provisions, to the extent Administrator, each certificate holder pedestrians and ground vehicles practicable, for the rescue of aircraft shall inspect the airport to assure necessary for airport operations; accident victims from significant bodies compliance with this subpart according (b) Establish and implement of water or marsh lands adjacent to the to the following schedule: procedures for the safe and orderly airport that are crossed by the approach (1) Daily, except as otherwise required access to, and operation in, movement and departure flight paths of air carriers. by the Airport Certification Manual; areas and safety areas by pedestrians A body of water or marshland is (2) When required by any unusual and ground vehicles, including significant if the area exceeds one- condition, such as construction provisions identifying the consequences quarter square mile and cannot be activities or meteorological conditions, of noncompliance with the procedures traversed by conventional land rescue that may affect safe air carrier by an employee, tenant, or contractor; vehicles. To the extent practicable, the operations; and (c) When an air traffic control tower plan shall provide for rescue vehicles (3) Immediately after an accident or is in operation, ensure that each with a combined capacity for handling incident. pedestrian and ground vehicle in the maximum number of persons that (b) Each certificate holder shall movement areas or safety areas is can be carried on board the largest air provide the following: controlled by one of the following:

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(1) Two-way radio communications determined by the Administrator, would airports or an individual working under between each pedestrian or vehicle and derogate the operation of an electronic direct supervision of such an the tower; or visual NAVAID and air traffic control individual. The wildlife hazard (2) An escort with two-way radio facilities on the airport; assessment shall contain at least the communications with the tower (b) Protect—or if the owner is other following: accompanying any pedestrian or vehicle than the certificate holder, assist in (1) An analysis of the events or without a radio; or protecting—all NAVAIDS on its airport circumstances that prompted the (3) Measures authorized by the against vandalism and theft; and assessment. Administrator for controlling (c) Prevent, insofar as it is within the (2) Identification of the wildlife pedestrians and vehicles, such as signs, airport’s authority, interruption of species observed and their numbers, signals, or guards, when it is not visual and electronic signals of locations, local movements, and daily operationally practical to have two-way NAVAIDS. and seasonal occurrences. radio communications between the (3) Identification and location of § 139.335 Public protection. tower and the pedestrian, vehicle, or features on and near the airport that escort; (a) In a manner authorized by the attract wildlife. (d) When an air traffic control tower Administrator, each certificate holder (4) A description of wildlife hazards is not in operation, or there is no air shall provide— to air carrier operations. traffic control tower, provide adequate (1) Safeguards to prevent inadvertent (5) Recommended actions for procedures to control pedestrians and entry to the movement area by reducing identified wildlife hazards to ground vehicles in movement areas or unauthorized persons or vehicles; and air carrier operations. safety areas through two-way radio (2) Reasonable protection of persons (d) The wildlife hazard assessment communications or prearranged signs or and property from aircraft blast. required under paragraph (b) of this signals; (b) Fencing that meets the section shall be submitted to the (e) Ensure that each employee, tenant, requirements of applicable FAA and Administrator for approval and or contractor is trained on procedures Transportation Security Administration determination of the need for a wildlife required under paragraph (b) of this security regulations in areas subject to hazard management plan. In reaching section, including consequences of these regulations is acceptable for this determination, the Administrator noncompliance, prior to moving on foot, meeting the requirements of paragraph will consider— (a)(l) of this section. or operating a ground vehicle, in (1) The wildlife hazard assessment; movement areas or safety areas; and § 139.337 Wildlife hazard management. (2) Actions recommended in the (f) Maintain the following records: wildlife hazard assessment to reduce (1) A description and date of training (a) In accordance with its Airport Certification Manual and the wildlife hazards; completed after June 9, 2004 by each (3) The aeronautical activity at the individual in compliance with this requirements of this section, each certificate holder shall take immediate airport, including the frequency and section. A record for each individual size of air carrier aircraft; shall be maintained for 24 consecutive action to alleviate wildlife hazards whenever they are detected. (4) The views of the certificate holder; months after the termination of an (5) The views of the airport users; and individual’s access to movement areas (b) In a manner authorized by the Administrator, each certificate holder (6) Any other known factors relating and safety areas. to the wildlife hazard of which the (2) A description and date of any shall ensure that a wildlife hazard assessment is conducted when any of Administrator is aware. accidents or incidents in the movement (e) When the Administrator areas and safety areas involving air the following events occurs on or near the airport: determines that a wildlife hazard carrier aircraft, a ground vehicle or a management plan is needed, the pedestrian. Records of each accident or (1) An air carrier aircraft experiences multiple wildlife strikes; certificate holder shall formulate and incident occurring after the June 9, 2004 implement a plan using the wildlife shall be maintained for 12 consecutive (2) An air carrier aircraft experiences substantial damage from striking hazard assessment as a basis. The plan calendar months from the date of the shall— accident or incident. wildlife. As used in this paragraph, substantial damage means damage or (1) Provide measures to alleviate or § 139.331 Obstructions. structural failure incurred by an aircraft eliminate wildlife hazards to air carrier In a manner authorized by the that adversely affects the structural operations; Administrator, each certificate holder strength, performance, or flight (2) Be submitted to, and approved by, shall ensure that each object in each characteristics of the aircraft and that the Administrator prior to area within its authority that has been would normally require major repair or implementation; and determined by the FAA to be an replacement of the affected component; (3) As authorized by the obstruction is removed, marked, or (3) An air carrier aircraft experiences Administrator, become a part of the lighted, unless determined to be an engine ingestion of wildlife; or Airport Certification Manual. unnecessary by an FAA aeronautical (4) Wildlife of a size, or in numbers, (f) The plan shall include at least the study. FAA Advisory Circulars contain capable of causing an event described in following: methods and procedures for the lighting paragraphs (b)(1), (b)(2), or (b)(3) of this (1) A list of the individuals having of obstructions that are acceptable to the section is observed to have access to any authority and responsibility for Administrator. airport flight pattern or aircraft implementing each aspect of the plan. movement area. (2) A list prioritizing the following § 139.333 Protection of NAVAIDS. (c) The wildlife hazard assessment actions identified in the wildlife hazard In a manner authorized by the required in paragraph (b) of this section assessment and target dates for their Administrator, each certificate holder shall be conducted by a wildlife damage initiation and completion: shall— management biologist who has (i) Wildlife population management; (a) Prevent the construction of professional training and/or experience (ii) Habitat modification; and facilities on its airport that, as in wildlife hazard management at (iii) Land use changes.

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(3) Requirements for and, where (a) Provide for the collection and § 139.341 Identifying, marking, and applicable, copies of local, State, and dissemination of airport condition lighting construction and other Federal wildlife control permits. information to air carriers. unserviceable areas. (4) Identification of resources that the (b) In complying with paragraph (a) of (a) In a manner authorized by the certificate holder will provide to this section, use the NOTAM system, as Administrator, each certificate holder implement the plan. appropriate, and other systems and shall— (5) Procedures to be followed during procedures authorized by the (1) Mark and, if appropriate, light in air carrier operations that at a minimum Administrator. a manner authorized by the includes— (c) In complying with paragraph (a) of Administrator— (i) Designation of personnel this section, provide information on the responsible for implementing the (i) Each construction area and procedures; following airport conditions that may unserviceable area that is on or adjacent (ii) Provisions to conduct physical affect the safe operations of air carriers: to any movement area or any other area inspections of the aircraft movement (1) Construction or maintenance of the airport on which air carrier areas and other areas critical to activity on movement areas, safety aircraft may be operated; successfully manage known wildlife areas, or loading ramps and parking (ii) Each item of construction hazards before air carrier operations areas. equipment and each construction begin; (2) Surface irregularities on movement roadway, which may affect the safe (iii) Wildlife hazard control measures; areas, safety areas, or loading ramps and movement of aircraft on the airport; and and parking areas. (iii) Any area adjacent to a NAVAID (iv) Ways to communicate effectively (3) Snow, ice, slush, or water on the that, if traversed, could cause derogation between personnel conducting wildlife movement area or loading ramps and of the signal or the failure of the control or observing wildlife hazards parking areas. NAVAID; and and the air traffic control tower. (4) Snow piled or drifted on or near (2) Provide procedures, such as a (6) Procedures to review and evaluate movement areas contrary to § 139.313. review of all appropriate utility plans the wildlife hazard management plan (5) Objects on the movement area or prior to construction, for avoiding every 12 consecutive months or damage to existing utilities, cables, following an event described in safety areas contrary to § 139.309. paragraphs (b)(1), (b)(2), and (b)(3) of (6) Malfunction of any lighting wires, conduits, pipelines, or other this section, including: system, holding position signs, or ILS underground facilities. (i) The plan’s effectiveness in dealing critical area signs required by § 139.311. (b) FAA Advisory Circulars contain with known wildlife hazards on and in (7) Unresolved wildlife hazards as methods and procedures for identifying the airport’s vicinity and identified in accordance with § 139.337. and marking construction areas that are (ii) Aspects of the wildlife hazards (8) Nonavailability of any rescue and acceptable to the Administrator. described in the wildlife hazard firefighting capability required in § 139.343 Noncomplying conditions. assessment that should be reevaluated. §§ 139.317 or 139.319. (7) A training program conducted by (9) Any other condition as specified Unless otherwise authorized by the a qualified wildlife damage management in the Airport Certification Manual or Administrator, whenever the biologist to provide airport personnel that may otherwise adversely affect the requirements of subpart D of this part with the knowledge and skills needed to safe operations of air carriers. cannot be met to the extent that uncorrected unsafe conditions exist on successfully carry out the wildlife (d) Each certificate holder shall hazard management plan required by the airport, the certificate holder shall prepare and keep, for at least 12 paragraph (d) of this section. limit air carrier operations to those consecutive calendar months, a record (g) FAA Advisory Circulars contain portions of the airport not rendered of each dissemination of airport methods and procedures for wildlife unsafe by those conditions. condition information to air carriers hazard management at airports that are Issued in Washington, DC on January 28, acceptable to the Administrator. prescribed by this section. (e) FAA Advisory Circulars contain 2004. § 139.339 Airport condition reporting. methods and procedures for using the Marion C. Blakey, In a manner authorized by the NOTAM system and the dissemination Administrator. Administrator, each certificate holder of airport information that are [FR Doc. 04–2255 Filed 2–9–04; 8:45 am] shall— acceptable to the Administrator. BILLING CODE 4910–13–P

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Part III

Securities and Exchange Commission 17 CFR Parts 239, 240, and 274 Confirmation Requirements and Point of Sale Disclosure Requirements for Transactions in Certain Mutual Funds and Other Securities, and Other Confirmation Requirement Amendments, and Amendments to the Registration Form for Mutual Funds; Proposed Rule

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SECURITIES AND EXCHANGE posted on the Commission’s Internet Act. The proposed new rules seek to COMMISSION Web site (http://www.sec.gov).1 improve investor access to material FOR FURTHER INFORMATION CONTACT: information about investments in open- 17 CFR Parts 239, 240 and 274 With respect to Securities Exchange Act end management investment company [Release Nos. 33–8358; 34–49148; IC– rules 10b–10, 15c2–2, and 15c2–3, securities, unit investment trust 26341; File No. S7–06–04] contact Catherine McGuire, Chief interests, and municipal fund securities Counsel, Paula R. Jenson, Deputy Chief used for education savings. The RIN 3235–AJ11; 3235–AJ12; 3235–AJ13; proposals would accomplish that by 3235–AJ14 Counsel, Joshua S. Kans, Special Counsel, or David W. Blass, Attorney, at requiring brokers, dealers and 2 Confirmation Requirements and Point 202/942–0073, Office of Chief Counsel, municipal securities dealers to make of Sale Disclosure Requirements for Division of Market Regulation, additional disclosures, beyond those Transactions in Certain Mutual Funds Securities and Exchange Commission, currently required, in transaction and Other Securities, and Other 450 Fifth Street NW., Washington, DC confirmations that they provide to Confirmation Requirement 20549–1001. customers at the time of a transaction, Amendments, and Amendments to the With respect to Form N–1A, contact and also by requiring point of sale Registration Form for Mutual Funds Tara L. Royal, Senior Counsel, Office of disclosure of material information prior Disclosure Regulation, at 202/942–0721, to the transaction. AGENCY: Securities and Exchange Division of Investment Management, The proposed new confirmation rules Commission. Securities and Exchange Commission, would require brokers, dealers and ACTION: Proposed rule. 450 Fifth Street NW., Washington, DC municipal securities dealers to provide 20549–0506. customers with information about SUMMARY: The Securities and Exchange SUPPLEMENTARY INFORMATION: The distribution-related costs that investors Commission is proposing two new rules Securities and Exchange Commission incur when they purchase those types of and rule amendments under the (‘‘SEC’’ or ‘‘Commission’’) is publishing securities. The confirmation rule Securities Exchange Act of 1934 that are for comment proposed rules 15c2–2 and proposals would also require disclosure designed to enhance the information 15c2–3, as well as amendments to rule of distribution-related arrangements broker-dealers provide to their 10b–10 under the Securities Exchange involving those types of securities that customers in connection with Act of 1934 (‘‘Exchange Act’’) and pose conflicts of interest for brokers, transactions in certain types of proposed amendments to Form N–1A dealers and municipal securities securities. The two new rules would under the Securities Act of 1933 dealers, as well as their associated require broker-dealers to provide their (‘‘Securities Act’’) and the Investment persons. These disclosures would customers with targeted information, at Company Act of 1940 (‘‘Investment promote more informed decision- the point of sale and in transaction Company Act’’). making by investors in securities issued confirmations, regarding the costs and Table of Contents by open-end management investment conflicts of interest that arise from the companies (also referred to here as distribution of mutual fund shares, unit I. Executive Summary ‘‘mutual funds’’ or ‘‘funds’’), interests investment trust interests (including II. Introduction III. Special Request for Comments from issued by unit investment trusts or insurance securities), and municipal ‘‘UITs’’ (including insurance company fund securities used for education Investors IV. Improved Confirmation Disclosure for separate accounts that offer variable savings. The Commission is also Transactions in Mutual Fund Shares, annuity contracts and variable life proposing conforming amendments to Unit Investment Trust Interests and 529 insurance policies) and securities issued its general confirmation rule, as well as Plan Interests by education savings ‘‘529’’ plans. amendments to that rule to provide V. Point of Sale Disclosure for Transactions The proposed new point of sale investors with additional information in Mutual Fund Shares, Unit Investment disclosure rule would require brokers, about call features of debt securities and Trust Interests and 529 Plan Interests dealers and municipal securities dealers preferred stock. Finally, the VI. Prospectus Disclosure to provide point of sale disclosure to Commission is proposing amendments VII. Disclosure Related to Transactions in customers about costs and conflicts of to Form N–1A, the registration form for Callable Preferred Stock and Callable Debt Securities, and Other Amendments interest. In contrast to confirmation mutual funds, to improve disclosure of to Rule 10b–10 disclosure, which a customer will not sales loads and revenue sharing. VIII. Paperwork Reduction Act Analysis receive in writing until after a DATES: Comments must be submitted on IX. Costs and Benefits of the Proposed Rule transaction has been effected, point of or before April 12, 2004. and Rule Amendments sale disclosure would specifically X. Consideration of Burden on Promotion of ADDRESSES: Comments should be require that investors be provided with submitted in triplicate to Jonathan G. Efficiency, Competition, and Capital Formation information that they can use as they Katz, Secretary, Securities and Exchange XI. Consideration of Impact on the Economy determine whether to enter into a Commission, 450 Fifth Street NW., XII. Initial Regulatory Flexibility Analysis transaction to purchase one of those Washington, DC 20549–0609. XIII. Statutory Authority types of securities. Comments also may be submitted Text of Proposed Rules The proposed new point of sale electronically at the following E-mail I. Executive Summary disclosure and confirmation rules and address: [email protected]. All rule amendments also would clarify that comment letters should refer to File No. The Commission is publishing for the rules do not provide safe harbors for S7–06–04; this file number should be comment two proposed new rules and activity that would violate the antifraud included on the subject line if E-mail is rule amendments under the Exchange provisions of the federal securities laws used. Comment letters will be available or other legal requirements. for inspection and copying in the 1 We do not edit personal identifying information, such as names or electronic mail addresses, from Commission’s Public Reference Room at electronic submissions. You should submit only 2 These proposed rules would apply to banks that the same address. Electronically information that you wish to make available act as municipal securities dealers in transactions submitted comment letters will be publicly. involving municipal fund securities.

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We are also proposing amendments to other distribution arrangements have the Investment Company Institute the Commission’s general confirmation evolved substantially since 1977, when (‘‘ICI’’) in 1979, related to confirmation rule to require broker-dealers to provide the Commission adopted its general disclosure of mutual fund sales loads customers with additional information confirmation rule, rule 10b–10.5 We and related fees.6 The relief granted by in connection with transactions in believe that disclosure of information that letter is inconsistent with proposed callable preferred stock and debt about those costs and conflicts can help rule 15c2–2, which would mandate securities, and to make additional investors make better informed specific disclosure of load information conforming and technical changes to the investment decisions. on customer confirmations. rule. Proposed rule 15c2–2 would require To avoid redundancy with proposed Finally, we are proposing to amend specific confirmation disclosure of new rule 15c2–2, we are also proposing Form N–1A, the registration form used information about front-end and to modify rule 10b–10 to exclude certain by mutual funds to register under the deferred sales fees (‘‘loads’’) and other transactions in mutual fund shares and Investment Company Act and to offer distribution-related costs that directly UIT interests from the rule’s scope, and their securities under the Securities Act, impact the returns earned by investors to make other changes consistent with to require improved disclosure in mutual fund shares, UIT interests and proposed rule 15c2–2.7 In addition, we regarding sales loads and revenue 529 plan securities. It also would are proposing to modify rule 10b–10 to sharing arrangements. require brokers, dealers and municipal clarify, consistent with proposed rule In proposing this rule, we have securities dealers to disclose their 15c2–2, that the rule does not provide requested comments on a variety of compensation for selling those a safe harbor for activity that would issues. We wish to emphasize that we securities, and to disclose information violate the antifraud provisions of the particularly hope to receive comments about revenue sharing arrangements and federal securities laws or other legal from investors. As part of this proposed portfolio brokerage arrangements that requirements. rulemaking, we have also proposed new create conflicts of interest for them. forms for confirmation disclosure and Moreover, the proposed rule would Because confirmation disclosure does point of sale disclosure. We want to require brokers, dealers and municipal not provide information to investors know whether the forms clearly securities dealers to inform customers prior to transactions in securities—i.e., communicate the information that about whether their salespersons or at the time they make investment investors need to make investment other associated persons receive extra decisions—we also are proposing new decisions, and whether the forms will compensation for selling certain fund rule 15c2–3 to require brokers, dealers provide investors with the information shares or fund share classes. and municipal securities dealers to they need, at the time they need it. As part of this rulemaking process, provide point of sale disclosure to the Commission intends to withdraw a customers prior to effecting transactions II. Introduction no-action letter that the Commission’s in mutual fund shares, UIT interests and The Commission is proposing new Division of Market Regulation granted to 529 plan securities. The proposed rule rule 15c2–2 under the Exchange Act, would enable investors to see which would govern the obligations of 5 Rule 10b–10 was adopted in 1977, and it transaction-specific information about brokers (including municipal securities became effective the next year following distribution-related costs, and about brokers),3 dealers and municipal amendments. See rule 10b–10 Adopting Release, Exchange Act Release No. 13508 (May 5, 1977), 42 remuneration arrangements that lead to securities dealers to disclose FR 25318 (May 17, 1977); Exchange Act Release No. conflicts of interest for their brokers, transaction-related information in 15219 (October 6, 1978), 43 FR 47495 (October 16, dealers or municipal securities dealers. confirmations or other documents when 1978) (amendment related to odd-lot differentials, That information would enable customers buy or sell certain investment mark-ups and mark-downs in certain riskless principal transactions, market maker status and investors to better understand the costs company securities and municipal fund procedures for periodic disclosure). Rule 10b–10 and conflicts associated with securities.4 The Commission also is replaced the Commission’s previous confirmation investments in those securities prior to proposing new rule 15c2–3 under the rule, rule 15c1–4, which had been limited to entering into transactions, which should Exchange Act, which would govern the transactions conducted over-the-counter. Prior to the adoption of rule 10b–10, transactions on promote better informed investment obligation of brokers, dealers and national securities exchanges were confirmed decision-making. The Commission also municipal securities dealers to disclose pursuant to self-regulatory organization rules. See proposes to amend Form N–1A 8 to information to investors prior to New York Stock Exchange (‘‘NYSE’’) rule 409(c) require improved disclosure by mutual (rescinded on October 6, 1978 upon effectiveness of effecting transactions in those securities. funds regarding sales loads and revenue The proposed new rules respond to rule 10b–10). Rule 10b–10 subsequently has been amended sharing arrangements. concerns that investors in mutual fund several times. See Exchange Act Release No. 19687 In addition, the Commission also shares, UIT interests (including certain (April 18, 1983), 48 FR 17583 (April 25, 1983) insurance company separate accounts (related to yield, call and redemption information proposes to amend rule 10b–10 to that issue variable insurance products) for debt securities, and monthly statements for require broker-dealers to disclose transaction in money market fund shares); and municipal fund securities used for whenever preferred stock can be called Exchange Act Release No. 22397 (September 11, by the issuer. Rule 10b–10 requires education savings lack adequate 1985), 50 FR 37648 (September 17, 1985) (related information about certain distribution- to price and mark-up information for principal similar disclosure for transactions in related costs, as well as certain transactions in reported securities); Exchange Act debt securities that are callable by the Release No. 34902 (October 27, 1994), 59 FR 55006 distribution arrangements, that create issuer. The Commission further (November 2, 1994) (related to disclosure of receipt proposes to amend rule 10b–10 to conflicts of interest for brokers, dealers, of payment for order flow); Exchange Act Release municipal securities dealers, and their No. 34962 (November 10, 1994), 59 FR 59612 require disclosure of the date of first call associated persons. Those costs and (November 17, 1994) (related to unrated securities, for certain transactions in callable debt price and mark-up information for principal securities. transactions in Nasdaq small-cap and regional stock 3 The term ‘‘broker’’ as used in this release also exchange-listed securities, non-SIPC broker-dealers, includes municipal securities brokers. and factors that affect yield for asset-backed 6 See Letter regarding Investment Company 4 The existing confirmation rule, Exchange Act securities); Exchange Act Release No. 46471 Institute (March 19, 1979, available April 18, 1979). rule 10b–10, would continue to govern broker- (September 6, 2002), 67 FR 58302 (September 13, 7 Rule 10b–10 does not apply to transactions in dealers’ confirmation obligations for transactions in 2002) (related to securities futures products in municipal securities. other securities. futures accounts). 8 17 CFR 239.15A and 274.11A.

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III. Special Request for Comments From the Investment Company Act.10 upon redemption, typically declines Investors Municipal fund securities—which are each year that the investor holds the Brokers may have conflicts of interest popularly known as ‘‘529’’ plans after shares, and eventually disappears when they sell mutual funds and other the section of the Internal Revenue Code entirely. Some mutual funds also use investments. For instance, your broker that governs the federal tax treatment of their assets to pay distribution-related may get paid more if you purchase one those securities—are issued by tuition expenses, including compensation of programs that are sponsored by state broker-dealers in connection with fund over another, or the broker may governments to provide investment distributing fund shares, under plans receive other fees or payments from a vehicles that parents and others can use adopted pursuant to rule 12b–1 under fund for selling its shares. to save for educational expenses.11 the Investment Company Act (‘‘12b–1 We have proposed two new forms that While 529 plan securities differ from fees’’).15 Sales loads and asset-based would require brokers to tell you how mutual fund shares because the states sales charges and service fees reduce the much you must pay when you buy a that issue those securities are not returns that investors earn on their particular fund and how much your registered under the Investment mutual fund investments. Not all broker and the firm will receive for Company Act, municipal fund securities mutual funds are sold subject to front- selling that fund. These two forms are can provide investors with investment end or deferred sales loads or impose designed to provide you with alternatives that are similar to those asset-based sales charges and service information at two points in time— provided by mutual fund shares. fees. either orally or in writing immediately Moreover, the assets that underlie b. Conflicts-of-interest. As discussed before your broker places the order municipal fund securities may be in detail below, broker-dealers that sell (which is also called the ‘‘point-of-sale’’) invested in shares of registered mutual fund shares to customers may and in a written confirmation statement investment companies.12 participate in distribution arrangements after the transaction occurs. The a. Distribution-related costs. Mutual that create conflicts of interest for the purpose of the forms is to give you fund investors may, directly or broker-dealers as well as their enough information so that you can indirectly, incur distribution-related personnel. Those arrangements can give understand what conflicts your broker costs that can reduce their investment broker-dealers a heightened financial and the firm have. That way, when a returns. The type and amount of those incentive to sell particular funds or broker recommends a particular fund, costs often vary among funds and share classes, and therefore may lead a you can assess with full knowledge among share classes issued by the same broker-dealer to provide some groups of whether the investment is better for you fund.13 Some mutual funds issue share funds with heightened visibility and or for your broker. classes that impose sales fees, or loads, access to the broker-dealer’s sales force, We want to know whether the forms on investors when they purchase the or otherwise influence the way that clearly communicate the information fund shares (‘‘front-end’’ sales loads). broker-dealers and their associated you need to make your investment Mutual funds may also sell share classes persons market those funds or share decisions. If not, why not? We further with sales loads that investors must pay classes to customers. Those want to know whether the forms will when they redeem fund shares arrangements therefore pose special provide you with the information you (‘‘deferred’’ or ‘‘back-end’’ sales confirmation disclosure issues. need at the time you need to receive it. loads).14 The amount of the deferred Moreover, some of those arrangements If not, when would you want to receive sales load, generally calculated as the may violate NASD rules, and the failure the information? Finally, we would like lesser of a percentage of the value of the to disclose relevant information about to know what improvements, if any, you initial investment or the account’s value those arrangements—regardless of would make to the forms. whether disclosure specifically is 10 IV. Improved Confirmation Disclosure Open-end management investment companies required by the confirmation rules—also are defined in Section 5(a)(1) of the Investment may violate the antifraud provisions of for Transactions in Mutual Fund Company Act, and unit investment trusts are Shares, Unit Investment Trust Interests defined in Section 4(2) of that Act. the federal securities laws. and 529 Plan Interests 11 The definition of ‘‘municipal fund security’’ As part of those distribution under the rules of the Municipal Securities arrangements, broker-dealers that sell A. Investors Need Better Disclosure Rulemaking Board (‘‘MSRB’’) also encompasses mutual fund shares generally earn sales About Distribution-Related Costs and interests in local government investment pools. This proposal, however, would not apply to broker- fees from the fund’s principal Conflicts dealer transactions involving interests in those investment pools. See Proposed paragraph (f)(12) of 15 Rule 12b–1 permits a fund’s board of directors 1. Types of Distribution-Related Costs rule 15c2–2. to adopt a plan to use fund assets to finance and Conflicts 12 Commission rules and rules of National activities that primarily are intended to result in the This proposal is intended to improve Association of Securities Dealers, Inc. (‘‘NASD’’) sale of the fund’s shares. NASD rule 2830 bars address broker-dealer practices for distributing member broker-dealers from offering or selling investors’ ability to obtain information mutual funds. Commission rules and rules of the securities of investment companies other than about costs and conflicts arising from MSRB address broker-dealer (including municipal variable contracts if annual asset-based sales transactions in mutual fund shares, UIT securities dealer) practices for distributing charges exceed 0.75% of net asset value, or if interests, and municipal fund securities municipal fund securities. annual service fees for ‘‘personal service and/or 13 maintenance of shareholder accounts’’ exceed 9 See Investment Company Act Section 18(f) and used for education savings. Open-end rule 18f–3 thereunder (relating to multiple share 0.25% of net asset value. See NASD rule 2830(b)(8), management investment company classes of open-end investment companies). (b)(9), (d)(2)(E), and (d)(5). That rule also restricts shares and UIT interests are securities 14 Based upon information filed publicly with the NASD members from distributing shares of funds issued by investment companies that are Commission on Form N–SAR, the Commission staff that have excessive front-end or deferred sales estimates that for the one year period between loads. See NASD rule 2830(d). registered with the Commission under September 2002 and August 2003, investors in Mutual fund principal underwriters use deferred open-end investment companies paid more than sales loads in conjunction with rule 12b–1 fees. 9 These proposed rules are written to exclude $6.7 billion in aggregate sales loads, consisting of Usually, the deferred sales load is intended to transactions in exchange-traded funds (‘‘ETFs’’), approximately $4.9 billion in front-end sales loads recover amounts that the principal underwriter even though ETFs technically are open-end and $1.8 billion in deferred sales loads. In addition, advances to a selling broker-dealer to compensate investment companies or unit investment trusts. funds and their affiliates paid about $13 billion in it for mutual fund share transactions if the customer ETF transactions would remain subject to the marketing and distribution payments pursuant to redeems its shares before the underwriter can confirmation requirements of rule 10b–10. 12b–1 plans. recover such amounts through the rule 12b–1 fee.

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underwriter at the time of sale. These types of distribution-related In addition to conflicts of interest at Alternatively, the principal underwriter arrangements may give broker-dealers the firm level, associated persons of may pay the selling broker-dealer sales heightened incentives to market the broker-dealers face conflicts arising fees attributable to a particular sales shares of particular mutual funds, or from financial incentives that promote transaction over time, for as long as the particular classes of fund shares. Those the sale of some shares or share customer holds the shares purchased.16 incentives may be reflected in a broker- classes—or differential compensation.’’ The amount of those sales fees is not dealer’s use of ‘‘preferred lists’’ that Associated persons may receive higher uniform, however, and a broker-dealer explicitly favor the distribution of commissions when they sell shares of a may receive a higher fee for selling a certain funds, or they may be reflected particular fund than they would if they particular dollar amount of shares in other ways, including incentives or sold the same dollar amount of the issued by one fund rather than shares instructions that the broker-dealer shares of another fund.22 They may also issued by another fund, or for selling provides to its managers or its receive higher commissions when they one share class rather than other share salespersons.20 Such incentives create sell a particular class of shares within a classes issued by the same fund and conflicts between broker-dealers’ fund than they would if they sold the available to the customer. financial interests and their agency same dollar amount of another share Broker-dealers also may be paid in duties to customers.21 class within that same fund.23 Other other ways for distributing fund shares, forms of differential compensation may such as through revenue sharing Payments of portfolio brokerage commissions, include a broker-dealer waiving certain payments from a fund’s investment however, are not invariably linked to distribution. fees or reimbursement of certain adviser.17 In some cases, a broker-dealer Some mutual funds may direct portfolio transactions to a particular broker-dealer for expenses ordinarily borne by an may receive payments from a fund or a execution without reference to the broker-dealer’s associated person, when the associated fund’s affiliates that are characterized as success in distributing fund shares. person sells the shares of particular service fees, recordkeeping and transfer Broker-dealers, at times, may also execute mutual funds. Broker-dealers may also fees, seminar sponsorships or other portfolio securities transactions on a principal sponsor sales contests that provide cash basis. In those cases, the firms would be types of payments that ostensibly compensated through mark-ups rather than through compensation to representatives and compensate the broker-dealer for costs commissions. managers for meeting certain sales that it incurs as part of its mutual fund 20 We recently took action against Morgan Stanley goals.24 Associated persons, moreover, distribution activities.18 Broker-dealers DW Inc. in connection with several of those practices, for violations of rule 10b–10 and the funds. Even though revenue sharing is paid to may also be compensated for antifraud provisions of Section 17(a)(2) of the broker-dealers directly by fund investment advisers, distribution through receiving Securities Act. Morgan Stanley entered into special rather than out of fund assets, it is possible that marketing arrangements with several funds, and commissions for portfolio transactions some advisers may seek to increase the advisory was compensated in part through revenue sharing executed on behalf of the fund or fees that they charge the fund to finance those payments and portfolio brokerage commissions. In distribution activities. It is not clear whether that affiliated funds, even though the broker- return, Morgan Stanley placed participating funds has occurred. See U.S. General Accounting Office, dealer may not necessarily execute on preferred lists and otherwise specially promoted Mutual Funds: Greater Transparency Needed in 19 them through its sales system. Morgan Stanley also those transactions. Disclosures to Investors (June 2003) at 39 specially promoted proprietary, or affiliated, funds. (discussing uncertainty about how revenue sharing Moreover, in calculating manager compensation, 16 Spreading the payment of sales fees over time has affected fund fees). Moreover, revenue sharing which it based in part on branch profitability, is the customary method for compensating selling arrangements may prevent some advisers from Morgan Stanley allocated lower overhead costs in broker-dealers for sales of class C mutual fund connection with the sale of proprietary or other reducing their current advisory fees. shares. favored funds than it allocated in connection with We have noted that fund assets would be 17 Revenue sharing arrangements may encompass the sale of less favored funds. As discussed below, indirectly used for distribution ‘‘if any allowance multiple revenue streams. For example, an adviser Morgan Stanley also paid special incentives to were made in the investment adviser’s fee to within a fund complex may give a broker-dealer one registered representatives in connection with the provide money to finance distribution.’’ See set of payments that is linked to the broker-dealer’s sale of proprietary and other favored funds. Morgan Investment Company Act Release No. 16431 (June recent sales of shares issued by that fund complex Stanley’s failure to disclose those practices to 13, 1988) at text accompanying note 124. (which would give the broker-dealer an incentive to customers violated rule 10b–10 and Section 22 If the associated person is paid a fixed sell more shares of that fund complex), together 17(a)(2). See In the Matter of Morgan Stanley DW percentage of the broker-dealer’s fee, then he or she with another set of payments that is linked to the Inc., Securities Act Release No. 8339 (November 17, may earn more to sell one fund instead of another asset-based fees that the adviser earns in connection 2003). when the broker-dealer receives a higher fee for with shares of a fund complex held by customers At the same time, the Commission sanctioned selling the first fund. Also, in some circumstances, of a broker-dealer (which would give the broker- Morgan Stanley under Section 17(a)(2) in an associated person may receive a higher dealer an incentive to keep its customers invested connection with its sale of class B mutual fund percentage of the broker-dealer’s compensation in that fund complex). shares. Morgan Stanley failed to adequately disclose when he or she sells a fund that is favored by the We understand that fund investment advisers certain features that could make class A shares broker-dealer (such as a fund that is affiliated with typically make revenue-sharing payments to selling more attractive to customers than the class B shares the broker-dealer or that pays revenue sharing to the broker-dealers at the rate of between 0.20% and it sold. Also, Morgan Stanley failed to adequately broker-dealer). The latter arrangement was a factor 0.25% of the annual gross sales of shares of a fund follow its compliance procedures governing large in the Commission’s recent action against Morgan complex made by a broker-dealer, and between purchases of class B shares. See id. Stanley, as associated persons whose annual 0.01% and 0.05% of the net asset value of shares The NASD also has sanctioned Morgan Stanley production exceeded $1 million received a 42% of a fund complex held by customers of a broker- for regulatory violations arising from its marketing payout to sell favored products but only a 40% dealer. arrangements on behalf of participating funds. The payout to sell other products. See In the Matter of 18 The payments may be made either to the NASD determined that Morgan Stanley violated Morgan Stanley DW Inc., supra note 20. Associated broker-dealer or to its affiliates. At times those NASD rule 2830(k), which prohibits a member firm persons with lower annual production also received payments may compensate the broker-dealer for from favoring the distribution of particular mutual higher payouts to sell favored products. work that it performs on behalf of the fund, and that fund shares on the basis of brokerage commissions 23 Associated persons may earn more when they the broker-dealer otherwise would not be required to be paid by the fund companies and which also sell class B shares than when they sell the same to perform, such as mailing certain documents prohibits a member firm from allowing sales dollar amount of class A shares of the same fund. (other than the prospectus) to customers. At other personnel from sharing in directed brokerage Because class B shares are not associated with times, those payments may offset the broker- commissions. See NASD, ‘‘Disciplinary and Other breakpoint discounts that can reduce the dealer’s expenses in connection with activities that NASD Actions,’’ December 2003, at D18 (available distribution costs that investors pay, broker-dealers it would be required to perform in any event, such on the Internet at http://www.nasdr.com/pdf-text/ often receive higher sales fees for distributing class as educating personnel and maintaining records. 0312dis.pdf ). B shares. 19 The amount of commissions that a broker- 21 Revenue sharing arrangements not only pose 24 NASD rules prohibit non-cash compensation dealer earns through portfolio brokerage potential conflicts of interest, but also may have the through sales contests for mutual funds and arrangements often is based on its total sales of all indirect effect of reducing investors’ returns by variable products, except under certain conditions. funds issued by that mutual fund complex. increasing the distribution-related costs incurred by Continued

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may receive additional fees in the years chooses to distribute only the municipal disclose the source and amount of after a sale, such as fees that some funds fund securities issued by a particular remuneration that it receives from third pay to broker-dealers for providing state, and does not provide its parties.31 shareholder services.25 Each of those customers with the opportunity to The Commission and its staff have types of arrangements may motivate invest in 529 plans issued by other taken the position, with respect to broker-dealer personnel to promote the states, even though those other plans mutual fund transactions, that a broker- sale of some funds over others. The may have lower loads or lower expense dealer may satisfy its rule 10b–10 funds that are favored by those ratios, or may provide state income tax obligations without providing customers arrangements may include proprietary benefits that are absent from the plans with a transaction-specific document funds that are affiliated with the broker- being offered. that discloses information about loads dealer, or funds whose advisers pay The associated persons of brokers, or third-party remuneration, so long as revenue sharing to the broker-dealer. dealers and municipal securities dealers the customer receives a fund prospectus Differential compensation may give the selling 529 plans may also receive that adequately discloses that associated person an incentive to incentives, such as differential information. This position had its improperly limit the range of mutual compensation, that create conflicts of genesis in a statement by the fund choices presented to customers, or interest for them. Moreover, in contrast Commission when it adopted rule 10b– may affect the associated person’s to NASD rules applicable to the 10. In response to comments related to recommendations. distribution of mutual fund shares, the rule’s disclosure requirement about UITs, which include certain insurance associated persons of brokers, dealers third-party remuneration, the company separate accounts that issue and municipal securities dealers are not Commission suggested that prospectus variable insurance products (i.e., generally precluded from receiving non- disclosure would be an adequate variable annuity contracts and variable cash compensation for selling municipal substitute for confirmation disclosure, life insurance policies),26 are subject to fund securities.27 explaining: similar distribution-related costs and 2. Current Confirmation Disclosure [I]n the case of offerings registered under conflicts. the Securities Act of 1933, the final c. Costs and conflicts related to 529 Requirements for Mutual Funds and Municipal Fund Securities prospectus delivered to the customer should plans. Compensation practices for generally set forth the information required municipal fund securities used for Rule 10b–10 under the Exchange Act by the proviso with respect to source and education savings, or ‘‘529’’ plans, raise requires broker-dealers to disclose amount of remuneration. * * * many of the same issues. Those specific information to their customers In such situations the information securities may be sold subject to loads about securities transactions.28 While specified in the proviso need not be separately set forth in the confirmation.32 that can reduce the returns they the rule generally directs broker-dealers produce. At times, brokers, dealers and to disclose the required information at In other words, the Commission was of municipal securities dealers that or before the completion of each the view that broker-dealer disclosure of distribute municipal fund securities also securities transaction,29 broker-dealers third-party remuneration would be may participate in distribution-related may also disclose the information redundant if the customer received a arrangements that create conflicts of monthly or quarterly in limited prospectus disclosing that interest for them, including revenue situations, such as when a customer has information.33 sharing payments and the use of entered into a periodic plan for The Commission’s staff reflected that portfolio commissions to reward purchasing mutual fund shares.30 The position in a 1979 letter to the distribution. In some cases, a broker, rule requires disclosure of, among other Investment Company Institute, in which dealer or municipal securities dealer information, the identity of the security, the Division of Market Regulation stated the number of shares purchased or sold, that it would not recommend Those rules, however, do not regulate contests that and the price at which the transaction enforcement action against broker- result in cash awards. See NASD Notice to Members was effected. When a broker-dealer acts dealers that did not provide transaction- 99–81 (September 1999). The NASD sanctioned as the customer’s agent, it must also specific disclosure about mutual fund Morgan Stanley for violating the non-cash compensation rules to promote the sale of disclose the amount of the remuneration proprietary mutual funds and selected variable it receives from the customer. For 31 See Rule 10b–10(a)(2)(i)(B) (customer annuities. Prohibited sales contests within the firm agency transactions in which the broker- remuneration) and Rule 10b–10(a)(2)(i)(D) (third offered a variety of rewards, including tickets to dealer also participates in the party remuneration). In the mutual fund context, Britney Spears and Rolling Stones concerts. See third party remuneration generally is paid by the NASD, ‘‘Disciplinary and Other NASD Actions,’’ distribution of the securities, it must fund and its affiliates. Rule 10b–10 also requires October 2003, at D18–D19 (available on the Internet disclosure of the mark-ups and mark-downs that a at http://www.nasdr.com/pdf-text/0310dis.pdf ). 27 In contrast to NASD rules, MSRB rules do not broker-dealer earns on transactions involving a 25 A fund may pay a service fee of up to 0.25% generally bar associated persons from receiving contemporaneous sale and purchase when it acts as to a broker-dealer out of fund assets pursuant to non-cash compensation. The MSRB has noted, a principal for its own account in a transaction, rule 12b–1 plans. See supra note 15. Associated however, that its fair dealing rule and other other than as a market maker. See Rule 10b– persons may receive some of those fees. The customer protection rules do apply to the marketing 10(a)(2)(ii)(A). Commission’s recent action against Morgan Stanley of 529 plans. See Municipal Securities Rulemaking 32 See Rule 10b–10 Adopting Release, supra note also noted that associated persons received a Board, Application of fair practice and advertising 5, at n.41. portion of the ongoing revenue sharing payments rules to municipal fund securities (May 14, 2002). 33 Of course, this applies only to information that fund complexes provided to Morgan Stanley. 28 Rule 10b–10 applies to broker-dealer disclosed in a prospectus that is delivered to See In the Matter of Morgan Stanley DW Inc., supra transactions in all securities, excluding U.S. customers at or before completion of the note 20. Savings Bonds and municipal securities. The MSRB transaction. The requirements of rule 10b–10 26 Although most variable insurance products are has a separate confirmation rule that governs cannot be satisfied via disclosure in a document issued by insurance company separate accounts member transactions in municipal securities, that is not delivered at or before completion of the that are structured as UITs, some are issued by including municipal fund securities. See MSRB rule transaction, such as a statement of additional insurance company separate accounts that are G–15. information (‘‘SAI’’). The SAI is part of a fund’s structured as open-end management investment 29 Rule 10b–10 defines ‘‘completion of the registration statement and contains information companies. Because proposed rules 15c2–2 and transaction’’ by reference to rule 15c1–1 under the about a fund in addition to that contained in the 15c2–3 would apply to transactions involving Exchange Act. See infra note 125. prospectus. The SAI is required to be delivered to interests in UITs and open-end companies, they 30 See Rule 10b–10(a) (general disclosure investors upon request and is available on the would encompass transactions in both types of requirement) and rule 10b–10(b) (periodic reporting Commission’s Electronic Data Gathering, Analysis, variable insurance products. alternative). and Retrieval System.

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loads and related charges, so long as the necessary to inform customers about individual retirement accounts and customer received a prospectus that conflicts of interest. other retirement plans. In addition, ‘‘disclosed the precise amount of the While the Commission has never distribution costs and broker-dealer sales load or other charges or a formula directly addressed the disclosure of conflicts have grown more complex. that would enable the customer to payments to a broker-dealer in the form Since 1980, many funds have offered calculate the precise amount of those of portfolio brokerage commissions, the multiple share classes, including class B fees.’’ 34 same principles apply. Currently, if a shares with deferred sales loads that can The Commission later discussed how prospectus is not delivered at or before have the effect of obscuring the completion of the transaction, or if the Rule 10b–10 disclosure obligations distribution costs borne by investors. prospectus fails to disclose the fact that apply to mutual fund transactions in an Many mature funds continue to rely on the fund pays portfolio brokerage amicus brief filed with the Second rule 12b–1 fees to pay for distribution, commissions to broker-dealers that Circuit in 2000.35 That brief focused on even though those fees were intended participate in distribution, or fails to the adequacy of prospectus disclosure by the Commission to be short-term disclose information about the degree of by broker-dealers that received third- tools for helping funds gather assets. the resulting conflict, then the party remuneration—in the form of rule The increase in the number of mutual transaction confirmation must provide 12b–1 payments from funds and funds has made broker-dealer ‘‘shelf information about the source and space’’ more critical to investment revenue sharing payments from fund amount of those payments.36 companies, leading to revenue sharing investment advisers—in connection In one case before the Second Circuit, and other distribution arrangements that with sweeping customer funds into we viewed the disclosures at issue as quietly compensate broker-dealers for money market accounts. We concluded meeting the requirements of rule 10b– distribution. The growth of funds that the prospectus disclosure at issue 10, but we went on to state: ‘‘We are not affiliated with broker-dealers has also substituted for confirmation disclosure, saying that this is necessarily all the generated special broker-dealer when the prospectuses included the disclosure about these types of fees that marketing incentives to promote the information required to be disclosed by should be required as a matter of distribution of those affiliated Form N–1A, including the maximum 37 policy.’’ We also noted that we had ‘‘proprietary’’ funds. In addition, the rule 12b–1 fees payable by the funds as directed the staff to make development of fund ‘‘supermarkets’’ a percentage of net assets, and noted the recommendations to us about whether sponsored by broker-dealers has led to presence of ‘‘significant amounts’’ of to require new disclosures or to refine related arrangements in which a fund or non-rule 12b–1 payments by the funds’ 38 the existing disclosures. The Second its affiliates compensates broker-dealers investment advisers. In arriving at that Circuit also questioned whether the in ways that are not generally disclosed conclusion, we interpreted the rule 10b– prospectus disclosure at issue to investors. Moreover, the introduction 10 Adopting Release as establishing the adequately placed investors on notice of highly promoted 529 plans has general principle that ‘‘delivery of a about the receipt of those payments and brought many new investors into prospectus containing sufficient 39 any resulting conflicts of interest. The products that themselves invest in disclosure can satisfy a broker-dealer’s rules we propose today address those mutual funds and that are associated obligations under Rule 10b–10.’’ concerns. with similar distribution-related costs Recognizing that ‘‘there is no precise and conflicts. standard as to how much disclosure the 3. Concerns About the Adequacy of Current Disclosure Practices Those changes raise significant Rule currently requires,’’ we went on to concerns about the adequacy of current note that the staff’s 1979 letter, with its The disclosure rules we are proposing disclosure practices. For example, we ‘‘precise amount’’ standard for are designed to respond to the ways in are concerned that some investors may which the mutual fund industry and its prospectus disclosure of loads and misunderstand the costs associated with distribution practices have evolved in related fees, did not apply to third-party purchasing mutual fund shares and 529 the years since the 1977 adoption of rule remuneration because precision was not plan securities because they lack 10b–10 and the staff’s 1979 letter to the transaction-specific confirmation and 34 ICI. See Letter regarding Investment Company point of sale information about loads Institute, supra note 6. That 1979 letter referred During the past quarter century, the both to the agency disclosure and the principal number of mutual fund customers, the and fees. In late 2002, in response to learning disclosure requirements of rule 10b–10. value of mutual fund investments, and Although in 1994 the staff indicated that it that some mutual fund investors did not the number of mutual funds all have intended to withdraw the 1979 letter, the letter receive appropriate volume discounts increased exponentially.40 The public currently remains in effect. The staff was concerned on the front-end sales loads they paid— that confirmations that do not disclose any increasingly has placed retirement transaction charges could mislead customers who savings into mutual funds through commonly known as ‘‘breakpoint might not look to the prospectus for a full discounts’’—NASD, the ICI, and the description of the remuneration. See Letter 36 Securities Industry Association (‘‘SIA’’) regarding Investment Company Institute (March 16, Id. at 10–12, 21, 24–28. 37 convened a task force to recommend 1994). The mutual fund industry commenced Id. at 24. discussions with the staff noting that some mutual 38 See id. industry-wide changes relating to funds impose transaction charges over the duration 39 See Press v. Quick & Reilly, Inc., 218 F.3d 121, breakpoints.41 The task force issued a of or at the end of the investment, and asserted that 129 (2d Cir. 2000). report in July 2003 recommending, disclosing the transaction charges through 40 Industry data indicates that between 1977 and among other changes, that mutual fund prospectus fee tables was more accurate than trying 2002, the number of mutual funds increased from to estimate them on the confirmation at the 477 to 8,256, total fund assets increased from $49 confirmations include front-end sales beginning of the investment. As a result of that billion to $6.4 trillion, and the number of dialogue, the staff decided not to withdraw the shareholder accounts increased from 8.7 million to 41 Mutual funds typically offer discounts on front- letter. 251 million. The magnitude of the changes, end sales loads assessed on class A shares if the 35 See Commission brief, Cohen v. Donaldson, however, is likely greater than what those figures amount of an investor’s investment in the fund Lufkin & Jenrette Securities Corp., reported as Press depict. The earlier figures include data for funds reaches certain pre-determined ‘‘breakpoint’’ levels. v. Quick & Reilly, Inc., 218 F.3d 121 (2d Cir. 2000) that invested in other mutual funds, while the latter Examinations by the Commission staff and self- (No. 97–9159) (‘‘amicus brief’’). The Commission figures exclude that data. See Investment Company regulatory organizations determined that many filed the brief in two separate dockets that were Institute, Mutual Fund Fact Book (43rd ed., 2003) investors did not receive the breakpoint discounts consolidated before the Second Circuit. at 63. to which they were entitled.

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load disclosure.42 The task force also act against the interests of their dealers followed that recommendation, recommended that the Commission staff customers.47 its adoption has not been uniform.50 revisit its 1979 letter to the ICI.43 While Investors also lack information about In September 2003, NASD requested the task force was studying the issue, whether their broker-dealers receive comment on proposed rules to require the Commission also received a revenue sharing or other third-party member firms to disclose certain rulemaking petition on behalf of a remuneration to distribute particular information about revenue sharing and mutual fund customer asking the mutual funds. Prospectus disclosure differential compensation to customers Commission to require broker-dealer does not identify which individual at account opening or, if no account is confirmations to specifically disclose broker-dealers receive revenue sharing, established, at the time the customer the front-end sales loads that customers let alone quantify those arrangements. first purchases shares of an investment incur with mutual fund transactions.44 Yet the magnitude of revenue sharing company.51 Stating that those Our concerns, however, go beyond the payments—estimated in 2001 to be $2 compensation arrangements could adequacy of front-end load disclosure. billion annually 48—suggests that those create conflicts of interest for broker- More complete disclosure also may help arrangements influence the mutual fund dealers and their associated persons, customers understand the costs choices that broker-dealers and their NASD added, ‘‘Disclosure of revenue associated with purchasing fund share representatives present to investors. sharing and differential cash classes that carry deferred sales loads, as Prospectus disclosure, moreover, is not compensation arrangements would well as the potential conflicts of interest designed to inform investors about enable investors to evaluate whether a that broker-dealers and their associated whether their particular broker-dealers registered representative’s particular persons have in connection with the are compensated in other ways for product recommendation was sale of those share classes. For example, distributing fund shares, such as by inappropriately influenced by these when the amount invested reaches receiving commissions for fund arrangements.’’ The Commission will certain breakpoint discount levels, portfolio brokerage transactions. consider the proposal in the event that associated persons of broker-dealers Broker-dealer compensation practices NASD submits it as a proposed rule generally are paid more for selling class related to proprietary funds raise change. We note, however, that NASD’s B shares than for selling shares of other additional disclosure issues. In 1994, a proposal is geared to giving customers classes. Because class A shares typically committee was formed at the request of generalized access to information about carry front-end sales loads while class B the Commission’s Chairman to examine revenue sharing and differential shares do not, some investors may be securities industry compensation compensation at the time the customer inclined to purchase class B shares practices, identify actual and perceived is evaluating potential mutual fund believing that they are cheaper, even conflicts of interest, and identify ‘‘best investments. That particular focus though class B shares generally carry practices’’ for controlling those would complement the disclosures we conflicts. The committee raised a contingent deferred sales loads and propose today—which would improve number of concerns in its 1995 report, higher 12b–1 fees. NASD has issued an disclosure of transaction-specific including concerns about the practice of alert informing investors that, before information about distribution-related offering higher payouts for selling purchasing class B shares, ‘‘you should costs and arrangements that lead to proprietary mutual funds. It determine whether this investment is in conflicts of interest. Investors who have recommended that broker-dealers pay your interest, and not just in the interest access to relevant transaction-specific identical commissions to registered of your broker or adviser who may information about those costs and representatives for selling proprietary conflicts of interest should be better receive higher commissions from the and non-proprietary products within a prepared to scrutinize the adequacy of sale of Class B shares than other classes product category.49 While some broker- the investment choices presented by of fund shares.’’45 In fact, questions their broker-dealers as well as the have been raised about whether class B 47 In one matter, the Commission affirmed a recommendations their broker-dealers shares ever would be appropriate for NASD disciplinary action against an associated make.52 most investors.46 Recent enforcement person of a broker-dealer who placed a customer actions have underscored how those into class B shares of a mutual fund instead of the more appropriate class A shares. The associated representatives] sell proprietary mutual funds types of compensation arrangements person testified that he generally recommended that instead of funds of a similar class managed by produce conflicts of interest that lead his clients purchase class B shares because he outside investment companies. (Proprietary funds associated persons of broker-dealers to received higher commissions for selling that class. are those created and/or managed by the firm.) This The Commission affirmed the NASD’s conclusion differentiation raised the question: Is the [registered that the associated person violated NASD suitability representative] rendering objective advice or simply 42 ‘‘Confirmations should reflect the entire requirements and standards of conduct maximizing commission income?’’ percentage sales load charged to each front-end load requirements. See In the Matter of Wendell D. Report of the Committee on Compensation mutual fund purchase transaction. This information Belden, Securities Exchange Act Release No. 47859 Practices (April 10, 1995) at 7–8 (available at http:/ would enable investors to verify that the proper (May 14, 2003). /www.sec.gov/news/studies/bkrcomp.txt). The charge was applied.’’ Report of the Joint NASD/ In another matter, the Commission sanctioned a committee was chaired by Daniel Tully of Merrill Industry Task Force on Breakpoints (July 2003) at broker-dealer for failing to adequately supervise an Lynch & Co., and its report commonly is known as 10 (footnote omitted) (‘‘Task Force Report’’) associated person who inappropriately placed the ‘‘Tully report.’’ (available at http://www.nasdr.com/ investors into class B shares to generate higher 50 _ As discussed above, Morgan Stanley had a breakpoints report.asp). commissions. See In the Matter of Prudential practice of paying associated persons a higher 43 See id. Securities, Inc., Securities Exchange Act Release percentage payout for selling proprietary funds or 44 See Letter to Jonathan Katz, Secretary, No. 48149 (July 10, 2003). other funds that were favored by the firm. See In Commission, from Donna Matheney, Vice As discussed above, we found that Morgan the Matter of Morgan Stanley DW Inc., supra note President, Joe Becks & Associates, Inc., January 22, Stanley violated the antifraud provisions of Section 20. This was not a unique situation, as other broker- 2003. The petition was written on behalf of a 17(a)(2) of the Securities Act by placing customers dealers also provide associated persons with higher company profit sharing plan that was invested in into class B shares without adequately disclosing percentage payouts for selling proprietary funds. mutual funds. information about the relative costs of class A and 51 See NASD Notice to Members 03–54 45 See NASD Investor Alert, ‘‘Class B Mutual class B shares. See In the Matter of Morgan Stanley (September 2003). Fund Shares: Do They Make the Grade?’’ (June DW Inc., supra note 20. 52 The SIA recently submitted suggestions to the 2003). 48 See ‘‘How high can costs go?,’’ Institutional staff for amending rule 10b–10 to provide 46 See ‘‘Why B Shares Deserve to Get an ‘F’: These Investor, May 2001 at 56. additional disclosure about revenue sharing and Broker-Sold Funds are a Bad Deal,’’ Wall Street 49 ‘‘Of particular concern is the practice of firms differential compensation related to purchases of Journal, July 2, 2003 at D1. offering higher payouts when [registered mutual fund shares. See Letter from Stuart

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B. New Rule and Proposed Amendments preliminary note also would state that interpreted rule 10b–10 to limit Regarding Cost and Conflict Disclosure rule 10b–10 would continue to set forth disclosure obligations in a way that is the confirmation requirements that inconsistent with our intent.55 To clarify 1. Proposed Rule 15c2–2 apply to broker-dealer transactions in our intent, the preliminary note to To provide investors with adequate other securities. More generally, as is proposed rule 15c2–2 would state that access to information regarding the costs the case under current law, disclosure the confirmation disclosure of their investments, as well as the provided pursuant to the proposed rules requirements are not determinative of, conflicts of interest their broker-dealers would not derogate from a broker- and do not exhaust, a broker’s, dealer’s face, the Commission is proposing a dealer’s other legal obligations to or municipal securities dealer’s new rule to require brokers, dealers and customers, such as in the context of disclosure obligations under the municipal securities dealers to provide making recommendations or suitability antifraud provisions of the federal their customers with certain information determinations. securities laws or under any other legal in connection with certain transactions a. No safe harbor from antifraud requirements.56 in mutual fund shares, UIT interests and provisions or other legal requirements. b. Securities transactions covered. 529 plan shares. Because those Proposed rule 15c2–2, like rule 10b–10, The disclosure requirements of securities have special distribution and would not function as a safe harbor for proposed rule 15c2–2 would apply to compensation practices, the non-disclosure that constitutes transactions by brokers, dealers and Commission is proposing to address deception or that otherwise violates a municipal securities dealers 57 on behalf those disclosure requirements in a new securities firm’s legal obligations. of customers in ‘‘covered securities.’’ rule, rather than in rule 10b–10. A Rather, it would provide a minimal Proposed paragraph (f)(6) of rule 15c2– broker, dealer or municipal securities benchmark for disclosing certain costs 2 would define the term ‘‘covered dealer that misstates information in a and conflicts related to the distribution security’’ as: (i) Any security issued by confirmation delivered pursuant to of these securities, in a manner that an ‘‘open-end company,’’ as defined by proposed rule 15c2–2 with an intent to would be accessible to investors and section 5(a)(1) of the Investment mislead may be subject to liability that could fit on a single piece of paper. Company Act, that is not traded on a under the antifraud provisions of In setting forth the minimum level of section 10(b) and rule 10b–5. disclosure, the proposed rule also 55 The Second Circuit, in Press v. Quick & Reilly, Proposed rule 15c2–2 would retain would not preclude additional Inc., 218 F.3d 121 (2d Cir. 2000), expressed the much of the disclosure framework of view that the confirmation requirements of rule disclosures, as appropriate. While we 10b–10 also could determine which information is rule 10b–10, while also providing believe the information required to be material under the antifraud standards of rule 10b– customers of brokers, dealers and disclosed under the proposed rule is 5 under the Exchange Act. The court reasoned that municipal securities dealers with material to investors, there may be other the Commission ‘‘has decided precisely’’ what targeted cost and conflict information disclosure was needed with regard to conflicts of information that is material for purposes interest arising from third-party payments to broker- that is relevant to purchases and sales of alerting investors about the costs of dealers, and concluded that ‘‘we will not of those securities.53 Accordingly, the these transactions and the conflicts undermine the SEC’s interpretation of its regulation preliminary note to proposed rule 15c2– raised by them.54 That is true even in by requiring even greater disclosure about that 2 would explain that the rule requires conflict of interest under the general antifraud instances where the confirmation rules provisions of Rule 10b–5.’’ Id. at 131–32. We brokers, dealers and municipal specifically address the categories of recognize the importance of the principle that securities dealers to provide specified information at issue, but do not require guided the court. That principle, however, is not information in writing to customers at disclosure of the information in what we intended when we adopted rule 10b–10. or before completion of a transaction in Even if a confirmation rule specifically addresses a question. particular practice, a broker, dealer or municipal certain investment company securities Accordingly, we propose to make that securities dealer could provide enough disclosure or municipal fund securities. The point explicit in the preliminary note to to satisfy that rule, but nonetheless violate the proposed rule 15c2–2. Currently, the antifraud provisions of the securities laws through its omission of material information to its customer Strachan, Chair, Investment Company Committee, preliminary note to rule 10b–10 SIA, to Paul Roye, Director, Division of Investment in a particular transaction or under particular Management, Commission, October 31, 2003. This explains that the confirmation arrangements. When we adopt confirmation rules, letter will be available in the public comment file. disclosure requirements do not exhaust we cannot consider all information that will be The SIA recommends that, when applicable, a firm’s obligation under the general material in a particular transaction, and we do not determine that additional information is not confirmations should include a statement antifraud provisions of the federal indicating that associated persons may have material under the antifraud provisions. The received additional compensation in connection securities laws to disclose additional confirmation rules cannot account for the variety of with the purchase. The SIA further suggests that information to a customer at the time of conflicts that are encompassed by the antifraud when a broker-dealer has received a cash payment the customer’s investment decision. We provisions. See SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180, 195 (1963) (noting that ‘‘as a condition for inclusion of the investment are aware, however, that a court has company on a preferred or select sales list, or Congress intended ‘‘securities regulation ‘enacted similar grouping, in connection with any other sales for the purpose of avoiding frauds’’’ to be construed program, or as a reimbursement of advancement of 54 While the confirmation rules require delivery ‘‘not technically and restrictively, but flexibly to expenses,’’ then the confirmation should contain a of information at or before a securities transaction, effectuate its remedial purposes’’). Similarly, with statement indicating that it ‘‘may have received a the antifraud provisions of the securities laws at regard to other courts that have looked to rule 10b– cash payment relating to the distribution.’’ In either times require a broker, dealer or municipal 10 in a more general context, we emphasize that case, the SIA suggests that the disclosure should securities dealer to disclose particular information rule 10b–10 was not intended to limit a broker- also indicate that the customer can obtain ‘‘further before a securities transaction. See Ettinger v. dealer’s obligation to disclose information, or information’’ by calling a toll-free or collect Merrill Lynch Pierce Fenner & Smith, Inc., 835 F.2d otherwise to limit a broker-dealer’s responsibilities telephone number or by visiting a website. As 1031, 1036 (3d Cir. 1987); Krome v. Merrill Lynch to its customers. See, e.g., Orman v. Charles Schwab discussed below, we are taking a different & Co., 637 F. Supp. 910, 916 (S.D.N.Y. 1986). & Co., 179 Ill. 29 282, 688 N.E.2d 620 (Ill. 1998), approach. Moreover, the Commission recently sanctioned cert. denied, 523 U.S. 1075 (1998). 53 While Exchange Act rule 10b–10 does not Morgan Stanley for violating certain antifraud 56 As discussed below, we also propose to amend apply to transactions in municipal securities, provisions of the Securities Act with respect to its the preliminary note to rule 10b–10 to be consistent transactions in 529 plan interests nonetheless pose sale of class B mutual fund shares, based in part on with this language. cost and conflict concerns similar to those a failure to disclose material information about 57 As the preliminary note to the rule would make associated with transactions in mutual fund shares differences between class B and class A shares. The clear, municipal securities brokers would be subject and UIT interests. Including municipal fund Commission did not sanction Morgan Stanley for to the proposed rule because they are a type of securities within the ambit of rule 15c2–2 therefore those omissions under rule 10b–10. See In the ‘‘broker.’’ See Exchange Act Section 3(a)(31) would promote a consistent disclosure framework. Matter of Morgan Stanley DW Inc., supra note 20. (definition of ‘‘municipal securities broker’’).

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national securities exchange; 58 (ii) any revenue sharing (e.g., revenue sharing clear and that provides useful context to security issued by a ‘‘unit investment with respect to the underlying funds of investors.62 Thus, paragraph (a) of trust,’’ as that term is defined by Section variable annuity contracts and variable proposed rule 15c2–2 would require a 4(2) of the Investment Company Act, life insurance policies), commenters are broker, dealer or municipal securities other than an ETF that is traded on a invited to address the extent to which dealer to make the required disclosures national securities exchange or facility revenue sharing and other arrangements (other than disclosures subject to the of a national securities association, or a that raise conflict of interest issues are periodic disclosure alternative, unit investment trust that is the subject not associated with the distribution of discussed below) in a manner that is of a secondary market transaction; 59 UIT interests. ‘‘consistent with Schedule 15C’’ under and (iii) any ‘‘municipal fund security.’’ • The Commission also seeks the Exchange Act. Proposed Schedule Proposed paragraph (f)(12) of rule 15c2– comment about whether proposed rule 15C, which is set forth at Figure 1, 2 would define a ‘‘municipal fund 15c2–2 should also apply to other types would establish the format for security’’ as any municipal security that of investment company securities, such disclosing the required information to is issued pursuant to a qualified state as ETF shares. Commenters moreover investors. While much of the form tuition program as defined by Section are invited to address whether the rule would be standardized, we have 529 of the Internal Revenue Code [26 also should apply to closed-end included flexibility to accommodate U.S.C. 529], and that is issued by an investment companies generally, or to implementation costs as well as the fact issuer that, but for the application of particular closed-end companies such as that confirmations are business forms Section 2(b) of the Investment Company ‘‘interval funds’’ that make regular traditionally utilized by brokers, dealers Act, would constitute an investment repurchase offers.61 Do transactions in and municipal securities dealers for company within the meaning of Section closed-end company shares at those their own business purposes. Proposed 3 of the Investment Company Act.60 times raise the types of costs or conflicts Schedule 15C has six main parts: A, • The Commission requests comment that warrant proposed rule 15c2–2’s general information; B, distribution-cost on the proposed definition of ‘‘covered disclosure requirements? information; C, broker-dealer security,’’ including whether the • We also request comment about compensation information; D, definition appropriately encompasses whether persons other than brokers, differential compensation information; all the types of securities having dealers or municipal securities dealers E, breakpoint discount information, and distribution practices that warrant also should be required to deliver F, explanations and definitions. targeted confirmation disclosure of confirmations to investors pursuant to Proposed paragraph (f)(4) of rule 15c2– information about distribution-related proposed rule 15c2–2. Commenters are 2 would provide that the term costs and conflicts. invited to discuss whether other persons ‘‘consistent with Schedule 15C’’ means • The Commission seeks comment on that participate in the distribution of using Schedule 15C, or using a similar whether proposed rule 15c2–2 should covered securities—such as banks—are layout of disclosure so long as: (i) All encompass transactions in all UIT subject to the same or similar conflicts information specified in Schedule 15C interests, given the differences in of interest as brokers, dealers and is set forth in the confirmation; (ii) distribution practices between UIT municipal securities dealers. information specified in Sections B interests and other securities within the Commenters also are invited to discuss through F of Schedule 15C (if scope of the proposed rule. While some whether the Commission should applicable) is included with no change, UIT interests are associated with propose rules to require those other including the use of bold print for data persons to disclose confirmation items printed in bold in Schedule 15C, 58 That definition excludes securities issued by information on or before the completion and in the order set forth in Schedule exchange traded funds (‘‘ETFs’’). Although ETFs are of such transactions. 15C; and (iii) information specified in open-end management investment companies or • Section A of Schedule 15C is displayed unit investment trusts, they do not present the same In addition, the Commission disclosure concerns as other open-end investment requests comment on whether a prominently. companies or UITs. Rather then being sold and transitional period is necessary to make Proposed Schedule 15C would not redeemed through retail transactions, large blocks adjustments necessary to deliver only provide the format for disclosing of ETF shares are created and redeemed through the quantitative information about a exchange of large blocks of the underlying confirmations that comply with securities. Retail investors then can buy or sell ETF proposed rule 15c2–2. transaction, but also would provide shares on the secondary market. Broker-dealers that c. Schedule 15C and the form of definitions and explanatory information effect retail transactions in ETFs generally charge disclosure. Proposed rule 15c2–2 would intended to help make the quantitative commissions that are disclosed on the information more useful to investors. By confirmations. Moreover, we do not believe that require brokers, dealers and municipal ETFs pose the same type of potential conflicts of securities dealers to disclose a range of supplementing the required disclosures interest that are associated with traditional open- cost and conflict information arising with explanations of the meaning of 63 end fund shares. We therefore do not believe it is from transactions in covered securities. terms such as net asset value, revenue necessary to include ETFs within the scope of the To be effective, this information would sharing and portfolio brokerage rule. commissions, and by explaining why 59 Broker-dealers may buy and sell UITs on the have to be disclosed in a manner that is secondary market, following their initial investors may wish to scrutinize distribution. Because proposed rule 15c2–2 focuses 61 In general, shares of closed-end investment information about revenue sharing and on disclosure of costs and conflicts when covered companies are distributed through one-time differential compensation, proposed securities are distributed, we would except underwritings, rather than on an ongoing basis. The Schedule 15C is intended to help give secondary market transactions in UITs from the broker-dealers that distribute the shares are investors the tools they need to ask the rule’s scope. compensated through the receipt of underwriting 60 Section 2(b) of the Investment Company Act fees, and practices such as revenue sharing may not excludes the United States, states and certain other be present. As a result, transactions in those 62 As discussed below, certain arrangements that government-related instrumentalities and securities generally may not raise the same raise cost and conflict concerns raise special corporations from the scope of that Act. disclosure issues as transactions in open-end disclosure challenges, particularly with regard to Because our proposed definition of ‘‘municipal investment companies. Some closed-end disclosure of deferred sales loads, revenue sharing fund security’’ does not encompass interests in investment companies, however, may offer to and portfolio brokerage commissions. local government investment pools, it would differ repurchase their shares on a periodic basis. See, 63 When we use the term ‘‘net asset value’’ in this from the way the term is defined in MSRB rule D– e.g., Investment Company Act section 23(c) and rule release, it includes ‘‘accumulation unit value’’ in 12. 23c–3 thereunder. the case of variable insurance products.

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right questions and to make informed customer purchase or sale of, any number of shares bought or sold decisions. Attachments 1, 2 and 3 to this covered security unless the broker, multiplied by the transaction price— proposal set forth examples of dealer or municipal securities dealer would help safeguard against confirmations that are consistent with complies with the requirements set forth misunderstandings about the value of Schedule 15C. in paragraphs (b), (c), (d) and (e) of the the transaction. Confirmations already • We are not at this time proposing a rule. Paragraph (b) would set forth typically contain information about the form for disclosures made pursuant to general disclosure requirements under dollar value of the transaction, together proposed rule 15c2–2’s periodic the rule. Paragraph (c) would set forth with the price of the shares and the disclosure alternative. Because of the additional disclosures that customers number of shares bought or sold. variance in the types of transactions that shall receive when they purchase Proposed paragraph (b)(5) of rule could be disclosed pursuant to this mutual fund shares, UIT interests and 15c2–2 would require disclosure of any alternative, we do not believe that a municipal fund securities, because commission, markup or other standardized disclosure form would be purchase transactions implicate the remuneration the broker, dealer or appropriate. We request comment, costs and conflicts associated with the municipal securities dealer will receive however, on whether standardized distribution of these securities. from the customer in connection with disclosure should be required with Paragraph (d) would set forth alternative the transaction. Rule 10b–10(a)(2)(i)(B) respect to periodic disclosures. If so, requirements for periodic reporting. already requires disclosure of should the format follow Schedule 15C? Paragraph (e) would set forth the remuneration from customers. This In the event a customer invests in requirement to disclose median remuneration is distinct from dealer multiple securities, including mutual information and comparison ranges for concessions and other types of sales fees fund shares, UIT interests and 529 plan the types of information required under that a broker, dealer or municipal securities, should the information paragraphs (b), (c) and (d). securities dealer may receive from the pertaining to each be in a separate i. General disclosure requirements. fund or its primary distributor. section? Alternatively, should there be Proposed paragraphs (b)(1) and (b)(2) of Remuneration from customers also is separate forms for each category of rule 15c2–2 would require disclosure of distinct from any sales load that the investment? Commenters are invited to the date of the transaction, and the customer may pay in connection with a send prototype forms reflecting their issuer and class of the covered security. transaction. Both of those would be view. disclosed separately.65 Under proposed • Those requirements are similar to the The Commission also requests requirements of rule 10b–10(a)(1). While paragraph (b)(5), a broker, dealer or comment on whether proposed rule 10b–10(a)(1) does not specifically municipal securities dealer often would Schedule 15C is an appropriate template mention share class, disclosure of class, not be required to disclose any for disclosing information to customers. when applicable, is necessary to information because the firm would The Commission also requests comment identify the security. receive all of its compensation from the on whether disclosure should be Proposed paragraph (b)(3) of rule issuer or distributor of the covered required to be in the exact form of 15c2–2 would require disclosure of both security, or other third parties, rather proposed Schedule 15C, rather than the net asset value of the shares or units than directly from the customer. merely consistent with it. and, if different, their public offering Proposed paragraph (b)(5) would require • The Commission further requests price.64 Rule 10b–10(a)(1) only requires separate disclosure or commissions or comment on whether it is appropriate disclosure of price. Fund share classes other compensation from the customer, for the proposed form of Schedule 15C that charge front-end sales loads are however, when a broker, dealer or to combine quantitative information sold to investors at a public offering municipal securities dealer, such as a with explanatory and definitional price that exceeds the net asset value by fund ‘‘supermarket,’’ charges its information. Commenters are invited to the size of the load. Providing customers customer a commission or service fee address the issue of whether the 66 with information about both price and for purchasing a fund. inclusion of both types of materials may Proposed paragraph (b)(6) of rule net asset value would help them verify conflict with the business purposes that 15c2–2 would require disclosure, for whether they are obtaining the benefit of confirmations fundamentally address. any transaction in which a customer any applicable breakpoints, and would Commenters also are invited to discuss make the costs associated with front-end whether there are preferable alternatives 65 Proposed paragraph (c)(4) of rule 15c2–2, sales loads more transparent in general. for providing explanatory and discussed below, would require disclosure of dealer Proposed paragraph (b)(4) of rule concessions and other types of sales fees received definitional information that would 15c2–2 would require disclosure of the from the issuer, its agent or primary distributor, or permit investors to fully use the number of shares of a covered security others. Brokers, dealers or municipal securities information set forth in the dealers would not receive those fees directly from purchased or sold by the customer. It confirmation. customers, although the fees may be funded by also would require the total dollar sales loads paid by customers. d. General and purchase-specific Proposed paragraphs (c)(1) and (c)(2) of rule disclosure requirements. As outlined amount paid or received in the transaction and the net amount of the 15c2–2, also discussed below, would require above, the disclosure requirements of disclosure of front-end and deferred sales loads that proposed rule 15c2–2 in large part are investment bought or sold in the the customer would incur in connection with the based on existing rule 10b–10, with transaction, which would be equal to transaction. 66 In some cases, a broker, dealer or municipal modifications to alert customers to the number of shares or units bought or sold multiplied by the net asset value of securities dealer itself may impose a special fee on targeted information about the special a customer that sells a mutual fund share shortly cost and conflicts raised by transactions those shares or units. Rule 10b–10(a)(1) after purchase, to discourage short-term trading. in mutual fund shares and municipal requires disclosure of the number of Paragraph (b)(5) would not require disclosure of shares. Specific disclosure of the dollar that type of fee at the time of purchase, unless the fund securities. amount and timing of the fee is reasonably Paragraph (a) of proposed rule 15c2– value of the transaction—equal to the foreseeable to the firm at the time of purchase (such 2 would provide that it is unlawful for as because the broker, dealer or municipal 64 any broker, dealer or municipal This discussion’s references to ‘‘share’’ and securities dealer is aware of the customer’s intent ‘‘per-share’’ information also apply to ‘‘unit’’ and to sell). This paragraph, however, would require securities dealer to effect any customer ‘‘per-unit’’ information connected to transactions disclosure of that type of fee when it is incurred at transaction in, or to induce any involving UITs. the time of the subsequent sale.

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sells a covered security, of the amount component, such as variable life together with information about the of any deferred sales loads incurred by insurance policies.70 potential relevance of breakpoint the customer. Rule 10b–10 does not • Commenters may also wish to discounts. Specifically, proposed explicitly require that disclosure, discuss whether all of these proposed paragraph (c)(1)(i) would apply if the although rule 10b–10 does require general disclosure requirements are customer will incur a sales load at the disclosure of price, and the deferred appropriate to transactions in variable time of sale, and would require sales load charged to a customer at the annuities. Commenters are invited to disclosure of information about the time of sale does affect the effective discuss any issues they believe are availability of breakpoints as reflected price that the customer receives. relevant to the application of proposed in Schedule 15C with regard to the Disclosure of the deferred sales loads rule 15c2–2 to variable insurance covered security, including a statement that customers incur when they sell products, as well as any modifications about what is the applicable sales load their shares would make those they believe could improve the that is set forth in the prospectus, in distribution costs more transparent.67 proposed rule’s effectiveness as applied light of any breakpoint discount and the Proposed paragraph (b)(7) of rule to variable insurance products. value of the securities position. In 15c2–2, when applicable, would require Specifically, commenters may wish to determining the value of the position disclosure of the fact that a broker, address whether alternative or that may be subject to a breakpoint dealer or municipal securities dealer is additional disclosure requirements discount, the broker-dealer should not a member of the Securities Investor would provide investors with more consider net asset value, public offering Protection Corporation (‘‘SIPC’’), or that useful information for transactions in price, historic cost or any other the broker, dealer or municipal variable insurance products. In measurement that reflects the covered securities dealer clearing or carrying the addition, we invite comment on security’s particular method of customer account is not a member of whether to use a single confirmation for providing breakpoint discounts. This SIPC.68 That disclosure would not be transactions in both the contract or proposed paragraph therefore requires required, however, if the customer policy and the underlying funds. disclosure not only of the sales load sends funds or securities directly to, or Commenters should address whether actually incurred at the time of receives funds or securities directly such a single confirmation is purchase, but also the sales load that from, the issuer or its transfer agent, appropriate under the federal securities should have been charged based on the custodian, or other designated agent that laws. availability of breakpoint discounts.72 ii. Additional Disclosures For is not an associated person of the Purchases. Proposed rule 15c2–2(c) broker, dealer or municipal securities would require additional disclosures differences. Proposed rule 15c2–2 would require dealer, and if that other person would disclosure of the load as a percentage of the net when customers purchase covered provide disclosure on behalf of the amount invested in the transaction, regardless of securities. that rounding practice. Attachment 1 illustrates the broker, dealer or municipal securities (a) Cost disclosure. Proposed practical impact of the rounding practice. The front- dealer. This would be consistent with paragraph (c)(1) of rule 15c2–2 would end sales load in that example is 4.0% of the public offering price. Rounding, however, causes the sales the disclosure requirement of rule 10b– require disclosure of the amount of any 10(a)(9).69 load charged on that $8,000 purchase to equal sales load that the customer has $321.18, rather than $320. The impact of the • The Commission requests comment incurred or will incur at the time of rounding practice can be more significant when net on whether these proposed general purchase, expressed in dollars and as a asset value is relatively low. 72 disclosure requirements would provide 71 Broker-dealers who sell fund shares to retail percentage of the net amount invested, customers must disclose breakpoint discount customers with adequate information information to their customers and must have about transactions in covered securities. 70 We note that customers who purchase a procedures reasonably designed to ascertain Commenters particularly are invited to variable life insurance policy will buy an insurance information necessary to determine the availability discuss whether all of these proposed component as well as make an investment, and that and appropriate level of breakpoints. A failure to do the investment component initially may be so can result not only in the customer being general disclosure requirements are relatively small. That would be reflected in deprived of a benefit to which he or she is entitled, appropriate to transactions in securities disclosure of net amount invested. but also in the broker-dealer and representative that have a substantial insurance 71 The fee table set forth in the front of a fund receiving increased commissions at the customer’s prospectus expresses front-end sales loads as a expense. See In the Matter of Application of Harold percentage of the offering price, pursuant to Item 3 R. Fenocchio for Review of Disciplinary Action 67 Proposed paragraph (c)(2) of rule 15c2–2, of Form N–1A, which governs prospectus content. Taken by NASD, 46 SEC 279 (1976) (registered discussed below, would separately require A separate table in the prospectus expresses the representatives had a responsibility to make certain prospective disclosure, in the confirmation, of the front-end sales loads as a percentage of both the that a letter of intent was filed with the mutual fund potential amounts of the deferred sales load that the offering price and the net asset value, pursuant to or, at the very least, to inform the clients of their customer may incur when he or she later sells the Item 8(a)(1) of Form N–1A. The differences between rights of accumulation). Because of the large shares. Proposed paragraph (b)(6), in contrast, those two amounts is significant. For example, a number of mutual funds offering different discounts would require disclosure of deferred sales loads front-end sales charge that equals 5.75% of the and employing different criteria for determining actually incurred at the time of sale. public offering price would equal approximately breakpoint eligibility, many broker-dealers have 68 SIPC is a private-sector, nonprofit membership 6.10% of net asset value. We are proposing to experienced operational challenges and other corporation that Congress created under the amend the prospectus fee table to require disclosure difficulties in assuring that customers consistently Securities Investor Protection Act of 1970 to help of loads as a percentage of net asset value. See infra receive the applicable discounts. Nevertheless, each protect customers of failed broker-dealers. section VI. broker-dealer is responsible for exercising due care, Generally, all broker-dealers registered with the We also note that industry practice is to round based on information reasonably ascertainable by Commission must be members of SIPC. If a broker- the public offering price to two decimal places the broker-dealer, to provide the appropriate dealer fails and is unable to meet its obligations to when calculating the number of shares purchased, breakpoint discounts. customers, SIPC steps in as quickly as possible and, and to round the number of shares purchased to Part E of Attachment 1, which illustrates a within certain limits, returns cash and securities to three decimal places. That rounding practice can confirmation for a transaction in class A shares with customers. Broker-dealers who sell only shares of lead to an actual front-end sales load as a a front-end sales load, states the front-end sales load mutual funds are exempt from the requirement to percentage of gross amount invested or net amount set forth in the prospectus. Note that the $8,000 be a member of SIPC. invested that is higher or lower than the sales load purchase in that example is entitled to a breakpoint If disclosure of SIPC membership is adopted, it disclosed in the prospectus as a percentage of discount. This could be because the current may be placed in the part A (general information) offering price or net asset value. See infra note 154 purchase should be considered in conjunction with of Schedule 15C. and accompanying text. Accordingly, as discussed other purchases by the investor or the investor’s 69 We are proposing conforming changes to rule below, the Commission is proposing prospectus family under rights of accumulation, or because it 10b–10. disclosure requirements to address these is subject to a letter of intent.

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Alternatively, proposed paragraph pay to a broker, dealer or municipal information about the maximum (c)(1)(ii) would apply if the customer securities dealer.75 Providing customers amount of the load expressed in dollars. will not incur a sales load at the time with information about the amount of Proposed paragraph (c)(2) also would of sale, and would require disclosure of the sales load they pay when they require disclosure of the maximum information about the availability of purchase covered securities would deferred sales load as a percentage of breakpoints as reflected in Schedule enable them to more effectively monitor net asset value at the time of purchase 15C with regard to a different class of potential breakpoint discounts and or sale, as applicable.80 This not only the covered security, including a would make the impact of distribution would improve the transparency of statement of the sales load that the costs generally more transparent. distribution costs, but also would customer would have incurred at the Moreover, brokers, dealers and promote balanced comparisons between time of sale if the transaction had been municipal securities dealers are well the distribution costs associated with in that different class of the covered positioned to provide load information front-end load share classes and those security. In other words, for transactions to customers on a transaction-by- associated with deferred sales load in share classes without a front-end transaction basis. Confirmation share classes. sales load, the proposed paragraph disclosure should make this information Proposed paragraph (c)(3) of rule would require disclosure of information more readily accessible to customers, 15c2–2 would require disclosure of any about the sales load that would have rather than expecting them to turn to a asset-based sales charges and service been charged had a share class with a prospectus to calculate the amount of fees paid in connection with the front-end load been purchased.73 the load paid.76 customer’s purchase of covered Proposed paragraph (f)(17) of rule Proposed paragraph (c)(2) to rule securities. Proposed paragraph (f)(1) of 15c2–2 would define ‘‘sales load’’ to 15c2–2 would require disclosure of the rule 15c2–2 would define ‘‘asset-based have the meaning set forth in Section potential amount of deferred sales sales charges’’ as all asset-based charges 2(a)(35) of the Investment Company loads 77 (other than a deferred sales load incurred in connection with the Act.74 Proposed paragraph (f)(13) would of no more than one percent that expires distribution of a covered security, paid define ‘‘net amount invested’’ to mean no later than one year after purchase, by the issuer or paid out of assets of the price paid to purchase the covered when no other sales load would be covered securities owned by the issuer. securities less any applicable sales incurred).78 We recognize that broker- roposed paragraph (f)(2) of rule 15c2–2 loads. Proposed paragraph (f)(18) of rule dealers would rarely, if ever, know in would define ‘‘asset-based service fee’’ 15c2–2 would define ‘‘securities advance when an investor may redeem as all asset-based amounts paid for position’’ to mean the value of the those shares, and therefore would personal service and/or the maintenance purchase of covered securities; the value generally not be able to disclose the of shareholder accounts by the issuer, or of securities that are subject to rights of specific amount of a deferred sales load. paid out of assets of covered securities accumulation under the terms of the Investors nonetheless have an interest in owned by the issuer. Those terms would prospectus with respect to the covered seeing transaction-specific information encompass rule 12b–1 fees and any security or a related class of the covered about the potential cost of deferred sales similar types of distribution or service security, to the extent known by the loads. Deferred sales loads cannot fees incurred by issuers. Those terms, broker, dealer or municipal securities exceed a specified percentage of the net moreover, would be broad enough to dealer, including the value of such asset value or the offering price at the require disclosure when the issuer of securities purchased in other accounts time of purchase.79 In practice, a the covered security itself does not or by other persons; and the value of deferred sales load may equal the lesser directly pay these fees, but instead any such securities that are the subject of a specified percentage of the net asset invests in other covered securities that of letters of intent that may be value at the time of purchase ‘‘which incur those fees.81 We recognize that considered in computing a breakpoint can be calculated as a dollar amount by because the amount of rule 12b–1 or with respect to the covered security or multiplying that percentage by the net similar fees would be linked to net asset a related class of the covered security. asset value and the number of shares value, a broker, dealer or municipal As discussed above, any sales load purchased ‘‘or a specified percentage of securities dealer would rarely, if ever, that an investor may pay to a fund’s the net asset value at the time of sale. know in advance what amount of those principal underwriter is distinct from Accordingly, proposed paragraph (c)(2) fees would be attributable to the shares the commission that the investor may would require the broker, dealer or purchased in a particular transaction. municipal securities dealer to disclose, This amount could be particularly 73 Part E of Attachments 2 and 3, which illustrate on a year-by-year basis for as long as the uncertain because a fund’s board of confirmations for transactions in class B shares with deferred load may be in effect, directors may later determine not to a deferred sales load, state what would have been the front-end sales loads associated with the renew the fund’s rule 12b–1 plan. The 75 purchase of class A shares of that dollar amount. An investor who pays a sales load often will The $8,000 purchases in those examples would not have to separately pay a commission. In some 80 Attachment 2 depicts confirmation disclosure have been entitled to breakpoint discounts on front- circumstances, however, such as certain of a transaction in a fund share that carries a end sales loads. As noted, brokers, dealers and transactions through a broker-dealer’s mutual fund deferred sales load that equals a specified municipal securities dealers must have procedures ‘‘supermarket,’’ an investor may have to pay both. percentage multiplied by the minimum of the net in place to determine the availability and level of 76 If this proposed provision is adopted, it would asset value at the time of purchase or time of breakpoint discounts. See supra note 72. Disclosure supercede the 1979 letter to the ICI. See supra note redemption. Attachment 3 depicts confirmation of information about front-end sales loads as part 6. disclosure of a transaction in a fund share that of confirmations for the purchase of share classes 77 Deferred sales loads include surrender charges carries a deferred sales load that equals a specified that carry deferred sales loads in no way immunizes on variable contracts. percentage multiplied by the net asset value at the a broker, dealer or municipal securities dealer from 78 At times, purchases of class A shares of more time of purchase. its suitability obligations or any other requirements. than $1 million will not carry any front-end sales 81 For example, while the issuer of a 529 plan 74 Section 2(a)(35) of the Investment Company load due to the availability of breakpoint discounts, may not pay rule 12b–1 fees, the plan assets may Act generally defines ‘‘sales load’’ as the difference but a deferred sales load of up to one percent is be invested in mutual funds that incur those fees. between the price of a security to the public and imposed for up to one year to discourage short-term Similarly, mutual funds underlying variable that portion of the proceeds from its sale that is holdings. That type of deferred sales load does not insurance contracts may also pay 12b–1 fees. In received and invested or held for investment by the raise the disclosure issues that this proposed rule those cases, the confirmation would have to issuer, less any portion of such difference deducted seeks to address. disclose information about those fees, even though for expenses or fees. 79 See Investment Company Act rule 6c–10. they are not directly paid by the issuer.

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proposed rule therefore would require can be a function of the future value of (c) Revenue sharing and portfolio brokers, dealers and municipal those securities. How can Schedule 15C brokerage disclosure. Proposed rule securities dealers to disclose asset-based best state those percentages in a way 15c2–2 also seeks to put customers on sales charges and asset-based service that is accurate and readily notice about the existence of fees as a percentage of net asset value, understood? 83 arrangements that lead to conflicts of and also to disclose an estimate of the (b) Sales fee disclosure. Proposed interest, and provide information about total annual dollar amount of asset- paragraph (c)(4) of rule 15c2–2 would the degree of those conflicts. That goal based sales charges and asset-based require disclosure of any dealer cannot be satisfied by superficial service fees that would be associated concession that the broker, dealer or changes, such as boilerplate with the shares purchased if net asset municipal securities dealer earns in confirmation language that may attract value were to remain unchanged (and connection with the transaction, the attention only of those investors assuming that the level of fees paid out expressed in dollars and as a percentage who already are attuned to the potential of assets under a rule 12b–1 plan or of the net amount invested. Proposed impacts of revenue sharing. For this similar distribution arrangement paragraph (f)(8) of rule 15c2–2 would reason, the proposed rule would place remains unchanged). quantified information about the • define ‘‘dealer concession’’ as fees that The Commission requests comment the broker, dealer or municipal arrangements directly in front of on whether these requirements would securities dealer will earn at the time of investors, so they may immediately provide customers with an appropriate the sale, in connection with the evaluate its importance and determine amount of information about the transaction, from the issuer of the whether to seek additional information. amount of distribution-related costs covered security, an agent of the issuer, Proposed paragraph (c)(5) of rule they or the issuer would incur in the primary distributor, or any other 15c2–2 would require disclosure of connection with their purchases. If not, broker, dealer or municipal securities information related to revenue sharing please describe additional disclosure dealer. That amount would be distinct payments and portfolio securities that would be helpful. Commenters are from the commission that the broker, transaction commissions received by the specifically invited to comment on dealer or municipal securities dealer broker, dealer or municipal securities whether the proposed requirements may receive directly from the customer, dealer. The proposed rule specifically related to deferred sales loads would as well as any load that the investor may would require disclosure of information provide disclosure that is sufficiently pay to the fund’s principal about two types of arrangements: (i) clear to customers. Revenue sharing payments from persons • underwriter.84 Because a dealer The Commission also requests within the fund complex; and (ii) comment on whether these concession constitutes part of the broker’s, dealer’s or municipal securities commissions, including riskless requirements would appropriately be principal compensation, associated with applied to all types of covered dealer’s financial stake in selling the security to the customer, the amount of portfolio securities transactions on securities, or whether in certain behalf of the issuer of the covered circumstances the disclosure that stake is relevant to customers so they can better scrutinize the adequacy security, or other covered securities requirements should be modified or 85 of the investment options with which within the fund complex. Because eliminated. Commenters in particular revenue sharing and portfolio brokerage may wish to address how disclosure of they were presented, as well as any recommendations they received. arrangements may be linked in part or front-end loads as a percentage of the in whole to a firm’s success in • The Commission requests comment net amount invested would apply to distributing securities on behalf of an about whether this requirement is securities which include a life insurance entire fund complex, the information adequate to inform customers about the component, such as variable life would be disclosed on the basis of the incentives associated with sales fees insurance policies, and whether firm’s sales on behalf of the fund and, if not, suggestions as to how it alternative disclosure requirements complex, rather than on a fund-by-fund would be preferable for those could be modified to do so. 86 82 basis. products. Commenters also may Proposed paragraph (f)(16) of rule address whether all of these 83 Proposed Schedule 15C states those amounts 15c2–2 would define ‘‘revenue sharing’’ (as well as dealer concession, revenue sharing and requirements are appropriately applied as any arrangement or understanding by to variable annuities. Commenters portfolio brokerage commissions, see infra) as a percentage of ‘‘your investment.’’ The note on the should address whether and how up- reverse of proposed Schedule 15C explains that the 85 Although these disclosures would be consistent front bonus payments on variable term ‘‘your investment’’ generally is based on with the requirements of rule 10b–10(a)(i)(D) insurance products and the recapture of current values, but in the case of deferred sales regarding third-party remuneration, the rule 10b-10 such bonus payments should be loads and asset-based fees may be based on future disclosure requirements have been interpreted in values. The use of the single term ‘‘your disclosed. the context of the prospectus disclosure principles • investment’’ is intended to be simple to understand, that the Commission articulated in the 1977 release The Commission further requests while flexible enough to accommodate the fact that adopting that rule. See supra text accompanying comment about how proposed Schedule present values and future values both can be note 5. Because we conclude that prospectus 15C could best disclose sales loads and relevant. disclosure is inadequate in this context, those asset-based fees in percentage terms, 84 As noted above, commissions would be interpretations—which permit prospectus disclosed pursuant to proposed paragraph (b)(4) of disclosure to satisfy the requirements of rule 10b– based on the customer’s investment. rule 15c2–2. Front-end and deferred loads would be 10—would not apply to disclosure requirements This disclosure needs to reflect the fact disclosed pursuant to proposed paragraphs (c)(1) under new rule 15c2–2. that while front-end sales loads will and (c)(2) of that rule. 86 A confirmation should inform an investor of equal a percentage of the present value For transactions in share classes that impose a the potential conflicts of interest that confront a of the securities being purchased, front-end sales load, the dealer concession is likely broker, dealer or municipal securities dealer. to be smaller than the amount of the load, because Because the relationships that can lead to those deferred sales loads and asset-based fees the fund’s primary distributor generally will retain potential conflicts typically are established on a some of the load to pay its own expenses. For fund complex basis, rather than on a fund-by-fund 82 Because variable life insurance initially may transactions in share classes that impose a deferred basis, it is appropriate to disclose those have a relatively small investment component, sales load, the amount of the dealer concession may relationships on a fund complex basis. Given that disclosure of the front-end sales load as a be linked to the expected amount of asset-based a prospectus is a fund-specific document, a percentage of net asset value may result in a sales charges (e.g., 12b–1 fees) and of deferred sales prospectus is particularly inappropriate for relatively high disclosed percentage. loads associated with the shares. disclosing information about those arrangements.

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which a person within a fund complex, Proposed paragraph (f)(14) of rule security that is an interest in a UIT, is other than the issuer of the covered 15c2–2 would define ‘‘portfolio an associated person of a sponsor, security, pays a broker, dealer or securities transaction’’ as any depositor or trustee of the covered municipal securities dealer, or any transaction involving securities owned security. associated person of the broker, dealer by the issuer of a covered security, or Those amounts should be disclosed as or municipal securities dealer, apart owned by any other issuer within the a percentage of the total net asset value from dealer concessions or other sales same fund complex. The required represented by such broker’s, dealer’s or fees that would be disclosed pursuant to disclosure of commissions associated municipal securities dealer’s (including paragraph (b)(4). This definition of with portfolio transactions would brokers, dealers and municipal revenue sharing would encompass include disclosure of commissions securities dealers that fall in category payments that have a variety of labels— received by a broker, dealer or (B) above) total sales of covered including payments that may be municipal securities dealer as part of a securities (as measured by cumulative characterized as having purposes other ‘‘soft dollar’’ arrangement. Proposed net asset value) on behalf of the fund than paying a broker, dealer or paragraph (f)(10) of rule 15c2–2 would complex over the four most recent municipal securities dealer for ‘‘shelf define ‘‘fund complex’’ to include the calendar quarters, updated each space.’’ For example, in responding to issuer of the covered security (including calendar quarter. The required NASD’s recent proposal regarding the sponsor, depositor or trustee of a disclosure also would set forth the total disclosure of revenue sharing and unit investment trust, and any insurance dollar amount of revenue sharing or differential compensation, the SIA company issuing a variable annuity portfolio brokerage commissions that stated that revenue sharing contract or variable life insurance the broker, dealer or municipal arrangements are used to reimburse policy), the issuer of any other covered securities dealer may expect to receive broker-dealers for a variety of expenses, security that holds itself out to investors in connection with the transaction, such as reviewing fund prospectuses.87 as a related company for purposes of calculated by multiplying that While recognizing that brokers, dealers investment or investor services, any percentage by the net amount invested or municipal securities dealers incur agent or investment adviser for such in the transaction. Firms would have 30 expenses in connection with selling and issuer, and any affiliated person of any days to update the information distributing mutual fund shares and such issuer or any such investment following the end of the calendar maintaining customers accounts, just as adviser.89 quarter.90 they incur expenses in connection with For both revenue sharing and By requiring disclosure of information selling other types of securities and portfolio brokerage commissions, a about amounts paid to affiliates, as well maintaining those customer accounts, broker, dealer or municipal securities as information about amounts paid payments that arguably reimburse firms dealer would be required to disclose directly to the broker, dealer or for these expenses may still influence information about amounts directly or municipal securities dealer, the the firms to promote the sale of indirectly earned from the fund proposed rule would inform investors particular funds. Moreover, payments complex by: (A) The broker, dealer or about the firm’s conflicts of interest that have the effect of reimbursing municipal securities dealer; (B) any even when the firm does not directly broker-dealers for expenses that they associated person (as defined in receive payment. Amounts received by would incur in their normal course of Sections 3(a)(18) and 3(a)(32) of the affiliates that are not brokers, dealers or business, or that exceed the expenses Exchange Act) that is a broker, dealer or municipal securities dealers would not the broker-dealers actually incur, act as municipal securities dealer, and (C) if be included with respect to transactions subsidies that create conflicts of the covered security is not a proprietary involving proprietary covered securities, interest. The proposed definition of covered security, any other associated to avoid requiring disclosure of revenue sharing excludes payments person. Proposed paragraph (f)(15) of management fees and other payments made by the issuer of the covered rule 15c2–2 would define the term between funds and investment advisers security, because those other payments, ‘‘proprietary covered security’’ as any and any other service providers that are such as payments for transfer agent covered security as to which the broker, associated with the broker, dealer and services, do not raise the same conflict dealer or municipal securities dealer is municipal securities dealer.91 of interest concerns that are the subject an affiliated person, as defined by Moreover, to the extent that the of this proposed rulemaking.88 Section 2(a)(3) of the Investment broker, dealer or municipal securities Company Act, of the issuer, or is an dealer has entered into a revenue 87 See Letter from Stuart Strachan, Chairman, associated person of the issuer’s sharing arrangement or understanding Investment Company Committee, SIA, to Barbara investment adviser or principal that would result in a specific amount Sweeny, NASD, October 17, 2003 (available at underwriter, or, in the case of a covered http://www.sia.com/2003_comment_letters/pdf/ of remuneration in connection with NASD10–17–03.pdf). The letter identified the purchases of the covered security, the following categories of reimbursement of broker- interest that they present to particular brokers, broker, dealer or municipal securities dealer expenses: ‘‘Customer Sub-accounting’; dealers and municipal securities dealers. dealer would have to disclose that mailing disclosure documents; maintaining 89 The term ‘‘affiliated person’’ of another person websites; reviewing prospectuses, statements of is defined by Section 2(a)(3) of the Investment expected remuneration as a percentage additional information and other ‘‘marketing Company Act to include, among others, officers, materials’; implementing changes initiated by directors, partners or employees of the other person, 90 The twelve month disclosure period is funds, such as systems and procedures changes, and persons directly or indirectly controlling, intended to accommodate the fact that certain and communicating changes to registered controlled by or under common control with the payment streams associated with revenue sharing representatives and customers; and ‘‘overseeing and other person, and investment advisers to may be annual in nature, such as sponsorship of coordinating fund wholesaler activities.’’ investment companies. seminars and other events held by brokers, dealers 88 In contrast, we believe that investors should be The definition of ‘‘fund complex,’’ by including and municipal securities dealers. At the same time, informed about portfolio brokerage commissions any agent of the issuer, may at times encompass the requiring the information to be updated quarterly is even though they are subject to regulation under selling broker, dealer or municipal securities dealer intended to permit the disclosure to reflect any Section 12 of the Investment Company Act and that is required to make disclosure under this rule. changes in a distribution relationship. oversight by the fund’s board of directors. We The amounts of revenue sharing to be disclosed 91 In any event, when a broker, dealer or believe that prospectus disclosure requirements for under this provision would apply only to payments municipal securities dealer is affiliated with a fund such payments are not specific enough to place the made to the broker, dealer or municipal securities family, revenue sharing may be less significant as brokerage customer on notice of the conflicts of dealer by other persons within the fund complex. a distribution incentive.

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of the net amount invested in the commissions to promote the particularly are invited to discuss covered securities, and would have to distribution of another mutual fund may whether firms should be required to disclose the total dollar amount of also be in violation of the Investment disclose absolute dollar amounts of remuneration it may expect to receive in Company Act. Nor would proposed rule revenue sharing and portfolio connection with the transaction.92 15c2–2 protect a firm from other forms commissions, in addition to or in lieu of Disclosing information about revenue of liability, such as liability under disclosing those payments in percentage sharing and portfolio brokerage agency law principles. terms and in terms of the amount of the commissions in the context of the firm’s • The Commission requests comment transaction. Commenters also are total sales on behalf of a fund complex, on whether the proposed definition of invited to discuss whether these instead of simply disclosing the revenue sharing appropriately arrangements more appropriately absolute dollar values the firm has encompasses all distribution should be disclosed on a different basis received from the fund complex, would arrangements that pose conflicts of than for 12 month periods, updated enable customers to see information interest to brokers, dealers and quarterly. We request comment on about a firm’s selling stake in a municipal securities dealers. whether the proposed approach takes standardized manner, regardless of Commenters particularly are invited to sufficient account of the fact that whether a customer’s particular broker, discuss whether the definition should revenue sharing arrangements at times dealer or municipal securities dealer is include additional distribution-related may consist of separate revenue streams large or small, and regardless of whether arrangements that lead to conflicts of arising from a firm’s new sales of fund the covered security is issued by a large interest, such as distribution-related shares and its prior sales of fund shares. or small fund complex.93 Disclosure of payments to other affiliates of brokers, Given that it is conceivable that a fund this information would alert customers dealers and municipal securities complex may pay different levels of to the existence and magnitude of dealers. Commenters also are invited to revenue sharing depending on the fund, revenue sharing and portfolio discuss whether the definition should or may pay revenue sharing only in commission arrangements that cause exclude certain arrangements that connection with selected funds, conflicts of interest for brokers, dealers compensate brokers, dealers or commenters are invited to discuss and municipal securities dealers and municipal securities dealers for actual whether the proposed approach can be their associated persons. At the same expenses they incur (such as mailing improved to account for differences in time, disclosure of the particular expenses) as part of activities that they revenue sharing practices between arrangements applicable to the would not generally be expected to different funds in the same complex. transaction will provide information to perform as part of a securities business. • Commenters also are invited to investors about the most direct • In addition, commenters are invited discuss whether, when calculating incentives for such transactions. to provide information about which revenue sharing and portfolio brokerage Proposed rule 15c2–2 is not intended specific payment streams would be commissions as a percentage of a to preempt or otherwise negate other encompassed by the proposed definition broker’s, dealer’s, or municipal provisions of law that may apply. We of revenue sharing, the dollar value of securities dealer’s sales on behalf of a note that NASD rule 2830(k)(1) bars those payment streams, and the uses of fund complex, that percentage should broker-dealers from favoring the those payments. be based on all sales, or whether certain distribution of funds that pay portfolio • Commenters also are invited to transactions such as transactions brokerage commissions.94 We wish to discuss whether the rule should use a involving money market funds should stress that the proposal to require term other than ‘‘revenue sharing,’’ be excluded from the denominator used broker-dealers to disclose information given that the proposed disclosure to calculate those percentages. We also about receipt of portfolio brokerage requirement would encompass more request comment on whether there are commissions in no way should be read than the traditional use of the term alternative ways to effectively inform to condone favoring distribution of ‘‘revenue sharing’’ in the mutual fund investors of material information about funds that pay portfolio brokerage industry, which is limited to payments arrangements that lead to conflicts of commissions, and would not prevent a from an investment adviser to the interest, while posing lower disclosure broker-dealer from being held liable for broker, dealer or municipal securities costs. In that regard, commenters may violating that NASD rule. Moreover, a dealer. Commenters suggesting wish to discuss whether investors can mutual fund that uses brokerage alternative terms should explain why be adequately informed about revenue those are preferable. Moreover, sharing and portfolio commission 92 Section C of Schedule 15C would provide commenters are invited to discuss arrangements through disclosures of space for disclosure of additional remuneration. whether the definition of revenue approximate percentage ranges or dollar 93 For example, a one hundred thousand dollar sharing appropriately excludes ranges, possibly in conjunction with annual revenue sharing payment from a mutual payments made by the issuer of the fund family may pose more of a potential conflict checkboxes. Finally, commenters are of interest to a firm that annually sells ten million covered security, and whether the invited to discuss whether disclosure of dollars worth of shares for that fund complex than proposed rule should require disclosure portfolio brokerage commissions is it would pose to a firm that annually sells fifty of payments made out of the issuer’s appropriate given existing restrictions million dollars worth of shares for that fund family. assets, such as transfer agent payments, 94 NASD rule 2830(k)(1) bars member firms from on those relationships influencing fund favoring funds on the basis of brokerage that lead to conflicts, regardless of distribution.95 commissions received or expected from any source. whether those payments already would (d) Differential compensation That restriction has not been uniformly followed. be accounted for in fund financial disclosure. Proposed paragraph (c)(6) of See supra note 20 (discussing NASD action against statements and are subject to oversight Morgan Stanley). Moreover, NASD rule 2830(k)(4) rule 15c2–2 would require disclosure of by the fund’s board of directors. whether a broker, dealer or municipal restricts member firms from disseminating • information about its receipt of commissions from More generally, the Commission securities dealer pays differential fund complexes other than to certain management requests comment on whether the compensation to associated persons personnel. In proposing required disclosure of proposal for disclosure of revenue portfolio brokerage commission arrangements, we related to purchases of two specific do not intend to provide any comfort for sharing and portfolio brokerage relationships or activities that are barred by existing arrangements would provide sufficient 95 See discussion of NASD rule 2830(k)(1), supra rules. information to investors. Commenters note 94.

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types of securities: (i) Covered securities other cash or non-cash compensation) interest in knowing whether that carry a deferred sales load (other that a broker, dealer or municipal salespersons or other associated persons than a deferred load of no more than securities dealer can be expected to pay have those higher incentives.100 The one percent that expires no later than to any associated person in connection proposed rule only relates to one year after purchase, when no other with the sale of a stated dollar amount remuneration expected to be paid in the sales load would be incurred),96 and (ii) of that class of covered security over the next year when identifying the presence shares of ‘‘proprietary covered next year, based on its current practices or absence of differential compensation, securities’’ that are issued by an affiliate and assuming no change in the shares’ because short-term compensation of the broker, dealer or municipal net asset value if applicable, compared reflects the associated person’s most securities dealer. If a customer with the compensation that the immediate financial incentive and purchased a proprietary covered associated person would have been paid because of the difficulty of estimating security that carries a deferred sales over the next year in connection with the near-term value of later revenues. load, both disclosures would be the sale of the same dollar amount of We note, however, that an associated required. The proposed rule would another class of the same security that person may receive significant provide for affirmative, negative or ‘‘not is associated with a front-end sales compensation after the first year for applicable’’ disclosure about differential load.97 The broker, dealer or municipal selling some share classes.101 compensation to alert customers to the securities dealer would have to disclose In the case of customer purchases of presence of compensation practices that the existence of differential proprietary covered securities, proposed provide incentives leading to conflicts compensation related to securities with paragraph (f)(9)(ii) of rule 15c2–2 would for associated persons. a deferred end sales loads whenever any define ‘‘differential compensation’’ as: Disclosure of differential associated person—salesperson or (A) Any practice by which a broker, compensation would be limited to supervisor—is paid more to sell a dealer or municipal securities dealer transactions in those two types of security that has a deferred sales load— pays an associated person a higher securities because of the special i.e., differential compensation.98 percentage of the firm’s gross dealer concerns they raise. Securities that carry Disclosure of those incentives should be concession in connection with selling a a deferred sales load—such as class B useful to investors, especially given the proprietary covered security than the shares—may appear more appealing to recent instances in which associated percentage of the gross dealer investors than shares with a front-end persons were found to have concession that the firm would pay in sales load, but their long-term costs may inappropriately placed customers into connection with selling the same dollar be greater and the personnel of a broker, class B shares to increase their own amount of any non-proprietary covered dealer or municipal securities dealer compensation.99 Investors have an security offered by the firm; and (B) may be more highly compensated for other practices of a broker, dealer or selling them, particularly when the 97 Typically, class B shares are subject to a municipal securities dealer that cause same investment in a share class with a decreasing deferred sales load for several years following purchase. The amount of the deferred an associated person to earn a higher front-end sales load would have been sales load, usually calculated as the lesser of a rate of compensation in connection with entitled to a breakpoint discount. percentage of the value of the initial investment or selling a proprietary covered security, Moreover, a broker, dealer or municipal the account’s value, declines each year that the such as additional cash compensation or securities dealer may pay its personnel customer holds the shares and eventually disappears entirely. Some class C shares are subject the imposition, allocation, or waiver of extra compensation for selling securities to a deferred sales load for the first year after expenses, overhead costs, or ticket of issuers affiliated with the broker, purchase. Generally, this disclosure requirement charges. That aspect of the proposed dealer or municipal securities dealer. would apply to investor purchases of class B shares. rule takes percentage payment rates into While a broker, dealer or municipal Purchases of class A shares of $1 million or more typically are subject to a one percent deferred sales account, rather than absolute dollar securities dealer also may pay extra load for one year, but those purchases generally amounts, because that would lead to compensation for selling securities that would not be within the scope of this requirement. more effective disclosure.102 Proposed generate revenue sharing, revenue When a customer purchases a class B share, the paragraph (f)(11) of rule 15c2–2 would sharing would be disclosed elsewhere question of whether an associated person receives differential compensation should take into account define the term ‘‘gross dealer on the confirmation. the remuneration he or she would have earned from concession’’ as the total amount of any The proposed rule would define the the sale of class A shares. discounts, concessions, fees, service term ‘‘differential compensation’’ Class B shares often carry relatively high 12b–1 fees, commissions, or asset-based sales differently depending on the securities fees, but may automatically convert into class A charges received by the broker, dealer or transaction at issue. With respect to shares (which generally carry lower 12b–1 fees) several years after purchase. Class C shares also municipal securities dealer from the customer purchases of a class of covered generally carry relatively high 12b–1 fees, and issuer in connection with the sale and security associated with a deferred sales usually do not automatically convert to a class of distribution of a covered security, other load (other than a deferred load of no shares with lower 12b–1 fees. The Commission’s Internet site contains an online calculator that than portfolio brokerage commissions more than one percent that expires no illustrates the impact of loads and other costs on the for transactions effected on behalf of the later than one year after purchase, when relative total returns earned on mutual fund no other sales load would be incurred), investments in different share classes for different 100 See supra note 49. proposed paragraph (f)(9)(i) of rule holding periods. The calculator is located at http:/ 101 Broker-dealers that sell class C shares may 15c2–2 would define ‘‘differential /www.sec.gov/investor/tools/mfcc/mfcc–int.htm. 98 For example, suppose that an associated person receive a relatively modest upfront dealer compensation’’ as any form of higher is paid a fixed 50% payout of the dealer concession concession, followed by a portion of the long-term compensation (including total received by a selling broker-dealer in connection 12b–1 fees that are paid on those shares. Because commissions, reimbursement or with the sale of fund shares, and that the dealer class C shares generally do not automatically concession received by the firm for selling $200,000 convert to a share class associated with lower 12b– avoidance of charges or expenses, or of a particular mutual fund’s shares is 4% for class 1 fees, unlike class B shares, the broker-dealer’s and B shares and 2.5% for class A shares. In that case, its associated person’s post-first year compensation 96 As noted, some large purchases of class A the associated person would receive a commission for selling class C shares may be particularly shares will carry a deferred sales load of up to one of $4,000 for selling the class B shares, but only significant. percent is imposed for up to one year to discourage $2,500 for selling the class A shares. That would 102 Because some non-proprietary securities can short-term holdings. Those sales do not raise the amount to $1,500 (or 60%) higher compensation for have a relatively modest payout, a focus on dollar conflict concerns that differential compensation selling the customer class B shares. amounts would invariably lead to ‘‘yes’’ disclosure is intended to capture. 99 See supra note 20. disclosures.

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issuer.103 As discussed above in the of sale proposal is intended to alert We further request comment on whether context of revenue sharing, proposed customers to additional information firms should be required to disclose paragraph (f)(15) of rule 15c2–2 would about the existence conflicts that information about their receipt of define the term ‘‘proprietary covered otherwise would be hidden.105 ongoing asset-based payments from security’’ as any covered security as to • We seek comment on whether this funds (sometimes known as ‘‘trailing which the broker, dealer or municipal proposal would adequately place commissions’’), or information about securities dealer is an affiliated person, customers on notice about the conflicts their payment of those fees to associated as defined by Section 2(a)(3) of the associated with differential persons.107 We moreover request Investment Company Act, of the issuer, compensation. We specifically request comment on whether firms should be or is an associated person of the issuer’s comment on whether brokers, dealers required to account for remuneration investment adviser or principal and municipal securities dealers should received after the first year when underwriter, or, in the case of a covered be required to disclose payment of determining whether associated persons security that is an interest in a UIT, is differential compensation in contexts receive differential compensation in an associated person of a sponsor, other than transactions involving shares connection with selling share classes depositor or trustee of the covered with deferred sales loads and without a front-end load. security. The broker, dealer or proprietary covered securities (such as • Finally, we request comment on municipal securities dealer would be in the context of fund complexes that whether, in addition to disclosure about required to disclose the existence of pay revenue sharing to the broker, the fact that associated persons receive dealer or municipal securities dealer). differential compensation, customers differential compensation related to the • sale of proprietary funds because We also specifically request should receive information about the investors would benefit from knowing comment about whether the proposed amount of any differential whether salespersons or other approach for defining differential compensation received by associated associated persons may receive higher compensation in transactions involving persons. If so, how should the incentives, which create conflicts of securities with a deferred sales load— differential compensation be quantified? interest for them.104 which focuses on compensation per What time period or periods would be The proposed rule would not require dollar of covered security sold, rather most relevant and useful to investors? brokers, dealers or municipal securities than on compensation as a percentage of iii. Provisions not included in general dealers to identify all instances in the dealer concession—should apply to and purchase-specific requirements. which an associated person has a higher other transactions in light of the fact Proposed rule 15c2–2 would not that dealer concessions can vary widely incorporate several provisions of rule financial stake to sell the shares of one 106 fund than another. Rather, the proposed among funds. 10b-10 that do not appear material to • We also request comment on rule is targeted toward transactions in customer transactions in mutual fund whether the definition of ‘‘proprietary shares, UIT interests and municipal securities without front-end sales loads covered security’’ is sufficiently broad. fund securities. In particular, proposed and proprietary securities because other rule 15c2–2 would not require aspects of the proposed rule 15c2–2 105 For example, while firms may provide higher disclosure of whether the broker, dealer should provide customers with percentage payouts to associated persons in or municipal securities dealer is acting information about other conflicts of connection with selling mutual funds associated in the capacity of agent or principal 108 interest facing the broker, dealer or with revenue sharing, other requirements of because those firms would act in an municipal securities dealer. This point proposed rule 15c2–2 should place investors on notice about the firms’ potential conflicts associated agency capacity for the transactions at with that practice. Also, while an associated person issue. For the same reason, the rule 10b- 103 Revenue sharing is not encompassed by the could have a heightened financial interest in selling term ‘‘gross dealer concession’’ because it is not non-proprietary funds associated with relatively 10 disclosure standards for principal paid by the issuer. These proposed rules contain high dealer concessions (for example, if the transactions 109 would not be separate definitions for the terms ‘‘gross dealer associated person is compensated by receiving a incorporated into proposed rule 15c2–2. concession’’ and ‘‘dealer concession.’’ The term particular percentage of the dealer concessions), the Proposed rule 15c2–2 also would not ‘‘gross dealer concession’’ would determine the proposed requirement that the broker, dealer or baseline for identifying whether associated persons municipal securities dealer disclose the sales fee it incorporate requirements for disclosing are paid differential compensation (through a receives would provide the customer with information about the person from higher percentage payout) in connection with the information about the relative size of the firm’s whom the security was purchased,110 sale of proprietary securities. That term focuses on financial stake in the sale. payment for order flow,111 odd-lot 106 amounts that the broker, dealer or municipal As proposed, the rule would not require differentials 112 and several securities dealer receives from the issuer. The term disclosure of all differences in financial incentives. ‘‘dealer concession’’ would govern the obligation of If an associated person is paid a specified requirements specific to transactions in a broker, dealer or municipal securities dealer, percentage payout of the gross dealer concession debt securities.113 under proposed paragraph (c)(4) of rule 15c2–2, to received by the broker, dealer or municipal • The Commission requests comment disclose the sales fee that it earns from the issuer securities dealer, then differences in the dealer on whether it would be appropriate to or issuer’s agent, or from the primary distributor or concession paid on behalf of specific funds can lead another broker, dealer or municipal securities to significant differences in compensation. For include any of those requirements in dealer. example, if a proprietary fund offers a dealer proposed rule 15c2–2. Commenters who 104 For example, a firm would have to disclose the concession of 4.0% for selling $100,000 of class A existence of differential compensation when an fund shares, while another nonproprietary fund 107 As noted above, funds may pay ongoing associated person receives a 50% payout of the offers a dealer concession of 2.5% for selling the service fees of 0.25% of assets under their 12b–1 firm’s gross dealer concession in connection with same amount of class A fund shares, then the plans. Brokers, dealers and municipal securities selling $200,000 of a proprietary fund, if the broker, dealer or municipal securities dealer would dealers may pay some or all of those amounts to associated person’s percentage payout associated earn $4,000 for selling the proprietary fund and salespersons as ‘‘trailing commissions.’’ Although with the sale of $200,000 of any other fund would $2,500 for the selling the nonproprietary fund. If an the fees may be depicted as service fees, they may be less than 50%. The firm also would have to associated person is paid 50% of the firm’s gross be viewed by registered representatives as deferred disclose differential compensation if an associated dealer concession, then his or her compensation compensation for sales. person benefits from any practice that compensates would be $2,000 for selling the proprietary fund 108 See rule 10b–10(a)(2). him or her in connection with selling the and $1,250 for selling the nonproprietary fund. That 109 See rule 10b–10(a)(2)(ii). proprietary fund, or reimburses his or her expenses $750 difference in compensation represents a 110 in connection with selling the proprietary fund, if potential conflict of interest, but would not be See rule 10b–10(a)(2)(i)(A). the same programs or practices are not uniformly identified if differential compensation related to 111 See rule 10b–10(a)(2)(i)(C). available in connection with the sale of all other that transaction is identified solely by reference to 112 See rule 10b–10(a)(3). funds. percentage payouts. 113 See rule 10b–10(a)(4).

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believe that proposed rule 15c2–2 This disclosure would encompass periodic disclosure alternative. should be expanded to encompass summary information designed to Moreover, the broker, dealer or transactions in additional types of inform investors about costs and municipal securities dealer would be securities also should address what conflicts, consistent with the general required to provide the customer with at additional disclosure provisions such and purchase-specific disclosure least one written disclosure document inclusion would require. requirements in other provisions of consistent with the general and e. Periodic disclosure alternative. proposed rule 15c2–2. In general, it purchase-specific disclosure standards Proposed paragraph (d) of rule 15c2–2 would require disclosure of the same at the time of each purchase of a would permit brokers, dealers and types of information that are required by particular security within a covered municipal securities dealers to disclose paragraphs (b) and (c), but some securities plan, prior to relying on the the required information periodically, information would be disclosed in periodic disclosure alternative.123 This rather than transaction-by-transaction, summary form that reflects all latter requirement is intended to help in certain limited circumstances transactions within a period, rather than customers to receive timely notice about involving transactions in a ‘‘covered each individual transaction. Proposed the costs and conflicts raised by securities plan’’ or in no-load open-end paragraph (d)(2) of rule 15c2–2 would purchases involving each security that money market funds. This provision is require disclosure of each transaction, is the subject of the covered securities based on the periodic disclosure and of the total number of shares in the plan. • requirements of rule 10b–10(b), but customer’s account at the end of the The Commission requests comment modified to be consistent with the period. It would further require, for each on whether any periodic disclosure targeted disclosure standards of transaction, disclosure of the general alternative is appropriate, in light of the proposed rule 15c2–2. Proposed information related to date, issuer and distribution-related concerns associated paragraph (f)(5) of rule 15c2–2 would with covered securities. class of the security, price and net asset • define ‘‘covered securities plan’’ as any value, number of shares, the total The Commission also requests plan for direct purchase or sale of a amount paid or received and the net comment on whether this proposal covered security pursuant to certain amount of the investment bought or strikes the right balance between retirement or pension plans or other sold, commissions from the customer, alerting investors to the distribution- 114 agreements or arrangements. While deferred sales load charges, and SIPC related issues associated with these this definition in large part would be membership.116 Also, to the extent securities and minimizing firms’ cost of analogous to the rule 10b-10 definition applicable, it would require disclosure disclosure. Should we require periodic of ‘‘investment company plan,’’ it also of information about front-end sales disclosures to be made more frequently? would encompass arrangements for loads charged to the customer,117 and If so, commenters are requested to automatic reinvestment of dividends or about dealer concessions received by suggest alternative time frames and their other distributions paid by the issuer of the firm.118 As of the date of the final reasons for believing they would a covered security. The periodic purchase or reinvestment during the provide more meaningful information to disclosure alternative of proposed rule period, the provision would require investors. • We also request comment about 15c2–2 would require a broker, dealer or disclosure of information about revenue whether permitting some categories of municipal securities dealer to provide sharing and portfolio brokerage information to be disclosed in summary quarterly disclosure for transactions commission arrangements 119 and about involving covered securities plans, and fashion is appropriate, or if broker- differential compensation.120 Based on monthly disclosure for money market dealers should be required to provide all the total value of the purchases and fund transactions subject to the periodic the transaction-by-transaction reinvestments during the period, and disclosure alternative.115 information otherwise required by the the net asset value at the end of the rule in the periodic statements. period, the rule would also require 114 This alternative would apply to three general f. Other provisions and definitions. types of arrangements: (i) individual retirement or disclosure of information related to 121 Proposed paragraph (g) of rule 15c2–2 individual pension plans; (ii) agreements for deferred sales loads and to asset- would permit the Commission to purchasing covered securities at the public offering based sales charges and service fees exempt any broker, dealer or municipal price, or redeeming covered securities at the such as rule 12b–1 fees.122 applicable redemption price, at specified time securities dealer from the provisions of intervals and setting forth the commissions or Proposed paragraph (d)(3) of rule the rule with regard to any transactions charges to be paid by the customer; or (iii) other 15c2–2 would require a broker, dealer or arrangements by which a group of two or more or any class of transactions, when the municipal securities dealer to provide Commission finds that firm will provide customers engage in periodic purchases of covered the customer with written notification securities through a person designated by the group, alternative procedures to effect the subject to specific notice requirements. before it could take advantage of the purposes of the rule. Rule 10b–10 has a As discussed below, we are proposing similar exemptive provision.124 conforming amendments to the periodic disclosure We do not propose at this time to amend rule provisions of rule 10b–10. 10b–10 in a corresponding way to provide for 115 Because the definition of ‘‘covered securities quarterly disclosure in connection with dividend 123 In other words, if a covered securities plan plan’’ encompasses reinvestment of dividends and reinvestment programs involving other securities. encompasses purchases of three separate mutual other distributions paid by issuers of covered 116 Those are set forth in paragraph (b) to funds, the broker, dealer or municipal securities securities, proposed rule 15c2–2 would permit proposed rule 15c2–2. dealer would have to provide a purchase-specific disclosure upon the first purchase of each of those quarterly disclosure related to those reinvestment 117 Those are set forth in paragraph (c)(1) to funds. Subsequent purchases of each particular transactions. This would encompass covered proposed rule 15c2–2. fund would not require the purchase-specific security dividend reinvestment activity that has 118 Those are set forth in paragraph (c)(4) to been the subject of exemptive relief under rule 10b– disclosure, because the customer already has been proposed rule 15c2–2. alerted to the costs and conflicts at issue. 10. See, e.g., Letter regarding Newbridge Securities 119 (February 20, 1997) (providing for monthly Those are set forth in paragraph (c)(5) to 124 The Commission, acting by authority disclosure in connection with dividend proposed rule 15c2–2. delegated to its staff, has granted a significant reinvestment transactions involving mutual funds 120 Those are set forth in paragraph (c)(6) to number of exemptions under rule 10b–10. Persons and other securities); Letter regarding Edward D. proposed rule 15c2–2. who have received those exemptions would not be Jones & Co. (August 1, 2003) (providing for 121 Those are set forth in paragraph (c)(2) to automatically exempt from the provisions of quarterly disclosure in connection with dividend proposed rule 15c2–2. proposed rule 15c2–2. As discussed above, reinvestment transactions involving money market 122 Those are set forth in paragraph (c)(3) to however, the periodic disclosure alternative funds). proposed rule 15c2–2. Continued

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Proposed paragraph (f)(3) of rule publish those medians and ranges in standards for vendors or other third 15c2–2 would also use the same percentage form. Firms would have to parties to derive and publish that definition of the term ‘‘completion of update median and percentage range information? the transaction’’ as is found in rule 10b– information on their confirmations We recognize that implementing these 10.125 In addition, proposed paragraph within 90 days of their publication. If reporting requirements for medians and (f)(7) of rule 15c2–2, consistent with adopted, this requirement would not comparison ranges will require rule 10b–10, would provide that the take effect until 90 days after the additional rulemaking to implement term ‘‘customer’’ does not include any Commission publishes the initial reporting requirements to permit the broker, dealer or municipal securities schedule of comparison ranges. Commission or its vendors to gather dealer.126 Because the two confirmation • We request comment about the information to calculate appropriate rules have parallel goals, it is utility and implementation of this medians and comparison ranges. appropriate for those definitions to be proposal to disclose median and • What entities should be required to the same. comparison range information. For disclose information that is necessary to g. Comparison range disclosure. example, in calculating comparison calculate median and comparative range Proposed paragraph (e) of rule 15c2–2 ranges related to loads and dealer information? In particular, should would provide a mechanism to give concessions, to what extent is it investment companies or brokers, investors additional context for appropriate to take into account the type dealers and municipal securities dealers evaluating the significance of certain of security (such as equity fund, debt be required to provide us with required disclosures by requiring fund, money market fund, or blend) that information to expedite the calculation brokers, dealers and municipal is the subject of the transaction. Are of comparison ranges? securities dealers to provide comparison there specific categories of covered There will be additional opportunity information. In many cases, including securities that would lead to the fairest to comment about those requirements at disclosures about sales loads, asset- ‘‘apples to apples’’ comparisons? the time of a reporting requirement based sales charges and service fees, Should all UITs be in a single category, proposal. If we conclude that revenue sharing and portfolio brokerage or would it be necessary, for example, publication of median and comparison commissions, investors could benefit to separate variable annuities, variable range information is not feasible due to from knowing how the position of the life insurance, and other UITs? Should implementation issues, then brokers, broker, dealer or municipal securities issuers of covered securities, or brokers, dealers and municipal securities dealers dealer compares to industry practices. would not be required to disclose Investors may obtain that context if they dealers or municipal securities dealers, median and comparative range are provided information about where be able to select the comparison costs and payments fall in comparison category applicable to particular information. to the median and ranges in the securities, or should the Commission If we conclude that comparative marketplace. In the case of disclosures assign covered securities to specific information would be useful to of loads, asset-based sales charges and categories? Should median and investors in this context, we may service fees, and dealer concessions, percentile range information related to consider implementing comparative these comparisons would be based on covered securities be weighted to information disclosure requirements in the median of, and the ranges associated account for the relative sales of covered other contexts, as well. with, 95 percent of the transactions securities? In other words, should h. Disclosures about transactions involving the same type of covered covered securities that are more highly effected by multiple firms. The security (i.e., mutual fund, unit sold have a higher weight in calculating requirements of proposed rule 15c2–2 investment trust or 529 plan). In the the medians and 95th percentile ranges? would apply to every broker, dealer or case of disclosures of revenue sharing Similarly, should median and range municipal securities dealer that effects a and portfolio brokerage, these would be information related to brokers, dealers transaction in a covered security, the medians and the ranges associated and municipal securities dealers be including transactions effected by more with 95 percent of the brokers, dealers weighted to account for relative sales by than one broker, dealer or municipal or municipal securities dealers that those firms? In other words, should securities dealer. As is the case today, distribute the same type of covered brokers, dealers and municipal customers whose transactions have been security. Median and 95th percentile securities dealers that sell more covered effected in the context of an range information are accepted securities have a higher weight in introducing-clearing arrangement statistical methods that, applied here, calculating the medians and 95th nonetheless may receive a single would provide a snapshot about percentile ranges? Should transactions confirmation if the two brokers, dealers whether a cost or conflict is typical or be compared to other transactions of a or municipal securities dealers enter is an outlier. The Commission would similar dollar amount? Moreover, into a written agreement—disclosed to publish the medians and comparison should confirmations disclose the customer—that determines the ranges from time to time in the Federal comparison information that is more responsibilities of each, including the Register.127 The Commission would specific than medians and 95th responsibility to provide confirmations percentile ranges, such as by stating the to customers.128 provisions of proposed rule 15c2–2 encompass percentile rank of the loads, other costs dividend reinvestment activities that have been the or compensation associated with a 128 In an introducing-clearing relationship, both subject of several of those exemptions under rule transaction? Should the Commission be the introducing firm and the clearing firm effect the 10b–10. See supra note 115. responsible for analyzing the transaction and are subject to confirmation 125 Rule 10b–10(d)(2) defines ‘‘completion of the requirements. The agreement between the two firms transaction’’ by reference to rule 15c1–1 under the information used to calculate medians would be provided to customers upon the Exchange Act. Rule 15c1–1 defines that term by and comparison ranges, or should the establishment of the account or the establishment reference to the time of payment, delivery, transfer Commission permit or require the of the introducing-clearing arrangement, and the or bookkeeping entry, depending on the specific disclosure of median and comparison customers thereafter have a reasonable expectation circumstances. of the responsibilities of both the introducing 126 Rule 10b–10(d)(1) provides that the term range information published by a broker-dealer and the clearing broker-dealer in ‘‘customer’’ does not include a broker or dealer. vendor or other third-party source? transactions effected for their accounts. See NYSE 127 Our goal is to do this annually. Should the Commission establish rule 382 and NASD rule 3230.

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Although a customer may receive a adequate disclosure of information Second, we propose to modify the single confirmation for a transaction about distribution-related costs and periodic reporting alternative permitted effected as part of an introducing- conflicts connected with transactions by paragraph (b) of rule 10b-10. That clearing arrangement, proposed rule effected by more than one broker, dealer alternative applies to transactions 15c2–2 would require specific or municipal securities dealer. effected pursuant to a ‘‘periodic plan’’ disclosure of sales fees, revenue sharing Commenters are invited to discuss any or ‘‘investment company plan,’’ or to and portfolio brokerage commissions potential implementation issues transactions in no-load money market received by any broker, dealer or associated with the proposed rule, funds. Because the latter two categories municipal securities dealer that effects a including any operational challenges or would be encompassed within the transaction. It is important that an difficulties that the requirement may periodic alternative of rule 15c2–2, we investor see information about those pose to introducing and clearing firms propose deleting them from the scope of types of remuneration specifically or other firms that together effect the periodic alternative of rule 10b-10. attributed to each broker, dealer or securities transactions. Commenters Because the term will no longer be used municipal securities dealer, so the may also wish to discuss the application in the rule, we also propose removing investor may evaluate conflicts of of the proposed rule to the principal the definition of ‘‘investment company interest. Thus, a single confirmation still underwriter or distributor of a covered plan’’ from rule 10b-10. shall separately disclose the sales fees, security. Finally, we propose to modify the revenue sharing and portfolio brokerage preliminary note of rule 10b-10 to be 2. Amendments to Rule 10b-10 commissions earned by each firm.129 consistent with the preliminary note of That may require a broker, dealer or Because proposed rule 15c2–2, if proposed rule 15c2–2. As explained municipal securities dealer that receives adopted, would govern confirmation above, this would reflect the fact that sales fees, revenue sharing or portfolio disclosure of purchases and sales in the confirmation disclosure brokerage to convey responsive investment company securities, we also requirements are not determinative of, information to the firm that sends out propose to amend rule 10b-10 to and do not exhaust, a broker-dealer’s the confirmation, which may require exclude those securities.131 In disclosure obligations under the enhancement of existing flows of particular, we propose to amend antifraud provisions of the federal information. There are other instances paragraph (a) of rule 10b-10 to provide securities laws or under any other legal in which a broker, dealer or municipal that the rule does not apply to securities requirements. excluded by paragraph (g) of the rule. securities dealer may effect transactions V. Point of Sale Disclosure for in covered securities in conjunction Proposed paragraph (g) would provide that rule 10b-10 does not extend to Transactions in Mutual Fund Shares, with another broker, dealer or Unit Investment Trust Interests and 529 transactions in: (i) U.S. Savings Bonds, municipal securities dealer. For Plan Interests example, a broker, dealer or municipal (ii) municipal securities, and (iii) any securities dealer may solicit persons at other security that is defined as a In addition to the tailored their workplaces, as part of an ‘‘covered security’’ by rule 15c2–2. confirmation requirements of rule 15c2– employer-sponsored marketing Transactions in savings bonds and 2, the Commission is also proposing arrangement, to invest in covered municipal securities already are rule 15c2–3, which would require securities. Although the broker, dealer excluded from the application of rule brokers, dealers and municipal or municipal securities dealer that 10b-10. The Commission also proposes securities dealers to provide customers solicits transactions may be paid on a amending the preliminary note to rule with specified information at the point transaction-basis, the customer accounts 10b-10 to clarify the application of the of sale—prior to the time they purchase may be opened at a different firm. rule.132 mutual fund shares, UIT interests and Proposed rule 15c2–2 would require Two other changes to rule 10b-10 are 529 plan securities. Investors, therefore, disclosure of payments to the broker, necessary to accommodate the addition would have this information before they dealer or municipal securities dealer of proposed rule 15c2–2. First, we finalize their investment decision to soliciting the transaction, even if it does propose to modify paragraph (a)(9) of purchase a covered security, regardless not maintain the account.130 rule 10b-10, which, when applicable, of whether the transaction is solicited or • We request comment on whether requires disclosure when a broker- unsolicited. The proposed rule would proposed rule 15c2–2 would result in dealer that effects a transaction is not a not apply to transactions in which an member of SIPC. As currently written, investor sells a covered security, 129 Attachments 1–3 hereto provide models for that paragraph contains an exception for because those transactions do not raise confirmations sent by clearing firms on behalf of certain transactions in open-end the same special cost and conflict themselves and introducing firms that receive sales investment companies and UITs. concerns. fees, revenue sharing and portfolio brokerage The new rule is designed to be commissions. Generally, so long as the fees that a Because proposed rule 15c2–2 would clearing firm receives in connection with a encompass transactions in those consistent with the existing obligations transaction do not constitute sales fees, revenue securities, we propose eliminating that of brokers, dealers and municipal sharing and portfolio brokerage commissions, the exception from rule 10b-10.133 securities dealers under the antifraud clearing firm would not have to separately state that provisions of the securities laws, which it does not receive that type of remmeration. 130 Absent an agreement disclosed to the 131 As noted, rule 10b–10 already exempts at times require a broker, dealer or customer, it is unlikely that the selling broker, transactions in municipal securities. municipal securities dealer to disclose dealer or municipal securities dealer would be able 132 Specifically, the preliminary note to rule 10b– information about particular costs and to send a single confirmation jointly with another 10 would be amended to note that rule 15c2–2, not conflicts prior to effecting a transaction firm effecting the transaction. See Office of rule 10b–10, governs disclosure requirements 134 Compliance Inspections and Examinations, related to transactions in open-end management in a covered security. It is also Commission, ‘‘Inspection Report on the Soft Dollar investment company shares, interests in unit Practices of Broker-Dealers, Investment Advisers investment trusts, and municipal fund securities transactions in UITs would not fall within the scope and Mutual Funds’’ (September 22, 1998) at n.78. used for education savings. of the ‘‘investment company plan’’ exception of rule The Commission, however, will consider requests 133 Proposed rule 15c2–2 would not apply to 10b–10. for exemptive relief permitting joint confirmations secondary market transactions in interests in UITs. 134 For example, the antifraud provisions at times in circumstances where the customer may That does not preclude this proposed amendment require disclosure prior to transactions about reasonably consent to such use. to rule 10b–10, however, because secondary market Continued

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intended to supplement the prudent the same securities that are subject to insurance products. In addition, we business ethic of firms that assure their the confirmation requirements of invite comment on whether point of sale customers will be apprised of key facts proposed rule 15c2–2, because those are disclosure is appropriate at or prior to prior to sales, to avoid surprises and the securities that raise the cost and the time the contract or policy is entered broken trades. Point of sale disclosure conflict issues that warrant this type of into or at the time the underlying funds should also complement confirmation disclosure requirement. Accordingly, are allocated. Commenters should disclosure, which provides a the disclosure requirements of proposed address whether such point of sale retrospective record of the complete rule 15c2–3 would apply to transactions disclosure is appropriate under the terms of a transaction for customers to in ‘‘covered securities.’’ Paragraph (f)(2) federal securities laws. assess in determining whether the of proposed rule 15c2–3 provides that transaction occurred as described and the term ‘‘covered security’’ has the B. Timing of Disclosure whether they received any applicable meaning set forth in rule 15c2–2. Proposed rule 15c2–3 would require breakpoint discounts.135 A broker, • We request comment on whether the broker, dealer or municipal dealer or municipal securities dealer this proposed rule appropriately securities dealer to deliver information that misstates information in a point of encompasses the types of securities that at the point of sale. Proposed paragraph sale disclosure with an intent to mislead raise distribution-related concerns that (f)(1) of the rule would define ‘‘point of may be subject to liability under the warrant point of sale disclosure. sale’’ differently depending on the antifraud provisions of section 10(b) and Commenters specifically are invited to relationship between the broker, dealer rule 10b-5. address whether this type of disclosure or municipal securities dealer and the The preliminary note to proposed rule requirement could have the effect of customers that it solicits. Generally, the 15c2–3, consistent with the preliminary directing investors away from mutual time of the point of sale would be note to proposed rule 15c2–2 and the funds and related securities.136 immediately prior to the time that the • proposed amendment to the preliminary We also request comment about broker, dealer or municipal securities note of rule 10b-10, would state that the whether persons other than brokers, dealer accepts the order from the point of sale disclosure requirements are dealers or municipal securities dealers customer. In the case of transactions in not determinative of, and do not also should be required disclose which the customer has not opened an exhaust, a broker’s, dealer’s or information to investors prior to account with the broker, dealer or municipal securities dealer’s disclosure transactions in covered securities. municipal securities dealer, or in which obligations under the antifraud Commenters are invited to discuss the broker, dealer or municipal provisions of the federal securities laws whether other persons that participate securities dealer does not accept the or under any other legal requirements. in the distribution of covered order from the customer—such as may Paragraph (a) of proposed rule 15c2– securities—such as banks—are subject be the case with workplace marketing of 3 would provide that it is unlawful for to the same or similar conflicts of 529 plans—the point of sale would be any broker, dealer or municipal interest as brokers, dealers and the time that the broker, dealer or securities dealer to effect a purchase of municipal securities dealers. municipal securities dealer first any covered security for a customer Commenters also are invited to discuss communicates with the customer about unless the broker, dealer or municipal whether the Commission should the covered security, specifically or in securities dealer delivers to the propose rules to require those other conjunction with other potential customer, at the point of sale, quantified persons to disclose specific information investments. information regarding distribution- to investors prior to transactions, or to This definition of point of sale is related costs and the dealer concession disclose confirmation information on or geared to be as simple as possible while that would be connected with the before the completion of such avoiding disclosure gaps. For most purchase, along with qualitative transactions. transactions, the time of disclosure is information about revenue sharing, • Commenters may also wish to based on the time that the broker, dealer portfolio brokerage commissions and discuss whether the point of sale or municipal securities dealer receives differential compensation. disclosure requirements of proposed rule 15c2–3 would be appropriate to the order from the customer—a standard A. Securities Transactions and Persons transactions in variable annuities. that should allow customers to consider Covered Commenters are invited to discuss any material information when they make The point of sale disclosure issues they believe would be relevant to their investment decisions. That requirements of proposed rule 15c2–3 the application of proposed rule 15c2– standard would not work, however, in would govern purchase transactions in 3 to variable insurance products, as well the case of brokers, dealers or municipal as any modifications they believe could securities dealers that solicit revenue sharing and portfolio brokerage improve the proposed rule’s transactions in covered securities—and arrangements, and about the cost differences effectiveness as applied to variable receive compensation in connection between various mutual fund share classes. See with those transactions—without generally In the Matter of Morgan Stanley DW Inc., insurance products. Specifically, supra note 20. commenters may wish to address opening accounts for or handling orders 135 As noted above, the confirmation also serves whether point of sale disclosure would from the investors who make those 137 as a record of previous transactions that customers provide investors with more useful purchases. Because the investors can assess in determining whether to make further solicited by those firms instead would investments with the same broker-dealer in the information for transactions in variable same mutual fund or similar type of security. contact another broker, dealer or Confirmation disclosure can be particularly 136 Other than in connection with transactions in municipal securities dealer or the issuer valuable with respect to transactions in mutual ‘‘penny stocks,’’ the rules we have promulgated to complete those transactions, it would fund shares and municipal fund securities, given under the Exchange Act generally do not not be feasible to trigger the disclosure that customers often invest in those securities specifically require a broker, dealer or municipal through a regular course of purchases. Moreover, securities dealer to disclose particular information obligations of those soliciting brokers, brokers, dealers and municipal securities dealers prior to transactions. See Exchange Act rules 15g– may supplement the disclosures required by 2 to 15g–5. As discussed above, however, the 137 Those may include brokers, dealers or proposed rule 15c2–2 by providing their customers antifraud provisions of the federal securities laws municipal securities dealers that market covered with additional information about costs and may mandate certain disclosures prior to security investments in the workplace of potential conflicts, using media such as the Internet. transactions. investors.

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dealers or municipal securities dealers C. Information Requirements The definitions of the terms ‘‘asset- on the time that an order is accepted.138 based sales charge,’’ ‘‘asset-based Those soliciting firms therefore would Proposed paragraph (a) would require service fee,’’ ‘‘dealer concession,’’ disclose the required information at the a broker, dealer or municipal securities ‘‘differential compensation,’’ ‘‘portfolio time they recommend the security or dealer to deliver quantitative securities transaction,’’ ‘‘revenue otherwise discuss the investment. information about distribution-related sharing’’ and ‘‘sales load’’ would be the costs that the investor may bear and the same as the definitions used in • We request comment on the point dealer concession that the broker, dealer proposed rule 15c2–2. Proposed of sale definition, and more generally on or municipal securities dealer may paragraph (f)(2) of rule 15c2–3 would the question of when, prior to expect to receive in connection with the cross-reference those definitions. transactions, should disclosure be transaction, combined with qualitative Like the confirmation provisions of provided to customers. Commenters information about practices that lead to proposed rule 15c2–2, the point of sale specifically are invited to address conflicts of interest in connection with provisions of proposed rule 15c2–3 are whether alternative times of disclosure the transaction. This proposed scope of not intended to preempt or negate any would be more effective. In their information is intended to give investors other provisions of law that may responses, commenters may wish to useful context for evaluating whether to apply.140 discuss alternatives such as at the time proceed with a possible investment, • The Commission requests comment of account opening or shortly thereafter, while accommodating practicalities of about the form and specificity of the at the time a broker, dealer or municipal disclosure. information that should be disclosed at securities dealer solicits a transaction, Proposed paragraph (a)(1) specifically the point of sale. Commenters on a periodic or annual basis, or at would require the broker, dealer or specifically are invited to discuss certain other times. Commenters also municipal securities dealer to inform its whether information about costs and may wish to address whether early customer about the distribution-related information about conflicts both are disclosure that is not specific to a costs that the customer would be appropriate elements of point of sale particular contemplated transaction expected to incur in connection with disclosure. Commenters may also wish would be an adequate substitute for the transaction, with separate disclosure to discuss whether the proposed disclosure later in time (but prior to the about: the amount of sales loads that combination of qualitative and transaction) that does contain would be incurred at the time of quantitative disclosure is appropriate, information that is specific to the purchase; estimated asset-based sales and whether the choice of quantitative transaction being contemplated. charges and asset-based service fees or qualitative disclosure is appropriate in each instance. In that regard, should • In addition, commenters are invited paid out of fund assets in the year following the purchase if net asset value all of the disclosures be qualitative? to discuss how to harmonize point of Alternatively, should all of the sale disclosure requirements with remained unchanged; and the maximum amount of any deferred sales load that disclosures be quantitative? NASD’s proposal to require member • Commenters also are invited to would be associated with the purchase firms to disclose information about address whether this proposed rule if those shares are sold within one year revenue sharing and differential should encompass additional categories (other than deferred sales loads of no compensation.139 Commenters further of information, and whether the cost of more than one percent that expire no are invited to discuss whether the providing certain types of information is later than one year after purchase, when proposed point of sale disclosure justified by the benefits to investors. no other sales load would be incurred requirement would impact the need for Commenters further are invited to the transaction confirmation on that transaction), along with a address whether, if applicable, the statement about how many years a requirements we propose in rule 15c2– broker, dealer or municipal securities deferred sales load may be in effect. 2. For example, would the transaction dealer should be required to identify the Proposed paragraph (a)(1) also would confirmation disclosures we propose be type of differential compensation (e.g., require the broker, dealer or municipal less necessary if the point of sale related to sales of proprietary securities, securities dealer to disclose the dealer disclosure requirements of proposed or related to sales of securities without concession or other sales fees it would a front-end load) it pays in connection rule 15c2–3 were combined with expect to receive in connection with the additional periodic disclosures that with transactions in the covered transaction. Those amounts would be security. Commenters further are invited inform customers about distribution- disclosed by reference to the value of related costs and conflicts of interest, to address whether a broker, dealer or the purchase, or, if that value is not municipal securities dealer should be such as quarterly account statements reasonably estimable at the time of the from the broker, dealer or municipal required, at the point of sale, to deliver disclosure, by reference to a model the same information that is required be securities dealer? Commenters are investment of $10,000. invited to provide empirical information disclosed in a transaction confirmation to support their views. Proposed paragraphs (a)(2)(i) and under proposed rule 15c2–2. (a)(2)(ii) would require the broker, • In addition, commenters are invited • In addition, the Commission dealer or municipal securities dealer to to address whether disclosure related to requests comment on whether a state whether it receives revenue breakpoint discounts would be transitional period is necessary to make sharing or portfolio brokerage adjustments necessary to deliver commissions from the fund complex. 140 As noted above, NASD rule 2830(k)(1) bars confirmations that comply with Proposed paragraph (a)(2)(iii) would member firms from favoring funds on the basis of proposed rule 15c2–3. brokerage commissions received or expected, and require the broker, dealer or municipal NASD rule 2830(k)(4) restricts member firms from securities dealer to state whether it pays disseminating information about its receipt of 138 In fact, the broker, dealer or municipal differential compensation in connection commissions from fund complexes other than to securities dealer may not even know the identities with transactions in the covered certain management personnel. See supra note 94. of the persons whom it solicits until after the In proposing required disclosure of portfolio investment is made and it is paid for helping make security, if the covered security charges brokerage commission arrangements, we do not the sale. a deferred sales load or is a proprietary intend to provide any comfort for relationships or 139 See supra text accompanying note 51. covered security. activities that are precluded by existing rules.

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warranted as part of point of sale paragraph (a) must be treated as an Those requirements are geared to disclosure. In that regard, we note that indication of interest until after the promote effective disclosure while broker-dealers already are required to point of sale information is disclosed, accommodating practicality. For provide information about breakpoint and customers have received an example, if the broker, dealer or discounts to customers.141 opportunity to terminate any order municipal securities dealer took the • Commenters moreover are invited following disclosure of the information. customer’s order over the telephone, to discuss whether additional point of It further would provide that the broker, then oral disclosure over the telephone sale disclosures are appropriate when a dealer or municipal securities dealer would be required. If the broker, dealer broker, dealer or municipal securities shall disclose this right to the customer or municipal securities dealer took the dealer recommends that an investor sell at the time it discloses the information customer’s order over the Internet, then a covered security that the investor required under the paragraph to the the Internet could be used to provide currently owns, and invest in or ‘‘switch customer. This provision is intended to the required disclosure.144 If the broker, to’’ a different covered security. At enable customers to consider material dealer or municipal securities dealer times, a broker, dealer or municipal information prior to a transaction being solicited the transaction in a seminar or securities dealer may recommend finalized. Based on the information, meeting, then the firm would have to switching of securities even if the customers may conclude that it would provide the disclosure orally and in investor would incur extra fees to make be prudent to explore alternative writing. A written disclosure document the switch, or even if the investor has investments, such as investments that that provides information consistent already incurred a front-end sales load carry lower distribution-related costs. In with the confirmation disclosure on the covered security he or she that case, the customer may determine requirement of rule 15c2–2 generally currently owns. While this is a complex not to make the order effective. also would satisfy this requirement. issue that is addressed by other rules Because disclosure of information is • We request comment on these including the antifraud provisions of the necessary for orders to be effective, we proposed requirements about the federal securities laws and self- expect that brokers, dealers and manner of disclosure. Commenters regulatory organization sales practice municipal securities dealers would particularly are invited to discuss rules and related guidance,142 we seek engage in careful procedures to ensure whether customers should have the comment on the extent to which that only effective orders are conveyed right to receive this information in additional specific confirmation or to the issuer, and would be required to writing as a supplement to oral point of sale disclosure should be keep appropriate records demonstrating disclosure, when the rule otherwise required, and possible disclosure compliance with the rule, as discussed would only require oral disclosure.145 alternatives. below.143 • Commenters also are invited to • We request comment on this discuss whether Schedule 15D is an D. Customers’ Right To Terminate proposed provision. Commenters appropriate form for written disclosures, Orders Made Prior to Disclosure specifically are invited to address how and whether the explanatory Proposed paragraph (b) of rule 15c2– customers may terminate orders made information accompanying Schedule 3 would provide that an order made prior to receiving point of sale 15D is appropriate. prior to the disclosure required by disclosure, and whether the rule should • Commenters further may wish to specify how customers may terminate discuss whether the rule should require 141 When we recently proposed rules to require orders. the broker, dealer or municipal open-end management investment companies to securities dealer to obtain from the disclose enhanced information about breakpoint E. Manner of Disclosure discounts, we pointed out that a ‘‘broker-dealer who customer a signed acknowledgement of sells fund shares to retail customers must disclose Proposed paragraph (c) generally having received point of sale disclosure, breakpoint information to its customers and must would require the broker, dealer or and, if so, what would be the have procedures reasonably designed to ascertain municipal securities dealer to give or appropriate exceptions to that information necessary to determine the availability send the information to the customer in and appropriate level of breakpoints.’’ See requirement. Commenters also should Securities Act Release No. 8349 (December 17, writing using Schedule 15D, discuss appropriate practices or 2003), 68 FR 74732 (December 24, 2003). supplemented by oral disclosure if the safeguards that may be necessary to Moreover, the joint NASD/industry task force on point of sale occurs at an in-person prevent brokers, dealers, or municipal breakpoints recommended that broker-dealers meeting. If the point of sale occurs securities dealers from delivering point provide disclosure statements to investors at the time of or prior to the confirmation of the initial through means of an oral of sale disclosure in a manner that purchase of front-end load fund shares, and communication other than at an in- undermines its purpose. thereafter on a periodic basis or at the time of or person meeting, however, then the prior to the confirmation of subsequent purchases. information shall be disclosed to the F. Recordkeeping See Task Force Report, supra note 42 at 14–15. customer orally at the point of sale. Proposed paragraph (d) of rule 15c2– 142 For instance, broker-dealer recommendations Attachments 4 and 5 to this proposal related to investment switching would be subject to 3 would require brokers, dealers or NASD rule 2310, regarding suitability. set forth examples of point of sale municipal securities dealers, at the time NASD Notice to Members 99–35 (May 1999), disclosure that are consistent with they disclose information required by which discussed the responsibility of members Schedule 15D. Like Schedule 15C for this rule, to make records of related to sales of variable annuities, noted that confirmation disclosure, Schedule 15D communications and their disclosure member firms may develop an analysis document or use a state-authorized form in connection with provides the format for the required sufficient to demonstrate compliance the replacement of variable annuities. If the firm disclosure accompanied by materials with the delivery requirements of uses that type of document, then it ‘‘should include that will help permit the customer to paragraphs (a) and (b). The brokers, an explanation of the benefits of replacing one evaluate the significance of the dealers or municipal securities dealers contract for another variable contract,’’ and the document should be signed by the customer, the disclosure information. registered representative and the registered 144 The use of electronic media to deliver the principal. We note, of course, that any practice that 143 For example, brokers, dealers and municipal required disclosure is subject to applicable legal provides information about the ‘‘benefits’’ of securities dealers may limit their exposure to losses requirements. switching, without discussing the costs of resulting from violations of the rule by maintaining 145 If the customer were to conclude the purchase, switching, may be inconsistent with the antifraud records demonstrating that the customer received then this supplementary disclosure may arrive at provisions of the federal securities laws. the disclosure information. roughly the same time as the confirmation.

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would have to preserve those records compensation. Proposed paragraph unnecessary burdens on clearing firms and for the period specified in Exchange (e)(1)(ii) of the rule would further and on primary distributors that do not Act rule 17a–4(b), or, in the case of specify that the exception in paragraph solicit transactions, when the investor records of oral communications and (e)(1) is available only to brokers, can be expected to receive the required their disclosures, in accordance with dealers or municipal securities dealers disclosure from another broker, dealer Rule 17a–4(f) and for the period that are not compensated for effecting or municipal securities dealer. specified in Exchange Act rule 17a–4(b) transactions for customers that do not • We request comment on whether with regard to similar written have accounts with that broker, dealer this proposed exception avoids communications and records. or municipal securities dealer.147 This unnecessary duplication of disclosure Often maintaining a copy of the proposed exception is intended to and whether it is tailored appropriately. disclosure document that was provided promote disclosure while avoiding the Commenters specifically are invited to to the customer can satisfy this need to delay the execution of orders discuss, based on their experiences, requirement. In the case of disclosure received via mail or similar services, what types of agreements, certification solely by means of oral given that it may not be possible to or verification would be appropriate for communications, this provision would quickly locate those customers, let alone establishing a ‘‘reasonable belief.’’ require the broker, dealer or municipal provide disclosure. Proposed paragraphs (e)(3) through securities dealer to have compliance • We request comment on this (e)(5) of rule 15c2–3 would provide procedures in place that are adequate to proposed exception, and particularly if additional targeted exceptions. demonstrate that it provided the the scope of the exception is Proposed paragraph (e)(3) would required disclosure.146 appropriate. provide an exception for transactions • We request comment on this Proposed paragraph (e)(2) of rule effected as part of a covered securities recordkeeping requirement. 15c2–3 would except a clearing broker, plan, as defined under proposed rule Commenters are invited to discuss dealer or municipal securities dealer, or 15c2–2, so long as the broker, dealer or whether, in the case of information that a fund’s primary distributor, from municipal securities dealer provides only is delivered orally, the rule should having to disclose information under disclosure consistent with proposed require electronic copies. Commenters the rule if the clearing firm or the rule 15c2–3 prior to the first purchase also are invited to address, in the case primary distributor did not of any covered security as part of the of oral disclosures, what records or communicate with the customer about plan. Proposed paragraph (e)(4) would procedures would be necessary to the transaction other than to accept the provide an exception for reinvestments demonstrate compliance with the rule. customer’s order, and if that clearing or of dividends earned. Proposed Also, should the recordkeeping distributing firm reasonably believed paragraph (e)(5) would provide an provisions of proposed rule 15c2–3(d) that another broker, dealer or municipal exception for transactions in which the instead be included in rules 17a–3 and securities dealer (such as an introducing broker, dealer or municipal securities 17a–4, the Commission’s books and firm or a selling firm) has delivered the dealer exercises investment discretion. records rules? information to the customer required by Paragraph (f)(2) of proposed rule 15c2– rule 15c2–3. The clearing or distributing 3 provides that the term ‘‘covered G. Exceptions firm could demonstrate this ‘‘reasonable securities plan’’ has the meaning set Proposed paragraph (e) of rule 15c2– belief’’ if it has entered into an forth in proposed rule 15c2–2. We 3 would except several types of agreement providing for the other believe that transactions that would be transactions from the rule’s scope. First, broker, dealer or municipal securities excluded by these three proposed proposed paragraph (e)(1) would dealer to make the required point of sale exceptions do not link the customer’s conditionally except transactions disclosures, supplemented with investment decision to the customer’s resulting from orders that a customer appropriate auditing practices.148 This communications with the broker, dealer placed via U.S. mail, messenger delivery proposed exception in paragraph (a)(2) or municipal securities dealer in a way or a similar third-party delivery service. is intended to preclude imposing that establishes a compelling need for Proposed paragraph (e)(1)(i) would point of sale disclosure. provide that the exception is available 147 As discussed above with respect to the • We request comment on those only to brokers, dealers or municipal definition of point of sale, brokers, dealers or proposed exceptions. Commenters are securities dealers that meet the municipal securities dealers that may be paid for effecting transactions without having to open also invited to discuss whether requirements of proposed paragraph accounts with those customers would have to additional exceptions may be (e)(1)(ii), discussed below, and that the provide disclosure at the time they recommend or appropriate. Commenters particularly broker, dealer or municipal securities discuss the investment, regardless of how the are invited to discuss whether the dealer must have, within the prior six investor ultimately transmits the order. proposed rule should have an exception months, provided the customer with 148 The rules of the NASD and the NYSE require clearing and carrying agreements to specify the for institutional orders and, if so, what information about the maximum responsibilities of each party with respect to a the appropriate scope of such an potential size of sales loads and asset- number of matters, including confirmations and exception would be. based sales charges and service fees statements, as well as maintenance of books and associated with covered securities sold records. See NASD rule 3230, NYSE rule 382. H. Definitions Agreements that specify the responsibilities of by that broker, dealer or municipal parties with respect to point of sale disclosure, and As noted above, proposed paragraph securities dealer, as well as statements associated recordkeeping, may form the basis for a (f)(1) of rule 15c2–3 would define the about whether the broker, dealer or reasonable belief. term ‘‘point of sale.’’ Proposed municipal securities dealer receives A fund’s primary distributor may enter into paragraph (f)(2) would define the terms revenue sharing or portfolio brokerage arrangements with other brokers, dealers or municipal securities dealers to sell interests in the ‘‘asset-based sales charges,’’ ‘‘asset- commissions or pays differential fund. That primary distributor may demonstrate the based service fee,’’ ‘‘covered securities requisite reasonable belief if its selling agreement plan,’’ ‘‘covered security,’’ ‘‘dealer 146 Broker-dealers are required to maintain copies with those other firms provides that the selling concession,’’ ‘‘differential of outgoing communications relating to their brokers, dealers or municipal securities dealers will business for a period of not less than three years, deliver point of sale information, and if the primary compensation,’’ ‘‘fund complex,’’ the first two years in an easily accessible place. See distributor audits the compliance of those other ‘‘portfolio securities transaction,’’ rule 17a–4(b)(4). firms. ‘‘revenue sharing’’ and ‘‘sales load’’ by

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referring to the definition of those terms paid a 5% front-end load on the gross amount invested.156 The footnote in proposed rule 15c2–2. Paragraph amount, the load would be $500. The requirement would apply to front-end (f)(2) also would define the term net amount invested would be $9,500 and back-end sales loads, as well as ‘‘customer’’ by reference to the ($10,000–$500), and the load as a cumulative sales loads where more than definition in proposed rule 15c2–2. percentage of the net amount invested one type of sales load is imposed. would be 5.26% ($500/$9,500 x 100%). We are also proposing to require VI. Prospectus Disclosure The fee table currently requires the load similar footnote disclosure with respect The Commission is proposing to to be disclosed as 5%. Our proposed to the table of front-end sales loads that amend Form N–1A in order to enhance amendment would require the load to is required elsewhere in the disclosure of sales loads. Currently, a be disclosed as 5.26%.154 prospectus.157 Our proposal would fund is required to disclose the The Commission is also proposing to require a fund to disclose in a footnote maximum sales loads as a percentage of amend Form N–1A to require disclosure to the table of front-end sales loads, if offering price in the fee table that is in the fund prospectus that would alert applicable, that the actual front-end located in the front of the prospectus.149 investors to the fact that sales loads sales load that may be paid by an In addition, elsewhere in the shown in the prospectus as a percentage investor as a percentage of the gross or prospectus, a fund is required to include of the net asset value or offering price net amount invested at any breakpoint a table of front-end sales loads at each may be higher or lower than the actual may be higher or lower than the breakpoint, shown as a percentage of sales load that an investor would pay as applicable load in the table of front-end both the offering price and the net a percentage of the net or gross amount sales loads. The footnote also would be amount invested.150 invested. This difference is a result of required to explain briefly the reason for The Commission is proposing to rounding.155 this variation and to disclose the range amend the fee table to require the Specifically, we are proposing to of the actual front-end sales loads at maximum front-end sales load to be require a fund to disclose in a footnote each sales load breakpoint as a shown as a percentage of net asset value to the fee table, if applicable, that the percentage of the gross and net amount rather than as a percentage of offering actual maximum sales load that may be invested.158 price.151 The proposed amendment paid by an investor as a percentage of • The Commission requests comment would make disclosure of front-end the net amount invested may be higher on the proposed amendments to the fee sales loads in the prospectus fee table than the maximum sales load shown as table and front-end sales load table of consistent with that in the confirmation a percentage of net asset value in the fee Form N–1A. In particular, the that would be required by proposed rule table. The footnote would be required to Commission requests comment on the 15c2–2. For consistency, the proposed explain briefly the reason for this proposed requirement that the fee table amendments would also remove the variation and disclose the maximum of the prospectus disclose the sales current requirement that a deferred sales sales load as a percentage of the net loads as a percentage of net asset value load based on net asset value at the time rather than offering price. Commenters of purchase be shown in the fee table as 154 As described below, there are differences are specifically invited to comment on a percentage of offering price at the time attributable to rounding between sales loads as a whether continuing to require of purchase. Instead, the proposed percentage of net and gross amount invested, on the one hand, and sales loads as a percentage of net disclosure of sales loads in the fee table amendments would require that a asset value and offering price, on the other. Because as a percentage of offering price may deferred sales load based on offering prospectus disclosure does not relate to a particular confuse investors if the confirmation price at the time of purchase be shown amount invested, it must be based on net asset value or offering price rather than net amount that would be required by proposed rule in the fee table as a percentage of net 15c2–2 requires sales loads to be shown 152 invested or gross amount invested. asset value at the time of purchase. 155 For example, if the net asset value per share as a percentage of net amount invested. Similarly, we are proposing to revise the is $1.98 and the applicable sales load is 4.25% of Which presentation better reflects costs instructions to the fee table to clarify the offering price, the offering price would be calculated as follows: $1.98/(1.00 – 0.0425), which to investors? Which presentation is that if a fund imposes more than one easier for investors to use and type of sales load (e.g., a deferred sales equals $2.07 when rounded to two decimal places. The number of shares purchased is determined by understand? load and a front-end sales load), the dividing the gross amount invested by this offering • Commenters are also invited to aggregate load should be shown in the price. Thus, if the gross amount invested is $30,000, comment on whether the proposed the number of shares purchased is 14,492.754 fee table as a percentage of net asset disclosure alerting investors to the fact 153 (rounded to three decimal places) ($30,000/$2.07). value. The net amount invested would be the number of that, as a result of rounding, sales loads We believe that disclosure of sales shares purchased, multiplied by the net asset value shown in the prospectus as a percentage × loads as a percentage of net asset value per share, or $28,695.65 (14,492.754 $1.98), and of the offering price or net asset value rather than offering price would better the remaining $1,304.35 would be deducted as a help investors to understand the true sales load. This $1,304.35 is equivalent to 4.35% of the gross amount invested of $30,000, rather than 156 Proposed Instruction 2(a)(iv) to Item 3 of Form costs of investing in a load fund. This the 4.25% sales load shown as a percentage of N–1A. For example, if the maximum front-end sales method would present sales loads as a offering price. load shown as a percentage of net asset value is percentage of the net amount invested As a second example, if the net asset value per 6.10%, but the maximum front-end sales load that in the fund, rather than a percentage of share is $7.78 and the applicable sales load is may be paid by an investor may range between 5.75% of the offering price, the offering price would 6.00% and 6.20% of the net amount invested, the the sum of the net amount invested in be calculated as follows: $7.78/(1.00 – 0.0575), fund would be required to disclose the maximum the fund plus the load. For example, if which equals $8.25 when rounded to two decimal 6.20% figure in the footnote. an investor started with $10,000 and places. If the gross amount invested is $30,000, the 157 Proposed Instruction 4 to Item 8(a)(1) of Form number of shares purchased is 3,636.364 (rounded N–1A. to three decimal places) ($30,000/$8.25). The net 158 For example, if the front-end sales load is 149 Item 3 of Form N–1A. amount invested would be the number of shares 6.10% of net asset value and 5.80% of offering 150 Item 8(a)(1) of Form N–1A. purchased, multiplied by the net asset value per price, but the front-end sales load that may be paid 151 Proposed Item 3 of Form N–1A (fee table share, or $28,290.91 (3,636.364 × $7.78), and the by an investor may range between 6.00% and caption). remaining $1,709.09 would be deducted as a sales 6.20% of the net amount invested and 5 .70% and 152 Proposed Instruction 2(a)(i) to Item 3 of Form load. This $1,709.09 is equivalent to 5.70% of the 5.90% of the gross amount invested, the fund N–1A. gross amount invested of $30,000, rather than the would be required to disclose these sales load 153 Proposed Instruction 2(a)(ii) to Item 3 of Form 5.75% sales load shown as a percentage of offering ranges of 6.00%–6.20% of net amount invested and N–1A. price. 5.70%–5.90% of gross amount invested.

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may be higher or lower than the actual • We also request comment on VII. Disclosure Related to Transactions sales load that an investor would pay as whether additional prospectus in Callable Preferred Stock and a percentage of the gross or net amount disclosure requirements regarding Callable Debt Securities, and Other invested is appropriate. Is this revenue sharing payments would be Amendments to Rule 10b–10 disclosure necessary for both sales loads appropriate. Should we adopt similar In addition to the amendments to rule disclosed as a percentage of net asset prospectus disclosure requirements 10b–10 noted above, we are also value and sales loads disclosed as a regarding portfolio securities transaction proposing to amend rule 10b–10 in percentage of offering price? Should this commissions? connection with transactions involving disclosure be required with respect to • The Commission further requests callable preferred stock and callable both front-end sales loads and deferred comment on whether amendments debt securities. Finally, we propose to sales loads? Should this disclosure be parallel to those being proposed for amend the rule to delete an expired required in both the prospectus fee table Form N–1A should be made to Forms transition period related to the and the table of front-end sales loads? N–3,160 N–4,161 and N–6,162 the confirmation of transactions involving • The Commission also requests registration forms for separate accounts securities futures products. comment on whether it is possible to that offer variable annuity contracts and quantify the variation between sales A. Proposed Amendment Related to loads disclosed as a percentage of net variable life insurance policies. In Transactions in Callable Preferred Stock particular, the Commission invites asset value or offering price and the We are proposing to amend rule 10b– amounts that investors will pay as a comment on whether the prospectus fee tables of these registration forms should 10 to require broker-dealers that effect percentage of net or gross amount transactions in shares of preferred stock invested, as would be required by the disclose sales loads as a percentage of accumulation unit value or net amount to inform customers about whether the proposals. If it is possible to quantify issuer of the stock has reserved the right invested. Would such a requirement be this variation, should the fee table and to repurchase—or call—the shares. appropriate for separate accounts that the table of front-end sales loads, rather Currently, paragraph (a)(4) of Rule 10b– offer variable life insurance policies, than a footnote, contain the sales loads 10 requires broker-dealers that effect given that significant deductions may be that an investor would pay as a transactions in callable debt securities made from premium payments for these percentage of net or gross amount to disclose the fact that the debt security invested after rounding is taken into policies for the cost of insurance, in may be subject to redemption in consideration? addition to deductions for sales loads? advance of maturity, and that the The Commission is also proposing to • Commenters are also invited to redemption may affect the yield of the amend Form N–1A to require that a comment on whether the actual sales debt security. Rule 10b–10, however, mutual fund include brief disclosure in loads paid by investors in variable does not require similar disclosure for its prospectus regarding revenue sharing insurance products may be higher or transactions in preferred stock that is payments, in order to direct investors to lower than the sales loads disclosed in callable. the disclosure regarding revenue sharing the prospectuses for these products as a Information about whether shares of that we are proposing to require in the result of rounding. If so, would preferred stock are callable is material to confirmation and point of sale disclosure regarding the effects of investors. Investors often purchase disclosure. If any person within a fund rounding parallel to that proposed for shares of preferred stock for their complex makes revenue sharing mutual funds be appropriate? dividend yield. If the preferred stock is payments, the proposed amendment • The Commission further requests callable and is repurchased by the would require a fund to disclose that comment on whether the proposed issuer, then the investor may not be able fact in its prospectus.159 For this prospectus disclosure regarding revenue to reinvest his or her proceeds in an purpose, ‘‘fund complex’’ and ‘‘revenue sharing payments, including the instrument with an equivalent yield. sharing’’ would have the meanings set reference to the confirmation and This is particularly significant given forth in proposed rule 15c2–2(f)(10) and periodic statements required under that issuers are most likely to call (15). If any such revenue sharing proposed rule 15c2–2 and the point of preferred stock when interest rates are payments are made, the fund would also declining. Confirmation disclosure of be required to disclose that specific sale disclosure required under proposed rule 15c2–3, would be appropriate for this material information could alert an information about revenue sharing investor to any misunderstandings payments to an investor’s financial the registration forms for variable insurance products. Are revenue sharing about the rights associated with the intermediary is included in the preferred stock, promote the timely confirmation or periodic statement payments to financial intermediaries made in connection with these resolution of problems, and better required under proposed rule 15c2–2 enable the investor to evaluate potential products, other than those made in and in the disclosure provided at the future transactions involving that connection with underlying funds? point of sale required under proposed security. rule 15c2–3. Accordingly, we propose amending • The Commission requests comment 160 17 CFR 239.17a and 274.11b. Form N–3 is used by all insurance company separate accounts rule 10b–10 to redesignate current on whether this proposed requirement offering variable annuity contracts that are paragraph (a)(4) as ‘‘(a)(4)(A),’’ and add for prospectus disclosure regarding registered under the Investment Company Act as a new paragraph (a)(4)(B) that would revenue sharing payments, including management investment companies. require a broker-dealer that effects a the reference to the confirmation and 161 17 CFR 239.17b and 274.11c. Form N–4 is transaction in callable preferred stock to used by all insurance company separate accounts periodic statement required under offering variable annuity contracts that are disclose to the customer that the proposed rule 15c2–2, and the point of registered under the Investment Company Act as preferred stock may be repurchased at sale disclosure required under proposed unit investment trusts. the election of the issuer and that rule 15c2–3, would provide useful 162 17 CFR 239.17c and 274.11d. Form N–6 is additional information is available upon information to investors. used by all insurance company separate accounts request. offering variable life insurance policies that are • registered under the Investment Company Act as The Commission requests comment 159 Proposed Item 8(c) of Form N–1A. unit investment trusts. about whether this proposal would

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provide adequate notice to investors. security when prevailing interest rates specific conditions. Because those Commenters are specifically invited to decline. transitional provisions no longer are in address whether transaction We considered the adequacy of yield- effect, we are proposing to delete confirmations also should state that the to-call disclosure in the early 1980s, subparagraph (2) of paragraph (e) of rule callability of preferred stock may affect when we proposed and adopted 10b–10, and make corresponding the yield earned on that stock. The amendments to rule 10b–10. In technical changes. Commission is particularly interested in proposing the amendments, we noted learning more about current industry that investors could be surprised by the VIII. Paperwork Reduction Act practice regarding the disclosure of the early redemption of investments in Analysis callable nature preferred stock and long-term debt securities. We Certain provisions of proposed whether broker-dealers already disclose concluded, however, in light of the such information as a matter of prudent variety and number of call provisions, Exchange Act rules 15c2–2 and 15c2–3, business practice on confirmations or in that ‘‘a legend advising the customer the amendments to Exchange Act rule some other way highlight such that he may request information from 10b–10, and the amendments to Form information to their customers. his broker-dealer is a sensible approach N–1A contain ‘‘collection of 164 information’’ requirements within the • Moreover, commenters are invited to this problem.’’ Nonetheless, a to address whether transaction confirmation does not provide optimal meaning of the Paperwork Reduction 166 confirmations should provide additional disclosure if it specifically identifies Act of 1995. The Commission has disclosures about preferred stock, such one call date, but requires an investor to submitted them to the Office of contact the broker-dealer to find out the as disclosures about annual yield, yield- Management and Budget (‘‘OMB’’) for first call date.165 to-redemption and, if callable, the fixed review in accordance with 44 U.S.C. In our view, disclosure of the first 3507(d) and 5 CFR 1320.11. The price at which the preferred stock may date upon which a debt security may be be repurchased and the date or dates collections of information under called would provide customers with proposed rules 15c2–2 and 15c2–3 are upon which the issuer may repurchase meaningful information that would help 163 new. The title for the new collection of the preferred stock. avoid confusion. We therefore propose • information under proposed rule 15c2– Commenters also may wish to amending rule 10b–10 to provide for address whether confirmation that additional disclosure. Specifically, 2 is ‘‘Rule 15c2–2 Confirmation of disclosure of such information would we propose to amend paragraph (a)(6)(i) transactions in open-end management serve as a useful means of informing to require a broker-dealer that effects a investment company shares, unit customers as to the investment features transaction in a debt security on the investment trust interests, and of preferred stock. basis of yield-to-call to disclose the date municipal fund securities used for education savings’’. The title for the B. Proposed Amendment Related to upon which the debt security may first new collection of information under Transactions in Callable Debt Securities be called. • We request comment on whether proposed rule 15c2–3 is ‘‘Rule 15c2–3 We also are proposing to amend rule this proposal would provide adequate Point-of-sale disclosure for purchase 10b–10 to require disclosure of the first notice to investors, and whether transactions in open-end management date on which a debt security may be additional information should be investment company shares, unit called. Currently, paragraph (a)(6) of disclosed on the confirmation related to investment trust interests, and rule 10b–10 requires a broker-dealer that the impact of callability on yield. municipal fund securities used for has effected a transaction in a debt Commenters are requested to address to education savings’’. The OMB has not security on the basis of yield-to-call to what extent broker-dealers currently yet assigned a control number to the disclose, among other information, the disclose call information in connection new collections of information under type of call, the call date and the call with transactions involving debt proposed rules 15c2–2 and 15c2–3. In price. In practice, a bond may be subject securities and whether broker-dealers addition, the Commission is revising the to call on a series of dates. As a result, already disclose the first possible call collection of information entitled ‘‘Rule although a confirmation may state what date as a matter of prudent business 10b–10 Confirmation of Transactions,’’ the bond’s yield-to-call would be if the practice on confirmations or in some OMB Control Number 3235–0444 and bond is called on one of those dates, the other way highlight such information to the collection of information entitled confirmation may not inform a customer their customers. about the first possible date on which a ‘‘Form N–1A under the Investment C. Outdated Transitional Provisions bond is subject to call. We believe this Company Act of 1940 and Securities Act Related to Security Futures Product may confuse investors who are not of 1933, Registration Statement of Open- Transactions otherwise aware that a bond may be End Management Investment called on a date earlier than the one Paragraph (e) of rule 10b–10 contains Companies,’’ OMB Control No. 3235– specified on the confirmation. The a conditional exception from the general 0307. An agency may not conduct or possibility of earlier call can subject the requirements of the rule for certain sponsor, and a person is not required to investor to additional reinvestment risk, transactions in securities futures respond to, a collection of information because the investor likely would be left products. Transitional provisions unless it displays a currently valid with worse alternatives for reinvesting permitted broker-dealers to take control number. the proceeds if the issuer calls the advantage of that exception up to June 1, 2003 without having to comply with 163 Paragraphs (a)(5) and (a)(6) of rule 10b–10 require yield disclosure for transactions in debt 164 Exchange Act Release No. 19687 (April 18, securities. Paragraph (a)(5) requires disclosure of 1983), 48 FR 17583 (April 25, 1983). yield to maturity for transactions in debt that are 165 Consistent with the discussion above, we note effected on the basis of dollar price. Paragraph (a)(6) that a broker-dealer has an obligation to disclose requires disclosure of yield to maturity, current material information to investors that goes beyond yield or yield to call for transactions in debt that the information that is strictly required to be are effected on the basis of yield. disclosed in the confirmation. 166 44 U.S.C. 3501, et seq.

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A. Rule 15c2–2 brokers, dealers and municipal costs of proposed rule 15c2–2 being securities dealers to disclose their overstated. 1. Collection of Information in compensation for selling those Connection With Certain Transactions 4. Reporting and Recordkeeping Burden securities, and to disclose information Involving Open-End Management about revenue sharing arrangements and The Commission staff estimates that Investment Company Securities, Unit there are 1 billion confirmations Investment Trust Interests, and portfolio brokerage arrangements that create conflicts of interest for them. delivered annually to customers in Municipal Fund Securities Used for connection with securities transactions Education Savings Moreover, the proposed rule would require brokers, dealers and municipal involving mutual fund shares, UIT As discussed previously in this securities dealers to inform customers interests and 529 plan securities.168 release, proposed rule 15c2–2 would about whether their salespersons or Rule 10b–10 currently requires broker- apply to transactions in mutual fund other associated persons receive extra dealers to deliver confirmations to shares, UIT interests and 529 plan compensation for selling certain covered customers in connection with securities. The proposed rule would securities. transactions in mutual fund shares and require brokers, dealers and municipal UIT interests. In addition, brokers, securities dealers to make certain of the The new rule’s more targeted dealers and municipal securities dealers disclosures that rule 10b–10 currently informational requirements would are required under the rules of the requires them to make. Thus, brokers, provide investors in mutual fund shares, MSRB to deliver confirmations to dealers and municipal securities dealers UIT interests and 529 plan securities customers in connection with would no longer be required to comply with important information about their transactions involving municipal fund with the requirements of rule 10b–10 brokers’, dealers’ or municipal securities securities.169 The Commission staff does when effecting transactions in the dealers’ conflicts of interest and about not anticipate that a significant number securities covered by proposed rule distribution costs that can reduce their of new confirmations would be required 15c2–2. Proposed rule 15c2–2 would investment returns. In addition, the to be generated if proposed rule 15c2– require brokers, dealers and municipal Commission, the self-regulatory 2 is adopted. The proposed rule would, securities dealers to disclose targeted organizations, and other securities however, require additional information information about the costs and regulatory authorities would be able to in confirmations that would otherwise conflicts of interest connected with use records of confirmations delivered be required to be delivered under those transactions. In particular, they pursuant to proposed rule 15c2–2 in the Exchange Act rule 10b–10 and MSRB would be required to disclose (a) course of examinations, and rule G–15. information about loads and other investigations, as well as enforcement The Commission staff estimates that distribution-related costs that directly proceedings against brokers, dealers and brokers, dealers and municipal impact the returns earned by investors municipal securities dealers. However, securities dealers would have a one- in those securities; (b) information about no governmental agency would time burden associated with compensation of brokers, dealers and regularly receive any of the information reprogramming software and otherwise municipal securities dealers for selling described above. updating systems in order to enable those securities and information about 3. Respondents confirmation delivery systems to revenue sharing arrangements and generate the information required under portfolio brokerage arrangements that By its terms, proposed rule 15c2–2 proposed rule 15c2–2.170 We create conflicts of interest for them; and potentially would apply to all of the understand that some brokers, dealers (c) information about whether their approximately 5,338 brokers, dealers and municipal securities dealers have associated persons receive extra and municipal securities dealers that are developed their own proprietary compensation for selling proprietary registered with the Commission and that confirmation delivery systems, which fund shares or certain fund share are members of NASD. It would also would need to be reprogrammed and classes. Brokers, dealers and municipal potentially apply to approximately 62 updated to comply with proposed rule securities dealers would provide this additional municipal securities 15c2–2. As a general matter, medium- information to customers in the form of dealers.167 It is important to note, sized and smaller firms, but also some written confirmations. however, that only those brokers, larger firms, use third-party service providers, or vendors, to generate the 2. Proposed Use of Information dealers and municipal securities dealers that effect transactions in mutual fund data necessary to send confirmations.171 The purpose of proposed rule 15c2– shares, UIT interests and 529 plan They may also use vendors to actually 2 is to provide investors in mutual fund securities would have to comply with send confirmations to investors. shares, UIT interests and 529 plan the provisions of proposed rule 15c2–2. Therefore, the firms’ vendors would be securities with the relevant information Although the staff believes some required to reprogram their software and currently required by rule 10b–10, as brokers, dealers and municipal update their systems to generate the well as information about certain securities dealers do not effect data that would allow their clients to distribution-related costs and certain transactions in mutual fund shares, UIT comply with proposed rule 15c2–2. distribution arrangements that create interests or 529 plan securities, the staff Some, if not all, of the cost for this conflicts of interest for brokers, dealers, is unable to estimate the number of such municipal securities dealers, and their brokers, dealers and municipal 168 This estimate is based on discussions with associated persons. In addition to industry participants. securities dealers and has, therefore, 169 certain basic transaction information MSRB rule G–15. assumed that all brokers, dealers and 170 The Commission staff understands that, currently required by rule 10b–10, municipal securities dealers effect such because confirmation delivery systems already proposed rule 15c2–2 specifically transactions. This assumption may exist, new systems are not needed to generate the would require confirmation disclosure result in the paperwork burdens and confirmations that would be required under of information about loads and other proposed rule 15c2–2. 171 Based on discussions with industry distribution-related costs that directly 167 Source: MSRB Registrants List (available on representatives, the Commission staff estimates that impact the returns earned by investors the Internet at http://www.msrb.org/msrb1/PQweb/ over 5,000 brokers, dealers and municipal securities in those securities. It also would require Registrants.xls). dealers use vendors’ confirmation data services.

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reprogramming and systems upgrading confirmations delivered pursuant to annual burden to brokers, dealers and would be allocated to the vendors’ proposed rule 15c2–2. As a result, the municipal securities dealers to generate clients—the brokers, dealers and burden associated with obtaining data to and send confirmations to customers municipal securities dealers. The staff be included in confirmations would be pursuant to proposed rule 15c2–2 understands from discussions with de minimis. The Commission staff would be 16.7 million hours.174 It is vendors that the allocation of costs estimates from information provided by important to note, however, that would coincide roughly with the industry participants that the annual confirmations for transactions in volume of the client’s transactions, so burden to brokers, dealers and covered securities are currently required that a broker, dealer or municipal municipal securities dealers, and their to be delivered pursuant to rule 10b–10 securities dealer that executes fewer vendors, to comply with the or MSRB rule G–15, as applicable. As a transactions involving covered requirements under proposed rule result, the burden for generating and securities would be allocated less of its 15c2–2 to calculate revenue sharing and sending confirmations would not be vendor’s costs than a broker, dealer or portfolio brokerage amounts and to entirely new, but would reflect a shift of municipal securities dealer that maintain and further update the burdens from rule 10b–10 to proposed executes more transactions. confirmation delivery systems, would rule 15c2–2. In addition, brokers, The Commission staff estimates from be 2 million hours.173 • dealers and municipal securities dealers information provided by industry The Commission requests comment routinely send customers account participants that the one-time burden to on the staff’s estimates of the burdens statements pursuant to self-regulatory brokers, dealers and municipal associated with complying with the organizations’ requirements and for securities dealers, and their vendors, for requirements of proposed rule 15c2–2, reasons of prudent business practice. including calculating revenue sharing reprogramming software and otherwise Nonetheless, the Commission staff and portfolio brokerage amounts, as updating systems to permit the estimates that the total annual burden well as maintaining and updating confirmation delivery systems required for complying with the requirements of confirmation delivery systems. The under proposed rule 15c2–2 would be proposed rule 15c2–2 would be 18.7 15 million hours.172 Commission specifically requests 175 • comment on the estimate that, after million hours. The number of The Commission requests comment confirmations sent and the cost of the on the staff’s estimates of the one-time reprogramming, the burden associated with obtaining the data necessary to confirmations vary from firm to firm. reprogramming software and otherwise Smaller firms typically send fewer updating systems to permit the comply with the confirmation delivery requirements of proposed rule 15c2–2 confirmations than larger firms because confirmation delivery systems required they effect fewer transactions. under proposed rule 15c2–2. would be de minimis. In particular, In addition to the one-time burden commenters are requested to address Based upon discussions with industry associated with reprogramming software whether reprogramming software and participants, the Commission staff and upgrading confirmation delivery updating systems would, in fact, permit anticipates that there would be one-time systems, the Commission anticipates on- the data to be automatically transmitted external costs for upgrading and going burdens for complying with the to brokers’, dealers’ and municipal reprogramming printing systems for requirements of proposed rule 15c2–2, securities dealers’ systems or whether brokers, dealers municipal securities including calculating revenue sharing data would need to be manually entered dealers who use out-sourced printing and portfolio brokerage amounts into such systems. Commenters are and other out-sourced services. The staff required under rule 15c2–2. Based upon further requested to provide quantitative anticipates that these costs would be discussions with industry data on the burdens associated with passed on to brokers, dealers and representatives, the Commission staff manually entering data into systems, if municipal securities dealers in the form understands that, once completed, this necessary. of higher fees. While the staff is reprogramming and systems updating Brokers, dealers and municipal currently unable to determine the would permit brokers, dealers, and securities dealers also would have a number of brokers, dealers and municipal securities dealers to have burden for generating and sending municipal securities dealers that utilize automated access to the information that confirmations to investors. The such outsourced services, based on Commission staff estimates from would be required to be disclosed in discussions with industry information provided by industry representatives the staff estimates that participants that it takes about one 172 This estimate is based on the staff’s the cost per broker, dealer or municipal understanding that 5,000 brokers, dealers and minute to generate and send a securities would be approximately municipal securities dealers, including virtually all confirmation. Based on the estimate that $18,500. Assuming that all of the small entities, directly or indirectly through there are 1 billion transactions annually approximately 5,400 brokers, dealers clearing brokers, use the services of 10 vendors. The in the covered securities, the staff estimates that the total one-time burden to the and municipal securities dealers subject 10 vendors would be 1,580,000 hours, or 158,000 Commission staff estimates that the to proposed rule 15c2–2 use such out- hours per vendor. Although the staff understands sourced services, the total one-time from discussions with vendors that this burden 173 The staff estimates that the burden to the 10 external cost would be about $100 would be allocated to all of the vendors’ clients in vendors to maintain their systems would be 500,000 a manner that reflects the volume of transactions million hours annually, or 50,000 hours per vendor. million. We note that this assumption the broker, dealer or municipal securities dealer The staff estimates that the burden allocated to each may result in a significant overstatement effects, the staff assumes for purposes of estimating client on a pro rata basis would be 100 hours of these external costs. the total burden that the burden would be allocated annually per broker, dealer or municipal security to each client on a pro rata basis (316 hours per dealer that uses vendors’ services (500,000 hours/ broker, dealer or municipal security dealer that uses 5,000 = 100 hours). The staff estimates, based on 174 (1 billion confirmations at one minute per vendors’ services). In addition, the staff estimates, discussions with industry representatives, that the confirmation = 1 billion minutes; 1 billion minutes/ based on discussions with industry representatives, 400 brokers, dealers and municipal securities 60 minutes per hour = 16.7 million hours.) that 400 brokers, dealers and municipal securities dealers that use proprietary confirmation delivery 175 (16.7 million hours to generate and send dealers use proprietary confirmation delivery systems, on average, would have a burden of 3,750 confirmations to customers + 2 million hours to systems that each of them, on average, would have hours annually for maintaining systems. Thus, the calculate revenue sharing and portfolio brokerage a one-time burden of 33,550 hours. Thus, the total annual burden for maintaining systems is estimated amounts and to maintain and further update the one-time burden is estimated to be 15 million hours to be 2 million hours ((5,000 × 100) + (400 × 3,750) confirmation delivery systems = 18.7 million ((5,000 × 316) + (400 × 33,550) = 15,000,000). = 2,000,000 hours). hours.)

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As stated earlier, the Commission staff 5. Collection of Information Is at the time they make their investment estimates that there are 1 billion Mandatory decisions with respect to transactions in securities transactions annually This collection of information would mutual fund shares, UIT interests and involving mutual fund shares, UIT be mandatory. 529 plan securities. The rule specifically interests and 529 plan securities. is intended to give investors timely According to information provided by 6. Confidentiality access to information about sales loads industry participants, the Commission The collection of information and other distribution-related costs staff estimates that the average cost, delivered pursuant to the proposed rule associated with transactions in those including postage and printing, for a 15c2–2 would be provided by brokers, securities, as well as distribution arrangements that pose conflicts of two-page confirmation is about $1.05. dealers and municipal securities dealers interest for the brokers, dealers or As a result, the Commission staff to customers, and also would be municipal securities dealers, or their estimates that the annual costs of maintained by brokers, dealers and municipal securities dealers. associated persons, that effect those complying with the requirements of transactions. In the absence of the new proposed rule 15c2–2, including the 7. Record Retention Period rule’s requirements, investors in such printing and postal costs for generating Exchange Act Rule 17a–4(b)(1) 178 transactions would lack, at the time they and sending confirmations, would be make their investment decision, 176 requires broker-dealers to preserve $1.05 billion, reflecting an increase of confirmations for three years, the first important information about $160 million over the cost of the two years in an accessible place. distribution costs that can reduce confirmations had they been delivered Similarly MSRB rule G–9 requires investment returns, and about conflicts pursuant to rule 10b–10.177 brokers, dealers and municipal of interest. In summary, the Commission staff securities dealers to preserve Records of the disclosure described estimates that there would be a one-time confirmations of transactions involving above may be used by the Commission, the self-regulatory organizations, and burden of 15 million hours associated municipal securities for three years, the other securities regulatory authorities in with reprogramming software and first two years in an accessible place. the course of examinations, upgrading systems to permit brokers, B. Rule 15c2–3 investigations, and enforcement dealer and municipal securities dealers, proceedings. No governmental agency and their vendors, to comply with the 1. Collection of Information at the Point of Sale in Connection With Certain regularly would receive any of the requirements of proposed rule 15c2–2. information described above. The staff further estimates that there Transactions Involving Open-End would be an additional one-time cost of Management Investment Company 3. Respondents $100 million for fees of service Securities, Unit Investment Trust By its terms, proposed rule 15c2–3 Interests, and Municipal Fund providers. The staff estimates that the potentially would apply to all of the Securities Used for Education Savings annual burden for complying with the approximately 5,338 brokers, dealers requirements of proposed rule 15c2–2 Proposed rule 15c2–3 under the and municipal securities dealers that are would be 18.7 million and that the Exchange Act would require brokers, registered with the Commission and that annual costs of complying with the dealers and municipal securities dealers are members of NASD. It would also requirements of proposed rule 15c2–2, to provide point of sale disclosure to potentially apply to approximately 62 including the printing and postal costs investors prior to effecting transactions additional municipal securities dealers. for generating and sending in mutual fund shares, UIT interests and It is important to note, however, that confirmations, would be $1.05 billion. 529 plan securities. The disclosure only those broker, dealers and would provide investors with targeted municipal securities dealers that effect We note that, as stated above, many of material information about distribution- transactions in mutual fund shares, UIT these costs and burdens, including the related costs and remuneration that lead interests and 529 plan securities would majority of the annual costs and to conflicts of interest for their brokers, be affected by the provisions of burdens, would be shifted from rule dealers or municipal securities dealers. proposed rule 15c2–3. Although as 10b–10 to proposed rule 15c2–2. We The collection of information under stated above, the staff believes some also note that some of the assumptions proposed rule 15c2–3 would require brokers, dealers and municipal the staff has made may result in the some of the disclosure that is also securities dealers do not effect costs and burdens being overstated. required under rule 15c2–2. However, transactions in mutual fund shares, UIT in contrast to the confirmation interests and 529 plan securities, the 176 (1 billion confirmations at $1.05 per disclosure required under proposed rule staff is unable to estimate the number of confirmation = $1.05 billion.) As noted above, 15c2–2, which a customer will not such brokers, dealers and municipal confirmations for transactions in covered securities are currently required to be delivered pursuant to receive in writing until after a securities dealers and has, therefore, rule 10b–10 or MSRB rule G–15, as applicable. As transaction has been effected, the point assumed that all brokers, dealers and a result, this estimated cost is not entirely a new of sale disclosure that would be municipal securities dealers effect such cost, but reflects a shift of costs from rule 10b–10 required under rule 15c2–3 would transactions. This assumption may to proposed rule 15c2–2. This estimated cost also specifically require that investors be result in the paperwork burdens and reflects an incremental increase in the cost of generating confirmations from 89 cents under rule provided with information that they can costs of proposed rule 15c2–3 being 10b–10 to $1.05 under proposed rule 15c2–2. This use at the time they determine whether overstated. incremental cost is associated with generating the to enter into a transaction to purchase 4. Reporting and Recordkeeping Burden two-page confirmation that would be required one of the covered securities. under proposed rule 15c2–2, as compared to a half- As noted above, the Commission staff page or one-page confirmation that is currently 2. Proposed Use of Information estimates that there are 1 billion permitted under rule 10b–10. The purpose of proposed rule 15c2– confirmations delivered annually in 177 (1 billion confirmations delivered pursuant to rule 10b–10 at $0.89 per confirmation = $890 3 is to provide information to investors connection with securities transactions million; $1.05 billion ¥ $890 million = $160 involving mutual fund shares, UIT million.) 178 17 CFR 240.17a–4(b)(1). interests and 529 plan securities.

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Proposed rule 15c2–3 would require rule 15c2–2 is not, the burdens for million hours.181 As a result, the brokers, dealers and municipal complying with proposed rule 15c2–3 Commission staff estimates that the total securities dealers to provide disclosure may increase. annual burden to brokers, dealers and to customers about costs and conflicts at Proposed rule 15c2–3(d) would municipal securities dealers to comply the point of sale for each of these require brokers, dealers and municipal with the requirements of proposed rule transactions. The information that 15c2–3, would be 18.7 million hours.182 securities dealers to make records of would be required to be delivered It is important to note that, under their disclosure sufficient to pursuant to proposed rule 15c2–3 specified conditions, paragraph (e)(1) of would be derived from information that demonstrate compliance with the proposed rule 15c2–3 would brokers, dealers and municipal delivery requirements of paragraphs (a) conditionally except transactions securities dealers would otherwise and (b) of proposed rule 15c2–3. The resulting from orders that a customer prepare in order to fulfill their brokers, dealers or municipal securities places via U.S. mail, messenger delivery confirmation disclosure requirements dealers would have to preserve those or a similar third-party delivery service. under proposed rule 15c2–2. The records for the period specified in The exception would be available to Commission staff anticipates that one of Exchange Act rule 17a–4(b), or, in the brokers, dealers or municipal securities the primary burdens to the industry of case of records of oral communications dealers that, within the prior six proposed rule 15c2–3 would be a one- or the disclosures, for the period months, have provided the customer time burden associated with specified in Exchange Act rule 17a–4(b) with information about the maximum reprogramming software and other such with regard to similar written potential size of sales loads and asset- activities that will enable confirmation communications and records. While this based sales charges and service fees delivery systems to generate the requirement often can be satisfied by associated with covered securities sold information at the point of sale. Based maintaining a copy of the disclosure by that broker, dealer or municipal on discussions with industry document that was provided to the securities dealer, as well as statements representatives, the Commission staff customer, in the case of disclosure about whether the broker, dealer or does not expect that brokers, dealers or solely by means of oral municipal securities dealer receives municipal securities dealers would communications, this provision would revenue sharing or portfolio brokerage require new systems to be developed. require the broker, dealer or municipal commissions or pays differential 183 Rather, the reprogramming and securities dealer to have compliance compensation. This exception would updating of current systems will enable procedures in place that are adequate to have the result of in a decrease in the burden to the industry of proposed rule brokers, dealers and municipal demonstrate that it provided the securities dealers to have access to such 15c2–3. required disclosure. Based on information at the point of sale, and to Based upon discussions with industry discussions with industry participants, provide such information to investors at participants, the Commission staff the Commission staff estimates that the that time. Based on discussions with anticipates that there would be one-time industry participants, the Commission annual burden to brokers, dealers and external costs for out-sourced services, staff estimates that the one-time burden municipal securities dealers to develop including call center services for to brokers, dealers and municipal and implement such compliance brokers, dealers and municipal securities dealers to reprogram software procedures would be approximately 2 securities dealers that may use such and conduct such other activities that million hours.180 services for delivery of point of sale will enable confirmation delivery The Commission staff further information for transactions placed by systems to generate information estimates from information provided by telephone. The staff anticipates that required by proposed rule 15c2–3 to be industry participants that it will take, on these costs would be passed on to delivered at the point of sale would be average, about one minute to deliver to brokers, dealers and municipal approximately 7 million hours.179 We customers the point of sale disclosure securities dealers in the form of higher note that some, but not all of the required under proposed rule 15c2–3. fees. While the staff is currently unable burdens for complying with proposed The Commission staff also estimates to determine the number of brokers, rule 15c2–3 would be shared with from information provided by industry dealers and municipal securities dealers that utilize such outsourced services, burdens for complying with proposed participants that the annual burden to based on discussions with industry rule 15c2–2. The estimates of burdens brokers, dealers and municipal and costs in this section reflect this representatives the staff estimates that securities dealers to deliver at the point shared burden. However, if proposed the cost per broker, dealer or municipal of sale the disclosure that would be rule 15c2–3 is adopted and proposed securities dealer would be required under proposed rule 15c2–3, approximately $18,500. Assuming that 179 The staff estimates that the total one-time and to maintaining systems that would all of the approximately 5,400 brokers, burden to the 10 vendors would be 1,040,000 hours, permit such disclosure, would be 16.7 dealers and municipal securities dealers or 104,000 hours per vendor. Although the staff understands from discussions with vendors that subject to proposed rule 15c2–3 use 180 this burden would be allocated to all of the vendors’ The staff estimates that the burden to the 10 such out-sourced services, the total one- clients in a manner that reflects the volume of vendors to maintain their systems would be 500,000 time external cost would be about $100 transactions the broker, dealer or municipal million hours annually, or 50,000 hours per vendor. securities dealer effects, for purposes of this The staff estimates that the burden allocated to each million. We note that this assumption calculation, the staff assumes that the burden would client on a pro rata basis would be 100 hours may result in a significant overstatement be allocated to each client on a pro rata basis (208 annually per broker, dealer or municipal security of these external costs. hours per broker, dealer or municipal security dealer that uses vendors’ services (500,000 hours/ 5,000 = 100 hours). The staff estimates, based on dealer that uses vendors’ services). In addition, the 181 staff estimates, based on discussions with industry discussions with industry representatives, that the (1 billion transactions at one minute per point representatives, that 400 brokers dealers and 400 brokers dealers and municipal securities of sale disclosure = 1 billion minutes; 1 billion municipal securities dealers use proprietary dealers that use proprietary confirmation delivery minutes/60 minutes per hour = 16.7 million hours.) confirmation delivery systems that each of them, on systems, on average, would have a burden of 3,750 182 (16.7 million hours per point of sale disclosure average, would have a one-time burden of 22,400 hours annually for maintaining systems. Thus, the + 2 million hours to develop and implement hours. Thus, the total one-time burden is estimated annual burden for maintaining systems is estimated compliance procedures = 18.7 million hours.) to be 7 million hours ((5,000 × 208) + (400 × 14,900) to be 2 million hours ((5,000 × 100) + (400 × 3,750) 183 See supra section V.G. for a detailed = 7,000,000 hours). = 2,000,000). discussion of this exception.

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Based on discussions with industry C. Proposed Amendments to Rule 10b– Commission in FOCUS Reports186, the participants, the Commission staff 10 Commission staff estimates that estimates that the annual cost to registered broker-dealers process 1. Collection of Information brokers, dealers and municipal approximately 295 million order tickets securities dealers for call center services For the reasons discussed above and per month for transactions on behalf of and other service providers which consistent with proposed Rule 15c2–2, customers. Each order ticket would assist with development and rule 10b–10 would be modified to representing a transaction effected on implementation of procedures sufficient exclude transactions in mutual fund behalf of a customer results in one to demonstrate compliance with the shares and UIT interests (other than UIT confirmation. Therefore, the delivery requirements of paragraphs (a) interests that are traded in a secondary Commission staff estimates that and (b) of proposed rule 15c2–3 would market). The purpose of the exclusion is approximately 3.54 billion be approximately $40 million.184 to enhance disclosure efficiency and to confirmations187 are sent to customers In summary, the Commission staff avoid duplicative regulatory burdens. annually. As noted above, the staff estimates that there would be a one-time This exclusion from a regulatory burden estimates that approximately 1 billion burden of 7 million hours associated would not impose recordkeeping or confirmations are generated in with reprogramming software and information collection requirements, or connection with transactions in mutual upgrading systems to permit brokers, other collections of information under funds, UIT interests and 529 plan dealers and municipal securities rule 10b–10 that require approval of the securities and will be delivered dealers, and their vendors, to comply Office of Management and Budget under pursuant to proposed rule 15c2–2, if with the requirements of proposed rule 44 U.S.C. 3501, et seq. However, the adopted, and will accordingly decrease 15c2–3. The staff further estimates that proposed amendments to rule 10b–10 the number of confirmations delivered there would be an additional one-time would also require brokers and dealers pursuant to rule 10b–10 by a like cost of $100 million for fees of service to disclose additional information in amount. As a result, the Commission providers. The staff estimates that the confirmations that would otherwise be staff estimates that approximately 2.54 annual burden for complying with the delivered in connection with billion confirmations will be sent to requirements of proposed rule 15c2–3 transactions involving callable preferred customers annually pursuant to rule would be 18.7 million hours and that stock and callable debt. Specifically, the 10b–10 if proposed rule 15c2–2 and the the annual costs of complying with the proposed amendments would require proposed amendments to rule 10b–10 requirements of proposed rule 15c2–3, disclosure of the callable nature of are adopted. including call center services, and preferred stock, if such is the case, and, The Commission staff estimates from recordkeeping and compliance costs, in the case of callable debt that is information provided by industry would be $40 million. effected on the basis of price to call, the participants that it takes about one date upon which the debt security may minute to generate and send a 5. Collection of Information Is first be called. This information would confirmation. As a result, the Mandatory be provided to customers in the form of Commission staff estimates that the This collection of information would written confirmations. annual burden to brokers, dealers and be mandatory. 2. Proposed Use of Information municipal securities dealers to comply with the confirmation delivery 6. Confidentiality The purpose of the proposed requirements of the proposed amendments to rule 10b–10 is to The collection of information amendments to rule 10b–10 would be provide to investors the information 42.3 million hours.188 The number of delivered pursuant to the proposed rule necessary to evaluate their transactions 15c2–3 would be provided by brokers, confirmations sent and the cost of the in callable preferred stock and confirmations vary from firm to firm as dealers and municipal securities dealers redeemable debt. In the absence of the to customers, and also would be smaller firms send fewer confirmations proposed amendments, investors in than larger firms because they effect maintained by brokers, dealers and such transactions may not be fully municipal securities dealers. fewer transactions. informed of important information, such The Commission staff estimates that 7. Record Retention Period as whether the preferred stock is the one-time burden associated with callable and the first date upon which reprogramming of software and other Proposed rule 15c2–3 would require callable debt securities may be called. In brokers, dealers and municipal such activities to enable confirmation addition, the Commission, the self- delivery systems to include the call securities dealers to preserve records for regulatory organizations, and other the period specified in Exchange Act information required under the securities regulatory authorities may use proposed amendments to rule 10b–10 rule 17a–4(b), or, in the case of records the confirmations described above in of oral communications and their would be minimal. The Commission the course of examinations, staff further estimates that the on-going disclosures, for the period specified in investigations, and enforcement Exchange Act rule 17a–4(b) with regard proceedings. No governmental agency 186 to similar written communications and FOCUS Reports are annual reports that broker- would regularly receive any of the dealers are required to file with the Commission. records. Exchange Act Rule 17a– information described above. They are contained in the broker-dealers’ Form X– 4(b)(1)185 requires the preservation of 17A–5 (17 CFR 249.617). confirmations for three years, the first 3. Respondents 187 (295 million confirmations/month × 12 two years in an accessible place. months/year = 3.54 billion confirmations.) Rule 10b–10 applies to all of the 5,338 188 (2.54 billion confirmations at one minute per brokers and dealers that are registered confirmation = 2.54 billion minutes; 2.54 billion 184 Based on discussions with industry with the Commission and that effect minutes/60 minutes per hour = 42.3 million hours.) representatives, the staff estimates that the annual transactions for customers. We note that the estimates of this annual burden cost would be $7,400 per broker, dealer or reflects a shift of confirmation delivery municipal securities dealer. (5,400 brokers, dealers 4. Reporting and Recordkeeping Burden requirements with respect to open-end investment and municipal securities dealers × $7,400 = company securities and unit investment trust $39,996,000.) Based on information provided by interests from rule 10b–10 to proposed rule 15c2– 185 17 CFR 240.17a–4(b)(1). registered broker-dealers to the 2.

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burden for complying with the mutual fund include brief disclosure in 0.5 hours, and that 36% of mutual fund additional disclosure requirements of its prospectus regarding revenue sharing portfolios have sales loads and hence rule 10b–10 with respect to callable payments, in order to direct investors to would be affected by the proposed securities would be minimal. In the disclosure regarding revenue sharing amendments regarding sales load addition, there would be no additional that the Commission is proposing to disclosure.193 Thus, the additional cost in connection with the deletion of require in the confirmation and point of incremental hour burden resulting from the expired transition period related to sale disclosure. the proposed amendments relating to the confirmation of transactions 2. Proposed Use of Information sales load disclosure would be 1265 involving securities futures products. hours ((0.5 hours for initial registration According to information previously The purpose of the proposed statements × 483 portfolios × 36%) + provided by industry participants, the amendments is to provide investors in (0.5 hours for post-effective Commission staff estimates that the mutual funds with enhanced disclosure amendments × 6,542 portfolios × 36%)). average cost, including postage, for a regarding sales loads, and to direct The Commission staff estimates that the one-page confirmation is 89 cents. investors to disclosure regarding proposed amendments regarding Based upon discussions with industry revenue sharing arrangements that a revenue sharing arrangements would participants, the Commission staff fund may have with an investor’s increase the hour burden per portfolio estimates that the total annual cost financial intermediary. per filing of an initial registration associated with generating and 3. Respondents statement or post-effective amendment delivering to investors the information on Form N–1A by 0.1 hours.194 Thus, The likely respondents to this required under rule 10b–10, including the staff estimates that the additional information collection are mutual funds the proposed amendments, would be incremental hour burden resulting from $2.26 billion.189 It is important to note, registering or already registered with the Commission. We estimate that there are the proposed amendments relating to however, that the confirmation is a disclosure of revenue sharing would be customary document used by the approximately 7,025 mutual fund portfolios that fit this description. 703 hours ((0.1 hours for initial industry for business purposes. registration statements × 483 portfolios) 4. Reporting and Recordkeeping Burden + (0.1 hours for post-effective 5. Collection of Information Is × Mandatory The current hour burden for preparing amendments 6,542 portfolios)). If the an initial Form N–1A filing is 812.5 proposed amendments to Form N–1A This collection of information would hours per portfolio, and the current are adopted, the total annual hour be mandatory. annual hour burden for preparing a burden for all funds for preparation and 6. Confidentiality post-effective amendment on Form N– filing of initial registration statements and post-effective amendments to Form The collection of information 1A is 104.5 hours per portfolio. The N–1A would be 1,111,298 hours (1265 delivered pursuant to rule 10b–10 Commission staff estimates that, on an hours + 703 hours + 1,109,330 hours). would be provided by broker-dealers to annual basis, registrants file initial customers, and also would be registration statements on Form N–1A 5. Collection of Information Is maintained by broker-dealers. covering 483 portfolios, and file post- Mandatory effective amendments on Form N–1A 7. Record Retention Period covering 6,542 portfolios. An additional This collection of information would Exchange Act Rule 17a–4(b)(1)190 burden of 33,250 hours is expected to be mandatory. requires broker-dealers to preserve result from the Commission’s recent 6. Confidentiality proposed rule relating to frequent confirmations for three years, the first Responses to the disclosure two years in an accessible place. purchases and redemptions of fund shares and selective disclosure of requirements are not confidential. D. Proposed Amendments to Form N– portfolio holdings, and the recent 7. Record Retention Period 1A proposed rule relating to disclosure of There is no mandatory record sales load breakpoints.191 Thus, the 1. Collection of Information in retention period associated with these Commission staff estimates that the total Connection With Prospectus Disclosure amendments. annual hour burden for the preparation The Commission is proposing to and filing of Form N–1A would be E. Request for Comment amend the fee table of the mutual fund 192 1,109,330 hours. Pursuant to 44 U.S.C. 3506(c)(2)(B), prospectus to require the maximum The Commission staff estimates that sales loads to be shown as a percentage the Commission solicits comments to: the proposed amendments regarding (i) Evaluate whether the proposed of net asset value rather than as a sales loads would increase the hour collection of information is necessary percentage of offering price. The burden per portfolio per filing of an for the proper performance of the proposed amendments also would initial registration statement or a post- functions of the Commission, including require a fund to provide disclosure in effective amendment on Form N–1A by the fund prospectus to alert investors to whether the information would have practical utility; the fact that sales loads shown in the 191 See Investment Company Act Release No. prospectus as a percentage of net asset 26287 (Dec. 11, 2003) [68 FR 70402 (Dec. 17, 2003)]; value or offering price may be higher or Investment Company Act Release No. 26298 (Dec. 193 This estimate is based on information lower than the actual sales load that an 17, 2003) [68 FR 74732 (Dec. 24, 2003)]. regarding the number of mutual fund portfolios 192 This estimate is based on the following with front-end or deferred sales loads, derived by investor would pay as a percentage of calculation: (812.5 hours × 483 portfolios) + (104.5 the staff from Commission filings and third-party the net or gross amount invested, due to hours × 6,542 portfolios) = 1,076,080 hours. An information sources. rounding. Finally, the proposed additional annual hour burden of 30,998 hours 194 The Commission estimates, for purposes of the amendments would require that a resulting from the proposed rule relating to frequent Paperwork Reduction Act, that a significant purchases and redemptions and selective majority of mutual fund portfolios either have disclosure, and an additional annual hour burden revenue sharing arrangements or are part of a fund 189 (2.54 billion confirmations at $0.89 per of 2,252 hours resulting from the proposed complex that has such an arrangement and thus confirmation = $2.26 billion.) amendments relating to breakpoints disclosure, would be affected by the proposed amendments 190 17 CFR 240.17a–4(b)(1). yield a total annual hour burden of 1,109,330 hours. regarding revenue sharing disclosure.

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(ii) Evaluate the accuracy of the has also considered the practices of Furthermore, as a result of the Commission staff’s estimate of the mutual funds in disclosing sales loads. standardized disclosure that would be burden of the proposed collection of Similarly, in considering the potential required under proposed rule 15c2–2, information; costs and benefits of the proposed the Commission believes that the (iii) Enhance the quality, utility, and amendments to rule 10b–10, the aggregate amount of the distribution- clarity of the information to be Commission has considered the related costs associated with mutual collected; and transaction confirmation practices of fund shares, UIT interests and 529 plan (iv) Minimize the burden of the broker-dealers, including those that securities may well decline over time. collection of information on those effect transactions in callable preferred These benefits, while qualitatively required to respond, including through securities and callable debt securities. important, are necessarily difficult to the use of automated collection The amendments to rule 10b–10 are quantify. Therefore, the Commission is techniques or other forms of information intended to provide investors with unable to provide a quantitative technology. information that is helpful in making an estimate of the benefits of proposed rule Persons desiring to submit comments informed decision when investing in 15c2–2. on the collection of information callable preferred stock and redeemable 2. Costs requirements should direct them to the debt securities. The amendments to Office of Management and Budget, Form N–1A are intended to provide Proposed rule 15c2–2 would require Attention: Desk Officer for the investors with a better understanding of brokers, dealers and municipal Securities and Exchange Commission, the costs of investing in a fund with a securities dealers to include additional Office of Information and Regulatory sales load, and of revenue sharing information in confirmations that are Affairs, Washington, DC 20503, and received by financial intermediaries. currently sent to investors pursuant to should also send a copy of their rule 10b–10. The costs of adding this B. Rule 15c2–2 comments to Jonathan G. Katz, new information into confirmation Secretary, Securities and Exchange Proposed rule 15c2–2 responds to disclosures may include both internal Commission, 450 Fifth Street, NW, concerns that investors in mutual fund costs (for information technology Washington, DC 20549–0609, and refer shares, UIT interests and 529 plan specialists to re-program and update to File No. S7–06–04. OMB is required securities lack adequate information confirmation delivery systems, and for to make a decision concerning the about certain distribution-related costs, compliance officers and other staff to collection of information between 30 as well as certain distribution oversee and maintain confirmation and 60 days after publication of this arrangements, that create conflicts of delivery systems) and external costs (for release in the Federal Register. interest for brokers, dealers, municipal printing and typesetting of the Therefore, comments to OMB are best securities dealers, and their associated confirmation disclosure), all of which assured of having full effect if OMB persons. As noted above, those costs are included in the estimates of the receives them within 30 days of this and other distribution arrangements Paperwork Reduction Act burden. For publication. Requests for materials have evolved substantially since 1977, purposes of the Paperwork Reduction submitted to OMB by the Commission when the Commission adopted its Act, the Commission staff has estimated with regard to this collection of general confirmation rule, rule 10b– that the one-time burden to brokers, information should be in writing, refer 10.195 dealers and municipal securities dealers, and their vendors, associated File No. S7–06–04, and be submitted to 1. Benefits the Securities and Exchange with reprogramming software and Commission, Records Management, The Commission believes that otherwise updating systems to permit the confirmation delivery systems Office of Filings and Information permitting investors to more readily required under proposed rule 15c2–2 Services, 450 Fifth Street, NW, obtain information about distribution- would be 15 million hours. We estimate Washington, DC 20549. related costs that have the potential to reduce their investment returns and to that this one-time burden would equal IX. Costs and Benefits of the Proposed give investors a better understanding of total internal costs of $750 million.197 Rule and Rule Amendments some of the distribution-related The staff further estimates that there would be an additional one-time cost of A. Introduction arrangements that create conflicts of interest for brokers, dealers, municipal $100 million for fees of service Proposed rules 15c2–2 and 15c2–3 are securities dealers, and their associated providers 198, for a total cost of $850 intended to improve investor access to persons.196 The disclosure of information about investments in information about these costs and 197 These figures are based on an estimated hourly mutual fund shares, UIT interests and arrangements can help investors make wage rate of $50. The estimated wage figure is based 529 plan securities. The Commission is on published compensation for compliance better informed investment decisions. attorneys outside New York City ($39) and sensitive to the costs and benefits that Investors will also be in a better position computer programmers ($34), and the estimate that result from its rules. In proposing new to compare the costs of these attorneys and programmers would divide time rules 15c2–2 and 15c2–3 and the investments, which we preliminarily equally on compliance with the proposed amendments to rule 10b–10 and Form disclosure requirements, yielding a weighted wage believe will lead to a general increase in rate of $36.50 ((39 × .50) + (34 × .50)) = $36.50). N–1A, the Commission has strived to the transparency and efficiency of the See Securities Industry Association, Report on minimize compliance costs while market for mutual fund shares, UIT Management & Professional Earnings in the promoting investor protection. interests and 529 plan securities. Securities Industry 2002 (Sept. 2002). This In considering the potential costs and weighted wage rate was then adjusted upward by 35% for overhead, reflecting the costs of benefits of proposed rules 15c2–2 and 195 See supra, note 5. supervision, space, and administrative support, to 15c2–3, the Commission has considered 196 The Commission staff estimates that for the obtain the total per hour internal cost of about $50 the transaction confirmation practices of one-year period between September 2002 and ((36.50 × 1.35) = $49.28). brokers, dealers and municipal August 2003, investors in open-end management 198 As noted above, while the staff is currently investment company securities paid more than $6.7 unable to determine the number of brokers, dealers securities dealers that effect transactions billion in aggregate sales loads, consisting of and municipal securities dealers that utilize in mutual fund shares, UIT interests and approximately $4.9 billion in front-end loads and outsourced services, based on discussions with 529 plan securities. The Commission $1.8 billion in back-end loads. Continued

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million, or approximately $157,407 per 15c2–2 would be $1.99 billion, or 2003, investors in open-end broker, dealer or municipal securities approximately $367,593 per broker, management investment company dealer. These figures will vary dealer or municipal securities dealer. It securities paid more than $6.7 billion in depending on whether a firm must is important to note, however, no new aggregate sales loads, consisting of update its own proprietary confirmation confirmations will be required to be sent approximately $4.9 billion in front-end delivery system or whether it uses to investors under proposed rule 15c2– loads and $1.8 billion in back-end loads. vendor services, in which case the cost 2; rather new information would be In addition, funds and their affiliates will likely vary depending on the required to be included in confirmations paid about $13 billion in marketing and number of transactions the firm that would otherwise be sent. distribution payments pursuant to 12b– executes on an annual basis.199 In addition to the foregoing costs, the 1 plans. Absent proposed rule 15c2–3, In addition, for purposes of the Commission notes that other possible investors in mutual fund shares, UIT Paperwork Reduction Act, the costs resulting from proposed rule interests, and municipal fund securities Commission staff has estimated that the 15c2–2 include the possibility that used for education savings would, at the annual burden to brokers, dealers and investors’ ready access to information time they make their investment municipal securities dealers for about the costs and conflicts associated decision, lack ready transaction-specific complying with the requirements of with mutual fund shares, UIT interests access to this information. proposed rule 15c2–2, including and 529 plan securities may lead to a The proposed rule specifically would generating and sending confirmations to net reduction in the amount invested in enable investors to see targeted, investors, calculating revenue sharing those types of securities. Investors may transaction-specific, information about and portfolio brokerage amounts and pursue other types of investments that these distribution-related costs, and maintaining and further updating the do not have, or do not appear to have, about remuneration that lead to confirmation delivery systems, would such costs and conflicts. In addition, the conflicts of interest for their brokers, be 18.7 million hours annually. As disclosure of distribution-related costs dealers or municipal securities dealers. noted above, confirmations for may result in a restructuring of the way That would enable investors to better transactions in covered securities are funds compensate sellers of their understand the costs and conflicts currently required to be delivered securities. associated with each investment in those securities prior to entering into pursuant to rule 10b–10 or MSRB rule 3. Request for Comments G–15, as applicable. As a result, the the transactions, which should promote burden for generating and sending The Commission requests comment better informed investment decision- confirmations would not be entirely on the costs and benefits of proposed making. In addition, as a result of the new, but would reflect a shift of an rule 15c2–2. Commenters are strongly standardized disclosure that would be annual burden of 16.7 million hours encouraged to identify and supply any required under proposed rule 15c2–3, from rule 10b–10 to proposed rule relevant data, analysis, and estimates the Commission believes that the 15c2–2. Nonetheless, the Commission concerning the costs and/or benefits of aggregate amount of the distribution- staff estimates that the annual burden proposed rule 15c2–2, including any related costs associated with mutual for complying with the requirements of costs and benefits not described above. fund shares, UIT interests and 529 plan proposed rule 15c2–2 would equal total Commenters should address in securities may well decline over time. internal costs of $935 million annually, particular the cost associated with Furthermore, the record-retention requirements of proposed rule 15c2–3 based on an estimated hourly wage of adjusting operational systems to provide would enable regulators to review the $50. The Commission staff further has the disclosure required under proposed compliance of brokers, dealers and estimated for purposes of the Paperwork rule 15c2 and whether the proposed municipal securities dealers with the Reduction Act that the external costs of rule will generate the benefits described proposed rule as well as other legal complying with the requirements of above. In addition, the Commission obligations. These benefits, while proposed rule 15c2–2, including the requests comment on whether a qualitatively important, are necessarily printing and postal costs for generating transitional period is necessary to make difficult to quantify. Therefore, the and sending confirmations, would be these adjustments. As always, Commission is unable to provide a $1.05 billion. The staff has estimated for commenters are specifically invited to share additional quantifiable costs and quantitative estimate of the benefits of purposes of the Paperwork Reduction proposed rule 15c2–3. Act that these external costs would benefits that they believe may be reflect an increase of $160 million over imposed or generated by new rule 15c2– 2. Costs 2. the external cost of delivering the Proposed rule 15c2–3 would require confirmations were they to be delivered C. Proposed Rule 15c2–3 brokers, dealers and municipal pursuant to rule 10b–10. The Proposed rule 15c2–3 is intended to securities dealers to provide point of Commission estimates that the annual provide information to investors in sale disclosure to customers prior to costs for complying with proposed rule mutual fund shares, UIT interests and effecting transactions in mutual fund 529 plan securities at the time they shares, UIT interests and 529 plan industry representatives the staff estimates that the securities. The costs of delivering this cost per broker, dealer or municipal securities make their investment decisions. information to investors at the point of dealer would be approximately $18,500. Assuming 1. Benefits that all of the approximately 5,400 brokers, dealers sale may include both internal costs (for and municipal securities dealers subject to Proposed rule 15c2–3 would require information technology specialists to re- proposed rule 15c2–2 use such out-sourced brokers, dealers and municipal program and update confirmation services, the total one-time external cost would be about $100 million. We note that this assumption securities dealers to provide point of delivery systems to allow point of sale may result in a significant overstatement of these sale disclosure to customers prior to disclosure, and for compliance officers external costs. effecting transactions in those securities and other staff to oversee and maintain 199 As noted above, based on discussions with i.e., at the time they make investment point of sale disclosure systems) and vendors, the Commission staff anticipates that vendors will allocate costs to brokers, dealers and decisions. The Commission staff external costs (for services related to municipal securities dealers roughly on the basis of estimates that for the one-year period point of sale disclosure, such as call the volume of transactions in the covered securities. between September 2002 and August center services and out-sourced services

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to assist firms with developing and 15c2–3 would be $40 million per fund shares and municipal fund implementing compliance procedures), year.203 Therefore, the Commission securities. all of which are included in the estimates that the costs annual costs for estimates of the Paperwork Reduction complying with proposed rule 15c2–3 D. Amendments to Rule 10b–10 Act burden. For purposes of the would be $975 million, or The proposed amendments to rule Paperwork Reduction Act, the approximately $180,556 per broker, 10b–10 would require a broker-dealer Commission staff has estimated that the dealer or municipal securities dealer. effecting transactions in shares of In addition to the foregoing costs, as one-time burden to brokers, dealers and preferred stock to inform customers in would be the case with proposed rule municipal securities dealers, and their writing, at or before the completion of 15c2–2, the Commission notes that vendors, associated with reprogramming the transaction, if the issuer of the stock software and otherwise updating other possible costs resulting from has reserved the right to repurchase—or systems to permit the confirmation proposed rule 15c2–3 include the call—the shares. The proposed delivery systems to deliver point of sale possibility that investors’ ready access amendments would also require a disclosure required under proposed rule to information about the costs and broker-dealer effecting a transaction in a 15c2–3 would be 7 million hours and conflicts associated with mutual fund that the one-time external cost would be shares, UIT interests and 529 plan debt security on the basis of yield-to-call $100 million.200 We estimate that these securities may lead to a net reduction in to disclose the first possible date on one-time burdens and costs would equal the amount invested in those types of which the debt security may be called. total internal costs of $450 million 201, securities. Investors may pursue other Finally, the amendments would exclude or approximately $83,333 per broker, types of investments that do not have, transactions subject to rule 15c2–2 from dealer or municipal securities dealer. or do not appear to have, such costs and the confirmation delivery requirements These figures will vary depending on conflicts. In addition, the disclosure of of rule 10b–10. whether a firm must update its own distribution-related costs may result in 1. Benefits proprietary confirmation delivery a restructuring of the way funds system or whether it uses vendor compensate sellers of their securities. The proposed amendments to rule services, in which case the cost will 10b–10 are intended to avoid customer 3. Request for Comments likely vary depending on the number of confusion by alerting customers to any transactions the firm executes on an The Commission requests comment misunderstandings about the rights annual basis.202 on the costs associated with requiring associated with preferred stock and In addition, for purposes of the brokers, dealers and municipal callable debt, and to promote the timely Paperwork Reduction Act, the securities dealers to disclose part or all resolution of problems. This leads to Commission staff has estimated that the of the information proposed to be better informed decision-making by annual burden to brokers, dealers and required under rule 15c2–3 prior to each investors. municipal securities dealers for customer purchase or sale of mutual complying with the point of sale fund shares, UIT interests and 529 plan 2. Costs disclosure requirements of proposed securities. The Commission requests For purposes of the Paperwork rule 15c2–3, including delivering point estimates of the costs and benefits Reduction Act, the Commission staff has of sale disclosure to investors and described above, as well as any costs estimated that the annual burden to maintaining and further updating point and benefits, not already defined, that brokers, dealers and municipal of sale disclosure systems, would be may result from the adoption of these securities dealers for complying with 18.7 million hours. The Commission proposed amendments. The the confirmation delivery requirements staff estimates that this burden would Commission specifically requests equal total internal costs of $935 million estimates of the one-time costs of rule 10b–10, as modified by the annually, based on an estimated hourly associated with reprogramming software proposed amendments, would be 42.3 wage of $50. The Commission staff to permit firms’ systems to generate the million hours. The Commission staff further estimated for purposes of the information required under proposed estimates that this burden would equal Paperwork Reduction Act that the rule 15c2–3 and estimates of the costs total internal costs of $2.12 billion additional external costs of complying for complying with the record-keeping annually, based on an estimated hourly with the requirements of proposed rule requirements of paragraph (d) of the wage of $50. The Commission staff proposed rule. In addition, the further estimated for purposes of the 200 As noted above, while the staff is currently Commission requests comment on the Paperwork Reduction Act that the unable to determine the number of brokers, dealers benefits and costs of requiring brokers, additional external costs of complying and municipal securities dealers that utilize with the requirements of proposed rule outsourced services, based on discussions with dealers and municipal securities dealers industry representatives the staff estimates that the to disclose all or parts of the 10b–10, as amended, including postage cost per broker, dealer or municipal securities information proposed to be required costs to send confirmations, would be 204 dealers would be approximately $18,500. Assuming under new rule 15c2–2 prior to each $2.26 billion. Therefore, the that all of the approximately 5,400 brokers, dealers Commission estimates that the annual and municipal securities dealers subject to customer purchase or sale of mutual proposed rule 15c2–3 use such out-sourced costs for complying with proposed rule services, the total one-time external cost would be 203 Based on discussions with industry 10b–10, as amended, would be $4.38 about $100 million. We note that this assumption participants, the Commission staff estimates that billion, or approximately $811,111 per may result in a significant overstatement of these the annual cost to brokers, dealers and municipal broker, dealer or municipal securities external costs. securities dealers for call center services and other dealer. We note that this is a net 201 (7 million hours × $50 per hour = $350 service providers which would assist with million; $350 million + $100 million for other development and implementation of procedures reduction in the annual costs for external costs = $450 million.) sufficient to demonstrate compliance with the complying with rule 10b–10, as 202 As noted above, based on discussions with delivery requirements of paragraphs (a) and (b) of transactions that would otherwise be vendors, the Commission staff anticipates that proposed rule 15c2–3 would be approximately required to be delivered pursuant to rule vendors will allocate costs to brokers, dealers and $7,400 per broker, dealer or municipal securities municipal securities dealers based roughly on the dealer, for a total of $40 million. (5,400 brokers, volume of transactions that require confirmations to dealers and municipal securities dealers × $7,400 = 204 (2.54 billion confirmations at $0.89 per be generated and sent. $39,996,000.) confirmation = $2.26 billion.)

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to 10b–10 would be delivered pursuant investor would pay as a percentage of burden would equal total internal costs to rule 15c2–2. the net or gross amount invested may of $98,400 annually, or approximately also assist investors in better $14.01 per fund portfolio.206 We expect 3. Request for Comments understanding the sales load that they the external costs of providing the new The Commission requests comment may pay. Finally, the proposed prospectus disclosure regarding sales on the costs and benefits of the amendments relating to disclosure of loads and revenue sharing arrangements proposed amendments to rule 10b–10, revenue sharing payments may benefit will be limited, because we do not including the costs and benefits investors by directing them to the expect that the proposed disclosure described above. As always, disclosure regarding these arrangements would add significant length to the commenters are specifically invited to that would be required in the prospectus. share additional quantifiable costs and confirmation and point of sale 3. Request for Comments benefits that they believe may be disclosure, and therefore may enhance imposed or generated by the proposed investors’ understanding of The Commission requests comment amendments to rule 10b–10. The arrangements that may lead to conflicts on the costs and benefits of the Commission is particularly interested in of interest. proposed amendments to Form N–1A. learning more about current industry Commenters are strongly encouraged to practice regarding the disclosure of call 2. Costs identify and supply any relevant data, and redemption information in The proposals would impose new analysis, and estimates concerning the connection with transactions involving requirements on mutual funds to costs and/or benefits of the proposed preferred stock and debt securities and provide certain new prospectus amendments to Form N–1A, including whether broker-dealers already disclose disclosures regarding sales loads and any costs and benefits not described such information as a matter of prudent revenue sharing arrangements. We above. business practice on confirmations or in estimate that complying with the some other way highlight such proposed new disclosures would entail X. Consideration of Burden on information to their customers. The a relatively limited burden. The Promotion of Efficiency, Competition, Commission also solicits comment on proposals to require fee table disclosure and Capital Formation what additional costs the required of sales loads on the basis of net asset Section 3(f) of the Exchange Act,207 disclosure of such information would value rather than offering price would Section 2(b) of the Securities Act of impose on those broker-dealers not impose a minimal burden, because 1933,208 and Section 2(c) of the currently providing such information to mutual funds are already required to Investment Company Act 209 require the customers. The Commission requests determine and disclose sales loads on Commission, whenever it is engaged in that commenters provide supporting this basis elsewhere in the prospectus. rulemaking and is required to consider empirical data for any positions The additional disclosure that would be or determine whether an action is advanced. required regarding the effects of necessary or appropriate in the public E. Amendments to Form N–1A rounding in calculating sales loads interest, to consider whether the action would be limited, and the additional will promote efficiency, competition, The proposed amendments to Form calculations regarding the range of and capital formation. In addition, N–1A would require mutual funds to variation resulting from rounding that section 23(a)(2) of the Exchange Act 210 provide enhanced prospectus disclosure would be required should be requires the Commission, in making regarding sales loads and revenue straightforward for funds to compute. rules under the Exchange Act, to sharing payments. Similarly, the additional disclosure that consider the impact that any such rule 1. Benefits would be required regarding revenue would have on competition. Exchange The proposed amendments to Form sharing arrangements would be brief, Act Section 23(a)(2) prohibits the N–1A are expected to benefit mutual and would only be required if any Commission from adopting any rule that fund investors by providing them with person within the fund complex that would impose a burden on competition a better understanding of sales loads includes the fund makes revenue not necessary or appropriate in and revenue sharing arrangements. sharing payments. furtherance of the purposes of the The costs of adding these new Specifically, we believe that the Exchange Act. prospectus disclosures may include proposed amendments relating to Proposed rules 15c2–2 and 15c2–3 are both internal costs (for attorneys and disclosure of sales loads as a percentage intended to improve investor access to other non-legal staff of a fund, such as of net asset value rather than as a material information about investments computer programmers, to prepare and percentage of offering price may benefit and contemplated investments in review the required disclosure) and investors by requiring that information mutual fund shares, UIT interests and external costs (for printing and regarding sales loads be provided in a 529 plan securities. Similarly, the typesetting of the disclosure). For manner that would better help investors purposes of the Paperwork Reduction effective amendment for revenue sharing disclosure to understand the true costs of investing Act, we have estimated that the × 6,542 portfolios) = 1,968 hours. in a load fund. Further, investors would 206 proposed new disclosure requirements These figures are based on a Commission benefit because disclosure of sales loads estimate that initial registration statements for 483 would add 1,968 hours to the total as a percentage of net asset value would portfolios and post-effective amendments for 6,542 annual burden of completing Form N– be consistent with the disclosure in the portfolios are filed annually that would be subject 1A.205 We estimate that this additional to the proposed disclosure requirements, and an confirmation that would be required by estimated hourly wage rate of $50. The estimate of the number of filings is based on data derived from proposed rule 15c2–2. In addition, the 205 This estimate is based on the following the Commission’s EDGAR filing system. For a proposed requirement that mutual funds calculation: (0.5 hours per initial registration discussion of the estimated hourly wage rate, see statement for sales load disclosure × 483 portfolios disclose in the fund prospectus the fact supra note 197. × 36% of portfolios) + (0.5 hours per post-effective that sales loads shown in the prospectus 207 amendment for sales load disclosure × 6,542 15 U.S.C. 78c(f). as a percentage of the net asset value or portfolios × 36% of portfolios) + (0.1 hours per 208 15 U.S.C. 77b(b). offering price may be higher or lower initial registration statement for revenue sharing 209 15 U.S.C. 80a–2(c). than the actual sales load that an disclosure × 483 portfolios) + (0.1 hours per post- 210 15 U.S.C. 78w(a)(2).

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proposed amendments to rule 10b–10 to whether the proposed regulation and transactions of callable preferred stock are intended to eliminate duplicative disclosure requirements constitute and redeemable debt. As described in requirements and to improve investor ‘‘major’’ rules. Under SBREFA, a rule is detail above, the Commission proposes access to material information about considered ‘‘major’’ where, if adopted, it to amend rule 10b–10 to require broker- investments in callable preferred stock results or is likely to result in: dealers to disclose whenever preferred and callable debt securities. The • An annual effect on the economy of stock could be called by the issuer. Rule proposed amendments to Form N–1A $100 million or more (either in the form 10b–10 requires similar disclosure for are intended to provide investors in of an increase or a decrease); transactions in callable debt securities. mutual funds with enhanced disclosure • A major increase in costs or prices The Commission further proposes to regarding sales loads, and to direct for consumers or individual industries; amend rule 10b–10 to require disclosure investors to disclosure regarding or of the date of first call for transactions • revenue sharing payments to an Significant adverse effect on in callable debt securities. Finally, the investor’s financial intermediary. competition, investment or innovation. Commission is proposing amendments The Commission preliminarily If a rule is ‘‘major,’’ its effectiveness to Form N–1A in order to provide believes that mandating certain will generally be delayed for 60 days investors with a better understanding of disclosure for transactions in mutual pending Congressional review. We the costs of investing in a fund with a fund shares, UIT interests and 529 plan request comment on the potential sales load, and of revenue sharing securities should serve as an efficient impact of the proposed regulation and payments to an investor’s financial and cost-effective means for those disclosure requirements on the economy intermediary. on an annual basis. Commenters are entities to deliver information to B. Legal Basis consumers. The proposals should not requested to provide empirical data and hinder efficiency because firms should other factual support for their view to The Commission is proposing new be able to use present confirmation the extent possible. rule 15c2–2, new rule 15c2–3 and delivery systems, after making amendments to rule 10b–10 under the XII. Initial Regulatory Flexibility Act Exchange Act pursuant to the authority appropriate adjustments, rather than Analysis having to build new information conferred by the Exchange Act, delivery systems. In addition, the Congress enacted the Regulatory including Sections 10, 11, 15, 17, 23(a), Commission preliminarily believes that Flexibility Act, 5 U.S.C. 601 et seq, to and 36 [15 U.S.C. 78j, 78k, 78o, 78q, the new rules and the proposed address concerns related to the effects of 78w(a), and 78mm] and Sections 12(b) amendments would improve investor agency rules on small entities. The and 38 of the Investment Company Act confidence and, therefore, would Commission is sensitive to the impact [15 U.S.C. 80a–12(b) and 80a–37]. The promote capital formation. With respect its rules may impose on small entities. Commission is proposing amendments to the proposed requirements for This Initial Regulatory Flexibility to Form N–1A pursuant to authority set enhanced disclosure by mutual funds, Analysis has been prepared in forth in Sections 5, 6, 7, 10, and 19(a) although we believe that the proposed accordance with 5 U.S.C. 603, and of the Securities Act [15 U.S.C. 77e, 77f, amendments would benefit investors, relates to the Commission’s proposed 77g, 77j, and 77s(a)], and Sections 8, the magnitude of the effect of the rule 15c2–2, 15c2–3 and amendments to 12(b), 24(a), 30, and 38 of the proposed amendments on efficiency, rule 10b–10 and Form N–1A. Investment Company Act [15 U.S.C. 80a–8, 80a–12(b), 80a–24(a), 80a–29, competition, and capital formation, and A. Reasons for, and Objectives of, and 80a–37]. the extent to which they would be offset Proposed Rules 15c2–2 and 15c2–3 and by the costs of the proposals, are Proposed Amendments to Rule 10b–10 C. Small Entities Subject to Proposed difficult to quantify. and Form N–1A Rules 15c2–2 and 15c2–3 and Proposed The Commission also preliminarily The Commission is proposing rules Amendments to Rule 10b–10 and Form believes that the proposals would 15c2–2 and 15c3–3 to address the N–1A enhance competition because investors concerns that investors in mutual fund Proposed rules 15c2–2 and 15c2–3 would have access to information that shares, UIT interests and 529 plan would apply to all brokers, dealers and would allow them to better understand securities be provided with adequate municipal securities dealers, regardless and differentiate among various access to information regarding the costs of size, that effect transactions in mutual investments. Because investors would of their investments, as well as the fund shares, UIT interests and 529 plan be in a better position to better compare conflicts of interest their broker-dealers securities. The proposed amendments to the costs of these investments, market face. As noted above, those costs, and rule 10b–10 would exclude from the participants would be encouraged to related distribution arrangements, have general disclosure requirements of rule compete on price, thereby increasing evolved substantially since 1977, when 10b–10 transactions in those securities. market efficiency. the Commission adopted its general The proposed amendments to rule 10b– • The Commission requests comment confirmation rule—rule 10b–10.212 We 10 would also require all broker-dealers, on whether the proposed amendments believe that disclosure of information regardless of size, to provide are expected to promote efficiency, about those costs and the arrangements confirmation disclosure about the competition, and capital formation. that lead to conflicts of interest can help callable nature of preferred stock and, in XI. Consideration of Impact on the investors make better informed the case of debt securities that are Economy investment decisions. effected on the basis of yield-to-call, the For purposes of the Small Business Similarly, the Commission is date upon which the debt securities may Regulatory Enforcement Fairness Act of proposing amendments to rule 10b–10 first be called. For purposes of the Regulatory 1996, or ‘‘SBREFA,’’ 211 we must advise to eliminate duplicative requirements Flexibility Act, a broker-dealer is a the Office of Management and Budget as and to address concerns that certain material information has not been small business if it had total capital (net 211 Pub. L. 104–121, Title II, 110 Stat. 857 (1996) included in confirmations of worth plus subordinated liabilities) of (codified in various sections of 5 U.S.C., 15 U.S.C. less than $500,000 on the date in the and as a note to 5 U.S.C. 601). 212 See supra note 5. prior fiscal year as of which its audited

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financial statements were prepared The Commission staff estimates that the result in total internal costs of $1.91 pursuant to rule 17a–5(d) of the one-time burden would result in total billion annually, or approximately Exchange Act or, if not required to file internal costs of $850 million, or $773,000, on average, per affected such statements, a broker or dealer that approximately $157,407, on average, per entity. We note that this is a net had total capital (net worth plus broker, dealer and municipal securities reduction in the annual costs for subordinated liabilities) of less than dealer, and that the annual burden complying with rule 10b–10, as $500,000 on the last business day of the would result in total internal costs of transactions that would otherwise be preceding fiscal year (or in the time that $1.99 billion,218 or approximately required to be delivered pursuant to rule it has been in business, if shorter) and $367,593, on average, per broker, dealer to 10b–10 would be delivered pursuant if it is not an affiliate of an entity that and municipal securities dealer. As to rule 15c2–2. is not a small business.213 The discussed above, as a general matter Finally, the Commission staff has Commission staff estimates that medium-sized and smaller firms, and further estimated that the disclosure approximately 885 brokers, dealers and also some larger firms, use third-party requirements of the proposed municipal securities dealers meet this service providers, or vendors, to amendments to Form N–1A would definition.214 generate the data necessary to send increase the hour burden of prospectus The proposed amendments to Form confirmations. They may also use disclosure by 1,968 hours. The N–1A would apply to all mutual funds. vendors to actually send confirmations Commission staff has estimated that this For purposes of the Regulatory to investors. Therefore, the firms’ additional burden would increase total Flexibility Act, an investment company vendors would be required to reprogram internal costs of filing an initial is a small entity if it, together with other their software and update their systems registration statement or post-effective investment companies in the same to generate the data that would allow amendment by $98,400 annually, or group of related investment companies, their clients to comply with proposed $14.01 per affected mutual fund has net assets of $50 million or less as rule 15c2–2. The staff understands from portfolio. of the end of its most recent fiscal discussions with vendors that the • The Commission requests comment year.215 Approximately 145 investment allocation of costs would coincide on the effect proposed new rules 15c2– companies registered on Form N–1A roughly with the volume of the client’s 2 and 15c2–3 and the proposed meet this definition.216 transactions, so that a broker, dealer or amendments to rule 10b–10 and Form municipal securities dealer that N–1A would have on small entities. The D. Reporting, Recordkeeping and Other Commission specifically requests data Compliance Requirements executes fewer transactions involving covered securities would be allocated and analysis of the costs to implement As described above, proposed rule less of its vendor’s costs than a broker, and comply with the proposals, 15c2–2 and the amendments to rule dealer or municipal securities dealer including expenditures of time and 10b–10 would require additional that executes more transactions. money for: any employee training; information to be provided to investors The Commission staff has further attorney, computer programmer or other in transaction confirmations. Proposed estimated that the disclosure professional time; preparing and rule 15c2–3 would require information requirements of rule 15c2–3 would processing relevant materials; and to be delivered to customers at the time result in a one-time burden of 7 million recordkeeping. they make investment decisions in hours and an annual burden of 18.7 connection with transactions involving E. Duplicative, Overlapping or million hours to brokers, dealers and Conflicting Federal Rules mutual fund shares, UIT interests and municipal securities dealers, and their 529 plan securities. vendors, in connection with delivering There are currently no rules that For purposes of the Paperwork point of sale disclosure for transactions conflict with proposed new rules 15c2– Reduction Act, the Commission staff has in mutual fund shares and UIT interests. 2 and 15c2–3 or the amendments to rule estimated that the proposed disclosure The Commission staff estimates that the 10b–10. The Commission notes, requirements under proposed rule one-time burden would result in total however, that MSRB rule G–15 is a 15c2–2 would result in a one-time internal costs of $450 million, or separate confirmation rule that governs burden of 15 million hours and an approximately $83,333, on average, per member transactions in municipal annual burden of 18.7 million hours 217 broker, dealer and municipal securities securities, including municipal fund to brokers, dealers and municipal dealer, and that the annual burden securities. Furthermore, NASD Rule securities dealers, and their vendors, in would result in total internal costs of 2230 requires broker-dealers that are connection with delivering $935 million, or approximately members of NASD to deliver a written confirmations in for transactions in $173,148, on average, per broker, dealer notification containing certain mutual fund shares and UIT interests. and municipal securities dealer. information, including whether the In addition, the Commission staff has member is acting as a broker for the 213 17 CFR 240.0–10. further estimated that the disclosure customer or is working as a dealer for 214 This estimate is based on information requirements of rule 10b–10, including its own account. Brokers and dealers provided by registered broker-dealers to the typically deliver this information in Commission in FOCUS Reports. the proposed amendments, would result 215 17 CFR 270.0–10. in an annual burden of 42.3 million confirmations that fulfill the 216 This estimate is based on analysis by the hours to brokers, dealers and municipal requirements of rule 10b–10. The Division of Investment Management staff of securities dealers, and their vendors, in Commission staff believes that, where information from databases compiled by third-party connection with delivering required, brokers and dealers would information providers, including Morningstar, Inc., confirmations in connection with incorporate such information into and Lipper. 217 It is important to note, however, that securities transactions. The Commission confirmations delivered pursuant to rule confirmations for transactions in covered securities staff estimates that this burden would 15c2–2. are currently required to be delivered pursuant to In addition, the Commission notes rule 10b–10 or MSRB rule G–15, as applicable. As 218 The staff has estimated for purposes of the that information required for the point a result, the burden for generating and sending Paperwork Reduction Act that these external costs of sale disclosures pursuant to proposed confirmations would not be entirely new, but would reflect an increase of $160 million over the would reflect a shift of a burden of 16.7 million external cost of delivering the confirmations were rule 15c2–3 would also be required in hours from rule 10b–10 to proposed rule 15c2–2. they to be delivered pursuant to rule 10b–10. confirmations delivered pursuant to

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proposed rule 15c2–2. The Commission municipal securities dealers, not just posted on the Commission’s Internet believes that this overlap is appropriate those that are not considered small Web site (http://www.sec.gov).219 because the information to be provided entities. XIII. Statutory Authority to investors at point of sale is helpful for We have endeavored through the customer when making his or her The Commission is proposing new proposed new rules 15c2–2 and 15c2– investment decision. Confirmation rule 15c2–2, new rule 15c2–3 and 3 and the amendments to rule 10b–10 disclosure of this information would amendments to rule 10b–10 under the serve to alert the customer to any and Form N–1A to minimize the Exchange Act pursuant to the authority misunderstandings about the rights regulatory burden on all brokers, dealers conferred by the Exchange Act, associated with his or her investment in and municipal securities dealers, including Sections 10, 11, 15, 17, 23(a), a security, promote the timely including small entities, while meeting and 36 [15 U.S.C. 78j, 78k, 78o, 78q, resolution of problems, and better our regulatory objectives. Small entities 78w(a), and 78mm] and Sections 12(b) enable the investor to evaluate potential should benefit from the Commission’s and 38 of the Investment Company Act future transactions involving that reasoned approach to the proposed new [15 U.S.C. 80a–12(b) and 80a–37]. The security. rules and proposed amendments to the Commission is proposing amendments Finally, there are no rules that same degree as other brokers, dealers to Form N–1A pursuant to authority set duplicate, overlap, or conflict with the and municipal securities dealers. forth in Sections 5, 6, 7, 10, and 19(a) proposed amendments to Form N–1A. Further consolidation or simplification of the Securities Act [15 U.S.C. 77e, 77f, F. Significant Alternatives of the proposals for brokers, dealers and 77g, 77j, and 77s(a)], and Sections 8, municipal securities dealers that are 12(b), 24(a), 30, and 38 of the The Regulatory Flexibility Act directs small entities would be inconsistent Investment Company Act [15 U.S.C. us to consider significant alternatives with the Commission’s goals for 80a–8, 80a–12(b), 80a–24(a), 80a–29, that would accomplish our stated and 80a–37]. objective, while minimizing any fostering investor protection. Finally, significant adverse impact on small we do not consider using performance Text of Proposed Rules rather than design standards to be issuers. In connection with the List of Subjects proposed amendments, the Commission consistent with our statutory mandate of considered the following alternatives: (i) investor protection in the present 17 CFR Part 239 The establishment of differing context. Reporting and recordkeeping compliance or reporting requirements or G. Solicitation of Comments requirements, Securities. timetables that take into account the 17 CFR Part 240 resources available to small entities; (ii) The Commission encourages the the clarification, consolidation, or submission of written comments with Broker-dealers, Reporting and simplification of compliance and respect to any aspect of this analysis. recordkeeping requirements, Securities. reporting requirements under the Comment is specifically requested on 17 CFR Part 274 proposed amendments for small the number of small entities that would Investment companies, Reporting and entities; (iii) the use of performance be affected by proposed new rules 15c2– rather than design standards; and (iv) an recordkeeping requirements, Securities. 2 and 15c2–3 and the proposed exemption from coverage of the For the reasons set forth in the amendments to rule 10b–10 and Form proposed amendments, or any part preamble, Title 17, Chapter II of the thereof, for small entities. N–1A and the likely impact of the Code of Federal Regulations is proposed The Commission believes at the proposals on small entities. Commenters to be amended as follows: present time that special compliance or are asked to describe the nature of any reporting requirements for small impact and provide empirical data PART 239—FORMS PRESCRIBED entities, or an exemption from coverage supporting the extent of the impact. UNDER THE SECURITIES ACT OF 1933 for small entities, would not be These comments will be considered in 1. The authority citation for part 239 appropriate or consistent with investor the preparation of the Final Regulatory continues to read in part as follows: protection. Different disclosure Flexibility Analysis, if the proposals are requirements for brokers, dealers, or adopted, and will be placed in the same Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z–2, 77sss, 78c, 78l, 78m, 78n, 78o(d), municipal securities dealers that are public file as comments on the 78u–5, 78w(a), 78ll(d), 79e, 79f, 79g, 79j, 79l, small entities may create the risk that proposals themselves. Commenters 79m, 79n, 79q, 79t, 80a–8, 80a–24, 80a–26, the investors who effect securities should provide empirical data to 80a–29, 80a–30, and 80a–37, unless transactions through such small entities support their views. Comments should otherwise noted. would not be as able as investors who be submitted in triplicate to Jonathan G. * * * * * effect transactions through larger such Katz, Secretary, Securities and Exchange entities to assess information, including Commission, 450 Fifth Street, NW., PART 240—GENERAL RULES AND the distribution-related costs or conflicts Washington, DC 20549–0609. REGULATIONS, SECURITIES of interest. Moreover, different Comments also may be submitted EXCHANGE ACT OF 1934 disclosure requirements could create electronically at the following e-mail investor confusion if it creates the 2. The authority citation for Part 240 address: [email protected]. All impression that small brokers, dealers or continues to read, in part, as follows: comment letters should refer to File No. municipal securities dealers do not Authority: 15 U.S.C. 77c, 77d, 77g, 77j, engage in the arrangements that are S7–06–04; this file number should be 77s, 77z–2, 77z–3, 77eee, 77ggg, 77nnn, addressed by the proposals, while large included on the subject line if E-mail is 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j, such entities do. We believe, therefore, used. Comment letters will be available that it is important for the disclosure for inspection and copying in the 219 We do not edit personal identifying that would be required by the proposed Commission’s Public Reference Room at information, such as names or electronic mail the same address. Electronically addresses, from electronic submissions. You should amendments to be provided to submit only information that you wish to make shareholders by all brokers, dealers and submitted comment letters will be available publicly.

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78j–l, 78k, 78k–1, 78l, 78m, 78n, 78o, 78p, (6) In the case of a transaction in a be delivered to some other person 78q, 78s, 78u–5, 78w, 78x, 78ll, 78mm, 79q, debt security effected on the basis of designated by the customer for 79t, 80a–20, 80a–23, 80a–29, 80a–37, 80b–3, yield: distribution to the customer; and 80b–4, 80b–11, and 7201 et seq.; and 18 (i) The yield at which the transaction (3) Such customer is provided with U.S.C. 1350, unless otherwise noted. was effected, including the percentage prior notification in writing disclosing * * * * * amount and its characterization (e.g., the intention to send the written 3. Section 240.10b–10 is amended by: current yield, yield to maturity, or yield information referred to in paragraph a. Revising the Preliminary Note; to call) and if effected at yield to call, (b)(1) of this section in lieu of an b. Revising the introductory text of the type of call, the call date and, if immediate confirmation. paragraph (a) and paragraphs (a)(4), different, the first date upon which the * * * * * (a)(6), (a)(9) and (b); security may be called, and call price; (e) Security futures products. The c. Removing paragraph (d)(6); and provisions of paragraphs (a) and (b) of d. Redesignating paragraphs (d)(7), (ii) The dollar price calculated from this section shall not apply to a broker (d)(8), (d)(9) and (d)(10) as paragraphs the yield at which the transaction was or dealer registered pursuant to section (d)(6), (d)(7), (d)(8) and (d)(9); effected; and 15(b)(11)(A) of the Act (15 U.S.C. e. Revising paragraph (e); and (iii) If effected on a basis other than 78o(b)(11)(A)) to the extent that it effects f. Adding paragraph (g). yield to maturity and the yield to transactions for customers in security The additions and revisions read as maturity is lower than the represented futures products in a futures account (as follows: yield, the yield to maturity as well as that term is defined in § 240.15c3– the represented yield; provided, § 240.10b–10 Confirmation of transactions. 3(a)(15)) and a broker or dealer however, that this paragraph (a)(6)(iii) registered pursuant to section 15(b)(1) of Preliminary Note. This section requires shall not apply to a transaction in a debt the Act (15 U.S.C. 78o(b)(1)) that is also broker-dealers to disclose specified security that either: a futures commission merchant information in writing to customers at or (A) Has a maturity date that may be registered pursuant to section 4f(a)(1) of before completion of a transaction. Section extended by the issuer thereof, with a the Commodity Exchange Act (7 U.S.C. 240.15c2–2 sets forth the confirmation variable interest rate payable thereon; or 6f(a)(1)), to the extent that it effects requirements that apply to broker-dealer (B) Is an asset-backed security, that transactions for customers in security transactions in certain investment company represents an interest in or is secured by securities or municipal fund securities. The futures products in a futures account (as requirements under this section that a pool of receivables or other financial that term is defined in § 240.15c3– particular information be disclosed at or assets that are subject continuously to 3(a)(15)); provided that the broker or before completion of a transaction are not prepayment; and dealer that effects any transaction for a determinative of, and do not exhaust, a * * * * * customer in security futures products in broker’s, dealer’s or municipal securities (9) That the broker or dealer is not a a futures account gives or sends to the dealer’s obligations under the general member of the Securities Investor customer no later than the next business antifraud provisions of the federal securities Protection Corporation (SIPC), or that day after execution of any futures laws, or under any other legal requirements, to disclose additional information to a the broker or dealer clearing or carrying securities product transaction, written customer at the time of the customer’s the customer account is not a member notification disclosing: investment decision. of SIPC, if such is the case. (1) The date the transaction was (b) Alternative periodic reporting. A executed, the identity of the single (a) Disclosure requirement. It shall be broker or dealer may effect transactions security or narrow-based security index unlawful for any broker or dealer to for or with the account of a customer underlying the contract for the security effect for or with an account of a without giving or sending to such futures product, the number of contracts customer any transaction in, or to customer the written notification of such security futures product induce the purchase or sale by such described in paragraph (a) of this purchased or sold, the price, and the customer of, any security (other than section if: delivery month; securities exempted by paragraph (g) of (1) Such transactions are effected (2) The source and amount of any this section) unless such broker or pursuant to a periodic plan; and remuneration received or to be received dealer, at or before completion of such (2) Such broker or dealer gives or by the broker or dealer in connection transaction, gives or sends to such sends to such customer within five with the transaction, including, but not customer written notification disclosing: business days after the end of each limited to, markups, commissions, * * * * * quarterly period, a written statement costs, fees, and other charges incurred (4) (i) In the case of any transaction in disclosing each purchase or redemption, in connection with the transaction; a debt security subject to redemption effected for or with, and each dividend provided that if no remuneration is to be before maturity, a statement to the effect or distribution credited to or reinvested paid for an initiating transaction until that such debt security may be for, the account of such customer during the occurrence of the corresponding redeemed in whole or in part before the month; the date of such transaction; liquidating transaction, that the broker maturity, that such a redemption could the identity, number, and price of any or dealer shall disclose the amount of affect the yield represented and the fact securities purchased or redeemed by remuneration only on the confirmation that additional information is available such customer in each such transaction; for the liquidating transaction; upon request; the total number of shares of such (3) The fact that information about the (ii) In the case of any transaction in securities in such customer’s account; time of the execution of the transaction, preferred stock that is subject to any remuneration received or to be the identity of the other party to the repurchase by the issuer at a specified received by the broker or dealer in contract, and whether the broker or price, a statement to the effect that such connection therewith; and that any dealer is acting as agent for such preferred stock may be repurchased at other information required by paragraph customer, as agent for some other the election of the issuer at any time; (a) of this section will be furnished person, as agent for both such customer and upon written request; provided, and some other person, or as principal * * * * * however, that the written statement may for its own account, and if the broker or

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dealer is acting as principal, whether it in any covered security, the broker, (i) If the customer will incur a sales is engaging in a block transaction or an dealer or municipal securities dealer load at the time of sale, information exchange of security futures products shall give or send to such customer about the availability of breakpoints as for physical securities, will be available written notification disclosing: reflected in Schedule 15C (§ 240.15c– upon written request of the customer; (1) The date of the transaction; 100). with regard to the covered and (2) The issuer and class of the covered security, including a statement of the (4) Whether payment for order flow is security; applicable sales load as set forth in the received by the broker or dealer for such (3) The net asset value of the shares prospectus, reflecting any breakpoint transactions, the amount of this or units and, if different, the public discount and the value of the securities payment and the fact that the source offering price of the shares or units; position (based on net asset value, and nature of the compensation (4) The number of shares or units of public offering price, or other applicable received in connection with the the security purchased or sold by the value) to which the sales load is particular transaction will be furnished customer, the total dollar amount paid applied; or upon written request of the customer; or received in the transaction and the (ii) If the customer will not incur a provided that brokers or dealers that do net amount of the investment bought or sales load at the time of sale, not receive payment for order flow have sold in the transaction (equal to the information about the availability of no disclosure obligation under this number of shares or units bought or sold breakpoints as reflected in Schedule paragraph. multiplied by the net asset value of 15C (§ 240.15c–100) with regard to a * * * * * those shares or units); different class of the covered security, (g) This section does not apply to (5) Any commission, markup or other including a statement of the sales load transactions in any of the following remuneration received or to be received that the customer would have incurred securities: by the broker, dealer or municipal at the time of sale if the transaction had (1) U.S. Savings Bonds; securities dealer from the customer in been in that different class of the (2) Municipal securities; and connection with the transaction; covered security. (3) Any other security that is a (6) In the case of transactions in (2) An explanation of the potential ‘‘covered security’’ as provided in which a customer sells shares or units amount of any deferred sales load that § 240.15c2–2. of a covered security, the amount of any the customer may incur in connection 4. Section 240.15c2–2 is added to read deferred sales load that the customer with any subsequent sale of the shares as follows: has incurred or will incur in connection or units purchased in the transaction with the transaction; and (other than deferred sales loads of no § 240.15c2–2 Confirmation of transactions (7) That the broker, dealer or in open-end management investment more than one percent that expire no company shares, unit investment trust municipal securities dealer (other than later than one year after purchase, when interests, and municipal fund securities a municipal securities dealer that is a no other sales load would be incurred used for education savings. bank) is not a member of the Securities on that transaction), including, for each Investor Protection Corporation (SIPC), year that the deferred sales load may be Preliminary Note. This section requires or that the broker, dealer or municipal in effect: brokers (including municipal securities securities dealer clearing or carrying the brokers), dealers and municipal securities (i) The maximum amount of the dealers to disclose specified information in customer account is not a member of deferred sales load that would be writing to customers at or before completion SIPC, if such is the case; provided, associated with the sale of those shares of a transaction in certain investment however, that this paragraph (b)(7) shall or units, expressed in dollars; and company securities or municipal fund not apply in the case of a transaction in (ii) The maximum amount of the securities, while § 240.10b–10 sets forth the shares or units of a covered security if: deferred sales load that would be confirmation requirements that apply to (i) The customer sends funds or associated with the sale of those shares other transactions. The requirements under securities directly to, or receives funds or units, expressed as a percentage of this section that particular information be or securities directly from, the issuer of disclosed at or before completion of a the net asset value at the time of transaction are not determinative of, and do the covered security, its transfer agent, purchase or at the time of sale, as not exhaust, a broker’s, dealer’s or municipal its custodian, or other designated agent, applicable. securities dealer’s obligations under the and such person is not an associated (3) An explanation of any asset-based general antifraud provisions of the federal person of the broker or dealer required sales charges and asset-based service securities laws, or under any other legal by paragraph (a) of this section to send fees incurred, or to be incurred, by the requirements, to disclose additional written notification to the customer; and issuer of the covered security in information to a customer at the time of the (ii) The written notification required connection with the customer’s customer’s investment decision. by paragraph (a) of this section is sent purchase of the shares or units. Based (a) Disclosure requirement. It shall be on behalf of the broker or dealer to the on the issuer’s policies at the time of the unlawful for any broker, dealer or customer by a person described in purchase, this explanation shall state: municipal securities dealer to effect for paragraph (b)(7)(i) of this section. (i) The annual amount of asset-based or with an account of a customer any (c) Additional disclosure requirement sales charges and asset-based service transaction in, or to induce the purchase for purchases. At or before the fees incurred in connection with the or sale by such customer of, any covered completion of any transaction in which shares or units purchased, as a security unless the broker, dealer or a customer purchases a covered percentage of net asset value; and municipal securities dealer complies security, the broker, dealer or municipal (ii) The total annual dollar amount of with the requirements set forth in securities dealer also shall give or send asset-based sales charges and asset- paragraphs (b), (c), (d) and (e) of this to such customer written notification based service fees incurred in section. All disclosures made pursuant that discloses the following information: connection with the shares or units to paragraphs (b) and (c) of this section (1) The amount of any sales load that purchased in the transaction, if the net shall be made in a manner consistent the customer has incurred or will incur asset value does not change. with Schedule 15C (§ 240.15c–100). at the time of purchase, expressed in (4) The amount of any dealer (b) General disclosure requirement. At dollars and as a percentage of the net concession that the broker, dealer or or before the completion of a transaction amount invested, together with: municipal securities dealer will earn in

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connection with the transaction, engages in the following types of (ii) The total number of shares or expressed in dollars and as a percentage differential compensation practices units of the covered security in the of the net amount invested. related to the covered security customer’s account; (5)(i) The amount directly or purchased: (iii) The information required by indirectly earned from the fund (i) Payment of differential paragraph (b) of this section and, to the complex by: compensation to any associated persons extent applicable, paragraphs (c)(1) and (A) The broker, dealer or municipal in connection with the sale of a class of (c)(4) of this section, related to each securities dealer; and covered securities that charges a purchase, redemption, credit or (B) Any associated person that is a deferred sales load (other than deferred reinvestment; broker, dealer or municipal securities sales loads of no more than one percent (iv) The information required by dealer; and that expire no later than one year after paragraphs (c)(5) and (c)(6) of this (C) If the covered security is not a purchase, when no other sales load section, as of the date of the final proprietary covered security, any other would be incurred on that transaction), purchase or reinvestment during the associated person of the broker, dealer if the customer purchased a covered period; or municipal securities dealer. security that charges that type of sales (v) The information required by (ii) The broker, dealer or municipal load; and paragraph (c)(2) of this section, based on securities dealer may disclose the (ii) Payment of differential the total value of the purchases or information required to be disclosed compensation to any associated persons reinvestments during the period; and pursuant to paragraphs (c)(5)(i)(A), (B) in connection with the sale of a and (C) of this section as a percentage (vi) The information required by proprietary covered security, if the of the total cumulative net asset value paragraph (c)(3) of this section, based on customer purchased a proprietary of the covered securities issued by the the total purchases or reinvestments covered security; and fund complex that are sold by such during the period and on the net asset broker, dealer or municipal securities (iii) For each of the types of value of the covered security at the end dealer over the four most recent differential compensation described in of the period; and calendar quarters (or over the four paragraphs (c)(6)(i) and (ii) of this (3) The broker, dealer or municipal calendar quarters preceding the most section, the broker, dealer or municipal securities dealer provides prior recent calendar quarter if the date of the securities dealer shall disclose whether notification to the customer, in writing, transaction is less than 30 days after the it provides differential compensation by disclosing the intention to send the end of the most recent calendar quarter), means of a series of three checkboxes, written information referred to in in connection with the following types associated with a yes, no or ‘‘not paragraph (d)(1) of this section in lieu of arrangements: applicable’’ response. of an immediate confirmation, and (A) Revenue sharing payments from (d) Alternative periodic reporting. A provides to the customer at least one persons within the fund complex; or broker, dealer or municipal securities written disclosure document consistent (B) Commissions associated with dealer may effect transactions for or with paragraphs (b) and (c) of this portfolio securities transactions, with the account of a customer without section prior to relying on this including markups or other giving or sending to such customer the paragraph (d) for any transaction in remuneration associated with written notification described in which the customer purchases a covered transactions effected on a riskless paragraphs (b) and (c) of this section if: security. principal basis, on behalf of the issuer (1) The broker, dealer or municipal (e) Comparison ranges. (1) For the of the covered security, or issuers of securities dealer: following disclosures required by other covered securities within the fund (i) Effects such transactions pursuant paragraphs (b), (c) and (d) of this complex. to a covered securities plan, or section, the broker, dealer or municipal (iii) For each of the types of (ii) Effects such transactions in shares securities dealer also shall disclose the arrangements described in paragraph of any open-end management median information and comparison (c)(5)(ii) of this section, the broker, investment company registered under ranges for the following: dealer or municipal securities dealer the Investment Company Act of 1940 (i) Front-end sales loads (paragraph shall disclose the percentage required (15 U.S.C. 80a) (the ‘‘Investment (c)(1) of this section)—the median and pursuant to that paragraph and the total Company Act’’) that holds itself out as 95th percentile range of front-end sales dollar amount of remuneration it may a money market fund and attempts to loads involving the same category of expect to receive in connection with the maintain a stable net asset value per covered security (i.e., mutual fund, unit transaction, calculated by multiplying share if no sales load is deducted upon investment trust or municipal fund that percentage by the net amount the purchase or redemption of shares in security); invested in the transaction. In addition, the money market fund; and (ii) Deferred sales loads (paragraph to the extent that the broker, dealer or (2) The broker, dealer or municipal (c)(2) of this section)—the median and municipal securities dealer has entered securities dealer gives or sends to the 95th percentile range of deferred sales into a revenue sharing arrangement or customer within five business days after loads involving the same category of understanding that would result in a the end of each quarterly period, for covered security, for each year in which specific amount of remuneration in transactions involving covered the sales load may be in effect; connection with purchases of the securities plans, and after the end of (iii) Annual asset-based sales charges covered security, the broker, dealer or each monthly period for other and service fees (paragraph (c)(3)(iv) of municipal securities dealer shall also transactions described in paragraph this section)—the median and 95th disclose that remuneration as a (d)(1) of this section, a written statement percentile range of asset-based percentage of the net amount invested disclosing: distribution and service fees involving and the total dollar amount of (i) Each purchase or redemption, the same category of covered security; remuneration it may expect to receive in effected for or with, and each dividend (iv) Dealer concession or other sales connection with the transaction. or distribution credited to or reinvested fees (paragraph (c)(4) of this section)— (6) If applicable, that the broker, for, the account of such customer during the median and 95th percentile range of dealer or municipal securities dealer the period; dealer concessions or other sales fees

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involving the same category of covered to, the issuer of the securities, or the traded on a national securities security; principal underwriter, custodian, exchange; provided, however, that an (v) Revenue sharing (paragraph trustee, or other designated agent of the interest in a unit investment trust that (c)(5)(i) of this section)—the median and registered investment company), or sold is the subject of a secondary market 95th percentile range of revenue sharing by a customer pursuant to: transaction is not a covered security for involving transactions by all brokers, (i) An individual retirement or purposes of this section; and dealers or municipal securities dealers individual pension plan qualified under (iii) Any municipal fund security. that distribute that category of covered the Internal Revenue Code (26 U.S.C. et (7) Customer shall not include a security; and seq. (1986)); broker, dealer or municipal securities (vi) Portfolio brokerage commissions (ii) A contractual or systematic dealer. (paragraph (c)(5)(ii) of this section)—the agreement under which the customer (8) Dealer concession means any fees median and 95th percentile range of purchases at the applicable public that the broker, dealer or municipal portfolio brokerage commissions offering price, or redeems at the securities dealer will earn at the time of involving transactions by all brokers, applicable redemption price, such the sale, in connection with the dealers or municipal securities dealers securities in specified amounts transaction, from the issuer of the that distribute that category of covered (calculated in security units or dollars covered security, an agent of the issuer, security. or by reference to dividends or other the primary distributor, or any other (2) The median information and distributions paid by the issuer) at broker, dealer or municipal securities comparison ranges will be published specified time intervals, or at the time dealer. from time to time by the Commission as dividends or other distributions are paid (9) Differential compensation means: percentages; provided, however, that by the issuer, and setting forth the (i) In the case of transactions this paragraph (e) will not be effective commissions or charges to be paid by involving the purchase of a class of until 90 days after the Commission such customer in connection therewith covered security that is associated with publishes the initial schedule of (or the manner of calculating them); or a deferred sales load (other than classes comparison ranges in the Federal (iii) Any other arrangement involving associated with a deferred sales load of Register. The Commission will publish a group of two or more customers and no more than one percent that expires revised ranges in the Federal Register. contemplating periodic purchases of no later than one year after purchase for When a range is revised, all disclosures such securities by each customer certain transactions, when no other pursuant to this section that are through a person designated by the sales load would be incurred on that provided to customers more than 90 group; provided that such arrangement transaction), any form of higher days following the publication of the requires the issuer of the covered compensation (including total revised ranges shall conform to the security or its agent: commissions, reimbursement of charges revised ranges. (A) To give or send to the designated or expenses, avoidance of charges or (f) Definitions. For purposes of this person, at or before the completion of expenses, other cash compensation, or section: the transaction for the purchase of such non-cash compensation) that a broker, (1) Asset-based sales charges means securities, a written notification of the dealer or municipal securities dealer all asset-based charges incurred in receipt of the total amount paid by the can be expected to pay to any of its connection with the distribution of a group; associated persons over the next year covered security, paid by the issuer or (B) To send to anyone in the group (assuming no change in net asset value paid out of the assets of covered who was a customer in the prior quarter if applicable) in connection with the securities owned by the issuer. and on whose behalf payment has not sale of a stated dollar amount of that (2) Asset-based service fee means all been received in the current quarter a class of covered security, compared asset-based amounts for personal service quarterly written statement reflecting with the compensation that would have and/or the maintenance of shareholder that a payment was not received on his been paid to the associated person over accounts, paid by the issuer or paid out behalf; and the next year in connection with the of the assets of covered securities owned (C) To advise each customer in the sale of the same dollar amount of by the issuer. group if a payment is not received from another class of the same covered (3) Completion of the transaction has the designated person on behalf of the security that is associated with a sales the meaning provided in § 240.15c1–1. group within 10 days of a date certain load at the time of purchase; and (4) Consistent with Schedule 15C specified in the arrangement for (ii) In the case of transactions means using Schedule 15C (§ 240.15c– delivery of that payment by the involving the purchase of a proprietary 100), or using a similar layout of designated person and thereafter to send covered security: disclosure so long as: to each such customer the written (A) Any practice by which a broker, (i) All information specified in notification described in paragraph (a) dealer or municipal securities dealer Schedule 15C is set forth in the of this section for the next three pays an associated person a higher confirmation; succeeding payments. percentage of the firm’s gross dealer (ii) Information specified in Sections (6) Covered security means: concession in connection with the sale B through F of Schedule 15C are (i) Any security issued by an open- of a proprietary covered security than included with no change, including the end company, as defined by section the percentage of the gross dealer use of bold print for data items printed 5(a)(1) of the Investment Company Act concession that firm would pay in in bold in Schedule 15C, and in the (15 U.S.C. 80a–5(a)(1)), that is not connection with the sale of the same order set forth in Schedule 15C; and traded on a national securities exchange dollar amount of any non-proprietary (iii) Information specified in Section or a facility of a national securities covered security offered by the firm; and A of Schedule 15C is displayed association; (B) Other practices of a broker, dealer prominently. (ii) Any security issued by a unit or municipal securities dealer that cause (5) Covered securities plan means any investment trust as that term is defined an associated person to earn a higher plan under which covered securities are by section 4(2) of the Investment rate of compensation in connection with purchased by a customer (the payments Company Act (15 U.S.C. 80a–4(2)), but the sale of a proprietary covered being made directly to, or made payable is not an exchange-traded fund that is security, including but not limited to

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additional cash compensation or the than the issuer of the covered security, customer at the time of the customer’s imposition, allocation or waiver of makes payments to a broker, dealer or investment decision. expenses, overhead costs or ticket municipal securities dealer, or any (a) Requirement. Except as provided charges. associated person of the broker, dealer in paragraph (e) of this section, it shall (10) Fund complex shall include the or municipal securities dealer, be unlawful for any broker, dealer or issuer of the covered security (including excluding amounts earned at the time of municipal securities dealer to effect a the sponsor, depositor or trustee of a the sale that constitute a dealer purchase of a covered security for a unit investment trust, and any insurance concession or other sales fee and that customer without disclosing company issuing a variable annuity are disclosed pursuant to paragraph information consistent with this contract or variable life insurance (b)(4) of this section. paragraph at the point of sale. policy), the issuer of any other covered (17) Sales load has the meaning set (1) The broker, dealer or municipal security that holds itself out to investors forth in section 2(a)(35) of the securities dealer shall separately as a related company for purposes of Investment Company Act (15 U.S.C. disclose each of the following categories investment or investor services, any 80a–2(a)(35)). of information by reference to the value agent of any such issuer, any investment (18) Securities position means the of the purchase, or, if that value is not adviser for any such issuer, and any value of the purchase of covered reasonably estimable at the time of affiliated person (as defined by section securities; the value of securities that disclosure, by reference to a model 2(a)(3) of the Investment Company Act are subject to rights of accumulation investment of $10,000: (15 U.S.C. 80a–2(a)(3))) of any such under the terms of the prospectus with (i) The amount of any sales load that issuer or any such investment adviser. respect to the covered security or a the customer would incur at the time of (11) Gross dealer concession means related class of the covered security, to purchase; the total amount of any discounts, the extent known by the broker, dealer concessions, fees, service fees, (ii) An estimate of the amount of any or municipal securities dealer, asset-based sales charge and asset-based commissions or asset-based sales including the value of such securities charges provided by the issuer of a service fees that, in the year following purchased in other accounts or by other the purchase, would be incurred by the covered security to the broker, dealer or persons; and the value of any such municipal securities dealer in issuer of the covered security in securities that are the subject of letters connection with the shares or units connection with the sale and of intent that may be considered in distribution of the covered security; but purchased over the next year if net asset computing a breakpoint with respect to value does not change; does not include any commissions the covered security or a related class of associated with portfolio securities (iii) An estimate of the maximum the covered security. amount of any deferred sales load that transactions on behalf of the issuer. (g) Exemptions. The Commission may (12) Municipal fund security means would be associated with the shares or exempt any broker, dealer or municipal units purchased if those shares or units any municipal security that is issued securities dealer from the requirements pursuant to a qualified State tuition are sold within one year (other than of paragraphs (b), (c) (d) and (e) of this deferred sales loads of no more than one program as defined by section 529 of the section with regard to specific Internal Revenue Code (26 U.S.C. 529), percent that expire no later than one transactions or specific classes of year after purchase, when no other sales and that is issued by an issuer that, but transactions for which the broker, dealer for the application of section 2(b) of the load would be incurred on that or municipal securities dealer will transaction), along with a statement Investment Company Act (15 U.S.C. provide alternative procedures to effect 80a–2(b)), would constitute an informing the customer about how the purposes of this section; any such many years a deferred sales load may be investment company within the exemption may be granted subject to meaning of section 3 of the Investment in effect; and compliance with such alternative (iv) The amount of any dealer Company Act (15 U.S.C. 80a–3). procedures and upon such other stated (13) Net amount invested means the concession that the broker, dealer or terms and conditions as the Commission price paid to purchase the covered municipal securities dealer would earn may impose. securities less any applicable sales load. at the time of sale in connection with 5. Section 240.15c2–3 is added to read (14) Portfolio securities transaction the transaction; and as follows: means any transaction involving (2) The broker, dealer or municipal securities owned by the issuer of a § 240.15c2–3 Point-of-sale disclosure for securities dealer also shall disclose: covered security, or owned by any other purchase transactions in open-end (i) Whether the broker, dealer or issuer within the same fund complex. management investment company shares, municipal securities dealer, or any (15) Proprietary covered security unit investment trust interests, and affiliate, receives revenue sharing from means any covered security as to which municipal fund securities used for the fund complex; the broker, dealer or municipal education savings. (ii) Whether the broker, dealer or securities dealer is an affiliated person Preliminary Note. This section requires municipal securities dealer, or any (as defined by section 2(a)(3) of the brokers (including municipal securities affiliate, receives portfolio brokerage Investment Company Act (15 U.S.C. brokers), dealers and municipal securities commissions from the fund complex; 80a–2(a)(3))) of the issuer, or is an dealers to disclose specified information in and associated person of the issuer’s writing to customers prior to transactions in (iii) If applicable, whether the broker, investment adviser or principal certain investment company securities or dealer or municipal securities dealer underwriter, or, in the case of a covered municipal fund securities. The requirements engages in the following types of security that is an interest in a unit under this section that particular information differential compensation practices be disclosed at the point of sale are not related to the covered security investment trust, is an associated person determinative of, and do not exhaust, a of a sponsor, depositor or trustee of the broker’s, dealer’s or municipal securities purchased: covered security. dealer’s obligations under the general (A) Payment of differential (16) Revenue sharing means any antifraud provisions of the federal securities compensation to any associated persons arrangement or understanding by which laws, or under any other legal requirements, in connection with the sale of a class of a person within a fund complex, other to disclose additional information to a covered securities that charges a

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deferred sales load (other than deferred be kept in accordance with § 240.17a– (i) The broker, dealer or municipal sales loads of no more than one percent 4(f) and for the period specified in securities dealer did not communicate that expire no later than one year after § 240.17a–4(b) with regard to similar with the customer about the transaction purchase, when no other sales load written communications and records. other than to accept the customer’s would be incurred on that transaction), (e) Exceptions. This section shall not order; and if the customer purchased a covered apply to the following transactions in a (ii) The broker, dealer or municipal security that charges that type of sales covered security, or participants in a securities dealer reasonably believes load; and transaction: that another broker, dealer or municipal (B) Payment of differential (1) Transactions resulting from orders securities dealer has delivered the compensation to any associated persons received from the customer via U.S. information to the customer as required in connection with the sale of a mail, messenger delivery or similar by this section; proprietary covered security, if the third-party delivery service if: (i) The broker, dealer or municipal (3) Transactions as part of a covered customer purchased a proprietary securities plan; provided, however, that covered security. securities dealer meets the requirements of paragraph (e)(1)(ii) of this section the broker, dealer or municipal (b) Customers’ right to terminate securities dealer provides disclosure orders made prior to disclosure. An and, within the previous six months, has provided the following information consistent with this section prior to the order received by the broker, dealer or first transaction in any covered security municipal securities dealer prior to the to the customer: (A) A statement of the maximum that is purchased as part of a covered disclosure required by this section shall securities plan; be treated as an indication of interest front-end and deferred sales loads that until after the information required by may be associated with investments in (4) Reinvestments of dividends paragraph (a) of this section is disclosed covered securities offered by the broker, earned; or to the customer, and, following dealer or municipal securities dealer, (5) Transactions in which the broker, disclosure, the customer has had an expressed as a percentage of net asset dealer or municipal securities dealer is opportunity to determine whether to value, along with an explanation of how exercising investment discretion. place an order. The broker, dealer or sales loads can reduce investment (f) Definitions. municipal securities dealer shall returns; (B) A statement of the maximum (1) Point of sale shall mean: disclose this right to the customer at the asset-based sales charge or asset-based (i) Except as provided by paragraph time it discloses the information service fees that may directly or (f)(1)(ii) of this section, immediately required by this paragraph (b). indirectly be paid out of the assets of prior to the time that the broker, dealer (c) Manner of disclosure—(1) issuers of covered securities offered by or municipal securities dealer accepts Generally. The information required to the broker, dealer or municipal the order from the customer. be disclosed pursuant to paragraph (a) securities dealer, expressed as a (ii) As to transactions for customers or (b) of this section shall be given or percentage of net asset value, along with who have not opened an account with sent to the customer in writing using an explanation of how asset-based the broker, dealer or municipal Schedule 15D (§ 240.15c–101); charges can reduce investment returns; securities dealer, and transactions in provided, however, that if the point of (C) A statement about whether the which the broker, dealer or municipal sale occurs at an in-person meeting, the broker, dealer or municipal securities securities dealer does not accept the information shall also be disclosed dealer receives revenue sharing or order from the customer, the time that orally to the customer at the in-person portfolio brokerage commissions from the broker, dealer or municipal meeting. any fund complex, along with an securities dealer first communicates (2) Exception for oral communication. explanation of how those arrangements with the customer about the covered Notwithstanding paragraph (c)(1) of this pose conflicts of interest; and security, specifically or in conjunction section, if the point of sale occurs (D) A statement about whether the with other potential investments. through means of oral communication broker, dealer or municipal securities other than at an in-person meeting, the (2) The terms asset-based sales dealer pays differential compensation in charges, asset-based service fee, covered information shall be disclosed orally to connection with transactions in covered the customer at the point of sale. securities plan, covered security, securities, along with an explanation of customer, dealer concession, differential (d) Recordkeeping. A broker, dealer or how differential compensation pose municipal securities dealer, at the time compensation, fund complex, portfolio conflicts of interest; and securities transaction, revenue sharing of disclosing information pursuant to (ii) The broker, dealer or municipal and sales load shall have the meanings this section, shall make records of securities dealer is not compensated for provided in § 240.15c2–2. communications and records of such effecting transactions for customers that disclosure sufficient to demonstrate do not have accounts with that broker, 6. Section 240.15c–100 is added to compliance with the requirements of dealer or municipal securities dealer; read as follows: paragraphs (a) and (b) of this section. (2) A broker, dealer or municipal § 240.15c–100 Schedule 15C. The broker, dealer or municipal securities dealer that clears transactions securities dealer shall preserve such on behalf of another broker, dealer or Securities and Exchange Commission, records for the period specified in municipal securities dealer, or that Washington, DC 20549. § 240.17a–4(b). Records of oral serves as the primary distributor of a Schedule 15C communications and records of covered security, with respect to disclosure of oral communications shall transactions in which: BILLING CODE 8010–01–P

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7. Section 240.15c–101 is added to § 240.15c–101 Schedule 15D. Schedule 15D read as follows: Securities and Exchange Commission, Washington, DC 20549.

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PART 274—FORMS PRESCRIBED Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, a. In the table entitled ‘‘Fees and UNDER THE INVESTMENT COMPANY 78c(b), 78l, 78m, 78n, 78o(d), 80a–8, 80a–24, expenses of the Fund’’ in Item 3, ACT OF 1940 80a–26, and 80a–29, unless otherwise noted. revising the caption ‘‘Maximum Sales * * * * * Charge (Load) Imposed on Purchases (as 8. The authority citation for part 274 9. Form N–1A (referenced in a percentage of offering price)’’ to read continues to read, in part, as follows: §§ 239.15A and 274.11A) is amended ‘‘Maximum Sales Charge (Load) by:

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Imposed on Purchases (as a percentage (ii) If more than one type of sales invested at any breakpoint may be of net asset value)’’; charge (load) is imposed (e.g., a deferred higher or lower than the applicable sales b. In Item 3, revising the first sentence sales charge (load) and a front-end sales load in the table of front-end sales loads, of Instruction 2(a)(i); charge (load)), the first caption in the and briefly explain the reason for this c. In Item 3, revising Instruction table should read ‘‘Maximum Sales variation. The footnote, if applicable, 2(a)(ii); Charge (Load) (as a percentage of net should disclose the range of the actual d. In Item 3, adding a new Instruction asset value)’’ and show the maximum front-end sales loads that may be paid 2(a)(iv); cumulative percentage of net asset by an investor at each sales load e. In Item 8, adding new Instruction value. Show the percentage amounts breakpoint, as a percentage of the gross 4 to paragraph (a)(1); and the terms of each sales charge (load) and net amount invested. f. In Item 8, redesignating paragraph comprising that figure on separate lines * * * * * below. (c) as paragraph (d); and (c) Revenue Sharing Arrangements. If * * * * * g. In Item 8, adding new paragraph any person within the fund complex (c). (iv) If applicable, disclose in a footnote that the maximum sales charge that includes the Fund makes revenue These additions and revisions read as sharing payments, disclose that fact and follows: (load) that may be paid by an investor as a percentage of the net amount disclose that specific information about Note: The text of Form N–1A does not, and invested may be higher than the revenue sharing payments to an these amendments will not, appear in the investor’s financial intermediary, if any, Code of Federal Regulations. maximum sales charge (load) shown as a percentage of net asset value in the fee is included in the written notification or periodic statement required under rule Form N–1A table, and briefly explain the reason for this variation. The footnote, if 15c2–2 under the Securities Exchange * * * * * applicable, should disclose the Act and in the disclosure provided at the point of sale required under rule Item 3. Risk/Return Summary: Fee Table maximum sales charge (load) that may be paid by an investor as a percentage 15c2–3 under the Securities Exchange * * * * * of the net amount invested. This Act. For purposes of this Item 8(c), Instructions. footnote requirement applies to all types ‘‘fund complex’’ and ‘‘revenue sharing’’ * * * * * of sales charges (loads) (e.g., front-end have the meanings set forth in rule 2. Shareholder Fees. and deferred), as well as cumulative 15c2–2(f)(10) and (15) under the (a)(i) ‘‘Maximum Deferred Sales sales charges (loads) disclosed pursuant Securities Exchange Act. Charge (Load)’’ includes the maximum to Instruction 2(a)(ii). * * * * * total deferred sales charge (load) * * * * * Dated: January 29, 2004. payable upon redemption, in By the Commission. installments, or both, expressed as a Item 8. Distribution Arrangements percentage of the amount or amounts (a)(1) * * * J. Lynn Taylor, stated in response to Item 8(a), except Instructions. Assistant Secretary. that, for a sales charge (load) based on * * * * * Note: Attachments 1–5 to the preamble offering price at the time of purchase, 4. If applicable, disclose in a footnote will not appear in the Code of Federal show the sales charge (load) as a that the actual front-end sales load that Regulations. percentage of the net asset value at the may be paid by an investor as a time of purchase. * * * percentage of the gross or net amount BILLING CODE 8010–01–P

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[FR Doc. 04–2327 Filed 2–9–04; 8:45 am] BILLING CODE 8010–01–C

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Part IV

Department of the Interior Bureau of Indian Affairs

25 CFR Part 162 Trust Management Reform: Residential Leases and Business Leases; Proposed Rule

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DEPARTMENT OF THE INTERIOR F. Energy Effects (Executive Order 13211) activities for residential and business G. Federalism (Executive Order 13132) leases, unless prohibited by federal law. Bureau of Indian Affairs H. Civil Justice Reform (Executive Order The proposed regulations provide 12988) procedures for lease amendments, 25 CFR Part 162 I. National Environmental Policy Act (NEPA) assignments, subleases and leasehold RIN 1076–AE36 J. Consultation and Coordination with mortgages. Indian Tribal Governments (Executive Under Subpart C, Residential Leases, Trust Management Reform: Residential Order 13175) of the proposed regulation, the Leases and Business Leases K. Paperwork Reduction Act (44 U.S.C. definition for Residential Leases covers 3501) both ground leases and leases for AGENCY: Bureau of Indian Affairs, residential development on tribal and Interior. I. Background allotted land. The definition of ACTION: Notice of proposed rulemaking. As part of trust reform initiatives, in Residential Lease is defined as single- January of 2001, the Bureau of Indian family homes and housing for public SUMMARY: The Bureau of Indian Affairs purposes. This definition was (BIA) proposes to revise its regulations Affairs issued final Leasing and developed in order to provide in the area of residential leases and Permitting Regulations, 25 CFR part 162 regulations that streamline the business leases on trust and restricted (66 FR 7109, January 22, 2001). This processing of residential leases for land. The revisions would further fulfill final rule replaced the existing part 162 Indian housing; leases not meeting this the Secretary’s fiduciary responsibility in its entirety. At that time, we reserved definition will be processed under to federally recognized tribes and Subpart C, Residential Leases, and Subpart D, Business Leases. The individual Indians. These regulations Subpart D, Business Leases, for future proposed regulations provide for a 30- currently have reserved subparts for rulemaking to include the Indian Land day time-frame under which the Residential Lease and Business Lease. Consolidation Act Amendments of 2000 Secretary or her designee must issue a These subparts, along with a subpart for and all other issues related to residential decision on a complete residential lease General Provisions, will eventually and business leases. This proposed rule provides guidance application. Residential leases for provide regulations for residential and for processing individual Indian and nominal rent will be approved on tribal business leases on trust and restricted tribal residential and business leases on land if the rent is established by the land. When we publish these changes as trust and restricted land. Subpart F, tribe or on individual Indian land when a final rule, we will remove the current Non-agricultural Leases, currently the tenant is a member of the subpart for Non-Agricultural Leases. provides general leasing regulations for landowner’s immediate family or a co- DATES: Written comments must be all non-agricultural leases, which owner in the tract. Rental adjustments submitted no later than May 10, 2004. includes residential and business leases. are not required for a residential lease ADDRESSES: Comments on this proposed The current Subpart F is general and unless negotiated in the lease. Also, rule should be addressed to: Ben does not differentiate between business bonds may not be required, if specified Burshia, Chief, Division of Real Estate and residential leases. Therefore, with in the lease and upon a determination Services, Office of Trust text added to reserved Subparts C and that it is in the best interest of the Responsibilities, Bureau of Indian D, Subpart F will be removed. landowner(s). Subpart C also includes Affairs, 1849 C Street NW., MS 4513– This proposed rule addresses the provisions for enforcement of lease MIB, Washington, DC 20240. specific needs of residential and violations. Submissions by facsimile should be sent business leases and thus, will facilitate Subpart D, Business Leases, of the to (202) 219–1255. Electronic comment streamlining the processing of proposed regulations covers both submission is not available at this time. residential and business leases. This ground leases (undeveloped land) and DOI invites comments on the proposed rule will strengthen the leases of developed land (together with information collection requirements in services that we provide to federally improvements thereon) on tribal or the proposed regulation. You may recognized tribes and individual allotted land, authorizing the submit comments by telefacsimile at Indians. The rule is consistent with our development or use of the leased (202) 395–5806 or by e-mail at fiduciary responsibility to individual premises. Leases covered by this subpart [email protected]. Please Indians and tribes and reflects the may authorize the construction of also send a copy of your comments to provisions of the Departmental Manual, single-purpose or mixed use projects BIA at the location specified above. Part 303, Chapter 2, Principles for designed for use by any number of Note that requests for comments on the Managing Indian Trust Assets. tenants or occupants. The leases may rule and the information collection are include: (1) Leases for residential separate. II. Subpart-by-Subpart Analysis purposes that are not covered in Subpart FOR FURTHER INFORMATION CONTACT: Ben 25 CFR part 162, Subpart C, C; (2) Leases for public, religious, Burshia, 202–219–1195. Residential Leases, and Subpart D, educational, and recreational purposes; SUPPLEMENTARY INFORMATION: Business Leases, will replace Subpart F, and (3) Commercial or industrial leases Non-Agricultural Leases. The consent I. Background for retail, office, manufacturing, storage, II. Subpart-by-Subpart Analysis requirements in the proposed and/or other business purposes. The III. Public Comments regulations are consistent with the potential lessee may negotiate a lease IV. Procedural Requirements Indian Land Consolidation Act with an Indian landowner. The lease is A. Regulatory Planning and Review Amendments (ILCA) of 2000. Because subject to the review and approval of (Executive Order 12866) the ILCA Amendments of 2000 do not the Secretary. Generally, business leases B. Regulatory Flexibility Act (5 U.S.C. 601 apply to tribes in Alaska, the consent will not be advertised for competitive et seq.) requirements for Alaska will remain the bid. A potential lessee may request, in C. Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 same as the previous regulations writing, the names and addresses of the D. Unfunded Mandates Reform Act of 1955 governing leasing. The proposed Indian landowners or their E. Taking Implication Assessment regulations provide for recognition and representatives for the purposes of (Executive Order 12630) accommodation of tribal laws regulating negotiating a lease. The proposed

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business lease regulations provide for The consent requirements were regulations the key terms under the following when considering amended to clarify that the applicable § 162.101 ‘‘Approval which means approval, disapproval or when percent for consent pertains to the written authorization by the Secretary or requesting additional document amount of undivided interest owned his/her delegated official and must be a information: When we receive a and not the amount of owners. Language part of the instrument being approved.’’ business lease and all of the supporting was provided to clarify who can Also, under this same section we are documents that conform to this part, we represent the Indian landowners in proposing to add for clarification, the will approve, disapprove, or return for negotiating or granting a residential term ‘‘Fair annual rental or fair market additional documents/corrections/ lease. The environmental requirements rental means the amount of rental modifications to the lease within 60 were amended to include an explicit income that a leased tract of Indian land days of the date of our receipt of the commitment to adopt tribal would most probably command in an documents. If we do not act within 60 environmental reviews, to the extent open and competitive market.’’ The days, the Indian landowner may take such adoption is allowed under our term Fair Annual Rental will be appropriate action under part 2 of this procedures implementing the National removed. Fair market rental relates to a chapter. If we approve or disapprove a Environmental Policy Act of 1969 period of time which may be more or lease, we will notify the parties (NEPA). less than one year, whereas, fair annual immediately and advise them of their Comments were received requesting rental is for a one year period. We right to appeal the decision under part clarification on whether or not a 30-year received comments on approvals and 2 of this chapter. Copies of business lease can be paid in full at one time. the proposed regulations were changed leases that have been granted or Consistent with 25 U.S.C. 415b, the to add to § 162.107 paragraph ‘‘(c) All proposed regulations allow for payment approved will be provided to the tenant, approvals must be in writing for in full only if it is provided for in the and made available to the Indian permits, leases, subleases, assignments, lease, otherwise rental payments may landowners upon request. modifications, amendments, etc., unless not be made or accepted more than one otherwise provided in the master lease.’’ III. Public Comments year in advance of the due date. During consultations, there was a The Bureau of Indian Affairs, with Comments were received requesting comment about Who can represent the tribal participation, formulated a team more than one option to renew a Indian landowners in negotiating or to draft regulations for residential and residential lease. The proposed granting a lease? The proposed business leases. On June 5, 2002, the regulations have been amended to allow initial draft Residential Lease and for more than one option to renew a regulations include paragraph ‘‘(d) Any Business Lease regulations were residential lease provided the lease person who is authorized to practice distributed to the Regional Offices, the authority is the Native American before the Department of the Interior National Congress of American Indians, Housing Assistance and Self- under 43 CFR part 1 and has been given and the Inter-Tribal Monitoring Determination Act of 1996, 25 U.S.C. written authorization for Association, requesting comments. The 4211. Comments were received from the representation.’’ A comment was comments received through that Department of Housing and Urban received about the requirement of distribution were considered in the Development (HUD) requesting that we appraisals on tribal land being unduly development of the final draft provide language for the approval of burdensome to tribal business and regulations as were the comments leasehold mortgages on a residential economic development. The proposed received from Tribal Consultations lease for the purposes of refinancing a regulations include under § 162.407 (meetings) in Portland, Oregon; loan. The proposed regulations have paragraph ‘‘(d) Upon a duly adopted Phoenix, Arizona; and Nashville, been amended to expand the scope for Tribal Resolution, we will use some Tennessee, in September of 2002. In approval of leasehold mortgages on other type of valuation for a business addition, the comments received from residential leases, which would include lease on tribal land, subject to our further consultation sessions in refinancing. The Secretary will approve approval.’’ A comment was received on November of 2002 were taken into a leasehold mortgage under a residential NEPA compliance. We address this consideration in the formulation of the lease when the required consents have concern in requiring that the tenant following proposed Residential and been obtained from the Indian should provide any environmental, Business Leasing regulations. The landowners and the Secretary finds that archaeological reports and other consideration of comments has resulted it is in the best interest of the documents, as determined by us to be in refinement, clarification and landowner. HUD requested that along necessary to facilitate our compliance restructuring of the residential and with the landowner’s approval for with federal and tribal and/or local land business lease provisions. cancellation of a lease, that we require use requirements, if applicable. We will In response to comments received, in the approval of the leasehold mortgagee. adopt any tribal environmental review Subpart C, Residential Leases, the The proposed regulations were as our NEPA review, to the extent such definition of ‘‘immediate family’’ has amended to include a requirement for adoption meets our standards in been expanded to include ‘‘or when approval from the mortgagee before implementing NEPA. We received a some other special relationship exists cancellation of the residential lease. comment inquiring on, May a lease be between the lessor and the lessee or Comments were received requesting mortgaged without the consent of the special circumstances exists that in the clarification of what would happen in Indian landowners? The proposed opinion of the Secretary warrant the the instance that a tenant does not regulations include under § 162.430, approval of the residential lease,’’ based diligently develop or abandons the ‘‘* * * provided, if the approved lease on 25 CFR 152.25(d). The definition of leased premises. The proposed includes the following: (a) The lease ‘‘single-family home’’ has been regulations were amended providing may be mortgaged without the further amended to include ‘‘a building with language to clarify this section of the consent of the Indian landowners for the one to four dwelling units on a tract of regulation. purpose of borrowing capital for land under a single lease’’ and a In the consideration of comments commercially reasonable purposes definition for ‘‘tribal land assignment’’ received, Subpart D, Business Leases, defined in the lease if the lease contains is provided. we are adding to the proposed a general authorization for such a

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mortgage; (b) The mortgage cannot inconsistencies or budgetary impacts to This proposed rule will not result in the secure any unrelated debts owed by the any other agency or federal program. expenditure by State, local and tribal lessee to the mortgagee; (c) The governments, in the aggregate, or by the B. Regulatory Flexibility Act (5 U.S.C. mortgage may be refinanced; and (d) private sector, of $100 million or more 601 et seq.) The encumbrance instrument must be in any one year (2 U.S.C. 1532). The approved by us.’’ A comment was Under the Regulatory Flexibility Act, impact of this proposed rule is confined received on What happens if the lessee 5 U.S.C. 601 et seq., as amended, to residential and business lease on land abandons the lease? The proposed whenever an agency is required to held in trust for individual Indians and regulations include under § 162.457, publish a notice of rulemaking for any tribes. Accordingly, this proposed rule ‘‘(a) If the lessee abandons the leased proposed or final rule, it must prepare will not result in the expenditure of premises, the lessee and its sureties will and make available for public comment $100 million or more in any one year. not be relieved of the obligations a regulatory flexibility analysis that E. Takings Implication Assessment contained in the lease; and (b) We may describes the effects of the rule on small (Executive Order 12630) cancel the lease, effective immediately, entities (e.g., small businesses, small and attempt to find a new lessee for the organizations, and small government This proposed implementation property.’’ There were other comments jurisdictions). Indian tribes are not guidance does not have significant on the typographical, grammatical and considered to be small entities for ‘‘takings’’ implications. Policies that punctuation of the draft regulation, they purposes of the Act and, consequently, have taking implications do not include were duly noted and changed no regulatory flexibility analysis has actions affecting properties that are held appropriately. Other comments were been done. in trust by the United States. The acknowledged, considered and duly This proposed implementation residential and business leasing noted when we felt those items were guidance does not have significant regulations provide specific regulatory either already addressed or were adverse effects on competition, guidance on trust lands. statutorily resolved. employment, investment, productivity, innovation, or the ability of U.S. based F. Energy Effects (Executive Order IV. Procedural Requirements enterprises to compete with foreign- 13211) based enterprises. Accordingly, this A. Regulatory Planning and Review On May 18, 2001, the President issued proposed regulation will not have an (Executive Order 12866) Executive Order 13211 which speaks to economic impact on a substantial regulations that significantly affect Under Executive Order 12866 (58 FR number of small entities, and, therefore, energy supply, distribution, and use. 51735, October 4, 1993), the BIA must no regulatory flexibility analysis has The Executive Order requires agencies determine whether the regulatory action been prepared. is ‘‘significant’’ and therefore subject to to prepare Statements of Energy Effects OMB review and the requirements of C. Small Business Regulatory when undertaking certain actions. This the Executive Order. The Order defines Enforcement Fairness Act (SBREFA) of proposed rule is restricted to 25 CFR ‘‘significant regulatory action’’ as one 1996 part 162, subpart C, Residential Leases, that is likely to result in a rule that may: Under 5 U.S.C. 804(2), SBREFA, a and subpart D, Business Leases, on lands held in trust for individual (1) Have an annual effect on the rule is major if OMB finds that it results Indians and tribes. Mineral economy of $100 million or more or in (1) An annual effect on the economy development on lands held in trust for adversely affect in a material way the of $100 million or more; (2) A major individual Indians and tribes is economy, a sector of the economy, increase in costs or prices for regulated under the Indian Mineral productivity, competition, jobs, the consumers, individual industries, Development Act. Regulations for environment, public health or safety, or Federal, State, or local government mineral development are provided State, local, or tribal governments or agencies, or geographic regions; or (3) under a separate part in 25 CFR parts communities; Significant adverse effects on 211, 212 and 225. This proposed (2) Create a serious inconsistency or competition, employment, investment, productivity, innovation, or the ability implementation guidance is not otherwise interfere with an action taken expected to significantly affect energy or planned by another agency; of U.S.-based enterprises to compete with foreign-based enterprises. supplies, distribution, or use. Therefore, (3) Materially alter the budgetary This proposed rule is not a major rule no Statement of Energy Effects has been impact of entitlements, grants, user fees, as defined by section 804 of the prepared. or loan programs or the rights and SBREFA. This rule is uniquely confined obligations of recipients thereof; or G. Federalism (Executive Order 13132) to the Federal Government, individual (4) Raise novel legal or policy issues Indians and tribal landowners, thus, it This proposed implementation arising out of legal mandates, the will not result in the expenditure by guidance does not have significant President’s priorities, or the principles State, local and tribal governments, in Federalism effects because it pertains set forth in the Executive Order. the aggregate, or by the private sector, of solely to Federal-tribal relations and This proposed rule describes how the $100 million or more in any one year. will not interfere with the roles, rights, BIA will administer residential and This proposed rule provides regulatory and responsibilities of States. While this business leases on trust and restricted guidance for residential and business proposed rule will impact tribal land. Thus, the impact of the rule is leases on trust and restricted lands governments, there is no federalism confined to the Federal Government and owned by individual Indians and tribes. impact on the trust relationship or individual Indian and tribal landowners balance of power between the United and does not impose a compliance D. Unfunded Mandates Reform Act States government and the various tribal burden on the economy generally. The proposed implementation governments affected by this Accordingly, it has been determined guidance would not impose unfunded rulemaking. Therefore, in accordance that this rule is not a ‘‘significant mandates as defined by the Unfunded with Executive Order 13132, it is regulatory action’’ from an economic Mandates Reform Act of 1995 (Pub. L. determined that this rule will not have standpoint, or otherwise creates any 104–4, March 22, 1995, 109 Stat. 48). sufficient federalism implications to

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warrant the preparation of a federalism standards provided in sections 3(a) and the development of the final rule. This assessment. 3(b)(2) of the Executive Order 12988. will reinforce good intergovernmental relations with tribal governments and H. Civil Justice Reform (Executive Order I. National Environmental Policy Act better inform, educate and advise such 12988) (NEPA) tribal governments on compliance This proposed rule is categorically With respect to the review of existing requirements of the rule making. We excluded from the preparation of an regulations and the promulgation of consulted with tribal representatives environmental assessment or an new regulations, section 3(a) of during the formulation of this proposed environmental impact statement under Executive Order 12988, Civil Justice regulation. On June 5, 2002, the initial the National Environmental Policy Act Reform, 61 FR 4729, February 7, 1996, draft Residential Lease and Business of 1969, 42 U.S.C. 4321, et seq., because imposes on executive agencies the Lease regulations were distributed to the its environmental effects are too broad, general duty to adhere to the following Bureau of Indian Affairs’ Regional speculative, or conjectural to lend requirements: (1) Eliminate drafting Offices, the National Congress of themselves to meaningful analysis and errors and ambiguity; (2) write American Indians, and the Inter-Tribal the Federal actions under the proposed regulations to minimize litigation; and Monitoring Association, requesting rule (i.e., approval or disapproval of comments. The comments received (3) provide a clear legal standard for leases of Indian lands) will be subject at effective conduct rather than a general through that distribution were the time of the action itself to the considered in the development of the standard and promote simplification National Environmental Policy Act and burden reduction. With regard to final draft regulations. We held Tribal process, either collectively or case-by- Consultations (meetings) in Portland, the review required by section 3 (a), case. Further, no extraordinary section (b) of Executive Order 12988 Oregon, Phoenix, Arizona and circumstances exist to require Nashville, Tennessee, in September specifically requires that executive preparation of an environmental agencies make every reasonable effort to 2002. The comments received from assessment or environmental impact these consultations were taken into insure that the regulations: (1) Clearly statement. specifies the preemptive effect, if any; consideration in the formulation of the (2) clearly specifies any effect on J. Consultation and Coordination With following proposed Residential and existing federal law or regulation; (3) Indian Tribal Governments (Executive Business Leasing regulations. We have provides a clear legal standard for Order 13175) committed to consulting with tribal affecting conduct while promoting Pursuant to Executive Order 13175 of representatives in the formulation of a simplification and burden reduction; (4) November 6, 2000, Consultation and final rule for the Residential and specifies the retroactive affect if any; (5) Coordination with Indian Tribal Business Lease regulations. adequately defines key terms; and (6) Governments, the Department has K. Paperwork Reduction Act (44 U.S.C. addresses other important issues determined that because the proposed 3501) affecting clarity and general rulemaking will uniquely affect tribal draftsmanship under any guidelines governments it will follow Department This regulation requires an issued by the Attorney General. Section and Administrative protocols in information collection from 10 or more 3(c) of Executive Order 12988 requires consulting with tribal governments on parties, and therefore is subject to executive agencies to review regulations the rulemaking. Consequently, tribal review under the Paperwork Reduction in light of the applicable standards in governments will be notified through Act of 1995 (Pub. L. 104–13). Because section 3(a) and section 3(b) to this Federal Register notice and through the sections where the information determine whether they are met or it is the BIA field offices, of the ramifications collections occur has changed from the unreasonable to meet one or more of of this rulemaking. This will enable proposed rule of July 14, 2000 (65 FR them. This proposed implementation tribal officials and the affected tribal 43918) and the final rule of January 22, guidance does not unduly burden the constituency throughout Indian country 2001, we are including a table showing judicial system and meets the applicable to have meaningful and timely input in the section changes.

TABLE SHOWING CHANGES IN INFORMATION COLLECTION

New CFR Change in Old CFR cite cite Section title collection Explanation of change

162.7 ...... 162.301 May individual Indian landowners No Change ...... There is no change in collection of information. The 162.205 * ...... 162.401 exempt their land from tribal poli- regulatory requirements have been separated and cies for leasing on Indian Agricul- clarified by providing separate regulations for Resi- tural lands? dential and Business Leases. 162.8 ...... 162.301 What notifications are required that No Change ...... There is no change in collection of information. The 162.109 * ...... 162.401 tribal law applies to a lease on In- regulatory requirements have been separated and 162.204 * ...... dian Agricultural lands? clarified by providing separate regulations for Resi- dential and Business Leases. 162.12 ...... 162.309 How will the Secretary decide No Change ...... There is no change in collection of information. The 162.241 * ...... 162.409 whether to grant and/or approve a regulatory requirements have been separated and lease? clarified by separate regulations. 162.14 ...... 162.312 Must a lease be recorded? ...... No Change ...... There is no change in collection of information. The 162.246 * ...... 162.412 regulatory requirements have been separated and clarified by providing separate regulations for Resi- dential and Business Leases. 162.18 ...... 162.313 Is there a standard lease form? ...... No Change ...... Same as above. 162.218 * ...... 162.413 162.20 ...... 162.316 How is leased land described? ...... No Change ...... Same as above. 162.416

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TABLE SHOWING CHANGES IN INFORMATION COLLECTION—Continued

New CFR Change in Old CFR cite cite Section title collection Explanation of change

162.22 ...... 162.325 May a lease be used as collateral No Change ...... Same as above. 162.610(c) * ...... 162.425 for a leasehold? 162.30 ...... 162.334 What happens to improvements con- No Change ...... Same as above. 162.608 * ...... 162.437 structed on Indian lands when the lease has been terminated? 162.32 ...... 162.319 When must a lease payment be No Change ...... Same as above. 162.613 * ...... 162.419 made? 162.37 ...... 162.320 Is there a penalty for late payment No Change ...... Same as above. 162.614–616 * ... 162.420 on a lease? 162.47 ...... 162.339 What forms of bonds will the BIA ac- No Change ...... There is no change in collection of information. The 162.604 * ...... 162.442 cept? regulatory requirements have been separated and clarified by providing separate regulations for Resi- dential and Business Leases. 162.52 ...... 162.341 What types of insurance may be re- No Change ...... Same as above. 162.604 * ...... 162.444 quired? 162.61 ...... 162.302 How do I acquire a lease on Indian No Change ...... Same as above. 162.605–606 * ... 162.402 land? 162.68 ...... 162.305 Must the parents or guardians of mi- No Change ...... Same as above. 162.603 * ...... 162.405 nors who own Indian land obtain a lease before using the land? 162.82 ...... 162.314 What supporting documents must I No Change ...... Same as above. 162.604 * ...... 162.414 provide? 162.213 * ...... 162.83 ...... 162.317 How much rent must a lessee pay? No Change ...... Same as above. 162.604 * ...... 162.417 162.113 ...... 162.348 May the Secretary waive administra- No Change ...... Same as above. 162.611 * ...... 162.451 tive fees? 162.126 ...... 162.348 What happens if you do not cure a No Change ...... Same as above. 162.619 * ...... 162.451 lease violation? 162.164 ...... 162.352 What can I do if I receive a trespass No Change ...... Same as above. 162.251 * ...... 162.455 notice? Note: Section numbers followed by an * are from final rule.

The table showing the burden of the information collection is included below for your information.

TABLE OF BURDEN FOR 25 CFR PART 162 (1076–0155)

Total Total Number of Number of Hourly annual Federal Federal CFR section annual burden per Salary 1 burden per annual Salary 2 respondents responses response hourly response burden burden hours

162.301 ..... 500 500 30 min ...... 250 $4,630 30 min ...... 250 $4,630 162.401 162.309 ..... 14,500 14,500 2 hrs ...... 29,000 537,080 2 hrs ...... 29,000 537,080 162.409 162.312 ..... 14,500 14,500 1 hr ...... 14,500 268,540 1 hr ...... 14,500 268,540 162.412 162.313 ..... 0 0 0 ...... 0 0 0 ...... 0 0 162.413 162.316 ..... 14,500 14,500 30 min ...... 7,250 134,270 30 min ...... 7,250 134,270 162.416 162.325 ..... 0 0 0 ...... 0 0 0 ...... 0 0 162.425 162.334 ..... 0 0 0 ...... 0 0 0 ...... 0 0 162.437 162.319 ..... 14,500 14,500 15 min ...... 3,625 66,156 15 min ...... 3,625 66,156 162.419 162.320 ..... 3,625 3,625 15 min ...... 906 16,779 15 min ...... 906 16,779 162.420 162.339 ..... 14,500 14,500 30 min ...... 7,250 134,270 30 min ...... 7,250 134,270 162.442 162.341 ..... 14,500 14,500 15 min ...... 3,625 66,156 15 min ...... 3,625 66,156 162.444 162.302 ..... 14,500 14,500 1 hrs ...... 14,500 268,540 1 hrs ...... 14,500 268,540 162.402

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TABLE OF BURDEN FOR 25 CFR PART 162 (1076–0155)—Continued

Total Total Federal Federal Number of Number of Hourly annual CFR section annual burden per Salary 1 burden per annual Salary 2 respondents responses response hourly response burden burden hours

162.305 ..... 0 0 0 ...... 0 0 0 ...... 0 0 162.405 162.314 ..... 7,250 7,250 3 hrs ...... 21,750 402,810 3 hrs ...... 21,750 402,810 162.414 162.317 ..... 725 725 30 min ...... 1,450 26,854 30 min ...... 1,450 26,854 162.417 162.342 ..... 7,250 7,250 15 min ...... 1,813 33,576 15 min ...... 1,813 33,576 162.445 162.348 ..... 145 145 30 min ...... 73 1,352 30 min ...... 73 1,352 162.451 162.352 ..... 145 145 30 min ...... 73 1,352 30 min ...... 73 1,352 162.455

Totals 14,500 121,140 106,065 1,962,365 106,065 1,962,365 1 $18.52 × total hourly burden = total hourly burden cost. 2 $18.52 × total hourly burden = total Federal burden cost.

In addition, BIA collects fees for collection is 1076–0155. However, OMB PART 162—LEASES AND PERMITS processing submitted documents, as set will assign a different temporary control forth in sections 162.342 and 162.445, number until the final rule is approved. 1. The authority citation for part 162 which can be considered as part of the At that time, the OMB Control Number is revised to read as follows: information collection burden. will revert to 1076–0155. Authority: 5 U.S.C. 301, R.S. 463 and 465; DOI invites comments on the OMB must make a decision 25 U.S.C. 2 and 9. Interpret or apply sec. 3, information collection requirements in 26 Stat. 795, sec. 1, 28 Stat. 305, secs. 1, 2, concerning the collection of information 31 Stat. 229, 246, secs. 7, 12, 34 Stat. 545, the proposed regulation. You may requirements in this proposed rule no submit comments by telefacsimile at 34 Stat. 1015, 1034, 35 Stat. 70, 95, 97, sec. sooner than 30 days, and no later than 4, 36 Stat. 856, sec. 1, 39 Stat. 128, 41 Stat. (202) 395–5806 or by e-mail at _ 60 days, after it is published in the 415, as amended, 751, 1232, sec. 17, 43 Stat. Ruth [email protected]. Please Federal Register. Therefore, a comment 636, 641, 44 Stat. 658, as amended, 894, also send a copy of your comments to is best assured of having its maximum 1365, as amended, 47 Stat. 1417, sec. 17, 48 BIA at the location specified under the effect if OMB receives it within 30 days Stat. 984, 988, 49 Stat. 115, 1135, sec. 55, 49 heading ADDRESSES. Note that requests of publication. Comments on Stat. 781, sec. 3, 49 Stat. 1967, 54 Stat. 745, 1057, 60 Stat. 308, secs. 1, 2, 60 Stat. 962, for comments on the rule and the information collection requirements do information collection are separate. sec. 5, 64 Stat. 46, secs. 1, 2, 4, 5, 6, 64 Stat. not relate, however, to the deadline for 470, 69 Stat. 539, 540, 72 Stat. 968, 107 Stat. You can receive a copy of BIA’s general public comments on the submission to OMB by contacting the 2011, 108 Stat. 4572, March 20, 1996, 110 proposed rule, indicated in the DATES Stat. 4016; 25 U.S.C. 380, 393, 393a, 394, 395, person listed in the FOR FURTHER section. 397, 402, 402a, 403, 403a, 403b, 403c, 409a, INFORMATION CONTACT section, or by Organizations and individuals who 413, 415, 415a, 415b, 415c, 415d, 477, 635, requesting the information from the BIA 2218, 3701, 3702, 3703, 3712, 3713, 3714, Information Collection Clearance submit comments on the information 3715, 3731, 3733, 4211; 44 U.S.C. 3101 et Officer, 1951 Constitution Avenue, NW., collection requirements should be aware seq. that BIA keeps such comments available Mail Stop 52 SIB, Washington, DC 2. Revise paragraphs (b) and (c) and 20240. for public inspection during regular business hours. If you wish to have your add paragraph (d) to § 162.100 to read Comments should address: (1) as follows: Whether the proposed collection of name and address withheld from public information is necessary for the proper inspection, you must state this § 162.100 What are the purposes of this performance of the Program, including prominently at the beginning of any part? the practical utility of the information to comments you make. BIA will honor * * * * * BIA; (2) the accuracy of BIA’s burden your request to the extent allowable by (b) This part includes five subparts, estimates; (3) ways to enhance the law. including separate, self-contained quality, utility, and clarity of the List of Subjects in 25 CFR Part 162 subparts relating to Agricultural Leases information collected; and (4) ways to (Subpart B), Residential Leases (Subpart minimize the burden of the collection of Indians—lands. C), Business Leases (Subpart D), and information on the respondents, Dated: January 6, 2004. Special Requirements for Certain including the use of automated Aurene M. Martin, Reservations (Subpart E). Subpart E identifies special provisions applicable collection techniques or other forms of Deputy Assistant Secretary—Indian Affairs. information technology. only to leases made under special acts Please note that an agency may not For the reasons stated in the of Congress that apply only to certain sponsor or request, and an individual preamble, the Department of the Indian reservations. Leases covered by need not respond to, a collection of Interior, Bureau of Indian Affairs, subpart E are also subject to subparts A information unless it has a valid OMB proposes to amend part 162 in Title 25 through D, except to the extent that Control Number. The valid OMB of the Code of Federal Regulations as subpart A through D are inconsistent Control Number for this information follows: with:

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(1) The provisions in subpart E; or duration. Unless otherwise provided, otherwise provided by the document (2) Any act of Congress under which the use of this term will also include creating the life estate or by agreement, the leases are made. permits, as appropriate. rent payable under the lease must be (c) These regulations apply to all * * * * * paid to the life tenant under part 179 of leases in effect when the regulations are Life estate means an interest in Indian this chapter. promulgated. land that expires upon the death of the (c) In approving a lease under this (d) Unless otherwise agreed by the interest holder(s) or some other person. part, we will not lease any fee interest parties, this part will not affect the A life estate is also referred to as ‘‘life in Indian land, nor will we collect rent validity or terms of any existing lease or use.’’ on behalf of any fee owners. The leasing any restatement of an existing lease. * * * * * of the trust and restricted interests of the 3. Amend § 162.101 by: Mortgage means a mortgage, deed of Indian landowners will not be A. Revising the terms of ‘‘Immediate trust or other instrument that pledges a conditioned on a lease having been family;’’ ‘‘Lease;’’ ‘‘Life Estate;’’ tenant’s leasehold interest as security obtained from the owners of any fee ‘‘Mortgage;’’ ‘‘Permit;’’and ‘‘Tribal for a debt or other obligation owed by interests. Where all of the trust or land;’’ and the tenant to a lender or other restricted interests in a tract are subject B. Removing the term ‘‘Fair annual mortgagee. A mortgage of a leasehold of to a life estate held in fee status, we will rental;’’ and Indian land cannot pledge the beneficial approve a lease of the remainder C. Adding in alphabetical order the or restricted title to the land. interests only if such action is necessary terms ‘‘Approval;’’ ‘‘Fair annual rental to preserve the value of the land or * * * * * or fair market rental;’’ ‘‘Consent or Permit means a written, non- protect the interests of the Indian consenting;’’ ‘‘Grant or granting;’’ assignable, contract between Indian landowners. ‘‘Housing for public purposes;’’ ‘‘Single- landowners and the applicant for the (d) This section applies to tribal land family home;’’ and ‘‘Tribal land permit, also referred to as a permittee, leased under a corporate charter that we assignment,’’ to read as follows: whereby the permittee is granted a issue under 25 U.S.C. 477, or under a revocable privilege to use Indian land or special act of Congress authorizing § 162.101 What key terms do I need to leases without our approval. This part know? government land, for a specified purpose. does not apply to these leases except to * * * * * the extent that the authorizing statutes Approval means written authorization * * * * * require us to enforce the leases on Single-family home means a building by the Secretary or a delegated official behalf of the Indian landowners. with one to four dwelling units on a that is a part of the instrument being 5. Revise § 162.105 to read as follows: approved. tract of land under a single lease (also * * * * * referred to as a homesite lease). § 162.105 Can BIA combine for leasing Consent or consenting means the * * * * * purposes tracts that have different Indian landowners? execution of a lease by the Indian Tribal land means the surface estate landowner or by the Secretary on behalf of land, or any interest therein, held by (a) A lease negotiated by Indian of an individual Indian landowner. the United States in trust for, or for the landowners may cover more than one Fair annual rental or fair market use and benefit of, a tribe, band, tract of Indian land, but the minimum rental means the amount of rental community, group or pueblo of Indians, consent requirements for leases granted income that a leased tract of Indian land or an Indian corporation chartered by Indian landowners will apply to each would most probably command in a under 25 U.S.C. 477. The term also tract separately. We may combine comparable open and competitive includes the surface estate of land or multiple tracts into a unit for leases market. any interest therein held by a tribe, negotiated by us, if we determine that unitization is in the Indian landowners’ * * * * * band, community, group or pueblo of best interests and consistent with the Grant or granting means the process Indians that is subject to federal efficient administration of the land. of consenting to a lease. restrictions against alienation or (b) Unless otherwise provided in the Housing for public purposes means encumbrance. Tribal land assignment means a lease, the rent or other consideration multi-family developments and single contract or agreement that conveys to derived from a unitized lease will be family residential developments tribal members any rights for temporary distributed based on the size of each administered by a Tribal Housing use of tribal lands, assigned by the owner’s interest in proportion to the Authority (or other Tribally-Designated Indian tribes in accordance with tribal acreage within the entire unit. Unless Housing Entity) or financed by a tribal/ laws or customs. otherwise agreed upon by the Indian federal/state housing program. landowners, market rent will be based Immediate family means a spouse, * * * * * on the value of the entire leased unit, brother, sister, aunt, uncle, niece, 4. Revise § 162.102 to read as follows: without any consideration being given nephew, first cousin, lineal ancestor, § 162.102 What land, or interests in land, to the relative or contributive values of lineal descendant, or when some other are subject to this part? the individual tracts within the unit. special relationship exists between the (a) This part applies to Indian land 6. Revise §§ 162.108, 162.109, and lessor and lessee or special and government land, including any 162.110 to read as follows: circumstances exist that in the opinion tract in which an individual Indian or of the Secretary warrant the approval of tribe owns an interest in trust or § 162.108 What are BIA’s responsibilities the residential lease. restricted status. in administering and enforcing leases? * * * * * (b) Where a life estate and remainder (a) We will make reasonable efforts to Lease means a written contract interest are both owned in trust or see that lessees meet their payment between Indian landowner(s) and a restricted status, the life estate and obligations to Indian landowners tenant or lessee, whereby the tenant or remainder interest must both be leased through the collection of rent on behalf lessee is granted a right to possession of under this part, unless the lease is for of the landowners and the prompt Indian land, for a specified purpose and less than one year in duration. Unless initiation of appropriate collection and

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enforcement actions. Upon actual notice § 162.110 Can tribes administer this part 162.312 Must a residential lease or permit of a violation, we will also assist on behalf of the Secretary or BIA? be recorded? landowners in the enforcement of direct Any tribe or tribal organization that is Lease Requirements payment obligations, and in the exercise administering programs or services 162.313 Is there a standard residential lease of any negotiated remedies that apply in under 25 CFR part 900: (a) Can administer the provisions in form? addition to specific remedies made 162.314 Are there any provisions that must available to us under these or other this part that authorize or require us to be included in a residential lease? regulations. take certain actions; and 162.315 What requirements must be (b) We will make reasonable efforts to (b) Cannot administer the provisions satisfied in executing a residential lease? see that lessees comply with the of this part relating to the granting, 162.316 How should a residential lease requirements in their leases through approval, or enforcement of leases and describe the land? appropriate inspections and permits. 162.317 How much rent must be paid under enforcement actions as needed to 7. Add § 162.114 to read as follows: a residential lease? protect the interests of the Indian 162.318 Must the rent be adjusted under a § 162.114 Who should I contact with residential lease? landowners and respond to concerns questions concerning the leasing process? expressed by them. We will take 162.319 When are rental payments due The Indian landowner or prospective under a residential lease? emergency action as needed to preserve tenant should contact the local BIA 162.320 Will untimely rental payments the value of the land. Realty Office or any tribal realty office incur interest charges or penalties? (c) In those cases where tribal law or for answers to questions about the 162.321 To whom can rental payments be ordinances are in place we may defer leasing process. made under a residential lease? enforcement responsibilities to the tribe. 8. Add § 162.115 to read as follows: 162.322 What form of rental payment can be accepted under a residential lease? § 162.109 What laws apply to leases § 162.115 Does the information 162.323 What other types of payments are granted or approved under this part? submission require approval by the Office required under a residential lease? (a) Leases granted or approved under of Management and Budget? 162.324 How long can the term of a this part are subject to Federal laws of Yes, information as requested in residential lease run? general applicability and any specific Subparts B, C, D and E requires 162.325 Can a residential lease be amended, federal statutory requirements that are approval by the Office of Management assigned, sublet, or mortgaged? not incorporated in this part. and Budget. OMB has assigned OMB 162.326 How will BIA decide whether to approve an amendment to a residential (b) Tribal laws generally apply to land Control Number 1076–0155. Please note under the jurisdiction of the tribe lease? that, as a federal agency, we may not 162.327 Can a residential lease be assigned enacting the laws, except to the extent conduct or sponsor, and you are not without the consent of the Indian that those tribal laws are substantially required to respond to, a collection of landowners? and materially inconsistent with this information unless it displays a 162.328 May a residential lease be sublet part or other applicable Federal law. currently valid OMB control number. without the consent of the Indian This part may be superseded or 9. Add subparts C and D to read as landowners? modified by tribal laws, so long as: follows: 162.329 May a residential lease be (1) The tribal laws are consistent with mortgaged without the consent of the the enacting tribe’s governing Subpart C—Residential Leases Indian landowners? documents; General Provisions 162.330 May Indian landowners withhold (2) The tribe has notified us of the their consent to an assignment, sublease, 162.300 What types of leases does this or mortgage? superseding or modifying effect of the subpart cover? 162.331 When will a decision to approve an tribal laws; 162.301 How will the BIA accommodate amendment, assignment, sublease, or tribal laws on land under a residential (3) The superseding or modifying of mortgage under a residential lease be lease? the regulation would not violate a effective? Federal statute or judicial decision, or How To Obtain a Lease 162.332 How can the leased premises be conflict with our general trust 162.302 Can a tenant negotiate a residential used under a residential lease? responsibility under Federal law; and lease with the Indian landowners? 162.333 Can improvements be made under (4) The superseding or modifying of 162.303 When can the Indian landowners a residential lease? the regulation applies only to tribal grant a residential lease? 162.334 Who will own the improvements land. 162.304 What are the consent requirements made under a residential lease? (c) Tribal laws may include laws for a residential lease on a fractionated 162.335 What indemnities are required assigning the responsibility for leasing tract? under a residential lease? to a Division, Department, or local 162.305 Who can represent the Indian 162.336 How will payment rights and obligations relating to residential land be governmental unit of a tribe, and any landowners in negotiating or granting a residential lease? allocated between the Indian landowners lease with that Division, Department, or 162.306 When can BIA grant a permit for and the tenant? local governmental unit is considered to residential use? 162.337 Can a residential lease provide for be a lease with that tribe. 162.307 Must the land be appraised before negotiated remedies in the event of a (d) State laws may apply to a lease of BIA’s grant or approval of a residential violation? Indian land if the laws are expressly lease? 162.338 Must a tenant provide a bond agreed to by the parties to the lease, and 162.308 What documents must BIA review under a residential lease? by the tribe, if the lease is for before granting or approving a residential 162.339 What forms of bonds can be individually-owned land. Unless lease? accepted under a residential lease? expressly provided in the lease of tribal 162.309 How and when will BIA decide 162.340 How will a bond be administered? whether to grant or approve a residential land, or the tribe’s consent for a lease of 162.341 Is insurance required under a lease? residential lease? individually owned land, the agreement 162.310 When will a residential lease be does not waive the tribe’s sovereign effective? Lease Administration immunity or provide its consent to state 162.311 When is a decision to grant or 162.342 Are there administrative fees for civil regulatory jurisdiction. approve a residential lease effective? actions relating to residential leases?

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162.343 Will BIA notify a tenant when a 162.416 How should the land be described Lease Enforcement rental payment is due under a residential in a business lease? 162.447 What will we do if rental payments lease? 162.417 How much rent must be paid under are not made in the time and manner a business lease? Lease Enforcement required by a business lease? 162.418 Must the rent be adjusted under a 162.448 Will any special fees be assessed 162.344 What will BIA do if rental business lease? on delinquent rental payments due payments are not made as required by a 162.419 When are rental payments due under a business lease? residential lease? under a business lease? 162.345 What fees are assessed on 162.449 How will we determine whether 162.420 Will untimely rental payments the activities of a lessee under a business delinquent rental payments due under a made under a business lease be subject residential lease? lease are in compliance with the terms to interest charges or late payment of the lease? 162.346 How will BIA determine whether penalties? the activities of a tenant under a 162.450 What will we do in the event of a 162.421 To whom can rental payments be violation under a business lease? residential lease comply with the terms made under a business lease? of the lease? 162.451 What will we do if a violation of 162.422 What form of rental payment can a business lease is not cured to our 162.347 What will BIA do about a violation be accepted under a business lease? under a residential lease? satisfaction within the requisite time 162.423 What other types of payments are period? 162.348 What will BIA do if a violation of required under a business lease? a residential lease is not cured on time? 162.452 Will BIA’s regulations concerning 162.424 How long can the term of a appeal bonds apply to cancellation 162.349 Will BIA’s appeal bond rules apply business lease run? to cancellation decisions? decisions involving business leases? 162.425 Can a business lease be amended, 162.453 When will a cancellation of a 162.350 When is a cancellation of a assigned, sublet, or mortgaged? residential lease effective? business lease be effective? 162.426 How and when can a business 162.351 Can BIA take emergency action if 162.454 Can we take emergency action if lease be amended? leased premises are threatened? the leased premises are threatened with 162.427 May a lease be assigned without 162.352 What will BIA do if a tenant immediate and significant harm? the consent of the Indian landowners? remains in possession after a lease 162.455 What will we do if a lessee holds expires or is canceled? 162.428 May a lease be subleased without over after the expiration or cancellation 162.353 May a lease be terminated before the consent of the Indian landowners of a business lease? its expiration date? and the approval of the Secretary? 162.456 May a lease be terminated before 162.354 What happens if the tenant 162.429 How will BIA decide whether to its expiration date? abandons or does not diligently develop approve an assignment or sublease under 162.457 What happens if the lessee the leased premises? a business lease? abandons the lease? 162.430 May a lease be mortgaged without Subpart D—Business Leases the consent of the Indian landowners? Subpart C—Residential Leases General Provisions 162.431 How will BIA decide whether to approve a leasehold mortgage under a General Provisions 162.400 What types of leases are covered by business lease? this subpart? 162.432 When will a BIA decision to § 162.300 What types of leases does this 162.401 How will BIA accommodate tribal approve an amendment, assignment, subpart cover? laws on land under a business lease? sublease, or mortgage under a business (a) This subpart covers both ground How To Obtain a Lease lease be effective? leases (undeveloped land) and leases of 162.433 Must an amendment, assignment, 162.402 How and when can a business sublease, or mortgage approved under a developed land (together with the lease be obtained? business lease be recorded? improvements thereon) on tribal or 162.403 When can the Indian landowners allotted land, for the purposes of Indian grant a business lease? 162.434 When will BIA take action on an 162.404 What are the consent requirements amendment, assignment, sublease, or housing. The regulations in this subpart for a business lease on a fractionated mortgage under a business lease? also apply to permits made for Indian tract? 162.435 How can the leased premises be housing purposes, if appropriate. Leases 162.405 Who can represent the Indian used under a business lease? covered by this subpart would authorize landowners in negotiating or granting a 162.436 Can improvements be made under the construction or use of: a business lease? business lease? (1) A single-family home; and 162.406 When can BIA grant a permit for 162.437 Who will own the improvements business use? made under a business lease? (2) Housing for public purposes. 162.407 How will BIA estimate the fair 162.438 What indemnities are required (b) Leases for other residential market rental of Indian land? under a business lease? development (for example, multi-family 162.408 What documents must BIA review 162.439 How will payment rights and developments and single family before granting or approving a business obligations relating to business leases be residential developments for profit) are lease? allocated between the Indian landowners covered under subpart D of this part. 162.409 How and when will BIA decide and the lessee? whether to approve a business lease? 162.440 Can a business lease provide for § 162.301 How will BIA accommodate 162.410 When will a business lease be negotiated remedies in the event of a tribal laws on land under a residential effective? violation? lease? 162.441 Must a lessee or assignee provide a 162.411 For purposes of appeal, when will (a) Unless prohibited by Federal law, a BIA decision to grant or approve a bond for a lease? business lease be effective? 162.442 What forms of bond can be we will recognize and accommodate 162.412 Must a business lease or permit be accepted under a business lease? tribal laws regulating activities on land recorded? 162.443 How will a bond be administered? under a residential lease, including 162.444 Will we require insurance for a tribal laws relating to land use, Lease Requirements business lease? environmental protection, and historic 162.413 Is there a standard business lease Lease Administration or cultural preservation. form? (b) This paragraph applies when this 162.414 Are there any provisions that must 162.445 Will administrative fees be charged be included in a business lease? for actions relating to business leases? subpart is inconsistent with a tribal law 162.415 Are there any formal requirements 162.446 Will we notify a lessee when a and § 162.109 prohibits tribal law to that must be satisfied in the execution of rental payment is due under a business supersede or modify this subpart. We a business lease? lease? may waive provisions of this subpart

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under 25 CFR part 1, if the waiver does rental, even if the land is being leased (i) We have given the Indian not: at less than a fair market rental under landowners written notice of our intent (1) Violate a Federal statute or judicial § 162.317. to grant a lease on their behalf; decision; or (e) Upon request of the Indian (ii) The Indian landowners are unable (2) Conflict with our general trust landowner, we will assist the tenant in to agree upon a lease during a 3-month responsibility under Federal law. obtaining the grant of the applicable negotiation period following the notice; How To Obtain a Lease percentage of interests under § 162.304 and of this subpart. (iii) The land is not being used by an § 162.302 Can a tenant negotiate a residential lease with the Indian § 162.304 What are the consent Indian landowner. requirements for a residential lease on a landowners? § 162.305 Who can represent the Indian fractionated tract? Yes, a tenant can obtain a residential landowners in negotiating or granting a lease through direct negotiation. We (a) Except for Alaska, the Indian residential lease? landowners must determine the will assist prospective tenants in The following individuals or entities percentage referred to in the Indian contacting the Indian landowners or may represent an individual Indian Land Consolidation Act Amendments of their representatives to negotiate a lease, landowner: including providing the names and 2000, 25 U.S.C. section 2218, as follows: (a) An adult acting on behalf of his or addresses of the Indian landowners her minor children; upon written request. We will assist the If the number of own- Then the percentage ers of the undivided of owners who must (b) A guardian, conservator, or other Indian landowners in those negotiations interest in the tract approve of the lease upon request. is... is... fiduciary appointed by a court of competent jurisdiction to act on behalf § 162.303 When can the Indian landowners (1) Five or fewer ...... 100 percent. of an individual Indian landowner; grant a residential lease? (2) More than five but 80 percent. (c) An adult or legal entity who has (a) Tribes may grant residential leases less than 11. been given a written power of attorney of tribally-owned land, including any (3) More than 10 but 60 percent. that: tribally-owned undivided interest(s) in a fewer than 20. (1) Meets all of the formal fractionated tract, as evidenced by an (4) Twenty or more ... Over 50 percent. requirements of any applicable Federal, appropriate tribal authorization and tribal, or state law; subject to our approval. Where tribal (b) In Alaska, residential leases of land is subject to a land assignment Indian lands may be negotiated by the (2) Identifies the attorney-in-fact and made to a tribal member or some other Indian landowners, or their the land to be leased; and individual under tribal law or custom, representatives who may execute leases (3) Describes the scope of the power the individual and the tribe must both under § 162.305, provided: granted and any limits thereon. grant the lease, subject to our approval. (1) The owners of a majority of the (d) Any person who is authorized to (b) Adult Indian landowners, or interests have negotiated a lease practice before the Department of the emancipated minors, may grant satisfactory to us; Interior under 43 CFR Part 1. residential leases of their land, (2) We grant the lease on behalf of including undivided interests in those persons for whom we are § 162.306 When can BIA grant a permit for fractionated tracts, subject to our authorized to grant leases under residential use? approval. paragraph (c) of this section; and (a) We may grant a permit for (c) In order to grant a residential lease (3) The total combined consent of the residential use in the same manner as of a fractionated tract, the Indian owners and us provides 100 percent we would grant a residential lease under landowners must: consent. § 162.304(c), for example, to keep an (1) Obtain approval of the required (c) We may give written consent to a Indian landowner’s house occupied percentage of the owners of the lease, and that consent must be counted while the landowner’s estate is going undivided interest in the tract as in the percentage ownership described through probate. We may also grant a required by § 162.304; and in paragraphs (a) or (b) of this section, permit on behalf of individual Indian (2) Obtain our approval. on behalf of: landowners, without prior notice, if it is (d) The proceeds from a residential (1) The individual owner if the owner impractical to provide notice to the lease that we approve under paragraph is deceased and the heirs to, or devisees owners and no substantial injury to the (c) of this section must be distributed to of, the interest of the deceased owner land will occur, or to protect the trust all owners of undivided interests in the have not been determined; resource, but we must give the Indian tract covered by the lease. landowners subsequent immediate (1) The amount of the proceeds (2) Individuals whose whereabouts are unknown to us, after reasonable notice and advise them of their right to distributed to each owner must be appeal the decision under part 2 of this determined in accordance with the attempts are made to locate such individuals; chapter. If the permit is granted to portion of the undivided interest in the protect the trust resource, the permit tract covered under the lease owned by (3) Individuals who are found to be non compos mentis, or determined to be will be effective immediately under part that owner. 2 of this chapter. (2) This paragraph applies where the an adult in need of assistance or under owners of the applicable percentage of legal disability as defined in part 115 of (b) We may grant a permit for interests under § 162.304 grant a this chapter; residential use on government land. residential lease on behalf of all of the (4) Orphaned minors; (c) A tribe may grant a permit, subject Indian owners of a fractionated tract. (5) Individuals who have given us a to our approval, in the same manner as The non-consenting Indian landowners written power of attorney to lease their it would grant a lease under § 162.303. (including those on whose behalf we land; and (d) Permits may be revoked upon have granted consent under (6) The individual landowners of a reasonable notice to the permittee, as § 162.304(c)) must receive a fair market fractionated tract where: specified in the permit.

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§ 162.307 Must the land be appraised § 162.309 How and when will BIA decide commence. All approvals must be in before BIA’s grant or approval of a whether to grant or approve a residential writing. residential lease? lease? (a) Before we grant or approve a lease, § 162.311 When is a decision to grant or (a) To support the Indian landowners approve a residential lease effective? in their negotiations, and to assist in our we must determine in writing that the consideration of whether a residential lease is in the best interest of the Indian Our decision to grant or approve a landowners. In making that lease is in the Indian landowners’ best residential lease will be effective determination, we will: interest, we must determine the fair immediately, notwithstanding any (1) Review the lease and supporting market rental of the land before our appeal that may be filed under part 2 of documents; this chapter. grant or approval of the lease, even if (2) Identify potential environmental the land may be leased at less than a fair impacts and ensure compliance with all § 162.312 Must a residential lease or market rental under § 162.317, except as applicable environmental laws, land use permit be recorded? provided in paragraph (c) of this laws, and ordinances (including (a) A residential lease or permit must section. approval of the appropriate review be recorded in our Land Titles and (b) A fair market rental may be documents under NEPA); Records Office with jurisdiction over determined by referral to published (3) Assure ourselves that adequate the land. We will record the lease or residential rental rates in the area, consideration has been given, as permit immediately following our grant appraisal, or any other appropriate appropriate, to: or approval under this subpart. (i) The relationship between the use valuation method. Where an appraisal (b) Residential leases of tribal land of the leased premises and the use of or other valuation is needed to that do not require our approval, under neighboring lands; determine the fair market rental, the § 162.102 of this part, must be recorded (ii) The height, quality, and safety of appraisal or valuation must be prepared by the tribe in our Land Titles and any structures or other facilities to be in accordance with the Uniform Records Office with jurisdiction over constructed on the leased premises; Standards of Professional Appraisal the land. Practice (USPAP). (iii) The availability of police and fire protection, utilities, and other essential Lease Requirements (c) Upon receipt of an appropriate community services; Tribal Resolution, we may not require (iv) The availability of judicial forums § 162.313 Is there a standard residential lease form? an appraisal for a lease on tribal land. for all criminal and civil matters arising § 162.308 What documents must BIA on the leased premises; and No, there is no standard residential review before granting or approving a (v) The effect on the environment of lease form. We will assist the Indian residential lease? the proposed land use. landowners in drafting lease provisions (4) Require any lease modifications or that conform to the requirements of this (a) The Indian landowner and the mitigation measures that are needed to part. tenant must provide an executed lease satisfy any requirements, or any other that complies with the requirements of Federal or tribal land use requirements. § 162.314 Are there any provisions that this part. We will assist the Indian (b) We will take action on the lease must be included in a residential lease? landowner in this process upon request. within 30 days of the date of our receipt Yes, in addition to the other (b) In addition to the executed lease, of the lease and supporting documents. requirements of this part, all residential the parties must provide the following (This deadline applies only if the lease leases must include the following supporting documents: is in an approved form and we have provisions. received all of the documents that we (1) If the tenant is a corporation, (a) The obligations of the tenant and need to support the findings required by partnership or other legal entity, it must its sureties to the Indian landowners are paragraph (a) of this section.) If we do provide organizational and financial also enforceable by the United States, so not act within 30 days, the Indian documents, as needed to show that the long as the land remains in trust or landowner may take appropriate action lease will be enforceable against the restricted status. under part 2 of this chapter. tenant and the tenant will be able to (c) If we approve or disapprove a (b) Nothing in the lease must delay or perform all of its lease obligations. lease, we will notify the parties prevent termination of Federal trust (2) Where a bond is required under immediately and advise them of their responsibilities for the land during the § 162.338, the bond must be furnished right to appeal the decision under part lease’s term. before we consider the lease application 2 of this chapter. Upon grant or (c) Termination of Federal trust complete under § 162.309(b). approval of a residential lease, we will responsibilities for the land does not (3) The tenant should provide provide a copy to the tenant and make abrogate the lease. environmental and archaeological the lease available to the Indian (d) The owners of the land and the reports, surveys, and site assessments, landowner(s) upon request. tenant and its surety or sureties must be as needed to facilitate BIA compliance § 162.310 When will a residential lease be notified of any change in the status of with NEPA and other applicable Federal effective? the land. and tribal land use requirements. We Unless otherwise provided in the (e) There must not be any unlawful will adopt any tribal environmental lease, a residential lease will be effective conduct, creation of a nuisance, illegal review as our NEPA review, to the on the date on which the lease is activity, or negligent use or waste of the extent such adoption is allowed under granted or approved by us. A residential leased premises. our procedure implementing NEPA. lease may be made effective on some (f) The tenant must comply with all (4) The tenant may be required to past or future date, by agreement, but applicable laws, ordinances, rules, provide proof that the proposed use is such a lease may not be granted or regulations, and other legal in conformance with applicable tribal approved more than one year before the requirements, including tribal laws and ordinances. date on which the lease term is to leasing policies.

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§ 162.315 What requirements must be (b) If rental adjustments are provided (1) An Indian landowner dies; satisfied in executing a residential lease? for, the lease must specify: (2) An Indian landowner requests that (a) A residential lease must identify (1) How adjustments are made; payment be made to us; the Indian landowners and their (2) Who makes the adjustments; (3) An Indian landowner is found by respective interests in the leased (3) When the adjustments are us to be in need of assistance in premises, and the lease must be granted effective; and managing his/her financial affairs; or by or on behalf of each of the Indian (4) How disputes about the (4) We determine, in our discretion landowners. One who executes a lease adjustments are resolved. and after consultation with the Indian in a representative capacity under § 162.319 When are rental payments due landowner(s), that direct payment § 162.305 must identify the owner being under a residential lease? should be discontinued. represented and the authority under A residential lease must specify the which such action is being taken. § 162.322 What form of rental payment can dates on which all rental payments are be accepted under a residential lease? (b) A residential lease must be due. Unless otherwise provided in the executed by individuals having the (a) When rental payments are made lease, rental payments may not be made necessary capacity and authority to bind directly to the Indian landowners, a or accepted more than one year in the tenant under applicable law. residential lease must specify the type (c) A residential lease must include a advance of the due date. Rent payments of payment that is acceptable to the citation of the provisions in this subpart are due at the time specified in the owners. that authorize our grant or approval, lease, regardless of whether the tenant (b) Payments made to us may be along with a citation of the formal receives an advance billing or other delivered in person or by mail. We will documents by which such authority has notice that a payment is due. not accept cash, foreign currency, or been delegated to the official taking § 162.320 Will untimely rental payments third-party checks. We will accept: such action. incur interest charges or penalties? (1) Personal or business checks drawn on the account of the tenant; A residential lease must specify the § 162.316 How should a residential lease (2) Money orders; describe the land? rate at which interest will accrue on any (3) Cashier’s checks; A residential lease should describe rental payment not made by the due (4) Certified checks; or the leased premises by reference to a date or any other date specified in the (5) Electronic funds transfer public survey, if possible. The lease lease. A lease may also identify payments. must include a legal description or other additional late payment penalties that will apply if a rental payment is not § 162.323 What other types of payments description that is sufficient to identify are required under a residential lease? the leased premises. Where there are made by a specified date. Unless (a) The tenant may be required to pay undivided interests owned in fee status, otherwise provided in the lease, such additional fees, taxes, and assessments the aggregate percentage of trust and interest charges and late payment associated with the use of the land, as restricted interests should be identified penalties will apply in the absence of determined by the tribe having in the description of the leased any specific notice to the tenant from us jurisdiction over the land. The tenant premises. or the Indian landowners, and the failure to pay such amounts will be must pay these amounts to the § 162.317 How much rent must be paid treated as a lease violation under appropriate tribal office. under a residential lease? § 162.347. (b) Except as otherwise provided in (a) A residential lease must provide part 171 of this chapter, if the leased for the payment of a fair market rental § 162.321 To whom can rental payments premises are within an Indian irrigation be made under a residential lease? at the beginning of the lease term and project or drainage district, the tenant at specified times during the term of the (a) A residential lease must specify must pay all operation and maintenance lease, unless a lesser amount is whether rental payments will be made charges that accrue during the lease permitted under paragraphs (b) or (c) of directly to the Indian landowners or to term. Payment must be to the this section. The tenant’s rent payments us on behalf of the Indian landowners. appropriate office in charge of the will be in fixed amounts. If the lease provides for payment to be irrigation project or drainage district. (b) We will approve a residential lease made directly to the Indian landowners, the lease must also require that the § 162.324 How long can the term of a of tribal land at a nominal rent, or at less residential lease run? than a fair market rental, if such a rent tenant retain specific documentation is negotiated or established by the tribe. evidencing proof of payment, such as (a) A residential lease must provide (c) We will approve a residential lease canceled checks, cash receipt vouchers, for a definite lease term, specifying the of individually-owned land at a nominal or copies of money orders or cashier’s commencement date. The rent or at less than a fair market rental, checks. commencement date of the lease may if the tenant is a member of the Indian (b) Rental payments made directly to not be more than one year after the date landowner’s immediate family; a co- the Indian landowners must be made to on which the lease is granted or owner in the lease tract; when some the parties and addresses specified in approved. other special relationship exists the lease, unless the tenant receives (b) The lease term must be reasonable, between the lessor and lessee or special notice of a change of ownership or given the purpose of the lease and the circumstances exist that in the opinion address. Unless otherwise provided in level of investment required. Unless of the Secretary warrant the approval of the lease, rental payments may not be otherwise provided by statute, the the conveyance. made payable directly to anyone other maximum term may not exceed 50 than the Indian landowners. years. The lease may provide for a § 162.318 Must the rent be adjusted under (c) A lease that provides for rental primary term of less than 50 years with a residential lease? payments to be made directly to the a provision for renewal(s), so long as the (a) A residential lease is not required Indian landowners must also provide maximum term, including the to allow for rental adjustments, unless for such payments to be suspended and renewal(s), does not exceed 50 years. A the parties agree to provide for periodic the rent thereafter paid to us, rather than residential lease may not be extended by adjustments in the lease. directly to the Indian landowners, if: holdover.

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(c) Where the Secretary grants a lease (1) The tenant is not in default, and (d) If the lease was approved at less under § 162.304(c)(1) on behalf of will remain liable under the lease; than fair market rent under § 162.317(c), undetermined heirs or devisees of an (2) The assignee agrees to be bound by and the subtenant is not a co-owner or individual Indian decedent owning 100 the terms of the lease; a member of the Indian landowner’s percent interest in the land, the (3) The proposed use by the assignee immediate family, the sublease must maximum term of that lease may not will require an amendment of the lease; provide for the subtenant to pay fair exceed 2 years. (4) The value of any part of the leased market rent to the Indian landowner. (d) If an option to renew is provided, premises not covered by the assignment (e) Except as provided in paragraph the lease must specify: would be adversely affected; and (e) of this section or as provided in the (1) The time and manner in which the (5) The assignee has provided lease, we must approve the sublease. We option must be exercised; and supporting documents which will not withhold approval providing (2) Any additional consideration demonstrate that the lease will be that our approval will protect the best which will be due upon the exercise of enforceable against the assignee, and interests of the Indian landowners. To the option or the commencement of the that the assignee will be able to perform make that determination we will renewal period. its obligations under the lease. consider whether: (e) The lease may be assigned without (1) The tenant is not in default, and § 162.325 Can a residential lease be our approval if: amended, assigned, sublet, or mortgaged? will remain liable under the lease; (1) The assignee is a leasehold (2) The subtenant agrees to be bound Yes, a residential lease can be mortgagee or its designee, acquiring the amended, assigned, sublet, or mortgaged by the terms of the lease; lease either through foreclosure or by (3) The Indian landowner should in accordance with §§ 162.326 to conveyance; 162.331. receive some or all of any income (2) The assignee agrees in writing to received by the tenant for the sublease; § 162.326 How will BIA decide whether to assume all of the obligations under the (4) The proposed use by the subtenant approve an amendment to a residential lease; and will require an amendment of the lease; (3) The assignee agrees in writing that lease? (5) The value of any part of the leased any tenant to whom it transfers the lease We will approve a residential lease premises not covered by the sublease will be another member of the tribe, a amendment if: would be adversely affected; and person who is eligible to be a member, (a) The required consents have been (6) The subtenant has provided a Tribal Housing Authority (or other obtained from the Indian landowners supporting documents which Tribally-Designated Housing Entity), or (under § 162.304) and any mortgagee or demonstrate that the sublease will be the tribe. If no tribal member or person any other sureties; and enforceable against the subtenant, and who is eligible to be a member or Tribal (b) We find the amendment to be in that the subtenant will be able to Housing Authority (or other Tribally- the best interest of the Indian perform its obligations under the Designated Housing Entity) or the tribe landowners, under the standards set sublease. forth in § 162.309. wishes to lease the property, the lease may be transferred to another Indian, (f) Part of the leased premises may be § 162.327 Can a residential lease be consistent with tribal law. If no Indian sublet without our approval when: assigned without the consent of the Indian wishes to lease the property, the lease (1) The sublease is for housing for landowners? may be transferred to a non-Indian, public purposes; and (a) The lease may be assigned without consistent with tribal law. (2) We have approved a sublease form the consent of the Indian landowners if (f) The assignment must be recorded and rent schedule for use in the project. the assignee agrees in writing to assume under § 162.312. (g) The sublease should be recorded all of the tenant’s obligations under the (g) If the lease was approved at less under § 162.312. lease, including bonding requirements, than fair market rent under § 162.317(c), (h) A sublease under paragraph (f) of and: and the assignee is not a co-owner or a this section should be recorded under (1) The lease provides for assignments member of the Indian landowner’s § 162.312. All other subleases must be without further consent of the immediate family, the assignment must recorded. landowners; provide for the assignee to pay fair (2) The assignee is a leasehold § 162.329 May a residential lease be market rent to the Indian landowner. mortgaged without the consent of the mortgagee or its designee, acquiring the Indian landowners? lease either through foreclosure or by § 162.328 May a residential lease be sublet conveyance; or without the consent of the Indian (a) The residential lease may be (3) As specified in the lease. landowners? mortgaged without further consent of (b) If the owners’ consent is required, (a) The lease may provide for the Indian landowners if the lease it must be obtained in the same manner subleasing without the consent of the contains a general authorization for as a new lease, unless the lease Indian landowners when the sublease is such a mortgage, and it states what law authorizes one or more of the Indian part of a housing development for would apply in case of foreclosure. landowners to consent on behalf of all public purposes for which a general (b) We must approve the leasehold such owners. plan has been submitted and approved mortgage. We will approve a leasehold (c) Consent must be obtained from the and we have approved a sublease form mortgage under a residential lease if: holders of any bonds or mortgages. for use in the project. Unless otherwise (1) The required consents have been (d) Except as provided in paragraph specified in the lease, the Indian obtained from the Indian landowners (e) of this section, the assignment must landowners must consent to a sublease and the holders of the tenant’s bond; be approved by the Secretary. Such of a single-family home in the same and approval will not be withheld providing manner as the initial lease. (2) We find that our approval is in the that our approval will protect the best (b) Consent to the sublease must be best interests of the Indian landowners. interests of the Indian landowners. To obtained from any sureties. (c) In making the finding required by make that determination we will (c) The subtenant must agree to be paragraph (b)(4) of this section, we will consider whether: bound by the terms of the lease. consider whether:

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(1) The tenant’s ability to comply with mortgage under a residential lease will § 162.335 What indemnities are required the lease would be adversely affected by be effective immediately, under a residential lease? any new loan obligations; notwithstanding any appeal that may be (a) A residential lease must require (2) Any lease provisions would filed under part 2 of this chapter. Copies that the tenant indemnify and hold the require modification to be consistent of approved documents will be United States and the Indian with the mortgage; provided to the party requesting landowners harmless from any loss, (3) The remedies available to us or to approval, and made available to the liability, or damages resulting from the the Indian landowners would be limited Indian landowners upon request. tenant’s use or occupation of the leased (beyond any additional notice and cure premises, unless the tenant would be rights to be afforded to the mortgagee) § 162.332 How can the leased premises be prohibited by law from making such an used under a residential lease? in the event of a lease violation; and agreement. (4) Any rights of the Indian A residential lease must describe the (b) Unless the tenant would be landowners would be subordinated or authorized uses of the leased premises. prohibited by law from making such an adversely affected in the event of a loan Any use of the leased premises for an agreement, a residential lease must default by the tenant. unauthorized purpose, will be treated as specifically require that the tenant a lease violation under § 162.347. § 162.330 May Indian landowners withhold indemnify the United States and the their consent to an assignment, sublease, § 162.333 Can improvements be made Indian landowners against all liabilities or mortgage? under a residential lease? or costs relating to the use, handling, Yes, Indian landowners may withhold (a) A residential lease must generally treatment, removal, storage, their consent to an assignment, describe the type and location of any transportation, or disposal of hazardous sublease, or mortgage. However, Indian improvements to be constructed by the materials, or the release or discharge of landowners are encouraged not to tenant. Unless otherwise provided in any hazardous material from the leased withhold their consent unreasonably. the lease, any specific plans for the premises that occurs during the lease (a) A lease may require that: construction of those improvements will term, regardless of fault. (1) The Indian landowners specify not require the consent of the Indian § 162.336 How will payment rights and their reasons for withholding consent; landowners or our approval. obligations relating to residential land be and (b) Construction of any improvements allocated between the Indian landowners (2) The owners’ consent will be not described in the lease must be and the tenant? deemed granted if a response to a approved as an amendment to the lease Unless otherwise provided in a request for consent is not given within under § 162.326. An attempt by the residential lease, the Indian landowners a time period specified in the lease. tenant to construct improvements, will be entitled to receive any (b) An attempt by the tenant to without the necessary consent and settlement funds or other payments mortgage the leasehold interest or approval, will be treated as a lease arising from certain actions that authorize possession by another party, violation under § 162.347. diminish the value of the land or the without the necessary consent and improvements thereon. The amount of approval, will be treated as a lease § 162.334 Who will own the improvements the payments that are distributed to violation under § 162.347. made under a residential lease? (c) A residential lease may authorize each owner must be determined in (a) A residential lease may specify accordance with the portion of the us, one or more of the Indian who will own any improvements landowners, or a designated undivided interests in the tract covered constructed by the tenant, during the under the lease owned by the land representative of the Indian landowners, lease term. The lease must indicate to consent to an amendment, owner. Such payments may include: whether any improvements constructed (a) Insurance proceeds; assignment, sublease, mortgage, or other by the tenant will remain on the leased type of agreement, on the landowners’ (b) Trespass damages; and premises upon the expiration or (c) Condemnation awards. behalf. A designated landowner or termination of the lease, providing for representative may not negotiate or the improvements to either: § 162.337 Can a residential lease provide consent to an amendment, assignment, (1) Remain on the leased premises, in for negotiated remedies in the event of a or sublease that would: a condition satisfactory to the Indian violation? (1) Reduce the rentals payable to the landowners and us; or (a) A residential lease of tribal land other Indian landowners; (2) Be removed within a time period may provide the tribe with certain (2) Increase or decrease the lease area; specified in the lease, at the tenant’s negotiated remedies in the event of a or expense, with the leased premises to be lease violation, including the power to (3) Terminate or modify the term of restored as close as possible to their terminate the lease. A residential lease the lease. condition before construction of such of individually owned land may provide (d) Where the Indian landowners have improvements. the individual Indian landowners with not designated a representative for the (b) If the lease allows the tenant to similar remedies, so long as the lease purpose of consenting to an remove the improvements, it must also also specifies the manner in which amendment, assignment, sublease, provide the Indian landowners with an those remedies may be exercised by or mortgage, or other type of agreement, option to waive the removal on behalf of the landowners. such consent may be granted by or on requirement and take possession of the (b) The negotiated remedies described behalf of the landowners in the same improvements if they are not removed in paragraph (a) of this section will manner as a new lease, under § 162.304. within the specified time period. If the apply in addition to the cancellation § 162.331 When will a decision to approve Indian landowners choose not to remedy available to us under § 162.349. an amendment, assignment, sublease, or exercise this option, we will take If the lease specifically authorizes us to mortgage under a residential lease be appropriate enforcement action to exercise any negotiated remedies on effective? ensure removal at the tenant’s expense. behalf of the Indian landowners, the Our decision to grant or approve an This obligation survives the termination exercise of such remedies may amendment, assignment, sublease, or or expiration of the lease. substitute for cancellation.

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(c) A residential lease may provide for payment if the tenant violates the lease cover our costs in preparing or lease disputes to be resolved in tribal or fails to replace the letter of credit at processing the documents and court or any other court of competent least 30 days before its expiration date; administering the lease. jurisdiction, or through arbitration or (ii) Be payable to BIA (or tribe if the (b) Except as provided in paragraph some other alternative dispute bond is held by the tribe under (c) of this section, we will charge resolution method. We may not be paragraph (b) of this section); administrative fees based on the rent bound by decisions made in such (iii) Be irrevocable during its term and payable under the lease. The fee will be forums, but we will defer to ongoing have an initial expiration date of not 3 percent of the annual rent. proceedings, as appropriate, in deciding less than one year following the date (c) The minimum administrative fee is whether to exercise any of the remedies BIA receives it; and $10.00 and the maximum administrative available to us under § 162.349. (iv) Be automatically renewable for a fee is $500.00, and any administrative period of not less than one year, unless fees that have been paid will be non- § 162.338 Must a tenant provide a bond the issuing financial institution refundable. However, we may waive all under a residential lease? provides us with written notice that it or part of these administrative fees, in (a) Except as provided in paragraph will not be renewed, at least 90 calendar our discretion. (b) of this section, the tenant must days before the letter of credit’s (d) If all or part of the costs in provide a bond to secure: expiration date. preparing or processing the documents (1) At least one rental payment under (5) A surety bond issued by a and administering the lease are paid the terms of the lease; company approved by the U.S. from tribal funds, the tribe may (2) The construction of any required Department of the Treasury. establish an additional or alternate improvements; (6) Assignment of a savings account. schedule of fees. (3) The performance of any additional (7) Any other form of highly liquid, § 162.343 Will BIA notify a tenant when a lease obligations, including the payment non-volatile security subsequently of operation and maintenance charges rental payment is due under a residential approved by us that is easily convertible lease? under § 162.323(b); and to cash and for which our approval is (4) The restoration and reclamation of We may issue bills or invoices to a required before redemption by any tenant in advance of the dates on which the leased premises, to their condition party. at the commencement of the lease term rental payments are due under a (b) A tribe may accept and hold any residential lease, but the tenant’s or some other specified condition. form of bond described in paragraph (a) (b) A bond may not be required, if obligation to make such payments in a of this section, to secure performance specified in the lease and upon a timely manner will not be excused if under a residential lease of tribal land. determination under § 162.309 that such such bills or invoices are not delivered a waiver is in the best interest of the § 162.340 How will a bond be or received. Indian landowner(s). administered? Lease Enforcement § 162.339 What forms of bonds can be (a) If a cash bond is submitted, we will retain the funds in an account § 162.344 What will BIA do if rental accepted under a residential lease? payments are not made as required by a established in the name of the tenant. (a) Except as provided in paragraph residential lease? (b) We will not pay interest on a cash (b) of this section, a bond must be performance bond. (a) A tenant’s failure to pay rent in the deposited with us and made payable (c) If the bond is not forfeited under time and manner required by a only to us, and the bond may not be §§ 162.344 or 162.348, we will refund residential lease is a violation of the modified or withdrawn without our the bond to the tenant upon the lease, and with will issue a notice of approval. We will only accept a bond in expiration or termination of the lease. violation under § 162.347. one of the following forms. (1) If the lease requires that rental (1) Cash. § 162.341 Is insurance required under a payments be made to us, we will send (2) Negotiable Treasury securities residential lease? the tenant and its sureties a notice of that: When necessary to protect the violation within 10 business days of the (i) Have a market value at least equal interests of the Indian landowners, a date on which the rental payment was to the bond amount; and residential lease must require that a due. (ii) Are accompanied by a statement tenant provide insurance. Such (2) If the lease provides for payment granting full authority to us to sell them insurance should include property, directly to the Indian landowners, we if the terms of the lease are violated. liability and/or casualty insurance, will send the tenant and its sureties a (3) Certificates of deposit that: notice of violation within 10 business (i) Indicate on their face that our depending on the interests to be protected. If insurance is required, it days of the date on which we receive approval is required before redemption actual notice of non-payment from the by any party; must identify both the Indian landowners and the United States as landowners. (ii) Have a face value at least equal to (b) If a tenant fails to provide additional insured parties, and be the bond amount, plus any penalties for adequate proof of payment or cure the sufficient to protect all insurable early redemption; and violation within the period required by improvements on the leased premises. (iii) Are accompanied by a statement § 162.347, and the amount due is not in granting full authority to us to sell them Lease Administration dispute, we may take any of the actions in case of a violation of the terms of the in this paragraph. lease. § 162.342 Are there administrative fees for (1) We may: (4) Irrevocable letters of credit issued actions relating to residential leases? (i) Take action to recover the unpaid by Federally-insured financial (a) We will charge an administrative rent and any associated interest charges institutions authorized to do business in fee each time we approve a residential or late payment penalties; the United States. A letter of credit lease, amendment, assignment, (ii) Cancel the lease under § 162.348; must: sublease, mortgage, or related or (i) Contain a clause that grants us the document. These fees will be paid by (iii) Invoke any other remedies authority to demand immediate the tenant, assignee, or subtenant, to available under the lease or applicable

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law, including collection on any without prior notice, to protect the the tenant by certified mail, return available bond or referral of the debt to interests of the Indian landowners and receipt requested. We will also provide the Department of the Treasury for ensure that the tenant is in compliance actual or constructive notice of a collection. with the operating requirements of the cancellation decision to the Indian (2) We do not have to cancel the lease lease. landowners, as appropriate. The or give any further notice to the tenant (b) If an Indian landowner notifies us cancellation letter will: before taking action to recover any that a specific lease violation has (1) Explain the grounds for unpaid rent. occurred, we will initiate an appropriate cancellation; (3) If we cancel the lease, we can still investigation within 10 business days of (2) Notify the tenant of the amount of take action to recover any unpaid rent. that notification. If we find out from any unpaid rent, interest charges, or late (c) We or the Indian landowners may another source that a specific lease payment penalties due under the lease; accept partial payments and violation has occurred, we will initiate (3) Notify the tenant of its right to underpayments, but acceptance does an appropriate investigation and make a appeal under part 2 of this chapter, as not waive any amounts remaining reasonable attempt to notify the Indian modified by § 162.349, including the unpaid or any other existing lease landowners. amount of any appeal bond that must be violations. Unless otherwise provided in posted to perfect an appeal of the the lease, overpayments may be credited § 162.347 What will BIA do about a cancellation decision; as an advance against future rent violation under a residential lease? (4) Order the tenant to vacate the payments. (a) If we determine that a residential property within 30 days of the date of (d) If a personal or business check is lease has been violated, we will send receipt of the cancellation letter, if an dishonored, and a rental payment is the tenant and its sureties and any appeal is not perfected by that time; and therefore not made by the due date, the mortgagee a notice of violation within 5 (5) If the lease so provides, failure to make the payment in a timely business days of that determination. The cancellation will be subject to the manner will be a violation of the lease, notice of violation must be provided by approval of the holder of any and a notice of violation will be issued certified mail, return receipt requested. outstanding leasehold mortgage. under § 162.347. Any payment made to (b) Within 10 business days of the cure such a violation, and any future receipt of a notice of violation, the § 162.349 Will BIA’s appeal bond rules payments by the same tenant, must be tenant must: apply to cancellation decisions? made by one of the alternative payment (1) Cure the violation and notify us in (a) The appeal bond provisions of part methods listed in § 162.322. writing that the violation has been 2 of this chapter will not apply to cured; appeals from lease cancellation § 162.345 What fees are assessed on (2) Dispute our determination that a decisions made under § 162.348. delinquent rental payments due under a violation has occurred and/or explain Instead, when BIA decides to cancel a residential lease? why we should not cancel the lease; or residential lease, we may require that (a) The following special fees will be (3) Request additional time to cure the the tenant post an appeal bond in order assessed if rent is not paid in the time violation. to perfect an appeal of the cancellation and manner required, in addition to any decision. The requirement to post an interest or late payment penalties that § 162.348 What will BIA do if a violation of appeal bond will apply in addition to all a residential lease is not cured on time? must be paid to the Indian landowners of the other requirements in part 2 of under a residential lease. The following (a) If the tenant does not cure a this chapter. special fees will be assessed to cover violation of a residential lease within (b) An appeal bond should be set in administrative costs incurred by the the requisite time period, we will an amount necessary to protect the United States in the collection of the consult with the Indian landowners, as Indian landowners against financial debt: appropriate, and determine whether: losses that will likely result from the (1) We should cancel the lease under delay caused by an appeal. Appeal bond The tenant will paragraph (c) of this section and pay . . . For . . . requirements will not be separately §§ 162.350 through 162.354; appealable, but may be contested during (2) We should invoke any other (1) $50.00 ...... Administrative fee for the appeal of the lease cancellation dishonored checks. remedies available to us under the lease, decision. (2) $15.00 ...... Administrative fee for including collecting on any available (c) If the appeal bond is not posted, BIA processing of bond; BIA can dismiss the appeal. That each notice or de- (3) The Indian landowners wish to dismissal will be final for the mand letter. invoke any remedies available to them Department of the Interior. (3) 18 percent of bal- Administrative fee under the lease; or ance due. charged by Treas- (4) The tenant should be granted § 162.350 When is a cancellation of a ury following refer- additional time in which to cure the residential lease effective? ral for collection of violation. A cancellation decision involving a delinquent debt. (b) If we decide to grant a tenant residential lease becomes stayed and not (b) If all or part of the costs incurred additional time in which to cure a effective 30 days after either the tenant in collection of the debt are paid from violation, the tenant must proceed receives a cancellation letter from us, or tribal funds, the tribe may establish an diligently to complete the necessary 40 days from the date the letter is additional or alternate schedule of fees. corrective actions within a reasonable or mailed, whichever is earlier. The specified time period from the date on cancellation decision will be further § 162.346 How will BIA determine whether which the extension is granted. stayed if the tenant perfects an appeal the activities of a tenant under a residential (c) If we decide to cancel the lease, we under §§ 162.348 and 162.349 and part lease comply with the terms of the lease? will send the tenant and its sureties and 2 of this chapter, unless the decision is (a) Unless a residential lease provides any mortgagee a cancellation letter made immediately effective under part otherwise, we may enter the leased within 5 business days of that decision. 2 of this chapter. While a cancellation premises at any reasonable time, The cancellation letter must be sent to decision is stayed, the tenant must

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continue to pay rent and comply with and its sureties continue to be addresses of the Indian landowners or the other terms of the lease. If an appeal responsible for the obligations their representatives for the purpose of is not perfected in accordance with contained in the lease. The lease may negotiating a lease. § 162.350 and part 2 of this chapter, the specify a time after which the leased cancellation decision will be effective premises must be developed or a period § 162.403 When can the Indian landowners grant a business lease? 31 days after either the tenant receives of non-use after which the lease a cancellation letter from us, or 41 days premises will be considered abandoned. (a) We can approve business leases on from the date the letter is mailed, (b) We will treat the non-use as a tribal land only with the written consent whichever is earlier. violation of the lease under § 162.346, of the tribe, as evidenced by an and may cancel the lease under appropriate tribal resolution. Tribal § 162.351 Can BIA take emergency action §§ 162.347–162.350. written consent is also required for a if leased premises are threatened? lease of any tribally-owned undivided We may take appropriate emergency Subpart D—Business Leases interest(s) in a fractionated tract, subject action if there is a natural disaster or if to our approval, except when the a tenant or any other party causes or General Provisions individual owners have consented in threatens to cause immediate and § 162.400 What types of leases are the percentages indicated in § 162.404. significant harm to the leased premises covered by this subpart? Where a tribal land assignment has been during the term of a residential lease. (a) This subpart covers both ground made to a tribal member or some other Emergency action may include judicial leases (undeveloped land) and leases of individual under tribal law or custom, action seeking immediate cessation of developed land (together with any and the assignee subsequently leases to the activity resulting in or threatening improvements) on Indian land, another party, the assignee and the tribe the harm. We will make reasonable authorizing the development or use of must both consent to the lease, subject efforts to notify the Indian landowners, the leased premises. to our approval. either before or after the emergency (b) Leases covered by this subpart (b) Adult Indian landowners, or action is taken. may authorize the construction of emancipated minors, may consent to § 162.352 What will BIA do if a tenant single-purpose or mixed use projects business leases of their land, including remains in possession after a lease expires designed for use by any number of undivided interests in fractionated or is canceled? tenants or occupants. These leases may tracts, subject to our approval. If a tenant remains in possession after include: (1) Leases for residential purposes § 162.404 What are the consent the expiration or cancellation of a requirements for a business lease on a residential lease, we will treat the that are not covered in subpart C; fractionated tract? unauthorized use as a trespass. Unless (2) Leases for public, religious, educational, and recreational purposes; (a) Except for Alaska, the Indian we have been advised in writing by the landowners must determine the applicable percentage of Indian and (3) Commercial or industrial leases for percentage referred to in the Indian landowners under § 162.304 that they retail, office, manufacturing, storage, Land Consolidation Act Amendments of are engaged in negotiations with the and/or other business purposes. 2000, 25 U.S.C. section 2218, as follows: tenant to obtain a new lease, we will take action to recover possession on § 162.401 How will BIA accommodate If the number of own- Then the percentage behalf of the Indian landowners, and tribal laws on land under a business lease? ers of the undivided of owners who must pursue any additional remedies interest in the tract approve of the lease (a) Unless prohibited by Federal law, is... is... available under applicable law, such as we will recognize and accommodate forcible entry and detainer action. tribal laws regulating activities on land (1) Five or fewer ...... 100 percent. under a residential lease, including § 162.353 May a lease be terminated (2) More than five but 80 percent. before its expiration date? tribal laws relating to land use, less than 11. environmental protection, and historic (3) More than 10 but 60 percent. (a) The lease may provide either party or cultural preservation. fewer than 20. with one or more options to terminate, (b) This paragraph applies when this (4) Twenty or more ... Over 50 percent. for any reason. If an option to terminate subpart is inconsistent with a tribal law is provided, the lease must specify the and § 162.109 prohibits tribal law to (b) In Alaska, Indian landowners, or time and manner in which the option supersede or modify this subpart. We their representatives who may execute must be exercised. may waive provisions of this subpart leases under § 162.405 of this part may (b) The lease may be mutually under 25 CFR part 1, if the waiver does negotiate business leases of Indian land terminated by agreement between the not: only if: lessee and the applicable percentage of (1) Violate a Federal statute or judicial (1) The owners of a majority of the Indian landowners under § 162.304, decision; or interests have negotiated a lease that we subject to our approval and notice to (2) Conflict with our general trust approve; any approved encumbrancer. responsibility under Federal law. (2) We grant the lease on behalf of (c) If the lease so provides, those persons for whom we are How To Obtain a Lease termination will be subject to the authorized to grant leases under approval of the holder of any § 162.402 How and when can a business § 162.404(c); and outstanding leasehold mortgage. lease be obtained? (3) Our consent when combined with § 162.354 What happens if the tenant If you are a potential lessee, you may the consent of the owners provides 100 abandons or does not diligently develop the negotiate a lease with an Indian percent consent. leased premises? landowner. The lease is subject to (c) We may give written consent to a (a) If the tenant does not diligently review and approval by the Secretary. lease, and that consent must be counted develop the leased premises or Generally, business leases will not be in the percentage ownership described abandons the leased premises before advertised for competitive bid. You may in paragraphs (a) and (b) of this section, expiration of the lease term, the tenant request, in writing, the names and on behalf of:

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(1) The individual owner if the owner land will occur, or to protect the trust negotiated rent and term provisions in is deceased and the heirs to, or devisees resource, but we must give the Indian the lease. of, the interest of the deceased owner landowners subsequent immediate (c) We may require you to provide, at have not been determined; notice and advise them of their right to a minimum, financial statements and (2) Any heir or devisee if the heir or appeal the decision under part 2 of this credit reports or, where such records are devisee has been determined but after chapter. If the permit is granted to not available, other appropriate reasonable attempts have been made, protect the trust resource, the permit documentation to show that you can cannot be located; will be effective immediately under part meet the monetary obligations under the (3) Individuals who are found to be 2 of this chapter. lease. non compos mentis, or determined to be (b) We may grant a permit for (d) We may require you to provide an adult in need of assistance or under business use on government land. proof that the proposed use is in legal disability as defined in part 115 of (c) We will not grant a permit for conformance with applicable tribal this chapter; business use on tribal land, but a tribe ordinances. (4) Orphaned minors who do not have may grant a permit, subject to our (e) If the proposed lease will authorize guardians duly appointed by a court of approval, in the same manner as it new construction, we may require you competent jurisdiction; would grant a lease under § 162.403. to provide: (5) Individuals who have given us a (d) Permits may be revoked upon (1) Environmental reports, written power of attorney to lease their reasonable notice to the permittee, as archaeological reports and other land; and specified in the permit. Decisions to documents that we need to comply with (6) The individual landowners of a revoke a permit may not be appealed environmental laws and land use requirements (if possible, we will adopt fractionated tract where we have under part 2 of this chapter. any tribal environmental review as our provided the Indian landowners with (e) Permits may not be assigned. NEPA review); written notice of our intent to grant a (2) A preliminary site plan identifying lease on their behalf, but the Indian § 162.407 How will BIA estimate the fair market rental of Indian land? the proposed location of any new landowners are unable to agree upon a We will use an appraisal to determine buildings, roads and utilities, and a lease during a 3-month negotiation construction schedule showing the period immediately following such the fair market rental of land before we grant or approve a lease, except as tentative commencement and notice, and the land is not being used completion dates for those by an Indian landowner. provided in paragraph (d) of this section. improvements; and § 162.405 Who can represent the Indian (a) The purpose of the appraisal is to (3) A certified survey plat of the landowners in negotiating or granting a support the Indian landowners in their leased premises that includes the legal business lease? negotiations, and to assist in our description of the land encumbered by The following individuals or entities consideration of whether a business the lease, and a description of each tract may represent an individual Indian lease is in the Indian landowners’ best of trust/restricted land in the lease and landowner, provided that there are no interest. the acreage of each. Plats should show Federal or tribal laws prohibiting this (b) We will either prepare the the tie-in to the nearest corner of a activity: appraisal ourselves or use an appraisal public survey, all courses and distances, (a) An adult with custody acting on from the Indian landowner or lessee exceptions, and tract acreages. (f) We may require you to provide behalf of his or her minor children; subject to our approval. additional documentation to (b) A guardian, conservator, or other (c) The appraisal must be prepared in demonstrate its ability to perform all of fiduciary appointed by a court of accordance with USPAP. the lease obligations. competent jurisdiction to act on behalf (d) Upon a duly adopted Tribal of an individual Indian landowner; Resolution, we will use some other type § 162.409 How and when will BIA decide (c) An adult, legal entity who has of valuation for a business lease on whether to approve a business lease? been given a written power of attorney tribal land, subject to our approval. (a) Before we approve a business that: lease, we must determine in writing that § 162.408 What documents must BIA (1) Meets all of the formal the lease is in the best interest of the requirements of any applicable Federal, review before granting or approving a business lease? Indian landowners. In making that tribal or state law; determination, we will: (2) Identifies the attorney-in-fact and If you are a lessee, you must submit (1) Review the lease and supporting the land to be leased; and the documents required by this section, documents; (3) Describes the scope of the power unless we decide otherwise. (2) Identify potential environmental granted and any limits thereon. (a) If you are a corporation, limited impacts and ensure compliance with all (d) Any representative who is liability company, partnership, joint applicable environmental laws, land use authorized to practice before the venture, or other legal entity, you must laws, and ordinances (including Department of the Interior under 43 CFR be in good standing, authorized to preparation of the appropriate review part 1.3. conduct business in the state where the documents under NEPA); land is located, or on the reservation, if (3) Assure ourselves that adequate § 162.406 When can BIA grant a permit for applicable. You must provide consideration has been given to: business use? organizational documents, certificates, (i) The relationship between the use (a) We may grant a permit for business filing records, and resolutions or other of the leased premises and the use of use in the same manner as we would authorization documents, as needed to neighboring lands; grant a business lease under § 162.404(c) show that the lease will be enforceable (ii) The height, quality, and safety of of this part. We may also grant a permit against you and that you will be able to any structures or other facilities to be on behalf of individual Indian perform all of your lease obligations. constructed on the leased premises; landowners, without prior notice, if it is (b) We may require you to pay for an (iii) The availability of police and fire impractical to provide notice to the independent appraisal, which we must protection, utilities, and other essential owners and no substantial injury to the review and approve, to support the community services;

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(iv) The availability of judicial forums Records Office with jurisdiction over either witnessed by two individuals or for all criminal and civil matters arising the land. be notarized. on the leased premises; and (v) The effect on the environment of Lease Requirements § 162.416 How should the land be described in a business lease? the proposed land use. § 162.413 Is there a standard business (4) Require any lease modifications or lease form? A business lease must describe the mitigation measures that are needed to No, based on the need for flexibility leased premises by reference to a public satisfy any requirements, or any other in negotiating and drafting of survey. Where there are undivided Federal or tribal land use requirements; appropriate lease terms and conditions, interests owned in fee status, the and there is no standard business lease form aggregate portion of trust or restricted (5) Receive notice from the tribe that that must be used. We will assist the interests should be identified in the all tribal procedures regarding tribal Indian landowners in drafting lease description of the leased premises. land development and land use have provisions that conform to the § 162.417 How much rent must be paid been satisfied. requirements of this part. (b) When we receive a business lease under a business lease? and all of the supporting documents § 162.414 Are there any provisions that (a) The lease must require the initial that conform to this part, we will must be included in a business lease? payment of fair market rental, based on approve, disapprove, or return the In addition to the other requirements a fixed amount, a percentage of the submission for revision within 60 days of this part, all business leases must projected income, or a combination of of the date of our receipt of the provide that: both unless paragraphs (c), (d) and (f) of documents. If we do not act within 60 (a) The obligations of the lessee and this section permit a lesser amount. days, the Indian landowner may take its sureties to the Indian landowners are (b) Unless the lessee is paying appropriate action under part 2 of this also enforceable by the United States, so nominal rental as described in chapter. If we approve or disapprove a long as the land remains in trust or paragraphs (c), (d) and (f) of this section, lease, we will notify the parties restricted status; or unless the rental amount is based immediately and advise them of their (b) Nothing contained in this lease primarily on a percentage of income, the right to appeal the decision under part must operate to delay or prevent a lease may be reviewed annually in 2 of this chapter. Copies of business termination of Federal trust accordance with § 162.418, but must leases that have been granted or responsibilities with respect to the land provide for a review and possible approved will be provided to the tenant, by the issuance of a fee patent or adjustment of the rental, at a minimum, and made available to the Indian otherwise during the term of the lease; every fifth year. landowners upon request. however, such termination must not (c) We will approve a negotiated lease serve to abrogate the lease. The owners of tribal land, or of any undivided tribal § 162.410 When will a business lease be of the land and the lessee and his surety interest in a fractionated allotment, effective? or sureties must be notified of any such which provides for the payment of Unless otherwise provided in the change in the status of the land; nominal rent, or less than a fair market lease, a business lease will be effective (c) There must not be any unlawful rental, if the tribe provides a resolution on the date on which the lease is conduct, creation of a nuisance, illegal containing an explanation why approval granted or approved by us. A business activity, or negligent use or waste of the will serve the tribe’s best interest over lease may be made effective on some leased premises; and the entire period in which the reduced past or future date, by agreement, but (d) The lessee must comply with all rent will be paid. Unless otherwise such a lease may not be granted or applicable Federal, tribal, state and local specified, the reduced rent must be approved more than one year before the laws, ordinances, rules, regulations, and applied for the entire lease term. date on which the lease term is to other legal requirements. (d) We may approve a lease of commence. All approvals must be in § 162.415 Are there any formal individually-owned Indian land which writing. requirements that must be satisfied in the provides for the payment of nominal § 162.411 For purposes of appeal, when execution of a business lease? rent, or less than a fair market rental, if: will a BIA decision to grant or approve a (a) A business lease must identify the (1) The lease is for religious, business lease be effective? Indian landowners and their respective educational, recreational, cultural, or Our decision to grant or approve a interests in the leased premises. The other public purposes; business lease will be effective requisite percentage of landowners must (2) The lessee is a member of the immediately, notwithstanding any consent in writing to the lease. One who individual Indian landowner’s appeal that may be filed under part 2 of executes a lease in a representative immediate family or a co-owner; or this chapter. capacity under § 162.405 must identify (3) The lessee is a joint venture or the owner being represented and the other legal entity in which the Indian § 162.412 Must a business lease or permit authority under which such action is owners directly participate in the be recorded? being taken. revenues or profits generated by the (a) A business lease or permit must be (b) The lessee must provide evidence lease, and the distribution of profits or recorded in the Land Titles and Records of appropriate authority to execute a revenues to the owners is projected to Office with jurisdiction over the land. business lease. exceed the rent that would otherwise be We will record the lease or permit (c) A business lease must include a paid over the entire lease term. immediately following our approval citation of the provisions in this subpart (e) We may grant on behalf of non- under this subpart. The business lease that authorize our approval, along with consenting minority undivided interest or permit may also be recorded in the a citation of the formal documents by owners only if the lease provides for local county recorder’s office. which such authority has been payment of fair market value for their (b) Business leases of tribal land that delegated to the official taking such interest(s). do not require our approval under action. (f) If new construction is required, the § 162.102 of this part must be recorded (d) All signatures of the landowner(s) lease may provide for the payment of by the tribe in the Land Titles and and lessee(s) may be required to be less than a fair annual rental during the

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pre-development and construction (b) Rental payments made directly to (b) The lease term, including any periods specified in the lease. the Indian landowners must be made to renewal period, must be reasonable, the parties specified in the lease, unless given the purpose of the lease and the § 162.418 Must the rent be adjusted under the lessee receives notice of a change of type of financing and level of a business lease? ownership. Unless otherwise provided investment required. If rental adjustments are required by in the lease, rental payments may not be us, the lease must specify: (c) Unless otherwise authorized by made payable directly to anyone other Federal statute, leases for business (a) When adjustments are made. than the Indian landowners. (b) Who makes the adjustments. purposes will have a maximum primary (c) What the adjustments are based (c) A lease that provides for rental term that does not exceed 25 years. An on. payments to be made directly to the extension for one additional term not to (d) How disputes arising from the Indian landowners must also provide exceed 25 years may be included. adjustments are resolved. for such payments to be suspended and Leases of land on the following the rent thereafter paid to us, rather than reservations may be made for terms of § 162.419 When are rental payments due directly to the Indian landowners, if: not to exceed 99 years, including any under a business lease? (1) An Indian landowner dies; option to renew: the Gila River A business lease must specify the (2) An Indian landowner requests that Reservation, AZ; the Hualapai dates on which all rental payments are payment be made to us; Reservation, AZ; the San Carlos Apache due. Unless otherwise provided in the (3) An Indian landowner is found by Reservation, AZ; Yavapai-Prescott lease, rental payments may not be made us to be in need of assistance in Community Reservation, land on the or accepted more than one year in managing his/her financial affairs; or Colorado River Reservation, AZ and advance of the due date. Rental (4) We determine after consultation CA., the Navajo Reservation, AZ, NM, payments are due at the time specified with the Indian landowner(s), that and UT; the Palm Springs Reservation, in the lease, regardless of whether the direct payment should be discontinued. CA; the Soboba Indian Reservation, CA; lessee receives an advance billing or the Viejas Indian Reservation, CA; the other notice that a payment is due. § 162.422 What form of rental payment can be accepted under a business lease? Cabazon Indian Reservation, CA; the Fort Mohave Reservation, CA, AZ, and § 162.420 Will untimely rental payments (a) When rental payments are made made under a business lease be subject to NV; the Southern Ute Reservation, CO; directly to the Indian landowners, the Hollywood (formerly Dania) interest charges or late payment penalties? form of payment must be acceptable to A business lease must specify the rate Reservation, FL; the Coeur d’Alene the Indian landowners. Indian Reservation, ID; The Mille Lacs at which interest will accrue on any (b) Payments made to us may be rental payment not made by the due Indian Reservation with respect to a delivered in person or by mail. We will lease between an entity established by date or any other date specified in the not accept cash, foreign currency, or lease. A lease may also identify the Mille Lacs Band of Chippewa third-party checks. We will accept: Indians and the Minnesota Historical additional late payment penalties that (1) Personal or business checks drawn will apply if a rental payment is not Society, MN; the Pueblos of Cochiti, on the account of the lessee; Pojoaque, Tesuque, Santa Ana (with the made by a specified date. Unless (2) Money orders; otherwise provided in the lease, such exception of the lands known as the (3) Cashier’s checks; ‘‘Santa Ana Pueblo Spanish Grant,’’), interest charges and late payment (4) Certified checks; or penalties will apply in the absence of and Zuni, NM; The Pyramid Lake (5) Electronic funds transfer Reservation, NV; the Burns Paiute any specific notice to the lessee from us payments. or the Indian landowners, and the Reservation, OR; the Spokane failure to pay such amounts will be § 162.423 What other types of payments Reservation, WA; the Kalispel Indian treated as a lease violation under are required under a business lease? Reservation, WA; the Swinomish § 162.450. (a) The lessee may be required to pay Reservation, WA; the Tulalip additional fees, taxes, and/or Reservation, WA; leases of the lands § 162.421 To whom can rental payments assessments associated with the use of comprising the Moses Allotment be made under a business lease? the land, as determined by entities Number 10, Chelan County, WA; and (a) A business lease must specify having jurisdiction over the land. The lands held in trust for: the Twenty-nine whether rental payments will be made lessee must pay these amounts to the Palms Band of Luiseno Mission Indians, directly to the Indian landowners or to appropriate office. CA; the Torres Martinez Desert Cahuilla us on behalf of the Indian landowners. (b) Except as otherwise provided in Indians, CA; the Guidiville Band of Any changes to the direct pay provision part 171 of this chapter, if the leased Pomo Indians of the Guidiville Indian of the lease must be made by premises are within an Indian irrigation Rancheria, CA; the Cahuilla Band of amendment to the lease, but such project or drainage district, the lessee Indians of California, CA; the amendment will only require the must pay all operation and maintenance Confederated Salish and Kootenai consent of the individual requesting charges that accrue during the lease Tribes of the Flathead Reservation, MT; direct pay and the lessee, and approval term. The lessee must pay these leases to the Devils Lake Sioux Tribe, or of the Secretary. If the lease provides for amounts to the appropriate office in any organization of such tribe, of land payment to be made directly to the charge of the irrigation project or on the Devils Lake Sioux Reservation, Indian landowners, the lease must also drainage district. Failure to make such ND; the Pueblo of Santa Clara, NM; the require that the lessee either provide payments will constitute a violation of Las Vegas Paiute Tribe of Indians, NV; immediate proof of payment to us or the lease. the Reno Sparks Indian Colony, NV; the retain specific documentation Cherokee Nation of Oklahoma, OK; the evidencing proof of payment, such as § 162.424 How long can the term of a Confederated Tribes of the Umatilla canceled checks, cash receipt vouchers, business lease run? Indian Reservation, OR; the or copies of money orders or cashier’s (a) A lease will specify the term of the Confederated Tribes of the Grand Ronde checks, for the duration of the lease plus lease, as well as any option to renew, Community of Oregon, OR; the 6 years and 90 days. extend, or terminate. Confederated Tribes of the Colville

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Reservation, WA; and any other (2) The assignee is a leasehold such approval will not be withheld reservations as authorized by Congress. mortgagee or its designee, acquiring the providing that our approval will protect (d) Where the Secretary grants a lease lease either through foreclosure or by the best interests of the Indian under § 162.404(c)(1) on behalf of conveyance; and the assignee agrees in landowners. To make that undetermined heirs or devisees of an writing to assume all of the lessee’s determination we will consider individual Indian decedent owning 100 obligations under the lease, including whether: percent interest in the land, the bonding requirements. (1) The proposed use by the sublessee maximum term of that lease may not (b) If the Indian landowners’ consent will require an amendment of the lease; exceed 2 years. is required, it must be obtained in the (2) The value of any part of the leased (e) A lease can be extended only by same manner as a new lease, unless the premises not covered by the sublease one renewal or extension, not to exceed lease authorizes one or more of the would be adversely affected; and 25 years. The exercise of the option Indian landowners to consent on behalf (3) The sublessee has bonded its must be in writing and the lease must of all such owners. performance and provided supporting specify: (c) If the lease provides, consent must documents which demonstrate that the (1) The time and manner in which the be obtained from any sureties or sublease will be enforceable against the option must be exercised; and guarantors. sublessee, and that the sublessee will be (2) Any additional consideration, if (d) The assignment of a lease must be able to perform its obligations under the any, which will be due upon the approved by the Secretary. Such sublease. exercise of the option or the approval will not be withheld providing commencement of the renewal period. that our approval will protect the best § 162.429 How will BIA decide whether to (f) The lease may not: interests of the Indian landowners. To approve an assignment or sublease under (1) Be renewed or extended by make that determination we will a business lease? holdover; or consider whether: (a) We will approve an assignment or (2) Provide a right of first refusal or (1) The proposed use by the assignee sublease under a business lease if: any other type of preference with will require an amendment of the lease, (1) The required consents have been respect to a new lease. (2) The value of any part of the leased obtained from the parties to the lease (g) The Secretary must record in the premises not covered by the assignment under § 162.404 and the tenant’s Land Titles and Records Office the would be adversely affected; and sureties and encumbrancers; official notice to the lessee of the grant (3) The assignee has provided (2) The tenant is not in violation of of extension or termination. supporting documents which the lease; demonstrate that the lease will be (3) The assignee agrees to be bound § 162.425 Can a business lease be enforceable against the assignee, and amended, assigned, sublet, or mortgaged? by, or the subtenant agrees to be that the assignee will be able to perform subordinated to, the terms of the lease; Yes, a business lease can be amended, its obligations under the lease. and assigned, sublet, or mortgaged in (e) The lease may provide that (4) We find no compelling reason to accordance with §§ 162.426 to 162.431. assignments may be made without the withhold our approval in order to consent of the landowners, but the protect the best interests of the Indian § 162.426 How and when can a business assignments must be approved by the lease be amended? owners. Secretary. (a) A lease may authorize one or more (b) In making the finding required by of the Indian landowners, or a § 162.428 May a lease be subleased paragraph (a)(4) of this section, we will designated representative of the Indian without the consent of the Indian consider whether: landowners, to consent to an landowners and the approval of the (1) The Indian landowners should amendment on the landowners’ behalf, Secretary? receive any income derived by the subject to our approval. The lease may (a) The lease may provide for tenant from the assignment or sublease, also designate us as the landowners’ subleasing without the consent of the under the terms of the lease; representative. A designated landowner Indian landowners when the sublease is (2) The proposed use by the assignee or representative may not negotiate or part of a commercial development or or subtenant will require an amendment consent to an amendment that would: residential development for which a of the lease; (1) Reduce the payment obligations or general plan has been submitted and (3) The value of any part of the leased terms to the Indian landowners; approved and we have approved a premises not covered by the assignment (2) Increase or decrease the lease area; sublease form for use in the project. The or sublease would be adversely affected; or lease may contain a provision and (3) Terminate or modify the term of authorizing the lessee to sublease the (4) The assignee or subtenant has the lease. premises, in whole or in part, without bonded its performance and provided (b) Where the Indian landowners have further approval of the Secretary. A supporting documents that demonstrate not designated a representative for the copy of the executed sublease must be that the lease or sublease will be purpose of consenting to an provided to us. enforceable against the assignee or amendment, such consent may be (b) If the owners’ consent is required, subtenant, and that the assignee or granted by or on behalf of the it must be obtained in the same manner subtenant will be able to perform its landowners in the same manner as a as a new lease, unless the lease obligations under the lease or sublease. new lease. authorizes one or more of the Indian landowners to consent on behalf of all § 162.430 May a lease be mortgaged § 162.427 May a lease be assigned without such owners. without the consent of the Indian the consent of the Indian landowners? (c) Consent must be obtained from landowners? (a) The lease may be assigned without any sureties or guarantors. (a) The lease may be mortgaged the consent of the Indian landowners if: (d) The sublessee must agree to be without further consent of the Indian (1) The lease provides for assignments subordinated to the terms of the lease. landowners for the purpose of without further consent of the (e) If the lease requires that the borrowing capital for commercially landowners; or sublease be approved by the Secretary, reasonable purposes defined in the lease

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if the lease contains a general § 162.434 When will BIA take action on an (2) Be removed within a time period authorization for such a mortgage. amendment, assignment, sublease, or specified in the lease, at the lessee’s (b) The mortgage cannot secure any mortgage under a business lease? expense, with the leased premises to be unrelated debts owed by the lessee to (a) We will take action on a business restored as close as possible to their the mortgagee. lease amendment, assignment, sublease, condition before construction of such (c) The mortgage may be refinanced. or mortgage within 60 days of the date improvements. (d) The encumbrance instrument must of our receipt of the complete (b) If the lease allows the lessee to be approved by us. assignment and all supporting remove the improvements, it must also documents. If we do not act within 60 provide the Indian landowners with an § 162.431 How will BIA decide whether to days, any interested party may take option to waive the removal approve a leasehold mortgage under a appropriate action under part 2 of this requirement and take possession of the business lease? chapter. If we approve or disapprove an improvements if they are not removed (a) We will approve a leasehold amendment, assignment, sublease, or within the specified time period. If the mortgage under a business lease if: mortgage, we will notify the parties Indian landowners choose not to (1) The required consents have been immediately and advise them of their exercise this option, we will take obtained from the parties to the lease right to appeal the decision under part appropriate enforcement action to under § 162.404 and the tenant’s 2 of this chapter. Copies of business ensure removal and restoration of the sureties; lease amendments, assignments, premises at the lessee’s expense. This (2) The mortgage covers only the subleases or mortgages that have been obligation survives the termination or tenant’s interest in the leased premises, granted or approved will be provided to expiration of the lease. and no unrelated collateral; and the tenant, and made available to the (c) A business lease may also contain (3) We find no compelling reason to Indian landowners upon request. alternative provisions for disposal of the withhold our approval in order to (b) Copies of approved documents leasehold improvements, including protect the best interests of the Indian will be provided to the party requesting provision for reimbursement of the landowners. approval, and made available to the residual value of the improvements at (b) In making the finding required by Indian landowners upon request. the termination of the lease. paragraph (a)(4) of this section, we will § 162.435 How can the leased premises be consider whether: § 162.438 What indemnities are required used under a business lease? under a business lease? (1) The tenant’s ability to comply with A business lease must describe the (a) A business lease must require that the lease would be adversely affected by authorized uses of the leased premises. the lessee indemnify and hold the any new loan obligations; Any use of the leased premises for an United States and the Indian (2) Any lease provisions would be unauthorized purpose, or a failure by landowners harmless from any loss, modified by the mortgage; the lessee to maintain continuous liability, or damages resulting from the (3) The remedies available to us or to operations throughout the lease term lessee’s use or occupation of the leased the Indian landowners would be limited unless so provided in the lease, will be premises, unless the lessee would be (beyond any additional notice and cure treated as a lease violation. rights to be afforded to the mortgagee), prohibited by law from making such an in the event of a lease violation; and § 162.436 Can improvements be made agreement. (4) Any rights of the Indian under a business lease? (b) Unless the lessee would be landowners would be subordinated or Yes, improvements can be made prohibited by law from making such an adversely affected in the event of a loan under a business lease. A business lease agreement, a business lease must default by the tenant. must: specifically require that the lessee (a) Describe, or provide for indemnify the United States and the § 162.432 When will a BIA decision to development of, a plan that describes Indian landowners against all liabilities approve an amendment, assignment, the type and location of any or costs relating to the use, handling, sublease, or mortgage under a business improvements to be constructed by the treatment, removal, storage, lease be effective? lessee. Development plans for the transportation, or disposal of hazardous Our decision to approve an construction of those improvements will materials, or the release or discharge of amendment, assignment, sublease, or require the review and approval by any hazardous materials from the leased mortgage under a business lease will be tribal officials, if applicable, and must premises that occurs during the lease effective immediately, even though an be filed with us before the term, regardless of fault, unless the appeal has been filed under part 2 of commencement of construction, unless liability or cost arises from the gross this chapter. Copies of approved specifically exempted in the lease. negligence or wilful misconduct of the documents will be provided to the party (b) Provide a construction schedule. Indian landowner. requesting approval, and made available to the Indian landowners upon request. § 162.437 Who will own the improvements § 162.439 How will payment rights and made under a business lease? obligations relating to business leases be § 162.433 Must an amendment, (a) A business lease must specify who allocated between the Indian landowners assignment, sublease, or mortgage will own any improvements constructed and the lessee? approved under a business lease be by the lessee during the lease term. The The lease must specify the recorded? lease must indicate whether any distribution of any settlement funds or An amendment, assignment, sublease, improvements constructed by the lessee other payments arising from certain or mortgage approved under a business will remain on the leased premises actions that diminish the value of the lease must be recorded in our Land upon the expiration or termination of land or the improvements thereon. Such Titles and Records Office that has the lease, providing for the payments may include, but are not jurisdiction over the leased premises. improvements to either: limited to: We will record the document (1) Remain on the leased premises, in (a) Insurance proceeds; immediately following our approval a condition satisfactory to the Indian (b) Trespass damages; and under this subpart. landowners and us; or (c) Condemnation awards.

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§ 162.440 Can a business lease provide for (a) Negotiable Treasury securities that: provides for modification or release at negotiated remedies in the event of a (1) Have a market value at least equal some future date, the lease must allow violation? to the bond amount; and us to establish or reinstate a bond or (a) A business lease of tribal land may (2) Are accompanied by a statement guaranty requirement at any time we provide the tribe with certain negotiated granting full authority to us to sell such deem it necessary to secure the remedies in the event of a lease securities in case of a violation of the contractual obligations. A tribe may violation, including the power to terms of the lease. request that we establish or reinstate a terminate the lease. A business lease of (b) Certificates of deposit that indicate bond or guaranty requirement. individually-owned land may provide on their face that our approval is (c) We may require that the surety or the individual Indian landowners with required before redemption by any guarantor provide any supporting similar remedies, so long as the lease party; and documents needed to show that the also specifies the manner in which (1) Have a face value at least equal to bond or guaranty will be enforceable, those remedies may be exercised by or the bond amount, plus any penalties for and that the surety or guarantor will be on behalf of the landowners. early redemption; and able to perform the guaranteed (b) The negotiated remedies described (2) Are accompanied by a statement obligations. The surety or guarantor in paragraph (a) of this section will granting full authority to us to sell such must provide notice of cancellation apply in addition to the cancellation securities in case of a violation of the before canceling the bond. remedy available to us under § 162.452. terms of the lease. (d) The lease must require that the If the lease specifically authorizes us to (c) Irrevocable letters of credit (LOC) lessee or assignee obtain the consent of exercise any negotiated remedies on issued by Federally-insured financial the surety or guarantor, with respect to behalf of the Indian landowners, the institutions authorized to do business in any amendment, assignment, sublease, exercise of such remedies may the United States. LOC’s must: or leasehold mortgage that directly (1) Contain a clause that grants us substitute for cancellation. impacts or affects the obligations and authority to demand immediate (c) A business lease may provide for liabilities of the surety or guarantor. The payment if the lessee defaults or fails to lease disputes to be resolved in tribal lease must also provide for the surety or replace the LOC within 30 calendar court or any other court of competent guarantor to receive a copy of any notice jurisdiction, or through an alternative days before its expiration date; (2) Be payable to the Department of of default issued to the lessee by us or dispute resolution method. We may not by the Indian landowners. be bound by decisions made in such the Interior, BIA; forums, for example, if they conflict or (3) Be irrevocable during its term and § 162.444 Will we require insurance for a diminish our trust responsibility to the have an initial expiration date of not business lease? Indian landowners or are contrary to less than one year following the date We may require any or all of the Federal law, but we will defer to BIA receives it; and following types of insurance depending ongoing proceedings, as appropriate, in (4) Be automatically renewable for a upon the activity conducted under the deciding whether to exercise any of the period of not less than one year, unless lease: property, business interruption, remedies available to us under the issuing financial institution liability, and casualty (such as for fire, § 162.452. provides BIA with written notice at least hazard, or flood). If insurance is 90 calendar days before the letter of required, it must: § 162.441 Must a lessee or assignee credit’s expiration date that it will not (a) Be provided in an amount provide a bond for a lease? be renewed. sufficient to: (a) Except as provided in paragraph (d) Surety bond issued by a company (1) Protect any improvements on the (c) of this section, the lessee or assignee approved by the U.S. Department of the leased premises; will be required to provide a bond to Treasury; (2) Cover losses such as personal secure: (e) Assignment of savings account; or injury or death; and (1) The payment of one year’s rental; (f) Any other form of highly liquid, (3) Protect the interest of the Indian (2) The construction of any required non-volatile security subsequently landowner. improvements; approved by us that is easily convertible (b) Identify the Indian landowners (3) The performance of any additional to cash by us and for which Secretarial and the United States as additional lease obligations, including the payment approval is required before redemption insured parties. of operation and maintenance charges by any party. (c) Be provided by a nationally under § 162.424; accredited insurance company, with a (4) The restoration and reclamation of § 162.443 How will a bond be administered? minimum insurer financial strength the leased premises, to their condition rating of ‘‘A’’ or its equivalent, at the commencement of the lease term (a) If a lease requires a bond or guaranty, the bond or guaranty must authorized to do business in the state or some other specified condition; and where the land is located. (5) Applicable tribal laws and remain effective throughout the lease policies. term and any renewal period. Lease Administration (b) The lease may provide that we Alternatively, the lease may provide for may adjust security or bond the bond or guaranty to be modified or § 162.445 Will administrative fees be released: charged for actions relating to business requirements at any time to reflect leases? changing conditions. (1) After a specified period of time; (c) The lease may provide that a bond (2) If we determine that the original (a) We will charge an administrative is not required, however we must bond or guaranty is no longer needed to fee each time we approve a business determine that this is in the best interest secure the contractual obligations; or lease, amendment, assignment, of the landowners. (3) If, for leases on tribal lands, the sublease, mortgage, or related tribe requests the modification or document. These fees will be paid by § 162.442 What forms of bond can be release of the bond, and we approve the the lessee, assignee, or sublessee, to accepted under a business lease? request. cover our costs in preparing or We will only accept bonds in the (b) If the lease does not initially processing the documents and following forms: require a bond or guaranty, or if it administering the lease.

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(b) We will charge administrative fees (c) Partial payments may be accepted investigation within 5 business days of based on the rent payable under the by the Indian landowners or us, but that notification. If we find out from lease. The fee will be 3 percent of the acceptance will not operate as a waiver another source that a specific lease annual rent payable, including any with respect to any amounts remaining violation has occurred, we will initiate percentage-based rent that can be unpaid or any other existing lease an appropriate investigation and make a reasonably estimated. The minimum violations. Unless otherwise provided in reasonable attempt to notify the Indian administrative fee is $10.00 and the the lease, overpayments may be credited landowners. maximum administrative fee is $500.00, as an advance against future rental and any administrative fees that have payments, or refunded. Lessee will not § 162.450 What will we do in the event of a violation under a business lease? been paid will be non-refundable. be entitled to any interest accrued on However, we may waive all or part of advanced payments. (a) If we determine that there has been these administrative fees, in our (d) If a personal or business check is a violation of a business lease we will discretion. dishonored, and a rental payment is send the lessee and its sureties a notice (c) If all or part of the expenses of the therefore not made by the due date, the of violation within 5 business days of work are paid from tribal funds, the failure to make the payment in a timely that determination. The notice of tribe may establish an additional or manner will be a violation of the lease violation must be provided by certified alternate schedule of fees. and a notice of violation will be issued mail, return receipt requested. under § 162.450. Any payment made to (b) Within 10 business days of the § 162.446 Will we notify a lessee when a receipt of a notice of violation, the rental payment is due under a business cure such a violation, and any future payments by the same lessee, must be lessee must: lease? (1) Cure the violation and notify us in made by one of the alternative payment We may issue bills or invoices to a writing that the violation has been methods listed in § 162.422. lessee in advance of the dates on which cured; rental payments are due under a § 162.448 Will any special fees be (2) Dispute our determination that a business lease, but the lessee’s assessed on delinquent rental payments violation has occurred and/or explain obligation to make such payments in a due under a business lease? why we should not cancel the lease; or timely manner will not be excused if (a) The following special fees will be (3) Request additional time to cure the such bills or invoices are not delivered assessed if rent is not paid in the time violation. or received. and manner required, in addition to any § 162.451 What will we do if a violation of Lease Enforcement interest or late payment penalties that a business lease is not cured to our must be paid to the Indian landowners satisfaction within the requisite time § 162.447 What will we do if rental under a business lease. The following period? payments are not made in the time and special fees will be assessed to cover manner required by a business lease? (a) If the lessee does not cure a administrative costs incurred by us in violation of a business lease within the (a) A lessee’s failure to pay rent in the the collection of the debt: requisite time period, we will consult time and manner required by a business with the Indian landowners, as lease will be a violation of the lease, and The lessee will pay . . . For . . . appropriate, and determine whether: a notice of violation will be issued (1) The lease should be canceled by us under § 162.450. If the lease requires under paragraph (c) of this section and that rental payments be made to us, we (1) $50.00 ...... Administrative fee for dishonored checks. §§ 162.453 through 162.457; will send the lessee and its sureties a (2) $25.00 ...... Administrative fee for (2) We should invoke any other notice of violation within 10 business our processing of remedies available to us under the lease, days after the date the rent was due. If each notice or de- including collecting on any available the lease provides for payment directly mand letter. bond; to the Indian landowners, we will send (3) 18 percent of bal- Administrative fee (3) The Indian landowners wish to the lessee and its sureties a notice of ance due. charged by Treas- invoke any remedies available to them violation within 10 business days of the ury following refer- under the lease; or date on which we receive actual notice ral for collection of (4) The lessee should be granted delinquent debt. of non-payment from the landowners. additional time in which to cure the (b) If a lessee fails to provide adequate violation. proof of payment or cure the violation (b) If all or part of the expenses of the work are paid from tribal funds, the (b) If we decide to grant a lessee within the requisite time period additional time in which to cure a described in § 162.450, and the amount tribe may establish an additional or alternate schedule of fees. violation, the lessee must proceed due is not in dispute, we may diligently to complete the necessary immediately take action to recover the § 162.449 How will we determine whether corrective actions within a reasonable or amount of the unpaid rent and any the activities of a lessee under a business specified time period from the date on associated interest charges or late lease are in compliance with the terms of which the extension is granted. payment penalties. We may also cancel the lease? (c) If we decide to cancel the lease, we the lease under § 162.451, or invoke any (a) Unless a business lease provides will send the lessee, its encumbrancers, other remedies available under the lease otherwise, we may enter the leased and its sureties a cancellation letter or applicable law, including collection premises at any reasonable time, within 5 business days of that decision. on any available bond or referral of the without prior notice, to protect the The cancellation letter must be sent to debt to the Department of the Treasury interests of the Indian landowners and the lessee by certified mail, return for collection. An action to recover any to determine if the lessee is in receipt requested. We will also provide unpaid amounts will not be conditioned compliance with the requirements of the actual or constructive notice of a on the prior termination of the lease or lease. cancellation decision to the Indian any further notice to the lessee, nor will (b) If an Indian landowner notifies us landowners. The cancellation letter will: such an action be precluded by a prior that a specific lease violation has (1) Explain the grounds for termination. occurred, we will initiate an appropriate cancellation;

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(2) Notify the lessee of the amount of a cancellation letter from us, or ten days will take action to recover possession on any unpaid rent, interest charges, or late from the date the letter is mailed, behalf of the Indian landowners, and payment penalties due under the lease; whichever is earlier. The cancellation pursue any additional remedies (3) Notify the lessee of its right to decision will be stayed if the lessee files available under applicable law, such as appeal under part 2 of this chapter, as an appeal under §§ 162.451 and 162.452 forcible entry and detainer action. modified by § 162.452, including the and part 2 of this chapter unless the amount of any appeal bond that must be decision is made immediately effective § 162.456 May a lease be terminated posted with an appeal of the under part 2. While a cancellation before its expiration date? cancellation decision; and decision is stayed, the lessee must (a) Yes, the lease may provide either (4) Order the lessee to vacate the continue to pay rent and comply with party with one or more options to property within 30 days of the date of the other terms of the lease. If an appeal terminate, for any reason. If an option to receipt of the cancellation letter, if an is not filed in accordance with § 162.453 terminate is provided, the lease must appeal is not filed by that time. and part 2 of this chapter, the specify the time and manner in which cancellation decision will be effective the option must be exercised. § 162.452 Will BIA’s regulations on the 31st day after either the lessee (b) The lease may be mutually concerning appeal bonds apply to terminated by agreement between the cancellation decisions involving business receives a cancellation letter from us, or leases? 10 days from the date the letter is lessee and the Indian landowners, mailed, whichever is earlier. subject to our approval and notice to (a) The appeal bond provisions in part any approved encumbrancer. The 2 of this chapter will not apply to § 162.454 Can we take emergency action if percentage of consent by the appeals from lease cancellation the leased premises are threatened with landowners for termination must be in immediate and significant harm? decisions made under § 162.451. the same percentages as required to Instead, when we decide to cancel a In the event of a natural disaster, or obtain a lease (see § 162.404). business lease, we may require that the if a lessee or any other party causes or lessee post an appeal bond with an threatens to cause immediate and § 162.457 What happens if the lessee appeal of the cancellation decision. The significant harm to the leased premises abandons the lease? requirement to post an appeal bond will during the term of a business lease, we (a) If a lessee abandons the leased apply in addition to all of the other may take appropriate emergency action. premises, the lessee and its sureties will requirements in part 2 of this chapter. Emergency action may include judicial not be relieved of the obligations (b) An appeal bond should be set in action seeking immediate cessation of contained in the lease. an amount necessary to protect the the activity resulting in or threatening (b) We may cancel the lease, effective Indian landowners against financial the harm. Reasonable efforts will be immediately, and attempt to find a new losses that will likely result from the made to notify the Indian landowners, lessee for the property. delay caused by an appeal. Appeal bond either before or after the emergency requirements will not be separately action is taken. Subpart E [Amended] appealable, but may be contested during the appeal of the lease cancellation § 162.455 What will we do if a lessee holds 9. The title for subpart E is revised to over after the expiration or cancellation of read as follows: decision. a business lease? (c) If the appeal bond is not posted, Subpart E—Special Requirements for BIA can dismiss the appeal. That If a lessee remains in possession after Certain Reservations dismissal will be final for the the expiration or cancellation of a Department of the Interior. business lease, we will treat the unauthorized use as a trespass. Unless Subpart F [Removed] § 162.453 When will a cancellation of a we have been advised in writing by the 10. Subpart F (§§ 162.600–162.633) is business lease be effective? applicable percentage of Indian removed in its entirety. A cancellation decision involving a landowners under § 162.404 that they business lease will not be effective until are engaged in good faith negotiations [FR Doc. 04–2392 Filed 2–9–04; 8:45 am] 30 days after either the lessee receives with the lessee to obtain a new lease, we BILLING CODE 4310–W7–P

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CUSTOMER SERVICE AND INFORMATION CFR PARTS AFFECTED DURING FEBRUARY

Federal Register/Code of Federal Regulations At the end of each month, the Office of the Federal Register General Information, indexes and other finding 202–741–6000 publishes separately a List of CFR Sections Affected (LSA), which aids lists parts and sections affected by documents published since Laws 741–6000 the revision date of each title. 228...... 5729 Presidential Documents 3 CFR 345...... 5729 Executive orders and proclamations 741–6000 Proclamations: 502...... 6201 The United States Government Manual 741–6000 7754...... 5457 563e...... 5729 7755...... 5677 Other Services Ch. VII...... 5300 7756...... 5903 703...... 4886 Electronic and on-line services (voice) 741–6020 Executive Orders: 704...... 4886 Privacy Act Compilation 741–6064 12512 (Revoked by 13 CFR Public Laws Update Service (numbers, dates, etc.) 741–6043 EO 13327)...... 5897 TTY for the deaf-and-hard-of-hearing 741–6086 13327...... 5897 Proposed Rules: Administrative Orders: 121...... 5302 ELECTRONIC RESEARCH Presidential 14 CFR Determinations: World Wide Web No. 2004-21...... 4843 39 ...... 5505, 5007, 5459, 5907, 5909, 5911, 5913, 5914, Full text of the daily Federal Register, CFR and other publications 5 CFR 5918, 5920, 5922, 5924, is located at: http://www.access.gpo.gov/nara 5926, 6139 532...... 5257 Federal Register information and research tools, including Public 71 ...... 5008, 5009, 5010, 5011, Proposed Rules: Inspection List, indexes, and links to GPO Access are located at: 5012, 5013, 5014, 5461, 591...... 6020 http://www.archives.gov/federallregister/ 5462, 5463 890...... 5935 77...... 5682 E-mail 97...... 5683, 5684 7 CFR FEDREGTOC-L (Federal Register Table of Contents LISTSERV) is 121...... 5388, 6380 an open e-mail service that provides subscribers with a digital 300...... 4845 135...... 5388 form of the Federal Register Table of Contents. The digital form 301...... 4845 139...... 6380 of the Federal Register Table of Contents includes HTML and 319...... 4845, 5673 145...... 5388 PDF links to the full text of each document. 762...... 5259 1260...... 5015, 5016 905...... 5679 1274...... 5016 To join or leave, go to http://listserv.access.gpo.gov and select 932...... 5905 Proposed Rules: Online mailing list archives, FEDREGTOC-L, Join or leave the list 1940...... 5263 25...... 5747 (orchange settings); then follow the instructions. 1941...... 5259 39 ...... 5302, 5477, 5756, 5759, PENS (Public Law Electronic Notification Service) is an e-mail 1943...... 5259 5762, 5765, 5767, 5769, service that notifies subscribers of recently enacted laws. 1951...... 5259, 5264 5771, 5773, 5775, 5778, 1962...... 5264 To subscribe, go to http://listserv.gsa.gov/archives/publaws-l.html 5780, 5781, 5783, 5785, 1965...... 5264 and select Join or leave the list (or change settings); then follow 5787, 5790, 5792, 5794, the instructions. Proposed Rules: 5936, 5939, 6214 319...... 5673 60...... 6216 FEDREGTOC-L and PENS are mailing lists only. We cannot 761...... 6056 61...... 6218 respond to specific inquiries. 762...... 6056 71 ...... 5093, 5094, 5095, 5097, Reference questions. Send questions and comments about the 763...... 6056 5098, 5479 Federal Register system to: [email protected] 764...... 6056 73...... 5099 765...... 6056 77...... 5101 The Federal Register staff cannot interpret specific documents or 91...... 6218 regulations. 766...... 6056 767...... 6056 119...... 6218 768...... 6056 121...... 6216, 6218 FEDERAL REGISTER PAGES AND DATE, FEBRUARY 769...... 6056 135...... 6218 1205...... 5936 136...... 6218 4843–5004...... 2 1423...... 6201 5005–5256...... 3 15 CFR 5257–5458...... 4 8 CFR 730...... 5686 732...... 5686 5459–5678...... 5 Proposed Rules: 734...... 5686, 5928 5679–5904...... 6 103...... 5088 736...... 5686 5905–6138...... 9 10 CFR 740...... 5686, 5928 6139–6524...... 10 746...... 5686 50...... 5267 748...... 5686 71...... 6139 750...... 5686 Proposed Rules: 752...... 5686 170...... 4865 774...... 5927 171...... 4865 16 CFR 12 CFR 456...... 5451 Proposed Rules: Proposed Rules: 25...... 5729 315...... 5440

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456...... 5440 30 CFR 40 CFR 27...... 5711 Proposed Rules: 52 ...... 4852, 4856, 5036, 5286, 54...... 5718, 6181 17 CFR 943...... 5102, 5942 5289, 5932, 6160 64...... 5718 1...... 6140 63...... 5038 73 ...... 6192, 6193, 6194 Proposed Rules: 31 CFR 81...... 4856 Proposed Rules: 239...... 6438 Proposed Rules: 180...... 5289 15...... 5945 240...... 6124, 6438 10...... 5304 Proposed Rules: 25...... 4908 274...... 6438 51...... 4901, 5944 54...... 6229 32 CFR 52 ...... 4902, 4903, 4908, 5412, 73...... 6238, 6239 18 CFR Proposed Rules: 6223 74...... 4908 2...... 5268 153...... 4890 72...... 4901, 5944 78...... 4908 4...... 5268 1602...... 5797 75...... 4901, 5944 5...... 5268 1605...... 5797 81...... 4908 48 CFR 9...... 5268 1609...... 5797 96...... 4901, 5944 1804...... 5087 16...... 5268 1656...... 5797 1852...... 5087 375...... 5268 43 CFR 33 CFR Proposed Rules: 385...... 5268 2930...... 5703 52...... 5480 110...... 5274 20 CFR 117 ...... 5017, 5275, 5276, 5463 44 CFR 49 CFR 404...... 5691 147...... 6146 64...... 5474 165 .....5277, 5280, 5282, 5284, 65 ...... 6165, 6166, 6170 107...... 6195 21 CFR 5465, 5467, 5469, 5471, 67...... 6172, 6179 171...... 6195 1...... 4851 5473, 6148, 6150, 6152, Proposed Rules: 176...... 6195 1271...... 5272 6154, 6156, 6158 67...... 6224 177...... 6195 Proposed Rules: Proposed Rules: 24 CFR 165...... 6219, 6221 45 CFR 192...... 5305, 5480 Proposed Rules: 2531...... 6181 195...... 5305, 5480 990...... 5796 34 CFR 2533...... 6181 571...... 5108 280...... 4995 Proposed Rules: 25 CFR 2551...... 6225 50 CFR 36 CFR Proposed Rules: 2552...... 6227 100...... 5018 162...... 6500 242...... 5018 2553...... 6228 216...... 5720 Proposed Rules: 622...... 5297 26 CFR 7...... 5799 46 CFR 648...... 4861 1 ...... 5017, 5248, 5272, 5931 242...... 5105 67...... 5390 679 .....5298, 5299, 5934, 6198, 301...... 5017 Proposed Rules: 6199 37 CFR 602...... 5017 67...... 5403 Proposed Rules: Proposed Rules: 262...... 5693 221...... 5403 17...... 6240 1 ...... 5101, 5797, 5940 263...... 5693 100...... 5105 301...... 5101 47 CFR 223...... 5810 38 CFR 1...... 5707 300...... 5481 28 CFR Proposed Rules: 2...... 5707 600...... 5483 2...... 5273 3...... 6223 25...... 5707 648...... 5307

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REMINDERS comments due by 2-17- 04; published 2-4-04 South Dakota; comments The items in this list were 04; published 12-18-03 [FR 04-02411] due by 2-19-04; published editorially compiled as an aid [FR 03-31202] Northeast multispecies; 1-20-04 [FR 04-01035] to Federal Register users. AGRICULTURE reporting and Environmental statements; Inclusion or exclusion from DEPARTMENT recordkeeping availability, etc.: this list has no legal Food and Nutrition Service requirements; comments Coastal nonpoint pollution significance. Food Stamp Program: due by 2-20-04; control program— published 1-21-04 [FR Performance reporting Minnesota and Texas; 04-01214] system; high performance Open for comments RULES GOING INTO bonuses; comments due Fishery conservation and until further notice; EFFECT FEBRUARY 10, by 2-17-04; published 12- management: published 10-16-03 [FR 2004 17-03 [FR 03-31031] Alaska; fisheries of 03-26087] Exclusive Economic Hazardous waste program AGRICULTURE Zone— authorizations: AGRICULTURE DEPARTMENT Pennsylvania; comments DEPARTMENT Grain Inspection, Packers Skates; comments due by 2-20-04; published 1-6- due by 2-19-04; published Agricultural Marketing and Stockyards 04 [FR 04-00229] 1-20-04 [FR 04-01042] Service Administration Solid wastes: Sorghum; U.S. standards; COURT SERVICES AND Olives grown in— Hazardous waste; comments due by 2-17-04; OFFENDER SUPERVISION California; published 2-9-04 identification and listing— published 12-17-03 [FR 03- AGENCY FOR THE CORPORATION FOR 31092] DISTRICT OF COLUMBIA Solvent-contaminated NATIONAL AND reusable shop towels, AGRICULTURE Semi-annual agenda; Open for COMMUNITY SERVICE rags, disposable wipes, DEPARTMENT comments until further Grants: notice; published 12-22-03 and paper towels; Farm Security and Rural conditional exclusion; Innovative and Special [FR 03-25121] Investment Act of 2002: comments due by 2-18- Demonstration Programs ENERGY DEPARTMENT Biobased products 04; published 11-20-03 and National Service designation guidelines for Climate change: [FR 03-28652] Fellowships; application Voluntary Greenhouse Gas Federal procurement; FEDERAL procedures, selection Reporting Program; comments due by 2-17- COMMUNICATIONS criteria, etc.; electronic general guidelines; 04; published 12-19-03 COMMISSION availability; published 2- [FR 03-31347] comment request; 10-04 Common carrier services: COMMERCE DEPARTMENT comments due by 2-17- 04; published 1-29-04 [FR Access charge reform; ENVIRONMENTAL National Oceanic and PROTECTION AGENCY 04-01922] reconsideration rules; Atmospheric Administration record update; comments Air quality implementation Fishery conservation and ENERGY DEPARTMENT due by 2-17-04; published plans; approval and management: Federal Energy Regulatory 1-16-04 [FR 04-00903] promulgation; various Alaska; fisheries of Commission Radio broadcasting: States: Exclusive Economic Electric rate and corporate Navigation devices; California; published 12-12- Zone— regulation filings: commercial availability; 03 Pollock; comments due by Virginia Electric & Power comments due by 2-19- TRANSPORTATION 2-19-04; published 2-9- Co. et al.; Open for 04; published 6-17-03 [FR DEPARTMENT 04 [FR 04-02715] comments until further 03-15188] Federal Aviation Pribilof Islands blue king notice; published 10-1-03 Radio stations; table of Administration crab; comments due by [FR 03-24818] assignments: Airworthiness directives: 2-17-04; published 12- ENVIRONMENTAL Michigan; comments due by 18-03 [FR 03-31226] PROTECTION AGENCY 2-17-04; published 1-6-04 Pratt & Whitney; published Air pollution control: [FR 04-00109] 1-6-04 Alaska; fisheries of Exclusive Economic State operating permit Wyoming; comments due by Zone— programs— 2-17-04; published 1-6-04 COMMENTS DUE NEXT Demersal shelf rockfish; California; comments due [FR 04-00108] WEEK comments due by 2-20- by 2-17-04; published FEDERAL MARITIME 04; published 1-21-04 1-16-04 [FR 04-01040] COMMISSION AGRICULTURE [FR 04-01220] California; comments due Ocean transportation DEPARTMENT Caribbean, Gulf, and South by 2-17-04; published intermediaries; financial Agricultural Marketing Atlantic fisheries— 1-16-04 [FR 04-01041] responsiblity requirements; Service Gulf of Mexico reef fish Air programs; approval and optional rider for additional coverage allowed as proof; Soybean promotion, research, resources; comments promulgation; State plans comments due by 2-20-04; and consumer information: due by 2-19-04; for designated facilities and published 1-5-04 [FR pollutants: published 1-29-04 [FR 04- Referendum request 04-00089] 01808] procedures; comments New York; comments due FEDERAL TRADE due by 2-17-04; published Magnuson-Stevens Act by 2-17-04; published 1- COMMISSION 1-27-04 [FR 04-01602] provisions— 15-04 [FR 04-00889] Domestic fisheries; Air quality implementation Sexually oriented e-mail; label AGRICULTURE exempted fishing permit plans; approval and requirements; comments DEPARTMENT applications; correction; promulgation; various due by 2-17-04; published Animal and Plant Health comments due by 2-20- States: 1-29-04 [FR 04-01916] Inspection Service 04; published 2-5-04 California; comments due by HEALTH AND HUMAN Plant-related quarantine, [FR 04-02412] 2-17-04; published 1-15- SERVICES DEPARTMENT foreign: Northeastern United States 04 [FR 04-00836] Food and Drug Fruits and vegetables fisheries— New York; comments due Administration importation; conditions Atlantic sea scallop; by 2-17-04; published 1- Administrative practice and governing entry; comments due by 2-19- 16-04 [FR 04-01044] procedure:

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Civil money penalties District of Columbia and Boeing; comments due by enacted public laws. To hearings; maximum United States Codes; 2-17-04; published 12-31- subscribe, go to http:// penalty amounts and prisoners serving 03 [FR 03-32134] listserv.gsa.gov/archives/ compliance with Federal sentences— Pilatus Aircraft Ltd.; publaws-l.html Civil Penalties Inflation Parole violators found comments due by 2-19- Adjustment Act; comments mentally incompetent 04; published 1-9-04 [FR Note: This service is strictly due by 2-17-04; published prior to scheduled 04-00476] for E-mail notification of new 12-1-03 [FR 03-29741] parole revocation Class D and Class E Medical devices: hearings; fair and airspace; comments due by laws. The text of laws is not available through this service. Class III devices— expeditious handling of 2-17-04; published 1-15-04 hearing; comments due [FR 04-00920] PENS cannot respond to Premarket approval by 2-17-04; published Class E airspace; comments specific inquiries sent to this requirement effective 12-19-03 [FR 03-31293] due by 2-17-04; published address. date; comments due by 1-15-04 [FR 04-00919] 2-17-04; published 11- NATIONAL AERONAUTICS 18-03 [FR 03-28741] AND SPACE Restricted areas; comments ADMINISTRATION due by 2-20-04; published Reports and guidance 1-6-04 [FR 04-00238] Acquisition regulations: documents; availability, etc.: VOR Federal airways; Evaluating safety of Administrative procedures comments due by 2-17-04; antimicrobial new animal and guidance; comments published 12-31-03 [FR 03- drugs with regard to their due by 2-20-04; published 32083] 12-22-03 [FR 03-31407] microbiological effects on TRANSPORTATION bacteria of human health NUCLEAR REGULATORY DEPARTMENT concern; Open for COMMISSION Federal Railroad comments until further Spent nuclear fuel and high- Administration notice; published 10-27-03 level radioactive waste; Railroad safety: [FR 03-27113] independent storage; Locomotive horns use at HEALTH AND HUMAN licensing requirements: highway-rail grade SERVICES DEPARTMENT Approved spent fuel storage crossings; requirement for Health Resources and casks; list; comments due sounding; comments due Services Administration by 2-17-04; published 1- by 2-17-04; published 12- Smallpox Compensation 16-04 [FR 04-00976] 18-03 [FR 03-30606] Program: Spent nuclear fuel and high- TREASURY DEPARTMENT Implementation; comments level radioactive waste; Internal Revenue Service due by 2-17-04; published independent storage; Income taxes: 12-16-03 [FR 03-30790] licensing requirements: Charitable remainder trusts; HOMELAND SECURITY Approved spent fuel storage ordering rule application; DEPARTMENT casks; list; comments due comments due by 2-17- by 2-17-04; published 1- 04; published 11-20-03 Coast Guard 16-04 [FR 04-00977] [FR 03-29042] Anchorage regulations: SMALL BUSINESS Contested liabilities; Maryland; Open for ADMINISTRATION transfers to provide for comments until further Small business size standards: satisfaction; cross notice; published 1-14-04 reference; public hearing; Nonmanufacturer rule; [FR 04-00749] comments due by 2-19- waivers— Ports and waterways safety: 04; published 11-21-03 General aviation turboprop [FR 03-29043] Savannah River, GA; aircraft; comments due TREASURY DEPARTMENT regulated navigation area; by 2-20-04; published Alcohol and Tobacco Tax comments due by 2-17- 2-4-04 [FR 04-02239] 04; published 11-19-03 and Trade Bureau [FR 03-28813] SOCIAL SECURITY Alcohol; viticultural area ADMINISTRATION INTERIOR DEPARTMENT designations: Organization and procedures: Trinity Lakes, Trinity County, Surface Mining Reclamation CA; comments due by 2- and Enforcement Office Social Security numbers assignment to foreign 17-04; published 12-17-03 Permanent program and academic students in F-1 [FR 03-31052] abandoned mine land status; comments due by reclamation plan 2-17-04; published 12-16- submissions: 03 [FR 03-30965] LIST OF PUBLIC LAWS Ohio; comments due by 2- TRANSPORTATION Note: A cumulative List of 19-04; published 1-20-04 DEPARTMENT Public Laws for the first [FR 04-01059] Uniform relocation assistance session of the 108th Congress JAMES MADISON and real property acquisition appears in Part II of this MEMORIAL FELLOWSHIP for Federal and federally- issue. FOUNDATION assisted programs; Last List January 29, 2004 Fellowship program comments due by 2-17-04; requirements; comments published 12-17-03 [FR 03- due by 2-17-04; published 30804] Public Laws Electronic 12-16-03 [FR 03-30945] TRANSPORTATION Notification Service JUSTICE DEPARTMENT DEPARTMENT (PENS) Parole Commission Federal Aviation Federal prisoners; paroling Administration PENS is a free electronic mail and releasing, etc.: Airworthiness directives: notification service of newly

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