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2 III

Contents Federal Register Vol. 63, No. 17

Tuesday, January 27, 1998

Agency for International Development See Engineers Corps NOTICES See Navy Department Grants and cooperative agreements; availability, etc.: PROPOSED RULES Central and Eastern Europe and New Independent States Federal Acquisition Regulation (FAR): of former Soviet Union; market-oriented solutions to Electronic data interchange transactions; shipment environmental problems promotion program, 3920– evidence, 4074 3921 NOTICES Federal Acquisition Regulation (FAR): Agricultural Marketing Service Agency information collection activities— PROPOSED RULES Submission for OMB review; comment request, 3884 Mushroom promotion, research, and consumer information order; referendum order, 3848–3849 Education Department NOTICES Agriculture Department Grants and cooperative agreements; availability, etc.: See Agricultural Marketing Service National Institute on Disability and Rehabilitation See Animal and Plant Health Inspection Service Research— See Commodity Credit Corporation Rehabilitation engineering research centers program, See Farm Service Agency 4148–4150 See Forest Service Energy Department Animal and Plant Health Inspection Service See Federal Energy Regulatory Commission PROPOSED RULES See Hearings and Appeals Office, Energy Department Interstate transportation of animals and animal products NOTICES (quarantine): Atomic energy agreements; subsequent arrangements; Livestock markets; handling of reactors, 3849–3851 correction, 3884–3885 Plant-related quarantine, foreign: Karnal bunt disease— Engineers Corps Mexicali Valley, Mexico, 3844–3848 NOTICES Environmental statements; availability, etc.: Antitrust Division San Gabriel Canyon, CA; sediment management plan, NOTICES 3884 National cooperative research notifications: Petroleum Environmental Research Forum, 3922 Environmental Protection Agency PROPOSED RULES Army Department Air pollution control; new motor vehicles and engines: See Engineers Corps New nonroad spark-ignition engines at or below 19 NOTICES kilowatts; phase 2 emission standards, 3950–4036 Meetings: Radiation protection programs: U.S. Military Academy, Board of Visitors, 3884 Spent nuclear fuel, high-level and transuranic radioactive Arts and Humanities, National Foundation wastes management and disposal; waste isolation pilot plant compliance— See National Foundation on the Arts and the Humanities Air drilling during petroleum exploration; analysis Coast Guard availability, 3863 NOTICES PROPOSED RULES Pollution: Clean Water Act: Marine transportation-related facilities and tank vessels; Pennsylvania; continuing planning process, 3890 capacity increases review, 3861–3862 Meetings: Drinking water issues— Commerce Department Arsenic; national primary drinking water regulation; See National Oceanic and Atmospheric Administration stakeholders, 3890–3891

Commodity Credit Corporation Executive Office of the President RULES See Management and Budget Office Tree assistance program; CFR part removed, 3791–3792 Farm Service Agency Consumer Product Safety Commission RULES NOTICES Tree assistance program; implementation, 3791–3792 Settlement agreements: COA, Inc., 3882–3883 Federal Aviation Administration RULES Defense Department Airworthiness directives: See Army Department Cessna, 3809–3811 IV Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Contents

PROPOSED RULES Federal Reserve System Airworthiness directives: RULES McDonnell Douglas, 3852–3854 Securities credit transactions: Class E airspace, 3854–3860 OTC margin stocks and foreign stocks lists (Regulations NOTICES G, T, U, and X), 3804–3809 Meetings: NOTICES RTCA, Inc., 3944 Banks and bank holding companies: Change in bank control, 3896 Formations, acquisitions, and mergers, 3896–3897 Federal Communications Commission Permissible nonbanking activities, 3897 RULES Meetings; Sunshine Act, 3897 Common carrier services: Reports and guidance documents; availability, etc.: Telecommunications Act of 1996; implementation— Capital and accounting standards; differences among Universal service support mechanisms; payment of Federal banking and thrift agencies; report to quarterly contributions in equal monthly congressional committees, 3897–3901 installments, 3830–3832 Radio stations; table of assignments: Fish and Wildlife Service Colorado, 3832–3833 RULES Florida, 3834–3835 Endangered and threatened species: Mississippi, 3833 San Bernardino kangaroo rat, 3835–3843 New York, 3832 PROPOSED RULES Texas, 3833–3834 Endangered and threatened species: Wisconsin, 3832, 3834 San Bernardino kangaroo rat, 3877–3878 NOTICES Willamette daisy, Fender’s Blue butterfly, and Kincaid’s Common carrier services: lupine, 3863–3877 Satellite notifications; registration and processing cost NOTICES recovery, 3891–3892 Agency information collection activities: Universal service contribution factors, 3892–3894 Proposed collection; comment request, 3908–3909 Meetings: Endangered and threatened species permit applications, 1999/2000 World Radiocommunication Conference (WRC 3909–3911 99) Advisory Committee, 3894 Food and Drug Administration North American Numbering Council, 3894–3895 NOTICES Meetings; Sunshine Act, 3895 Agency information collection activities: Proposed collection; comment request, 3902–3903 Federal Election Commission Human drugs: PROPOSED RULES Drug products discontinued from sale for reasons other Contribution and expenditure limitations and prohibitions: than safety or effectiveness— Corporate and labor organizations— Minocycline hydrochloride tablets, 3903–3904 Membership association member; definition; correction, Medical devices; premarket approval: 3851–3852 Periogard Periodontal Tissue Monitor, 3904 NOTICES VENTAK AV AICD Models 1810/1815 Automatic Privacy Act: Implantable Cardioverter Defibrillator, 3905 Systems of records, 3895–3896 Meetings: Anesthetic and Life Support Drugs Advisory Committee, 3905–3906 Federal Energy Regulatory Commission Food Advisory Committee, 3906 NOTICES Health professional organizations representatives, 3906– Hydroelectric applications, 3889–3890 3907 Applications, hearings, determinations, etc.: Medical Imaging Drugs Advisory Committee, 3907 Aurora Power Resources, Inc., 3885 Reports and guidance documents; availability, etc.: CNG Transmission Corp., 3885 Veterinary medicinal products; analytical procedures Consumers Energy Co., 3885–3886 validation; definition and terminology and East Tennessee Natural Gas Co., 3886 methodology; industry guidance, 3907–3908 Garden Banks Gas Pipeline, L.L.C., 3886 Granite State Gas Transmission Inc., 3886 Foreign Claims Settlement Commission Great Lakes Gas Transmission Co., 3886–3887 NOTICES Great Lakes Gas Transmission L.P., 3887 Meetings; Sunshine Act, 3922 Millennium Energy Corp., 3887–3888 NorAm Gas Transmission Co., 3888 Forest Service South Georgia Natural Gas Co., 3888 NOTICES Texas Gas Transmission Corp. et al., 3888–3889 Meetings: Intergovernmental Advisory Committee, 3879 Federal Highway Administration General Services Administration RULES PROPOSED RULES Speed limit enforcement certification: Federal Acquisition Regulation (FAR): National maximum speed limit compliance program; CFR Electronic data interchange transactions; shipment part removed, 3811–3812 evidence, 4074 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Contents V

NOTICES Justice Programs Office Federal Acquisition Regulation (FAR): NOTICES Agency information collection activities— Agency information collection activities: Submission for OMB review; comment request, 3884 Proposed collection; comment request, 3922–3923 Grants and cooperative agreements; availability, etc.: Health and Human Services Department Federal justice statistics program; continuation, 3923– See Food and Drug Administration 3925 NOTICES Agency information collection activities: Labor Department Submission for OMB review; comment request, 3901– See Occupational Safety and Health Administration 3902 See Pension and Welfare Benefits Administration Federal claims; interest rates on overdue debts, 3902 Meetings: Vital and Health Statistics National Committee, 3902 Land Management Bureau NOTICES Hearings and Appeals Office, Energy Department Environmental statements; notice of intent: NOTICES Bisti/De-Na-Zin Wilderness Area, NM; oil and gas Cases filed, 3890 development, 3911 Management framework plans, etc.: Housing and Urban Development Department Utah, 3911–3912 Meetings: NOTICES Resource advisory councils— Public and Indian housing: Eastern Washington, 3912 Housing assistance payments (Section 8)— Rental voucher, rental certificate, and moderate rehabilitation programs; administrative fees; annual Management and Budget Office factors, 4090–4146 NOTICES Native American housing block grant program; transition Cost-effectiveness analysis of Federal programs; discount requirements, 4076–4087 rates (Circular A-94), 3932–3933

Immigration and Naturalization Service Maritime Administration RULES RULES Immigration: U.S.-flag commercial vessels: Spouses and unmarried minor children of refugees/ Carriage of bulk and packaged preference cargoes; fair asylees; procedures for filing derivative petitions, and reasonable guideline rates determination; 3792–3803 procedures and methodology, 3819–3830

Interior Department Minerals Management Service See Fish and Wildlife Service NOTICES See Land Management Bureau Agency information collection activities: See Minerals Management Service Proposed collection; comment request, 3912–3913 See National Park Service See Reclamation Bureau National Aeronautics and Space Administration PROPOSED RULES Internal Revenue Service Federal Acquisition Regulation (FAR): RULES Electronic data interchange transactions; shipment Income taxes: evidence, 4074 Foreign tax credit claims of U.S. taxpayers; filing NOTICES requirements, 3812–3813 Federal Acquisition Regulation (FAR): NOTICES Agency information collection activities— Agency information collection activities: Submission for OMB review; comment request, 3884 Proposed collection; comment request, 3946–3947 National Foundation on the Arts and the Humanities International Development Cooperation Agency NOTICES See Agency for International Development Meetings: Humanities Panel, 3926 Justice Department See Antitrust Division See Foreign Claims Settlement Commission National Highway Traffic Safety Administration See Immigration and Naturalization Service RULES See Justice Programs Office Speed limit enforcement certification: See National Institute of Justice National maximum speed limit compliance program; CFR NOTICES part removed, 3811–3812 Pollution control; consent judgments: Abbott Laboratories et al., 3921 National Institute of Justice Chester (PA) Residents Concerned for Quality Living et NOTICES al., 3921 Grants and cooperative agreements; availability, etc.: Young Refining Co., 3921–3922 Drug court evaluation II program, 3925–3926 VI Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Contents

National Oceanic and Atmospheric Administration Securities and Exchange Commission NOTICES NOTICES Coastal zone management programs and estuarine Self-regulatory organizations; proposed rule changes: sanctuaries: Chicago Board Options Exchange, Inc., 3938–3940 State programs— Chicago Stock Exchange, Inc., 3940–3941 Intent to evaluate performance, 3879–3880 Depository Trust Co., 3941–3942 Fishery conservation and management: National Association of Securities Dealers, Inc., 3942– Magnuson Act provisions— 3944 Individual fishing quotas; public hearings, 3880 Applications, hearings, determinations, etc.: Meetings: Daily Money Fund et al., 3933–3938 Pacific Fishery Management Council, 3880 Permits: Surface Transportation Board Marine mammals, 3880–3882 NOTICES Railroad operation, acquisition, construction, etc.: National Park Service Burlington Northern & Santa Fe Railway Co., 3944 NOTICES GRC Holdings Corp., 3945 Meetings: Missouri Central Railroad Co., 3945 White House Preservation Committee, 3913 Thrift Supervision Office Navy Department NOTICES PROPOSED RULES Applications, hearings, determinations, etc.: Personnel: Harbor Financial, M.H.C., 3947 Employee conduct standards and reporting procedures on Heritage Federal Savings & Loan Association, 3947 defense related employment; CFR parts removed, SouthBanc Shares, M.H.C., 3947 3860–3861 Transportation Department Nuclear Regulatory Commission See Coast Guard NOTICES See Federal Aviation Administration Environmental statements; availability, etc.: See Federal Highway Administration Northern States Power Co., 3929–3932 See Maritime Administration Meetings; Sunshine Act, 3932 See National Highway Traffic Safety Administration Applications, hearings, determinations, etc.: See Surface Transportation Board Commonwealth Edison Co., 3926–3928 Vermont Yankee Nuclear Power Corp., 3928–3929 Treasury Department Westinghouse Electric Corp., 3929 See Internal Revenue Service See Thrift Supervision Office Occupational Safety and Health Administration NOTICES RULES Organization, functions, and authority delegations: Construction safety and health standards: Assistant Secretary (Financial Markets), 3945–3946 Scaffolds; effective date and reporting and recordkeeping requirements, 3813–3814 Separate Parts In This Issue Office of Management and Budget See Management and Budget Office Part II Environmental Protection Agency, 3950–4036 Pension and Welfare Benefits Administration NOTICES Part III Employee benefit plans; prohibited transaction exemptions: Department of Labor, Pension and Welfare Benefits MBNA America Bank, National Association et al., 4038– Administration, 4038–4071 4071 Part IV Postal Service Department of Defense, General Services Administration, RULES National Aeronautics and Space Administration, 4074 International Mail Manual: Global priority mail; expansion, 3814–3819 Part V Department of Housing and Urban Development, 4076– Public Health Service 4087 See Food and Drug Administration Part VI Reclamation Bureau Department of Housing and Urban Development, 4090– NOTICES 4146 Contract negotiations: Tabulation of water service and repayment; quarterly Part VII status report, 3913–3920 Department of Education, 4148–4150 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Contents VII

Reader Aids Additional information, including a list of telephone numbers, finding aids, reminders, and a list of Public Laws appears in the Reader Aids section at the end of this issue.

Electronic Bulletin Board Free Electronic Bulletin Board service for Public Law numbers, Federal Register finding aids, and a list of documents on public inspection is available on 202–275– 1538 or 275–0920. VIII Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Contents

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 783...... 3791 1478...... 3791 Proposed Rules: 319...... 3844 1209...... 3848 8 CFR 207...... 3792 208...... 3792 299...... 3792 9 CFR Proposed Rules: 71...... 3849 11 CFR Proposed Rules: 114...... 3851 12 CFR 207...... 3804 220...... 3804 221...... 3804 224...... 3804 14 CFR 39...... 3809 Proposed Rules: 39...... 3852 71 (6 documents) ...... 3854, 3855, 3856, 3857, 3858, 3859 23 CFR 1260...... 3811 26 CFR 1...... 3812 29 CFR 1926...... 3813 32 CFR Proposed Rules: 721...... 3860 722...... 3860 33 CFR Proposed Rules: 154...... 3861 155...... 3861 39 CFR 20...... 3814 40 CFR Proposed Rules: 90...... 3950 194...... 3863 46 CFR 382...... 3819 47 CFR 54...... 3830 73 (7 documents) ...... 3832, 3833, 3834 48 CFR Proposed Rules: 52...... 4074 50 CFR 17...... 3835 Proposed Rules: 17 (2 documents) ....3863, 3877 3791

Rules and Regulations Federal Register Vol. 63, No. 17

Tuesday, January 27, 1998

This section of the FEDERAL REGISTER 0517, Washington, DC 20012–0517, of a Federalism Assessment. The contains regulatory documents having general telephone (202) 690–4091, e-mail provisions contained in this rule will applicability and legal effect, most of which address: dnix@wdc.fsa.usda.gov. not have a substantial direct effect on are keyed to and codified in the Code of SUPPLEMENTARY INFORMATION: States or their political subdivisions or Federal Regulations, which is published under on the distribution of power and 50 titles pursuant to 44 U.S.C. 1510. Executive Order 12866 responsibilities among the various The Code of Federal Regulations is sold by This final rule has been determined to levels of government. be not significant and was not reviewed the Superintendent of Documents. Prices of Unfunded Mandates Reform Act of new books are listed in the first FEDERAL by the Office of Management and 1995 REGISTER issue of each week. Budget (OMB) under Executive Order 12866. This rule contains no Federal mandates under the regulatory DEPARTMENT OF AGRICULTURE Regulatory Flexibility Act provisions of Title II of the Unfunded The Regulatory Flexibility Act is not Mandates Reform Act of 1995 (UMRA) Farm Service Agency applicable to this rule because the Farm for State, local, and tribal governments Service Agency (FSA) is not required by or the private sector. Therefore, this rule 7 CFR Part 783 5 U.S.C. 553 or any other provision of is not subject to the requirements of Commodity Credit Corporation law to publish a notice of proposed sections 202 and 205 of the UMRA rulemaking with respect to the subject regulations. matter of this rule. 7 CFR Part 1478 Discussion of Changes RIN 0560±AF17 Environmental Evaluation No comments were received in An Environmental Evaluation with response to the interim rule issued on Tree Assistance Program respect to the Tree Assistance Program September 29, 1997. However, during AGENCIES: Farm Service Agency and has been completed. It has been the administration of this program, FSA Commodity Credit Corporation, USDA. determined that this action is not discovered a need for clarification expected to have a significant impact on ACTION: Final rule. regarding duplication of benefits which the quality of the human environment. will be set forth in this final rule. SUMMARY: The purpose of this final rule In addition, it has been determined that Clarification provides if an owner is is to adopt as final, with change, the this action will not adversely affect eligible to receive payments under this interim rule published in the Federal environmental factors such as wildlife part, catastrophic risk protection crop Register on September 29, 1997 (62 FR habitat, water quality, air quality, and insurance program (7 CFR part 402), and 50850). This final rule sets forth the land use and appearance. Accordingly, non-insured crop disaster assistance regulations necessary for implementing neither an Environmental Assessment program (7 CFR part 1437) for the same the 1997 Tree Assistance Program nor an Environmental Impact Statement tree or vine loss, the eligible owner must (TAP). The Act Making Emergency is needed. choose whether to receive the other program benefits or payments under this Supplemental Appropriations for Executive Order 12372 Recovery from Natural Disasters for the part. fiscal year ending September 30, 1997 This program is not subject to the provisions of Executive Order 12372, List of Subjects in 7 CFR Parts 783 and (the Act), authorized TAP assistance to 1478 small orchardists to replace or which require intergovernmental rehabilitate trees and vineyards consultation with State and local Disaster assistance, Grant programs— damaged by natural disasters. Due to officials. See the Notice related to 7 CFR agriculture. limited funds appropriated for this part 3015, subpart V, published at 48 FR Accordingly, the interim rule set forth program, the losses for which 29115 (June 24, 1983). at 7 CFR part 783 which was published reimbursement is sought are limited to Executive Order 12988 September 29, 1997, is adopted as a natural disasters that occurred between final rule with the following change: This rule has been reviewed in October 1, 1996, and September 30, accordance with Executive Order 12988. PART 783Ð1997 TREE ASSISTANCE 1997. Cost-share assistance may not The provisions of this rule preempt PROGRAM exceed 100 percent of the eligible State law to the extent that such laws replacement or rehabilitation costs and 1. The authority citation for part 783 are inconsistent with the provisions of may be based on average costs or the continues to read as follows: this rule. The provisions of this rule are actual costs for the replanting practices, retroactive to October 1, 1996. Before Authority: Pub. L. 105–18, 111 Stat. 158. as determined by the Deputy any judicial action may be brought Administrator for Farm Programs. 2. Section 783.8 paragraph (c) is regarding the provisions of this rule, the revised to read as follows: EFFECTIVE DATE: Final rule effective administrative remedies must be January 26, 1998. exhausted. § 783.8 Application process. FOR FURTHER INFORMATION CONTACT: * * * * * David M. Nix, Production, Emergencies, Executive Order 12612 (c) If an owner is eligible to receive and Compliance Division (PECD), Farm It has been determined that this rule payments under this part and the Service Agency (FSA), USDA, 1400 does not have sufficient Federalism catastrophic risk protection crop Independence Avenue, SW., STOP implications to warrant the preparation insurance program (7 CFR part 402), or 3792 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations the noninsured crop disaster assistance child(ren) born to, or legally adopted by, status from the principal refugee would program (7 CFR part 1437) for the same the principal alien and spouse after not be eligible to file a Form I–730. tree or vine loss, the eligible owner must approval of the principal alien’s asylum Fourth, the proposed rule would choose whether to receive the other application. amend the asylum regulations by program benefits or payments under this DATES: This rule is effective February requiring that, for purposes of filing a part. The eligible owner cannot receive 26, 1998. Form I–730, the asylee’s relationship to both. However, if the other program FOR FURTHER INFORMATION CONTACT: a child must have existed at the time of benefits are not available until after the Suzy Nguyen or Ramonia Law-Hill, approval of the asylum application. eligible owner has received benefits Senior Adjudications Officer, Finally, the proposed rule added under this part, the eligible owner may Adjudications Division, Immigration certain documentary and evidentiary obtain the other program benefits if the and Naturalization Service, 425 I Street, requirements for filing a Form I–730, eligible owner refunds the total amount NW., Room 3214, Washington, DC such as requiring that a separate Form of the payment received prior to 20536, telephone (202) 514–5014. I–730 be filed for each individual qualifying family member and that a receiving the other program benefits. If SUPPLEMENTARY INFORMATION: On July 9, photograph of the derivative be the eligible owner purchased additional 1996, the Service published a proposed included. These proposed regulations coverage insurance, as defined in 7 CFR rule in the Federal Register at 61 FR served to clarify the Service’s 400.651, or is eligible for emergency 35984, providing procedures that must accompanying and following-to-join loans, the eligible owner will be eligible be followed by a refugee or asylee to policy for Service officers and the for assistance under such program, and bring his or her spouse and unmarried, general public by standardizing refugee this part as long as the amount received minor child(ren) (derivatives) into the and asylee derivative procedures. for the loss under the additional United States. coverage or the emergency loan together The proposed rule was designed to The Immigration and Naturalization with the amount received from the other respond more fully to the family Service allowed a 60-day public programs does not exceed the amount of reunification needs of refugees, while comment period which ended on the actual loss of the eligible owner. establishing specific guidelines on the September 9, 1996. The Service received 19 comments on the proposed rule. The Signed at Washington, D.C., on January 20, derivative policy for both refugees and 1998. asylees. First, the proposed rule allowed following is a discussion of those comments and the Service’s response. Bruce R. Weber, the Service to use the refugee’s date of Acting Administrator, Farm Service Agency admission into the United States to Discussion of Comments and Acting Executive Vice President, determine accompanying or following- Commodity Credit Corporation. to-join eligibility for his/her spouse and Using the Principal Refugee’s Date of Admission To Determine Derivative [FR Doc. 98–1916 Filed 1–26–98; 8:45 am] unmarried, minor child(ren). A refugee Eligibility BILLING CODE 3410±05±P would be able to file a Form I–730, Refugee/Asylee Relative Petition, for The Service proposed that the his/her spouse and/or each individual principal refugee’s date of admission DEPARTMENT OF JUSTICE child if the relationship predates the into the United States be used to refugee’s date of admission to the determine accompanying or following- Immigration and Naturalization Service United States, rather than the date of to-join eligibility for his/her derivatives. interview or tentative approval date of Current regulations require that the 8 CFR Parts 207, 208, and 299 the application. This eligibility would refugee’s relationship to the spouse or [INS No. 1639±93] extend to a child who is in utero on the child exist prior to the tentative date of the refugee’s admission to the approval date of the principal’s RIN 1115±AD59 United States but is born after the application for refugee status. Furthermore, according to the proposed Procedures for Filing a Derivative refugee’s admission as a refugee. Second, the proposed rule imposed a rule, if the refugee proves that he/she is Petition (Form I±730) for a Spouse and 1-year time limit from the date of the the parent of a child who was born after Unmarried Children of a Refugee/ principal refugee’s admission to the the refugee’s admission to the United Asylee United States within which he or she States, but who was in utero on the date AGENCY: Immigaration and must file a Form I–730 for his/her of refugee’s admission as a refugee, the Naturalization Service, Justice. spouse and/or each individual child, child shall be eligible to accompany or ACTION: Final rule. unless the Service determined that the follow-to-join the refugee. filing period should be extended for Fourteen commenters praised and SUMMARY: This final rule amends the humanitarian reasons. Similarly, the supported the Service’s decision to use Immigration and Naturalization Service principal asylee would be required to the principal refugee’s date of admission (Service) regulations by providing file a Form I–730 for each qualifying rather than date of tentative approval. In specific guidelines on the procedures family member within 1 year of the date addition, three commenters supported which must be followed by a refugee or on which he or she was granted asylum the Service’s proposed rule pertaining to asylee to bring his/her spouse and status, unless the Service determines children in utero. Only one commenter unmarried, minor child(ren) that the filing period should be was in opposition, claiming that the (derivatives) into the United States. This extended for humanitarian reasons. change would invite exploitation and rule responds to the family reunification Third, the proposed rule required that fraud. needs of refugees by establishing an only an alien who was admitted to the The Service has carefully considered equitable and consistent derivative United States as a principal refugee the one commenter’s concern regarding policy for refugees which parallels the would be eligible to file the Form I–730 the possibility of fraud. The Service current derivative procedures for for accompanying or following-to-join feels that the proposed rule contains asylees. This rule also amends asylum benefits for his/her spouse and/or certain evidentiary and documentary regulations by removing from the unmarried, minor child(ren). Those requirements (such as requiring a recent definition of qualifying relationship individuals who derived their refugee photograph of the spouse or child and Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3793 requiring evidence of the claimed reunification of refugee families. At the of the I–730 petitions, particularly in the relationship as set forth in 8 CFR part moment, Service regulations on early stages of the promulgation of this 204) which may reduce the risk of fraud derivative benefits for refugee and rule, and provide guidance to Service and exploitation. Furthermore, the asylees contain no time limitation. As a officers, if necessary, in order to ensure current interpretation of derivative result, there are individuals who had uniformity in the decision process. eligibility for refugees has created entered the United States in the late Ten commenters noted that the confusion for Service officers, attorneys 1970s or early 1980s as refugees who and representatives, refugees, and the did not file Form I–730 petitions for Service should have some type of general public. The Service believes that their derivatives until ten or more years grandfather clause to allow petitioners this rule will alleviate inconsistencies in after their admission. Such filings no whose Forms I–730 were denied under determining eligibility that has been longer serve the purpose for which they the old regulations to refile or reopen encountered due to the difficulty in were originally intended and, instead, their cases. Five commenters pointed determining the date of tentative only serve to deplete limited refugee out that, although the introductory approval of the principal refugee’s admission numbers and refugee comment to the proposed rule had application. In addition, the current resettlement monies needed for indicated that refugees and asylees in interpretation is too restrictive because currently emerging refugee populations. the United States for more than 1 year it requires a refugee to meet a heavier In determining the filing time limitation when the regulation becomes effective burden for establishing a relationship for Form I–730, the Service would be given 1 year to file, this with his/her spouse and/or child(ren) acknowledges that it must be responsive provision was not put in the proposed than is required by regulation for a to the needs of the applicant base. regulation itself. Furthermore, the citizen or lawful permanent resident of After careful consideration of the proposed rule failed to address refugees the United States. Moreover, the Service comments received, the Service is and asylees who have been in the believes that this rule reflects the intent modifying the proposed rule with regard United States for less than 1 year at the to the 1-year time limit. Accordingly, of Congress by enhancing family time the regulation becomes effective. reunification for refugees. the final rule requires that the Form I– 730 must be filed within 2 years of the The Service agrees with the One Year Filing Requirement date of admission to the United States commenters who expressed the need for The proposed rule required that a for a refugee, or within 2 years of the some type of grandfather clause. The separate Form I–730 must be filed for grant of asylum for an asylee. Although Service is also grateful to those each qualifying derivative within 1 year the Service believes that 1 year is a commenters who spotted the of the principal refugee’s admission to reasonable time limit for refugees and inadvertent omission. In response to the United States, unless the Service asylees to file the Form I–730, the these comments, the Service is determines that the filing period should Service would like to acknowledge and including a grandfather clause in the be extended for humanitarian reasons. address the commenters’ concerns by final rule which allows all persons Similarly, the proposed rule required adopting this change. Therefore, the admitted as refugees or granted asylum that a separate Form I–730 for each filing of the Form I–730 within 2 years prior to the effective date of the final qualifying derivative must be filed of admission as a refugee or grant of rule to file the Form I–730 within 2 within 1 year of the date on which the asylum will serve to notify the Service years of that effective date regardless of principal asylee was granted asylum of a refugee’s or asylee’s intent to have when they were admitted as a refugee or status, unless the Service determines his/her derivative(s) join him/her in the granted asylum. This will allow refugees that the filing period should be United States. The Service has also extended for humanitarian reasons. carefully reviewed the provisions of and asylees an equal opportunity to Twelve commenters opposed the 1- section 207(c)(2) of the Act and has apply for derivative benefits for their year time limit. Ten of those claimed determined that the establishment of a spouse and/or child(ren). A principal that 1 year is too short or unrealistic. filing period does not violate the refugee who had previously submitted Two commenters suggested a minimum language or intent of that section of the the Form I–730 but was denied because of 3 years, and one suggested that a Act. of current regulations requiring the more reasonable time limit would be Five commenters argued that, since relationship with his/her derivative(s) to when the refugee/asylee becomes the proposed rule did not define which have existed prior to the tentative eligible for U.S. Citizenship. Seven ‘‘humanitarian reasons’’ warranted an approval date of his/her application for commenters argued that there is no time extension of the filing deadline, this refugees status should reapply by restriction imposed in the Immigration would lead to arbitrary and conflicting submitting Form I–730 for each and Nationality Act (‘‘the Act’’) and decisions by Service officers, or create a individual derivative within 2 years of that, therefore, the Service should not large category of applicants under this the effective date of the final rule. It is set a time limit. Others noted that, since exception. On the contrary, the Service noted that petitioners must reapply in this is a newly imposed time limit, the believes that defining the specific these situations since the Service will Service should ensure that refugees and qualifying ‘‘humanitarian reasons’’ not sua sponte reopen previously asylees are well informed of this filing would only act to restrict severely the denied files. In order to better inform requirement. Only one commenter category and shut the door on the general public, the Service is agreed that the 1-year time limit was applicants who need this exception including the grandfather clause in the reasonable. most. As with other immigration Derivative benefits for refugees and benefits, applications should be decided instructions part of the revised Form I– asylees are intended to expediently on a case-by-case basis. Likewise, 730 to inform all potential refugee and reunite families in order for them to although humanitarian exceptions are asylee petitioners that they have either make the difficult transition to a new used throughout other Service 2 years from the date on which the final life with the support of their immediate regulations, the term is not defined so rule becomes effective or 2 years after family members by avoiding lengthy that individuals with exceptional cases the date of admission (for refugees) or delays due to visa quotas. The timely are not shut out. The Service will make grant of asylum (for asylees), whichever filing of Form I–730 will expedite the continual assessments of the processing is later, to file the Form I–730. 3794 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations

Only the Principal Refugee May File a of the terms ‘‘principal refugee,’’ The Service has carefully considered Form I–730 ‘‘principal applicant,’’ and ‘‘principal these comments. However, section Similar to current regulations, the alien.’’ The Service agrees with these 207(c)(2) of the Act clearly specifies that proposed rule required that the Form I– comments and has removed the term only a ‘‘spouse or child (as defined in 730 be filed by the principal refugee. ‘‘principal applicant’’ from the final rule section 101(b)(1) (A), (B), (C), (D), or Individuals who have derived their in order to avoid any confusion. (E))’’ of a refugee shall be eligible for refugee status from the principal refugee accompanying or following-to-join Eligible and Ineligible Relatives of a benefits. Accordingly, the Service has are not eligible to file a Form I–730. Refugee/Asylee Ten commenters opposed the deemed ineligible those relatives who Service’s requirement that only the The Service listed in proposed do not fit the statutory definition of a principal refugee may file the Form I– § 207.7(b) relatives of refugees who are spouse and child as defined in sections 730. Four commenters claimed that, ineligible for accompanying or 101(a)(35) and 101(b)(1) (A), (B), (C), because of the refugee registration following-to-join benefits, which (D), or (E), respectively, of the Act. systems used overseas, certain refugees included: a spouse or child who has Evidentiary and Documentary may be inadvertently labeled as a previously been granted asylee or Requirements derivative when he/she does not fit the refugee status; an adopted child, if the adoption took place after the child The proposed rule required that a definition of a derivative spouse or separate Form I–730 must be filed for child and, in fact, should be considered became 16 years old, or if the child has not been in the legal custody and living each qualifying family member, which a principal for the purposes of filing the must also include a recent photograph Form I–730. Two commenters argued with the parent(s) for at least 2 years; a stepchild, if the marriage that created of this family member. The petitioning that any refugee who does not meet the refugee or asylee has the burden to statutory definition of a ‘‘derivative’’ this relationship took place after the child became 18 years old; a husband or establish by a preponderance of the should be allowed to file the Form I– evidence that the person for whom he/ wife if each/both were not physically 730. Several commenters stated that if she is petitioning is an eligible spouse present at the marriage ceremony and the purpose of the principal applicant or child. The evidence to establish the the marriage was not consummated, or rule is to deter fraud, then it is claimed relationship for a spouse or if the U.S. Attorney General has overbroad and, as such, violates the unmarried, minor child as set forth in 8 determined that such alien has intent and language of the Act. One CFR part 204 must be submitted with attempted or conspired to enter into a commenter expressed the need for a the Form I–730; where possible, this marriage for the purpose of evading humanitarian exception in the case will consist of the documents specified immigration laws; and a parent, sister, where the principal refugee is deceased in § 204.2(a)(1)(i)(B), (a)(1)(iii)(B), (a)(2), brother, grandparent, grandchild, or incapacitated, becomes abusive, or (d)(2), and (d)(5). No fee is charged for abandons his/her family after the nephew, niece, uncle, aunt, cousin or filing a Form I–730 petition. derivative spouse has reached the in-law. Three commenters opposed the United States, in order to allow the Six commenters put forth various proposed requirement that a separate derivative spouse to petition for their arguments for the inclusion of certain Form I–730 must be filed for each mutual child(ren). Another commenter relatives as eligible accompanying or family member. Four commenters stated that the regulation should allow following-to-join derivatives of a refugee claimed that the photograph for the child of an unmarried parent to or asylee. Four commenters stated that requirement is too restrictive and accompany or follow-to-join him/her some type of exclusion should be made unrealistic. Six commenters argued that even if the parent had obtained his/her for a child of a derivative child. Two the heightened evidence needed to refugee status on a derivative basis. commenters claimed that relatives listed prove spousal relationship should only The Service has carefully considered in proposed § 207.7(b)(6) (i.e., parent, apply in situations where Congress has their comments and has reviewed the sibling, grandparent/child, nephew/ expressed the fear of marriage fraud, language of the Act at sections 207 (c)(1) niece, uncle/aunt, cousin, and in-law) which would not include refugees cases. and (c)(2). The requirement that only should be included as derivative In addition, five commenters stated that the principal refugee may file for refugees when they are dependent on the ‘‘where possible’’ language of the accompanying of following-to-join the principal refugee and reside in his/ proposed rule is vague and, therefore, benefits for his/her spouse and/or her household. One commenter argued may result in arbitrary decisions by child(ren) may be ascertained from the that barring the mother of the principal Service officers. language of sections 207 (c)(1) and (c)(2) alien’s child because the principal was The Service has carefully considered of the Act. Section 207(c)(2) provides for not married to the child’s mother is the comments. However, the Service the admission of spouses and children harsh and irrelevant. Another claimed believes that the evidentiary and (as defined in section 101(b)(1) (A), (B), that eligible ‘‘accompanying derivative’’ documentary requirements are (C), (D), or (E) of the Act) of a refugee should include relatives of the principal reasonable. First, having a separate qualifying for admission under section petitioner’s spouse, or the principal Form I–730 for each family member will 207(c)(1) of the Act. Accordingly, only petitioner’s child. One commenter enhance efficiency and facilitate Service a principal refugee, admitted under pointed out that many children in processing of the petition, especially in section 207(c)(1) of the Act, may file a agrarian or less-developed societies are cases where there are many derivatives Form I–730 on behalf of his or her customarily adopted without legal and/or they are residing in different spouse or child(ren). The Service formalities; therefore, people should be geographic locations. Since each already regards persons admitted under allowed to present proof that they were derivative has a separate I–730, each section 207 who do not meet the the actual custodial guardian of the petition may be processed on its own statutory definition of a spouse or child child for the requisite minimum of 2 without having to wait for the rest of the to be principals for the purpose of filing years, to petition for the child as a family members. Second, the an I–730 petition. derivative refugee, and then complete photograph required of each derivative Eight commenters stated that the the legal adoption formalities in the need not meet Alien Documentation proposed rule was confusing in its use United States. Identification and Telecommunication Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3795

System (ADIT) specifications. The on the distribution of power and 8 CFR Part 208 Service believes that it is not overly responsibilities among the various Administrative practice and burdensome to require a non-ADIT levels of government. Therefore, in procedure, Aliens, Immigration, photograph. Third, the Service believes accordance with Executive Order 12612, Reporting and recordkeeping that adopting the standard of evidence it is determined that this rule does not requirements. set forth in 8 CFR part 204 to establish have sufficient federalism implications a claimed relationship for a spouse or to warrant the preparation of a 8 CFR Part 299 minor, unmarried child is a reasonable Federalism Assessment. Immigration, Reporting and requirement in light of the risk of recordkeeping requirements. fraudulent petitions. Executive Order 12988 Civil Justice Accordingly, chapter I of title 8 of the Finally, petitioners should note that Reform although there is no appeal from the Code of Federal Regulations is amended This rule meets the applicable denial of a petition filed on Form I–730, as follows: standards set forth in sections 3(a) and the denial shall be without prejudice to 3(b)(2) of E.O. 12988. PART 207ÐADMISSION OF the consideration of a new petition or REFUGEES motion to reopen the refugee or asylee Unfunded Mandates Reform Act of relative petition proceeding, if the 1995 1. The authority citation for part 207 petitioner establishes eligibility for continues to read as follows: This rule will not result in the accompanying or following-to-join Authority: 8 U.S.C. 1101, 1103, 1151, 1157, benefits. This is consistent with other expenditure by State, local and tribal 1159, 1182, 8 CFR part 2. types of applications for immigration governments, in the aggregate, or by the benefits where no administrative appeal private sector, of $100 million or more §§ 207.7 and 207.8 [Redesignated as is available, but the applicant may in any 1 year, and it will not § 207.8 and § 207.9] submit a new application or a motion to significantly or uniquely affect small 2. Sections 207.7 and 207.8 are reopen in the case of a denial (e.g., 8 governments. Therefore, no actions were redesignated as § 207.8 and § 207.9 CFR 204.2(a)(1)(iii)(D)). deemed necessary under the provisions respectively. of the Unfunded Mandates Reform Act 3. A new § 207.7 is added to read as Regulatory Flexibility Act of 1995. follows: The Commissioner of the Immigration Small Business Regulatory Enforcement § 207.7 Derivatives of refugees. and Naturalization Service, in Fairness Act of 1996 accordance with the Regulatory (a) Eligibility. A spouse, as defined in section 101(a)(35) of the Act, and/or Flexibility Act (5 U.S.C. 605(b)), has This rule is not a major rule as child(ren), as defined in section reviewed this regulation and, by defined by section 804 of the Small 101(b)(1)(A), (B), (C), (D), or (E) of the approving it, certifies that this rule will Business Regulatory Enforcement Act, shall be granted refugee status if not have a significant economic impact Fairness Act of 1996. This rule will not accompanying or following-to-join the on a substantial number of small result in an annual effect on the principal alien. An accompanying entities. This rule is administrative in economy of $100 million or more; a derivative is a spouse or child of a nature and merely imposes specific major increase in costs or prices; or refugee who is in the physical company regulatory restraints, which parallel significant adverse effects on of the principal refugee when he or she procedures currently found in asylum competition, employment, investment, is admitted to the United States, or a regulations. This rule will not result in productivity, innovation, or on the spouse or child of a refugee who is an annual effect on the economy of $100 ability of United States-based admitted within 4 months following the million or more or adversely and companies to compete with foreign- principal refugee’s admission. A materially affect a sector of the based companies in domestic and following-to-join derivative, on the economy, or cause major increases in export markets. costs or prices for consumers, or have other hand, is a spouse or child of a other adverse effects on the economy in Form I–730 refugee who seeks admission more than terms of productivity, competition jobs, 4 months after the principal refugee’s The revised Form I–730 has been the environment, public health, or admission to the United States. included at the end of this final rule to safety. Furthermore, the affected parties (b) Ineligibility. The following allow the public to duplicate the form are not small entities, and the impact of relatives of refugees are ineligible for from the Federal Register until the form the regulation is not an economic one. accompanying or following-to-join is printed and distributed worldwide. benefits: Executive Order 12866 Paperwork Reduction Act (1) A spouse or child who has This rule is considered by the previously been granted asylee or Department of Justice, Immigration and The information collection refugee status; Naturalization Service, to be a requirement (Form I–730) contained in (2) An adopted child, if the adoption ‘‘significant regulatory action’’ under this rule has been submitted to and took place after the child became 16 Executive Order 12866, section 3(f), approved by the Office of Management years old, or if the child has not been Regulatory Planning and Review. and Budget under the provisions of the in the legal custody and living with the Accordingly, this regulation has been Paperwork Reduction Act. The parent(s) for at least 2 years; submitted to and, approved by, the clearance number for this collection is (3) A stepchild, if the marriage that Office of Management and Budget. contained in 8 CFR 299.5 created this relationship took place after the child became 18 years old; Executive Order 12612 List of Subjects (4) A husband or wife if each/both The regulations proposed herein will 8 CFR Part 207 were not physically present at the not have substantial direct effects on the marriage ceremony, and the marriage States, on the relationship between the Immigration, Refugees, Reporting and was not consummated (section National Government and the States, or recordkeeping requirements. 101(a)(35) of the Act); 3796 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations

(5) A husband or wife if the U.S. preponderance of the evidence that any of a new petition or motion to reopen Attorney General has determined that person on whose behalf he/she is the refugee or asylee relative petition such alien has attempted or conspired to making a request under this section is proceeding, if the refugee establishes enter into a marriage for the purpose of an eligible spouse or unmarried, minor eligibility for the accompanying or evading immigration laws; and child. Evidence to establish the claimed following-to-join benefits contained in (6) A parent, sister, brother, relationship for a spouse or unmarried, this part. grandparent, grandchild, nephew, niece, minor child as set forth in 8 CFR part uncle, aunt, cousin or in-law. 204 must be submitted with the request PART 208ÐPROCEDURES FOR (c) Relationship. The relationship of a for accompanying or following-to-join ASYLUM AND WITHHOLDING OF spouse and child as defined in sections benefits. Where possible this will REMOVAL 101(a)(35) and 101(b) (1)(A), (B), (C), consist of the documents specified in 4. The authority citation for part 208 (D), or (E), respectively, of the Act, must § 204.2(a (1)(i)(B), (a)(1)(iii)(B), (a)(2), continues to read as follows: have existed prior to the refugee’s (d)(2), and (d)(5) of this chapter. In admission to the United States and must addition, a recent photograph of each Authority: 8 U.S.C. 1103, 1158, 1226, 1252, 1282; 8 CFR part 2. continue to exist at the time of filing for derivative must accompany the Form I– accompanying or following-to-join 730. The photograph must clearly 5. In § 208.19, paragraphs (b), (c), (d), benefits and at the time of the spouse or identify the derivative, and will be and (f) are revised to read as follows: child’s subsequent admission to the made part of the derivative’s United States. If the refugee proves that § 208.19 Admission of asylee's spouse immigration record for identification and children. the refugee is the parent of a child who purposes. was born after the refugee’s admission (f) Approvals. (1) Spouse or child in * * * * * as a refugee, but who was in utero on the United States. When a spouse or (b) Relationship. The relationship of the date of the refugee’s admission as a child of a refugee is in the United States spouse and child as defined in sections refugee, the child shall be eligible to and the Form I–730 is approved, the 101(a)(35) and 101(b)(1) of the Act must accompany or follow-to-join the refugee. Service will notify the refugee of such have existed at the time the principal The child’s mother, if not the principal approval on Form I–797, Notice of alien’s asylum application was refugee, shall not be eligible to Action. Employment will be authorized approved and must continue to exist at accompany or follow-to-join the incident to status. the time of filing for accompanying or principal refugee unless the child’s (2) Spouse or child outside the United following-to-join benefits and at the mother was the principal refugee’s States. When a spouse or child of a time of the spouse or child’s subsequent spouse on the date of the principal refugee is outside the United States and admission to the United States. If the refugee’s admission as a refugee. the Form I–730 is approved, the Service asylee proves that the asylee is the (d) Filing. A refugee may request will notify the refugee of such approval parent of a child who was born after accompanying or following-to-join on Form I–797. The approved Form I– asylum was granted, but who was in benefits for his/her spouse and 730 will be sent by the Service to the utero on the date of the asylum grant, unmarried, minor child(ren) (whether Department of State for forwarding to the child shall be eligible to accompany the spouse and children are in or the American Embassy or Consulate or follow-to-join the asylee. The child’s outside the United States) by filing a having jurisdiction over the area in mother, if not the principal asylee, shall separate Form I–730 Refugee/Asylee which the refugee’s spouse or child is not be eligible to accompany or follow- Relative Petition, for each qualifying located. to-join the principal asylee unless the family member with the designated (3) Benefits. The approval of the Form child’s mother was the principal Service office. The Form I–730 may only I–730 shall remain valid for the duration asylee’s spouse on the date the principal be filed by the principal refugee. Family of the relationship to the refugee and, in asylee was granted asylum. members who derived their refugee the case of a child, while the child is (c) Spouse or child in the United status are not eligible to file the Form under 21 years of age and unmarried, States. When a spouse or child of an I–730 on behalf of their spouse and provided also that the principal’s status alien granted asylum is in the United child(ren). A separate Form I–730 must has not been revoked. However, the States, but was not included in the be filed for each qualifying family approved Form I–730 will cease to asylee’s application, the asylee may member before February 28, 2000 or confer immigration benefits after it has request accompanying or following-to- within 2 years of the refugee’s been used by the beneficiary for join benefits for his/her spouse or child admission to the United States, admission to the United States as a by filing for each qualifying family whichever is later, unless the Service derivative of a refugee. To demonstrate member a separate Form I–730, Refugee/ determines that the filing period should employment authorization, the Service Asylee Relative Petition, and supporting be extended for humanitarian reasons. will issue a Form I–94, Arrival- evidence, with the designated Service There is no time limit imposed on a Departure Record, which also reflects office, regardless of the status of that family member’s travel to the United the derivative’s current status as a spouse or child in the United States. A States once the Form I–730 has been refugee, or the derivative may apply recent photograph of each derivative approved, provided that the relationship under § 274a.12(a) of this chapter, using must accompany the Form I–730. The of spouse or child continues to exist and Form I–765, Application for photograph must clearly identify the approval of the Form I–730 petition has Employment Authorization, and a copy derivative, and will be made part of the not been subsequently revoked. There is of the Form I–797. derivative’s immigration record for no fee for filing this petition. (g) Denials. If the spouse or child of identification purposes. Additionally, a (e) Evidence. Documentary evidence a refugee is found to be ineligible for separate Form I–730 must be filed by consists of those documents which derivative status, a written notice the asylee for each qualifying family establish that the petitioner is a refugee, explaining the basis for denial shall be member before February 28, 2000, or and evidence of the claimed forwarded to the principal refugee. within 2 years of the date in which he/ relationship of the petitioner to the There shall be no appeal from this she was granted asylum status, beneficiary. The burden of proof is on decision. However, the denial shall be whichever is later, unless it is the petitioner to establish by a without prejudice to the consideration determined by the Service that this Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3797 period should be extended for designated Service office, setting forth for admission to the United States as a humanitarian reasons. Upon approval of the full name, relationship, date and derivative of an asylee. the Form I–730, the Service will notify place of birth, and current location of * * * * * the asylee of such approval on Form I– each such person. A recent photograph (f) Burden of proof. To establish the 797, Notice of Action. Employment will of each derivative must accompany the claimed relationship of spouse or child be authorized incident to status. To Form I–730. The photograph must as defined in sections 101(a)(35) and demonstrate employment authorization, clearly identify the derivative, and will 101(b)(1) of the Act, evidence must be the Service will issue a Form I–94, be made part of the derivative’s submitted with the request as set forth Arrival-Departure Record, which also immigration record for identification in part 204 of this chapter. Where reflects the derivative’s current status as purposes. A separate Form I–730 for possible this will consist of the an asylee, or the derivative may apply each qualifying family member must be documents specified in § 204.2 under § 274a.12(a) of this chapter, using filed before February 28, 2000, or within (a)(1)(i)(B), (a)(1)(iii)(B), (a)(2), (d)(2), Form I–765, Application for 2 years of the date in which the asylee and (d)(5) of this chapter. The burden of Employment Authorization, and a copy was granted asylum status, whichever is proof is on the principal alien to of the Form I–797. The approval of the later, unless the Service determines that establish by a preponderance of the Form I–730 shall remain valid for the the filing period should be extended for evidence that any person on whose duration of the relationship to the asylee humanitarian reasons. When the Form behalf he or she is making a request and, in the case of a child, while the I–730 is approved, the Service will under this section is an eligible spouse child is under 21 years of age and notify the asylee of such approval on or child. unmarried, provided also that the Form I–797. The approved Form I–730 principal’s status has not been revoked. shall be forwarded by the Service to the * * * * * However, the approved Form I–730 will Department of State for delivery to the PART 299ÐIMMIGRATION FORMS cease to confer immigration benefits American Embassy or Consulate having after it has been used by the beneficiary jurisdiction over the area in which the 6. The authority citation for part 299 for admission to the United States as a asylee’s spouse or child is located. The continues to read as follows: derivative of an asylee. approval of the Form I–730 shall remain (d) Spouse or child outside the United valid for the duration of the relationship Authority: 8 U.S.C. 1101, 1103; 8 CFR part States. When a spouse or child of an to the asylee and, in the case of a child, 2. alien granted asylum is outside the while the child is under 21 years of age 7. Section 299.1 is amended by United States, the asylee may request and unmarried, provided also that the revising the entry for Form ‘‘I–730’’ to accompanying or following-to-join principal’s status has not been revoked. read as follows: benefits for his/her spouse or child(ren) However, the approved Form I–730 will by filing a separate Form I–730 for each cease to confer immigration benefits § 299.1 Prescribed forms. qualifying family member with the after it has been used by the beneficiary * * * * *

Form No. Edition date Title

******* I±730 ...... 01±07±98 Refugee/Asylee Relative Petition.

*******

8. Section 299.5 is amended by revising the entry for Form ‘‘I–730’’ to read as follows: § 299.5 Display of control numbers. * * * * *

Currently assigned INS form No. INS form title OMB control No.

******* I±730 ...... Refugee/Asylee Relative Petition ...... 1115±0121

*******

Dated: July 30, 1997. Doris Meissner, Commissioner, Immigration and Naturalization Service. Note: The Form I–730, Refugee/Asylee Relative Petition, will not appear in the Code of Federal Regulations.

BILLING CODE 4410±01±M 3798 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3799 3800 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3801 3802 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3803

[FR Doc. 98–1879 Filed 1–26–98; 8:45 am] BILLING CODE 4410±01±C 3804 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations

FEDERAL RESERVE SYSTEM List also includes any OTC stock used as collateral for a purpose loan. To designated for trading in the national determine whether an OTC stock is 12 CFR Parts 207, 220, 221 and 224 market system (NMS security) under subject to this limitation, a Regulation U [Regulations G, T, U and X] rules approved by the Securities and lender will need to determine whether Exchange Commission (SEC). the stock trades in the National Market Securities Credit Transactions; List of Additional OTC stocks may be tier of the Nasdaq Stock Market. The Marginable OTC Stocks; List of designated as NMS securities in the names of these stocks are available at Foreign Margin Stocks interim between the Board’s quarterly the SEC and at the National Association publications. They will become of Securities Dealers, Inc. and can also AGENCY: Board of Governors of the automatically marginable upon the be determined by consulting the Federal Reserve System. effective date of their NMS designation. internet at http://www.nasdaq.com. ACTION: Final rule; determination of The names of these stocks are available Lenders subject to Regulation T and applicability of regulations. at the SEC and at the National borrowers subject to Regulation X who Association of Securities Dealers, Inc. are required under § 224.3(a) to conform SUMMARY: The List of Marginable OTC In order to determine the loan value credit they obtain to Regulation T will Stocks (OTC List) is composed of stocks of stock and other collateral under continue to use the OTC List until traded over-the-counter (OTC) in the Regulations G and U, lenders must be publication of the next OTC List, United States that have been determined able to determine whether a particular anticipated for May 1998. The definition by the Board of Governors of the Federal stock is a margin stock,1 a term which of OTC margin stock will be retained in Reserve System to be subject to the is currently defined to include OTC Regulation T until January 1, 1999. The margin requirements under certain margin stock. The definition of OTC Board will cease publication of the OTC Federal Reserve regulations. The List of margin stock in Regulations G and U List at that time. Foreign Margin Stocks (Foreign List) is states that ‘‘[a]n OTC stock is not Also listed below are the deletions composed of foreign equity securities considered to be an OTC margin stock from and additions to the Foreign List, that have met the Board’s eligibility unless it appears on the Board’s which was last published on October criteria under Regulation T. The OTC periodically published list of OTC 27, 1997 (62 FR 55495), and became List and the Foreign List are published margin stocks.’’ The OTC List provides effective November 10, 1997. The four times a year by the Board. This the names of these stocks. Foreign List is used solely by lenders document sets forth additions to and Pursuant to amendments recently subject to Regulation T. A copy of the deletions from the previous OTC List adopted by the Board (see 63 FR 2805, complete Foreign List is available from and the previous Foreign List. January 16, 1998) lenders subject to the Federal Reserve Banks. Regulation G will become subject to EFFECTIVE DATES: Regulations G and U Public Comment and Deferred Effective Regulation U on April 1, 1998 and (12 CFR parts 207 and 221): February 9, Date 1998–March 31, 1998; Regulations T Regulation G will be removed from the The requirements of 5 U.S.C. 553 with and X (12 CFR parts 220 and 224): Code of Federal Regulations. Also on respect to notice and public February 9, 1998–January 1, 1999. April 1, 1998, the definition of margin stock in the revised Regulation U will participation were not followed in FOR FURTHER INFORMATION CONTACT: no longer include OTC margin stock connection with the issuance of this Peggy Wolffrum, Securities Regulation and the definition of OTC margin stock amendment due to the objective Analyst, Division of Banking will be removed from the revised character of the criteria for inclusion Supervision and Regulation, (202) 452– Regulation U. and continued inclusion on the Lists 2781, Board of Governors of the Federal With the extension of Regulation U on specified in 12 CFR 207.6(a) and (b), Reserve System, Washington, D.C. April 1, 1998 to cover lenders currently 220.17(a), (b), (c) and (d), and 221.7(a) 20551. For the hearing impaired only, subject to Regulation G, and the and (b). No additional useful contact Diane Jenkins, elimination of the concept and information would be gained by public Telecommunications Device for the Deaf accompanying definition of OTC margin participation. The full requirements of 5 (TDD) at (202) 452–3544. stock in the revised Regulation U, U.S.C. 553 with respect to deferred SUPPLEMENTARY INFORMATION: Listed lenders subject to Regulation U will no effective date have not been followed in below are the deletions from and longer be bound by the OTC List connection with the issuance of this additions to the Board’s OTC List, published today. Instead, as of April 1, amendment because the Board finds which was last published on October 1998, lenders subject to the revised that it is in the public interest to 27, 1997 (62 FR 55495), and became Regulation U will be bound by the facilitate investment and credit effective November 10, 1997. A copy of revised definition of margin stock, decisions based in whole or in part the complete OTC List is available from which continues to include ‘‘[a]ny OTC upon the composition of these Lists as the Federal Reserve Banks. security designated as qualified for soon as possible. The Board has The OTC List includes those stocks trading in the National Market System responded to a request by the public traded over-the-counter in the United under a designation plan approved by and allowed approximately a two-week States that meet the criteria in the Securities and Exchange delay before the Lists are effective. Regulations G, T and U (12 CFR Parts Commission (NMS security).’’ In other List of Subjects 207, 220 and 221, respectively). This words, on April 1, 1998, all lenders determination also affects the subject to the revised Regulation U will 12 CFR Part 207 applicability of Regulation X (12 CFR no longer use the OTC List to determine Banks, Banking, Credit, Margin, Part 224). These stocks have the degree whether an OTC stock is subject to the Margin requirements, National Market of national investor interest, the depth 50 percent loan value limitation when System (NMS Security), Reporting and and breadth of market, and the recordkeeping requirements, Securities. availability of information respecting 1 The equivalent term in Regulation T is margin the stock and its issuer to warrant security. Regulation X incorporates Regulations G, 12 CFR Part 220 T, and U in section 224.3 and therefore also regulation in the same fashion as incorporates the definitions in Regulations G, T, Banks, Banking, Brokers, Credit, exchange-traded securities. The OTC and U. Margin, Margin requirements, Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3805

Investments, National Market System $.01 par common $.01 par common (NMS Security), Reporting and GATEWAY DATA SCIENCES WASHINGTON MUTUAL, INC. recordkeeping requirements, Securities. CORPORATION Series C, $1.00 par non-cumulative $.01 par common Depositary shares 12 CFR Part 221 GEOGRAPHICS, INC. WELCOME HOME, INC. No par common. Warrants (expire 06–01– $.01 par common Banks, Banking, Credit, Margin, 1999) WELLCARE MANAGEMENT GROUP, INC., Margin requirements, National Market GLASGAL COMMUNICATIONS, INC. THE System (NMS Security), Reporting and Warrants (expire 09–21–1999) $.01 par common recordkeeping requirements, Securities. GRAND UNION COMPANY, THE WESTERN PACIFIC AIRLINES, INC. $1.00 par common $.001 par common 12 CFR Part 224 HOUSECALL MEDICAL RESOURCES, INC. $.01 par common Stocks Removed for Listing on a National Banks, Banking, Borrowers, Credit, HYBRIDON, INC. Securities Exchange or Being Involved in an Acquisition Margin, Margin requirements, Reporting $.001 par common and recordkeeping requirements, IITC HOLDINGS, LTD. 1ST UNITED BANCORP (Florida) Securities. Class A, no par common $.01 par common INTERNATIONAL VERIFACT, INC. ACC CONSUMER FINANCE CORPORATION Accordingly, pursuant to the Redeemable Warrants (expire 01–05–1998) $.001 par common authority of sections 7 and 23 of the INTERSTATE NATIONAL DEALER ACCESS BEYOND, INC. Securities Exchange Act of 1934, as SERVICES, INC. $.01 par common amended (15 U.S.C. 78g and 78w), and Warrants (expire 07–22–1999) ADCO TECHNOLOGIES, INC. in accordance with 12 CFR 207.2(k) and KINETIC CONCEPTS, INC. $.01 par common 207.6 (Regulation G), 12 CFR 220.2 and $.001 par common AIRWAYS CORPORATION KS BANCORP, INC. (North Carolina) $.01 par common 220.17 (Regulation T), and 12 CFR No par common ALL AMERICAN COMMUNICATIONS, INC. 221.2(j) and 221.7 (Regulation U), there LTX CORPORATION $.0001 par common is set forth below a listing of deletions 131⁄2% convertible debentures Class B, non-voting, $.0001 par common from and additions to the OTC List and MACHEEZMO MOUSE RESTAURANTS, ALLIED CAPITAL ADVISERS, INC. the Foreign List. INC. $.001 par common No par common ALLIED CAPITAL COMMERCIAL Deletions From the List of Marginable OTC MAXCOR FINANCIAL GROUP, INC. CORPORATION Stocks Series A, warrants (expire 11–30–2001) $.0001 par common Stocks Removed for Failing Continued Listing Series B, warrants (expire 11–30–2001) ALLIED CAPITAL CORPORATION Requirements McMORAN OIL & GAS COMPANY $1.00 par common Rights (expire 11–13–1997) ALLIED CAPITAL CORPORATION II ALLERGAN LIGAND RETINOID MERIDIAN POINT REALTY TRUST 83 $1.00 par common THERAPEUTICS, INC. No par shares of beneficial ALLTRISTA CORPORATION $.001 par common MICRO-INTEGRATION CORPORATION No par common ALLIANCE IMAGING, INC. $.01 par common ALPINE LACE BRANDS, INC. $.01 par common MIDCOM COMMUNICATIONS, INC. $.01 par common AMERICA FIRST FINANCIAL FUND 1987 $.0001 par common AMERICAN NATIONAL BANCORP, INC. Beneficial unit certificates MVSI, INC. $1.00 par common AMERICAN TELECASTING, INC. Warrants (expire 08–15–2000) AMERICAN RECREATION COMPANY $.01 par common NAL FINANCIAL GROUP, INC. HOLDINGS AMSCAN HOLDINGS, INC. $.15 par common $.01 par common $.10 par common NEUROBIOLOGICAL TECHNOLOGIES, INC. ANDYNE COMPUTING LTD. BATTERY TECHNOLOGIES, INC. $.001 par common No par common No par common NIAGARA CORPORATION ARBOR HEALTH CARE COMPANY CAI WIRELESS SYSTEMS, INC. Warrants (expire 08–13–2000) $.03 par common No par common NUKO INFORMATION SYSTEMS, INC. ARV ASSISTED LIVING, INC. CATALYTICA, INC. $.001 par common No par common Warrants (expire 10–31–1997) ON-GARD SYSTEMS, INC. ATCHISON CASTING CORPORATION CENTURA SOFTWARE CORPORATION $.001 par common $.01 par common $.01 par common PENNICHUCK CORPORATION ATLAS AIR, INC. CHEMTRAK INCORPORATED $1.00 par common $.01 par common $.001 par common PREMIER LASER SYSTEMS, INC. BANK CORPORATION OF GEORGIA Class A, warrants (expire 11–30–1999) $1.00 par common CINERGI PICTURES ENTERTAINMENT INC. Q-ENTERTAINMENT, INC. BDM INTERNATIONAL, INC. $.01 par common No par common $.01 par common CYPROS PHARMACEUTICAL REDWOOD TRUST, INC. BELMONT HOMES, INC. CORPORATION Warrants (expire 12–31–1997) $.10 par common Class B, warrants (expire 11–03–1997) REGENT BANCSHARES CORP. BOWLIN OUTDOOR ADVERTISING & EGEORGE FINANCIAL CORPORATION (Pennsylvania) TRAVEL $.10 par common Series A, $.10 par convertible $.001 par common ECOGEN INC. TRANSWORLD HEALTHCARE, INC. BOX WORLDWIDE, INC., THE Warrants (expire 01–31–1998) Warrants (expire 12–07–1997) $.001 par common ELEK-TEK, INC. U.S. BANCORP (Minnesota) BRANFORD SAVINGS BANK (Connecticut) $.01 par common Series A, preferred stock No par common FAULDING INC. VENTURE SEISMIC, LTD. CAIRN ENERGY USA, INC. $.01 par common Warrants (expire 11–06–2000) $.01 par common FFBS BANCORP, INC. (Mississippi) VIDEOLAN TECHNOLOGIES, INC. CALNETICS CORPORATION $.01 par common Warrants (expire 08–10–2000) No par common FIRST BANKS, INC. (Missouri) VIROGROUP, INC. CAPITAL BANCORP (Florida) Class C, 9% increasing rate $.01 par common $1.00 par common GARNET RESOURCES CORPORATION VISION-SCIENCES, INC. CB COMMERCIAL REAL ESTATE SERVICES 3806 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations

$.01 par common $2.50 par common Warrants (expire 05–09–1999) CENTRAL FIDELITY BANKS, INC. LB FINANCIAL, INC. TECNOL MEDICAL PRODUCTS, INC. $5.00 par common $.01 par common $.001 par common COMMUNITY BANK SYSTEM, INC. (New LEASING SOLUTIONS, INC. THOMPSON PBE, INC. York) No par common $.01 par common $1.25 par common LINDSAY MANUFACTURING CO. TODHUNTER INTERNATIONAL, INC. COMMUNITY CARE OF AMERICA, INC. $1.00 par common $.01 par common $.01 par common MAGNA BANCORP, INC. (Mississippi) TRANSTEXAS GAS CORPORATION COMPUTATIONAL SYSTEMS, INC. $.01 par common $.01 par common No par common MAGNETIC TECHNOLOGIES TRIANGLE BANCORP, INC. (North COMPUTER DATA SYSTEMS, INC. CORPORATION No par common $.10 par common $.15 par common TUESDAY MORNING CORP. CYRIX CORPORATION MAIL BOXES ETC. $.01 par common $.004 par common No par common TYSON FOODS, INC. DATA DOCUMENTS INCORPORATED MEDIC COMPUTER SYSTEMS, INC. Class A, $.10 par common $.01 par common $.01 par common USLD COMMUNICATIONS CORPORATION DELCHAMPS, INC. MELAMINE CHEMICALS, INC. $.01 par common $.01 par common $.01 par common VACATION BREAK U.S.A., INC. DOUBLETREE CORPORATION MODTECH, INC. $.01 par common $.01 par common $.01 par common VECTRA BANKING CORPORATION ELEXSYS INTERNATIONAL, INC. MOSINEE PAPER CORPORATION $.01 par common $1.00 par common $2.50 par common VBC Capital I Cumulative capital ENDOVASCULAR TECHNOLOGIES, INC. MUSTANG SOFTWARE, INC. VIEWLOGIC SYSTEMS, INC. $.00001 par common No par common $.01 par common EXIDE ELECTRONICS GROUP, INC. NATIONAL HEALTH ENHANCEMENT VIRGINIA FIRST FINANCIAL $.01 par common SYSTEMS CORPORATION FINANCIAL INSTITUTIONS INSURANCE $.001 par common $1.00 par common $1.00 par common NATIONAL PICTURE & FRAME COMPANY WALTER INDUSTRIES, INC. FIRST FINANCIAL CORPORATION $.01 par common $.01 par common $1.00 par common NETWORK GENERAL CORPORATION ZYTEC CORP. FIRST SOUTHEAST FINANCIAL $.01 par common No par common CORPORATION NFO WORLDWIDE, INC. $.01 par common Additions to the List of Marginable OTC $.01 par common FIRSTPLUS FINANCIAL GROUP, INC. Stocks OFFSHORE ENERGY DEVELOPMENT $.01 par common ACT TELECONFERENCING, INC. $.01 par common FOREST OIL CORPORATION No par common ORTHODONTIC CENTERS OF AMERICA $.10 par common ADVANTICA RESTAURANT GROUP, INC. GAME FINANCIAL CORPORATION INC. $.01 par common $.01 par common $.01 par common Warrants (expire 01–07–2005) GATEWAY BANCORP, INC. (Kentucky) PHONETEL TECHNOLOGIES, INC. ALYDAAR SOFTWARE CORPORATION $.01 par common $0.01 par common $.001 par common GLASTONBURY BANK & TRUST PHYSICIAN SUPPORT SYSTEMS, INC. AMERICAN BINGO & GAMING COMPANY $.001 par common CORPORATION $2.50 par common PHYSICIANS HEALTH SERVICES, INC. $.001 par common GREEN, A.P. INDUSTRIES, INC. Class A, $.01 par common AMERICAN EDUCATIONAL PRODUCTS, $1.00 par common PITTENCRIEFF COMMUNICATIONS, INC. INC. GREENFIELD INDUSTRIES, INC. $.01 par common $.05 par common $.01 par common POE & BROWN, INC. AMERICAN PHYSICIAN PARTNERS, INC. GROUND ROUND RESTAURANTS, INC. $.10 par common $.001 par common $.1667 par common PREMENOS TECHNOLOGY CORPORATION AMERIPATH, INC. GYNECARE INC. $.01 par common $.01 par common $.01 par common PREMIER PARKS, INC. AMSURG, INC. HA-LO INDUSTRIES, INC. $.05 par common Class A, no par common No par common PRIMARY BANK (New Hampshire) Class B, no par common HAYES WHEELS INTERNATIONAL, $.01 par common AMVESTORS FINANCIAL CORPORATION $.01 par common PRONET, INC. Warrants (expire 04–03–2002) HEALTHDYNE, INC. $.01 par common APPLIED FILMS CORPORATION $.01 par common REXWORKS, INC. No par common HOLLYWOOD PARK, INC. $.12 par common APPLIED MICRO CIRCUITS CORPORATION $.01 par common ROBBINS & MYERS, INC. $.01 par common HOMEGATE HOSPITALITY, INC. No par common ATLANTIC GULF COMMUNITIES $.01 par common ROTECH MEDICAL CORPORATION CORPORATION HPR, INC. $.0002 par common A Warrants (expire 06–23–2004) $.01 par common SEAMAN FURNITURE COMPANY, INC. B Warrants (expire 06–23–2004) INACOM CORP. $.01 par common C Warrants (expire 06–23–2004) $.10 par common SEQUANA THERAPEUTICS, INC. AVTEAM, INC. INFINITY FINANCIAL TECHNOLOGY, INC. $.001 par common $.01 par common No par common SHO-ME FINANCIAL CORPORATION BANK OF THE OZARKS, INC. INTERNATIONAL DAIRY QUEEN, INC. $.01 par common $.01 par common Class A, $.01 par common SIRROM CAPITAL CORPORATION BARBEQUES GALORE LIMITED Class B, $.01 par common No par common American Depositary Receipts INTERNATIONAL IMAGING MATERIALS, $.01 par common BAY BANCSHARES, INC. (Texas) INC. Class A, $.01 par common $1.00 par common $.01 par common SULLIVAN DENTAL PRODUCTS, INC. BERINGER WINE ESTATES HOLDINGS, JACKSON HEWITT INC. $.01 par common INC. $.02 par common TECHNOLOGY SERVICE GROUP, INC. Class B, no par common JEFFERSON BANKSHARES, INC. (Virginia) $.01 par common BIGMAR, INC. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3807

$.001 par common $.001 par common $.01 par ordinary shares BIOANALYTICAL SYSTEMS, INC. FINET HOLDINGS CORPORATION INTERNATIONAL MANUFACTURING No par common $.01 par common SERVICES, INC. BOREL BANK & TRUST COMPANY FIRST ROBINSON FINANCIAL Class A, $.001 par common (California) CORPORATION INTERNATIONAL SPORTS WAGERING, $.01 par common $.01 par common INC. BRASS EAGLE, INC. FIRST SECURITYFED FINANCIAL, INC. $.001 par common $.01 par common $.01 par common INTERVU, INC. BRIGHT HORIZONS, INC. FLEXIINTERNATIONAL SOFTWARE, INC. $.001 par common $.01 par common $.01 par common ITC DELTACOM, INC. BROUGHTON FOODS COMPANY FOCAL, INC. $.01 par common $1.00 par common $.01 par common JAVELIN SYSTEMS, INC. C.H. ROBINSON WORLDWIDE, INC. FORMULA SYSTEMS (1985), LTD. $.01 par common $.10 par common American Depositary Receipts KSB BANCORP, INC. C3, INC. FRANKLIN BANK, NATIONAL $.01 par common No par common ASSOCIATION LAMINATING TECHNOLOGIES, INC. CANADA SOUTHERN PETROLEUM LTD. Series A, noncumulative exchangeable $.01 par common $1.00 par limited voting shares preferred LANDMARK SYSTEMS CORPORATION CAPITOL BANCORP, LTD. FRANCHISE MORTGAGE ACCEPTANCE $.01 par common $10.00 par trust preferred COMPANY LET’S TALK CELLULAR & WIRELESS, INC. CAPTEC NET LEASE REALTY, INC. $.001 par common $.01 par common $.01 par common FRIENDLY ICE CREAM CORPORATION LINC CAPITAL, INC. CASELLA WASTE SYSTEMS, INC. $.01 par common $.001 par common Class A, $.01 par common GAMETECH INTERNATIONAL, INC. LONG ISLAND COMMERCIAL BANK CELLEGY PHARMACEUTICALS, INC. $.001 par common $3.00 par common Warrants (expire 08–10–2000) GART SPORTS COMPANY LYNX THERAPEUTICS, INC. CFI MORTGAGE, INC. $.01 par common $.001 par common $.01 par common GENE LOGIC, INC. MADE2MANAGE SYSTEMS, INC. COLORADO MEDTECH, INC. $.001 par common No par common No par common GILAT COMMUNICATIONS, LTD. MAHONING NATIONAL BANCORP, INC. COLT TELECOM GROUP, PLC Ordinary Shares (NIS .01) No par common, $1.00 stated value American Depositary Shares GOLD BANC CORPORATION, INC. MEDIWARE INFORMATION SYSTEMS, COMMUNITY FIRST BANKSHARES, INC. $25 par preferred securities INC. Cumulative Capital Securities of CFB GREAT PEE DEE BANCORP, INC. $.10 par common $.01 par common METROMEDIA FIBER NETWORK, INC. Capital II HAYES CORPORATION Class A, $.01 par common COMPU-DAWN, INC. $.01 par common METRONET COMMUNICATIONS $.01 par common HEALTHWORLD CORPORATION CORPORATION CONCORD COMMUNICATIONS, INC. $.01 par common Class B, non-voting no par common $.01 par common HERBALIFE INTERNATIONAL, INC. MIDWAY AIRLINES CORPORATION CONNING CORPORATION Class B, $.01 par common $.01 par common $.01 par common HERITAGE FINANCIAL CORPORATION MMC NETWORKS, INC. CONSOLIDATED CAPITAL CORPORATION $.01 par common $.001 par common $.001 par common HERLEY INDUSTRIES, INC. MONTGOMERY FINANCIAL CRAGAR INDUSTRIES, INC. Warrants (expire 01–11–1999) CORPORATION $.01 par common HOLT’S CIGAR HOLDINGS, INC. $.01 par common CROSSKEYS SYSTEMS CORPORATION $.001 par common MOTOR CARGO INDUSTRIES, INC. No par common HOMECAPITAL INVESTMENT No par common DENALI, INC. CORPORATION MPW INDUSTRIAL SERVICES GROUP, INC. $.01 par common $.01 par common No par common DENTAL CARE ALLIANCE, INC. HURRICANEHYDROCARBONS, LTD. MYSTIC FINANCIAL, INC. $.01 par common Class A, no par common $.01 par common DENTAL/MEDICAL DIAGNOSTIC HYBRID NETWORKS, INC. N2K, INC. SYSTEMS, INC. $.001 par common $.001 par common $.01 par common I.C. ISAACS & COMPANY, INC. NAM TAI ELECTRONICS, INC. EAST TELECOM GROUP PLC $.0001 par common Warrants (expire 11–01–2000) American Depositary Receipts ICOS VISION SYSTEMS CORPORATION NANOPHASE TECHNOLOGIES ECHOSTAR COMMUNICATIONS No par common CORPORATION CORPORATION IMAGEMAX, INC. $.01 par common Series C, $.01 par cumulative convertible No par common NEUTRAL POSTURE ERGONOMICS, INC. preferred IMAGING TECHNOLOGIES CORPORATION $.01 par common EDISON BROTHERS STORES, $.005 par common NOVACARE EMPLOYEES SERVICES, INC. INCORPORATED IMPERIAL CREDIT COMMERCIAL $.01 par common $.01 par common MORTGAGE INVESTORS NOVAMERICAN STEEL, INC. ELECTRIC LIGHTWAVE, INC. $.001 par common No par common Class A, $.01 par common INDIANA UNITED BANCORP, INC. NRG GENERATING (U.S.), INC. ELECTRONIC PROCESSING, INC. Cumulative trust preferred securities $.01 par common $.01 par common INFORMATION ADVANTAGE, INC. NYMOX PHARMACEUTICAL ENERGIS, PLC $.01 par common CORPORATION American Depositary Shares INMARK ENTERPRISES, INC. $2.00 par common ESG RE LIMITED $.001 par common OAO TECHNOLOGY SOLUTIONS, INC. $1.00 par common INNOVATIVE VALVE TECHNOLOGIES, $.01 par common EXCEL SWITCHING CORPORATION INC. OMNI ENERGY SERVICES CORPORATION $.01 par common $.001 par common $.01 par common FALLBROOK NATIONAL BANK INTERNATIONAL AIRCRAFT INVESTORS OUTSOURCE INTERNATIONAL, INC. $.625 par common $.01 par common $.001 par common FAROUDJA, INC. INTERNATIONAL BRIGUETTES HOLDING OYO GEOSPACE CORPORATION 3808 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations

$.01 par common $.01 par common Common shares par 40 French francs PAPER WAREHOUSE, INC. TODAY’S MAN, INC. WORMS ET COMPAGNIE SCA $.01 par common Warrants (expire 12–31–1999) Registered shares, par 12 French PAULA FINANCIAL TOPRO, INC. $.01 par common $.0001 par common Germany PEMBRIDGE, INC. TOYMAX INTERNATIONAL, INC. PWA PAPIERWERKE WALDHOF- No par common $.01 par common ASCHAFFENBURG PENNFED FINANCIAL SERVICES, INC. TRANSCOASTAL MARINE SERVICES, INC. Bearer shares, par DM 50 $25.00 par cumulative trust preferred stock $.001 par common Hong Kong PENNFIRST BANCORP, INC. TRANSIT GROUP, INC. Cumulative trust preferred securities $.01 par common CHINA LIGHT & POWER COMPANY, PERICOM SEMICONDUCTOR TRI-COUNTY BANCORP, INC. LIMITED CORPORATION $.10 par common HK$5.00 par ordinary shares No par common TROPICAL SPORTSWEAR KOWLOON MOTOR BUS COMPANY (1933) PETROGLYPH ENERGY, INC. INTERNATIONAL CORPORATION LTD $.01 par common $.01 par common HK$1.00 par ordinary shares POWER INTEGRATION, INC. U.S. TIMBERLANDS COMPANY, LP Ireland $.001 par common No par common PRECISION AUTO CARE, INC. U.S. VISION, INC. WOODCHESTER INVESTMENTS PLC $.01 par common $.01 par common A Ordinary shares, par .20 Irish PREVIEW TRAVEL, INC. UBICS, INC. Italy $.001 par common $.01 par common PRINCETON VIDEO IMAGE, INC. UNIDYNE CORPORATION BANCO AMBROSIANO VENETO SPA No par common $.001 par common Non-convertible savings shares, par PRIORITY HEALTHCARE CORPORATION UNION COMMUNITY BANCORP. BANCO AMBROSIANO VENETO SPA Class B, $.01 par common No par common Ordinary shares, par 1000 lira PROGENICS PHARMACEUTICALS, INC. USWEB CORPORATION Japan $.0013 par common $.0001 par common PRT GROUP VARI-LITE INTERNATIONAL, INC. HOKKAIDO TAKUSHOKU BANK, LIMITED $.001 par common $.01 par common Y 50 par common QUESTA OIL & GAS COMPANY VIRGIN EXPRESS HOLDINGS, PLC JAPAN SYNTHETIC RUBBER CO., LTD. $.01 par common American Depositary Shares Y 50 par common QUIGLEY CORPORATION VRB BANCORP (Oregon) SANYO SECURITIES CO., LTD. $.0005 par common No par common Y 50 par common REALNETWORKS, INC. WARWICK COMMUNITY BANCORP, INC. TOSHOKU LTD. $.001 par common $.01 par common Y 50 par common ROCK OF AGES CORPORATION WASHINGTON SCIENTIFIC INDUSTRIES, YAMAICHI SECURITIES CO., LTD. Class A, $.01 par common INC. Y 50 par common SIX RIVERS NATIONAL BANK (California) $.10 par common Mexico $5.00 par common WHG BANCSHARES CORPORATION SKY NETWORK TELEVISION LIMITED $.10 par common CIFRA, S.A. DE C.V. American Depositary Shares WHITE CAP INDUSTRIES, INC. Series A Common, par .30 Mexican SNB BANCSHARES, INC. (Georgia) $.01 par common CIFRA, S.A. DE C.V. $1.00 par common WMF GROUP, LTD. Series B Common, par .30 Mexican SOMNUS MEDICAL TECHNOLOGIES, INC. $.01 par common Norway $.001 par common YOUNG INNOVATIONS, INC. STOREBRAND AS SOUTHERN COMMUNITY BANCSHARES, $.01 par common Convertible preferred A shares, par INC. ZYMETX, INC. $.01 par common $.001 par common Philippines SPECTRA-PHYSICS LASERS, INC. Deletions From the Foreign Margin List AYALA CORPORATION $.01 par common Class B common shares, par 1 SPIROS DEVELOPMENT CORPORATION II, Australia AYALA LAND INC. INC. ARNOTTS LIMITED Class B Common Shares, par 1 Units (expire 12–31–1999) Ordinary shares, par A$0.50 SPORTSLINE USA, INC. BANK OF MELBOURNE LIMITED Singapore $.01 par common Ordinary shares, par A$1.00 HAW PAR BROTHERS INTERNATIONAL STIRLING COOKE BROWN HOLDINGS LTD. LIMITED Austria Ordinary shares, par S$1.00 $.25 par ordinary shares CREDITANSTALT-BANKVEREIN AG INCHCAPE BERHAD SUCCESS BANCSHARES, INC. (Illinois) Preferred shares, par 100 Austrian Ordinary shares, par S$0.50 $.001 par common CREDITANSTALT-BANKVEREIN AG SUN BANCORP, INC. (New Jersey) Ordinary shares, par 1000 Austrian Sweden $1.00 par common CREDITANSTALT-BANKVEREIN AG NORDBANKEN AB T & W FINANCIAL CORPORATION Participation Certificates, par 500 Restricted shares, par 12.50 $.01 par common SPARBANKEN SVERIGE AB (Swedbank) TEKGRAF, INC. Belgium Series A, par 10 Swedish krona $.001 par common BBL (BANQUE BRUX LAMB) Warrants (expire 11–20–2002) Ordinary shares, no par Switzerland TELIGENT, INC. POWERFIN SA ELEKTROWATT AG Class A, $.01 par common No par participating certificates Bearer shares, par 50 Swiss francs TELSCAPE INTERNATIONAL, INC. $.001 par common Canada United Kingdom TERA COMPUTER COMPANY LONDON INSURANCE GROUP INC. COWIE GROUP PLC $.01 par common No par common Ordinary shares, par 5 p TIER TECHNOLOGIES, INC. GRAND METROPOLITAN PLC Class B, no par common France Ordinary shares, par 25 p TIMBERLAND BANCORP, INC. USINOR SACILOR GUINNESS PLC Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3809

Ordinary shares, par 25 p United Kingdom Attention: Rules Docket 97–CE–151– HARRISONS & CROSFIELD PLC ARRIVA PLC AD, Room 1558, 601 E. 12th Street, Ordinary shares, par 25 p Ordinary shares, par 5 p Kansas City, Missouri 64106. MERCURY ASSET MANAGEMENT GROUP CITY OF LONDON PLC Service information that applies to PLC Ordinary shares, par 25 p this AD may be obtained from The Ordinary shares, par 5 p DIAGEO PLC Cessna Aircraft Company, P.O. Box REDLAND PLC Ordinary shares, par 25 p Ordinary shares, par 25 p 7706, Wichita, Kansas 67277, telephone ELEMENTIS PLC (316) 941–7550, facsimile (316) 942– TR CITY OF LONDON TRUST PLC Ordinary shares, par 25 p Ordinary shares, par 25 p 9008. By order of the Board of Governors of the FOR FURTHER INFORMATION CONTACT: Additions to the Foreign Margin List Federal Reserve System, acting by its Director Mr. of the Division of Banking Supervision and Paul Pendleton, Aerospace Engineer, Australia Regulation pursuant to delegated authority Wichita Aircraft Certification Office, TELSTRA CORPORATION (12 CFR 265.7(f)(10)), January 21, 1998. 1801 Airport Road, Rm. 100, Mid- Ordinary shares, par A$1.00 Jennifer J. Johnson, Continent Airport, Wichita, Kansas Austria Deputy Secretary of the Board. 67209, telephone (316) 946–4128; facsimile (316) 946–4407. AUSTRIAN TABAK [FR Doc. 98–1863 Filed 1–26–98; 8:45 am] SUPPLEMENTARY INFORMATION: Ordinary shares, par 1000 Austrian BILLING CODE 6210±01±P Belgium Discussion UCB SA On December 30, 1997, the FAA Ordinary shares, no par DEPARTMENT OF TRANSPORTATION issued priority letter AD 98–01–14, which applies to Cessna 182S airplanes. France Federal Aviation Administration Cessna Aircraft Company has recently FRANCE TELECOM SA Ordinary shares, par 25 French 14 CFR Part 39 reported that a quality control problem USINOR SA exists with Aeroquip engine exhaust Common, par 40 French francs [Docket No. 97±CE±151±AD; Amendment mufflers installed on certain Cessna 39±10292; AD 98±01±14] Model 182S airplanes. Nineteen Cessna Germany RIN 2120±AA64 Model 182S airplanes are equipped with HOECHST AG these mufflers. Bearer shares, par DM 50 Airworthiness Directives; Cessna The problem was discovered during a Hong Kong Aircraft Company Model 182S delivery flight from the manufacturing CLP HOLDINGS, LIMITED Airplanes facility. Following this incident, three HK$5.00 par ordinary shares operators have reported cracked AGENCY: Federal Aviation mufflers during use, and two similar KMB HOLDINGS, LIMITED Administration, DOT. HK$1.00 par ordinary shares failures occurred at Cessna’s facility ACTION: Final rule; request for during production acceptance flight Italy comments. tests. Cessna subsequently pressure- BANCA INTESA SPA tested the Aeroquip muffler assemblies, SUMMARY: This document publishes in Ordinary shares, par 1000 lira which revealed that 7 out of 10 mufflers the Federal Register an amendment BANCA INTESA SPA showed gas leak paths through defective Non-convertible savings shares, par adopting Airworthiness Directive (AD) weldments. Japan 98–01–14, which was sent previously to These inadequate or failed weldments all known U.S. owners and operators of will permit exhaust gas (including JSR CORPORATION Cessna Aircraft Company (Cessna) Y 50 par common carbon monoxide) leakage from the RINNAI CORPORATION Model 182S airplanes. This AD requires muffler, and consequently into the Y 50 par common replacing the left and right Aeroquip airplane’s cabin and cockpit area. engine exhaust mufflers (P/N 71379– Mexico Cessna reports that 19 of these Model 1254017–8) with an FAA-approved 182S airplanes are directly affected. The CIFRA, S.A. DE C.V. equivalent part. Reports of carbon Series V, no par common serial numbers for these models are monoxide gas entering the cabin heating 18280050 through 18280060, 18280062, Norway system and the cabin of the Cessna 18280063, 18280066, 18280067 through STOREBRAND AS Model 182S airplanes prompted this 18280070, and 18280083. All other A Common Shares, par 5 Norwegian action. This condition, if not corrected, Cessna Model 182S airplanes were could result in passenger and pilot Philippines manufactured with Cessna mufflers, injury with consequent loss of control of part number (P/N) 1254017–8. After AYALA CORPORATION the airplane. Common, par 1 Philippine peso examining the circumstances and DATES: Effective February 23, 1998, to reviewing all information related to the AYALO LAND, INC. all persons except those to whom it was Common, par 1 Philippine peso situation described above, the FAA has made immediately effective by priority determined that AD action should be Singapore letter AD 98–01–14, issued December taken to prevent carbon monoxide gas HAW PAR CORPORATION 30, 1997, which contained the from entering the airplane’s cabin Ordinary shares, par S$1.00 requirements of this amendment. heating system and cabin, which, if not INCHOAPE MOTORS, LTD. Comments for inclusion in the Rules corrected, could result in passenger and Ordinary shares, par S$.50 Docket must be received on or before pilot injury with consequent loss of Sweden March 27, 1998. control of the airplane. ADDRESSES: Submit comments in FORENINGS SPARBANKEN AB Relevant Service Information Series A, par 10 Swedish krona triplicate to the Federal Aviation NORDBANKEN HOLDING AB Administration (FAA), Central Region, Cessna Aircraft Company Service Registered shares, par 12.50 Office of the Regional Counsel, Bulletin No. SB97–78–01, dated 3810 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations

December 23, 1997, titled ‘‘Engine the rule that might suggest a need to Authority: 49 U.S.C. 106(g), 40113, 44701. Exhaust Muffler Inspection’’ pertains to modify the rule. All comments § 39.13 [Amended] the subject of this priority letter AD. submitted will be available, both before and after the closing date for comments, 2. Section 39.13 is amended by The FAA’s Determination and in the Rules Docket for examination by adding a new airworthiness directive Explanation of the AD interested persons. A report that (AD) to read as follows: Since an unsafe condition (carbon summarizes each FAA-public contact 98–01–14 Cessna Aircraft Company. monoxide leakage into the cabin area) concerned with the substance of this AD Amendment 39–10292; Docket No. 97– has been identified that is likely to exist will be filed in the Rules Docket. CE–151–AD. or develop in other Cessna Model 182S Commenters wishing the FAA to Applicability: Model 182S airplanes (all airplanes of the same type design, the acknowledge receipt of their comments serial numbers), certificated in any category. FAA issued priority letter AD 98–01–14 submitted in response to this rule must Note 1: This AD applies to each airplane to prevent carbon monoxide gas from submit a self-addressed, stamped identified in the preceding applicability entering the airplane’s cabin heating provision, regardless of whether it has been postcard on which the following modified, altered, or repaired in the area system and cabin, which, if not statement is made: ‘‘Comments to corrected, could result in passenger and subject to the requirements of this AD. For Docket No. 97–CE–151–AD.’’ The airplanes that have been modified, altered, or pilot injury with consequent loss of postcard will be date stamped and repaired so that the performance of the control of the airplane. The AD requires returned to the commenter. requirements of this AD is affected, the replacing the left and right Aeroquip owner/operator must request approval for an engine exhaust mufflers (P/N 71379– Regulatory Impact alternative method of compliance in 1254017–8) with an FAA-approved The regulations adopted herein will accordance with paragraph (d) of this AD. equivalent part. The request should include an assessment of not have substantial direct effects on the the effect of the modification, alteration, or Determination of the Effective Date of States, on the relationship between the repair on the unsafe condition addressed by the AD national government and the States, or this AD; and, if the unsafe condition has not on the distribution of power and been eliminated, the request should include Since it was found that immediate responsibilities among the various specific proposed actions to address it. corrective action was required, notice levels of government. Therefore, in Compliance: Required as indicated in the and opportunity for prior public accordance with Executive Order 12612, body of this AD, unless already comment thereon were impracticable it is determined that this final rule does accomplished, except to those operators and contrary to the public interest, and not have sufficient federalism receiving this action by priority letter issued good cause existed to make the AD December 30, 1997, which made these implications to warrant the preparation effective immediately by individual actions effective immediately upon receipt. of a Federalism Assessment. letters issued on December 30, 1997, to To prevent carbon monoxide gas from The FAA has determined that this all known U.S. operators of Cessna entering the airplane’s cabin heating system regulation is an emergency regulation and cabin, which, if not corrected, could Model 182S airplanes. These conditions that must be issued immediately to result in passenger and pilot injury with still exist, and the AD is hereby correct an unsafe condition in aircraft, consequent loss of control of the airplane, published in the Federal Register as an and is not a ‘‘significant regulatory accomplish the following: amendment to section 39.13 of the action’’ under Executive Order 12866. It (a) For Cessna Model 182S airplanes with Federal Aviation Regulations (14 CFR serial numbers 18280050 through 18280060, has been determined further that this 39.13) to make it effective as to all 18280062, 18280063, 18280066, 18280067 action involves an emergency regulation persons. through 18280070, and 18280083: Prior to under DOT Regulatory Policies and further flight after the effective date of this Comments Invited Procedures (44 FR 11034, February 26, AD, replace the left and right engine exhaust Although this action is in the form of 1979). If it is determined that this mufflers with an FAA-approved equivalent emergency regulation otherwise would part in accordance with the appropriate a final rule that involves requirements Cessna maintenance manual. affecting immediate flight safety and, be significant under DOT Regulatory Policies and Procedures, a final (b) For all Cessna Model 182S airplanes: thus, was not preceded by notice and After the effective date of this AD, no person opportunity to comment, comments are regulatory evaluation will be prepared may install any Aeroquip engine exhaust invited on this rule. Interested persons and placed in the Rules Docket. A copy muffler, part number 71379–1254017–8, on are invited to comment on this rule by of it, if filed, may be obtained from the any airplane. submitting such written data, views, or Rules Docket at the location provided Note 2: Cessna Aircraft Company Service arguments as they may desire. under the caption ADDRESSES. Bulletin No. SB97–78–01, dated December 23, 1997, titled ‘‘Engine Exhaust Muffler Communications should identify the List of Subjects in 14 CFR Part 39 Rules Docket number and be submitted Inspection’’ pertains to the subject of this AD. in triplicate to the address specified Air transportation, Aircraft, Aviation (c) Special flight permits may be issued in above. All communications received on safety. accordance with sections 21.197 and 21.199 of the Federal Aviation Regulations (14 CFR or before the closing date for comments Adoption of the Amendment 21.197 and 21.199) to operate the airplane to will be considered, and this rule may be Accordingly, pursuant to the a location where the requirements of this AD amended in light of the comments authority delegated to me by the can be accomplished. received. Factual information that (d) An alternative method of compliance or Administrator, the Federal Aviation supports the commenter’s ideas and adjustment of the compliance time that Administration amends part 39 of the suggestions is extremely helpful in provides an equivalent level of safety may be Federal Aviation Regulations (14 CFR evaluating the effectiveness of the AD approved by the Manager, Wichita Aircraft part 39) as follows: action and determining whether Certification Office, 1801 Airport Road, Rm. 100, Mid-Continent Airport, Wichita, Kansas additional rulemaking action would be PART 39ÐAIRWORTHINESS 67209. The request shall be forwarded needed. DIRECTIVES through an appropriate FAA Maintenance Comments are specifically invited on Inspector, who may add comments and then the overall regulatory, economic, 1. The authority citation for part 39 send it to the Manager, Wichita Aircraft environmental, and energy aspects of continues to read as follows: Certification Office. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3811

Note 3: Information concerning the Division, 202–366–9790; or Heidi L. with the NHS Act, such a declaration existence of approved alternative methods of Coleman, Office of the Chief Counsel, would delay the effective date of the compliance with this AD, if any, may be 202–366–1834. repeal of the NMSL until the 60th day obtained from the Wichita Aircraft SUPPLEMENTARY INFORMATION: following the date on which the Certification Office. legislature next convenes. Five States (e) Copies of the relative service Background decided to exercise the option: Kansas, information may be obtained from The The 55 mph National Maximum Cessna Aircraft Company, P.O. Box 7706, Louisiana, Mississippi, Missouri and Wichita, Kansas 67277. Copies of this Speed Limit (NMSL) was first instituted Ohio. document also may be inspected at the FAA, in 1974 as a temporary conservation Accordingly, as provided in the NHS, Central Region, Office of the Regional measure in response to the oil embargo on December 8, 1995, the NMSL was Counsel, Room 1558, 601 E. 12th Street, imposed by certain oil-producing repealed for all States other than these Kansas City, Missouri 64106. nations. Because of the reduction in five States. In those five States, it (f) This amendment (39–10292) becomes traffic fatalities that accompanied the remained in effect until the 60th day effective on February 23, 1998, to all persons institution of the speed limit, it was following the date on which the except those persons to whom it was made made permanent in 1975. legislature of that State next convened. immediately effective by priority letter AD In 1978, Congress amended the law to 98–01–14, issued December 30, 1997, which The agencies published a final rule in require that, in addition to posting and the Federal Register on March 20, 1996, contained the requirements of this enforcing the speed limit, States would amendment. 61 FR 11305, which rescinded the have to achieve specific levels of regulation for all States except the five Issued in Kansas City, Missouri, on January compliance. In April 1987, Congress 20, 1998. which had delayed the effective date passed legislation that allowed States to until after their legislatures next Carolanne L. Cabrini, post 65 mph maximum speed limits on Acting Manager, Small Airplane Directorate, convened. That final rule added an rural Interstate highways. In December applicability section to Part 1260 Aircraft Certification Service. 1987, the President approved legislation [FR Doc. 98–1860 Filed 1–26–98; 8:45 am] (section 1260.4), making the regulation enacting a limited demonstration applicable only to those five States. In BILLING CODE 4910±13±U program, that allowed the posting of addition, sections of the regulation that speed limits as high as 65 mph on pertained to speed monitoring, certain rural non-Interstate highways certification requirements and DEPARTMENT OF TRANSPORTATION through the end of FY 1991. compliance standards were deleted from The Intermodal Surface the regulation because they were no Federal Highway Administration Transportation Efficiency Act of 1991 longer applicable to any State. This (ISTEA) made the demonstration National Highway Traffic Safety removed the information collection program permanent, and allowed other Administration requirement for all States at that time. rural non-Interstate highways that were The expiration of the 60-day period not a part of the demonstration program 23 CFR Part 1260 has now occurred for all States. Since to be posted at the 65 mph speed limit, Part 1260 no longer applies to any State, [NHTSA±97±3196] provided they met certain criteria. the regulation is being rescinded in its RIN 2125±AE17 ISTEA also required the Secretary of Transportation to publish a rule to entirety. Certification of Speed Limit establish speed limit compliance Regulatory Analyses and Notices Enforcement requirements on 65 mph roads, in addition to 55 mph roads, and to Civil Justice Reform AGENCY: Federal Highway include a formula for determining This final rule will not have any Administration (FHWA) and National compliance by the States. preemptive or retroactive effect. It Highway Traffic Safety Administration FHWA and NHTSA had shared imposes no requirements on the States, (NHTSA), Department of responsibility for the implementation of but rather removes regulatory Transportation. the NMSL compliance program since obligations that are no longer authorized ACTION: Final rule. 1980. To implement this program and by statute. the requirements of ISTEA, the agencies SUMMARY: Section 205(d) of the National Executive Order 12866 (Regulatory promulgated a joint regulation, 23 CFR Highway System Designation Act of Planning and Review) and DOT part 1260. 1995 repealed the National Maximum On November 28, 1995, the President Regulatory Policies and Procedures Speed Limit (NMSL) Compliance signed into law the National Highway The agencies have analyzed the effect Program. It made the repeal effective on System Designation Act of 1995 (NHS of this action and determined that it is December 8, 1995, but provided that the Act). Section 205(d) of the NHS Act not significant within the meaning of Governors of certain States could delay repealed the NMSL compliance Executive Order 12866 or of Department the effective date of the repeal. All program, as set forth in 23 U.S.C. of Transportation regulatory policies possible delay periods have now passed. §§ 141(a) and 154. and procedures. This final rule imposes This Final Rule provides that 23 CFR The NHS Act made the repeal no additional burden on the public. part 1260, which contains the effective on December 8, 1995, but Regulatory obligations have been procedures for implementing the NMSL, provided some States with an option to removed since they are no longer is now rescinded. delay this effective date. In any State in authorized by statute. Therefore, a EFFECTIVE DATE: January 27, 1998. which the legislature was not in session regulatory evaluation is not required FOR FURTHER INFORMATION CONTACT: In on November 28, 1995, the Governor and was not prepared. FHWA, Janet Coleman, Office of could declare, before December 8, 1995, Highway Safety, 202–366–4668; or that the legislature was not in session Regulatory Flexibility Act Raymond W. Cuprill, Office of the Chief and that the State preferred to delay the In compliance with the Regulatory Counsel, 202–366–1377. In NHTSA, effective date until after the State’s Flexibility Act, the agencies have Garrett Morford, Police Traffic Services legislature next convenes. In accordance evaluated the effects of this action on 3812 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations small entities. Based on the evaluation, List of Subjects in 23 CFR Part 1260 adopted as revised by this Treasury we certify that this action will not have Grant programs—transportation, Decision. a significant economic impact on a Highway and roads, Motor vehicles, Summary of Comments and Final substantial number of small entities. Traffic regulations. Regulations Accordingly, the preparation of a In consideration of the foregoing, Part Regulatory Flexibility Analysis is The commenters argued that the 1260 of Title 23, Code of Federal unnecessary. ‘‘interim credit’’ notion incorporated in Regulations, is removed. the proposed regulations from Paperwork Reduction Act Issued on: January 12, 1998. Continental Illinois, T.C. Memo 1991– Kenneth R. Wykle, 66, 61 T.C.M. (CCH) 1916 (1991), aff’d The Office of Management and Budget in part and rev’d in part, 998 F.2d 513, (OMB) had approved the information Administrator, Federal Highway Administration. 516–17 (7th Cir. 1993), was misapplied collection requirements associated with and that the proposed amendment to 23 CFR part 1260 (OMB Clearance No. Ricardo Martinez, § 1.905–2(b)(3) denied district directors 2125–0027). By rescinding all of part Administrator, National Highway Traffic the flexibility to find compliance with 1260, the information collection Safety Administration. section 905(b) unless the taxpayer requirement, as that term is defined by [FR Doc. 98–1888 Filed 1–26–98; 8:45 am] produces receipts (or other direct OMB in 5 CFR part 1320, remains at BILLING CODE 4910±59±P evidence of payment) in order to prove zero. that the taxes actually were paid to the National Environmental Policy Act foreign government. They argued that, DEPARTMENT OF THE TREASURY even if the district director should be The agencies have analyzed this Internal Revenue Service able to require such proof in cases such action for the purpose of compliance as Continental Illinois, district directors with the National Environmental Policy 26 CFR Part 1 must have the flexibility to accept lesser Act and have determined that it will not proof. They argued that a portfolio have a significant effect on the human [TD 8759] holder of publicly-traded foreign environment. RIN 1545±AP36 securities, for example, will not be able Executive Order 12612 (Federalism) to obtain proof in the form of receipts Filing Requirements for Returns evidencing that the issuer of the This action has been analyzed in Claiming the Foreign Tax Credit securities actually paid the withheld accordance with the principles and taxes to the foreign government. AGENCY: Internal Revenue Service (IRS), criteria contained in Executive Order The comment letters are correct that Treasury. 12612. There are no federalism the regulations historically have implications pursuant to Executive ACTION: Final Regulation. allowed the district director flexibility to determine that section 905(b) is Order 12612 since regulatory obligations SUMMARY: This document contains a are being rescinded because they are no satisfied without the production of tax final regulation relating to the receipts evidencing that the tax has been longer authorized under current law. substantiation requirements for Under these circumstances, the paid to the foreign government. taxpayers claiming foreign tax credits. Treasury and the IRS did not intend that preparation of a Federalism Assessment The regulation is necessary to provide is not warranted. the amendment to § 1.905–2(b)(3), as guidance to U.S. taxpayers who claim proposed, deny the district director the Notice and Comment foreign tax credits. flexibility to accept secondary evidence DATES: Effective date: This regulation is of the foreign tax payment where it has The agencies find that prior notice effective January 27, 1998. been established to the satisfaction of and opportunity for comment are Applicability date: These regulations the district director that it is impossible unnecessary under 5 U.S.C. 553(b)(3)(B) are applicable for tax returns whose to furnish a receipt for such foreign tax because the agencies are not exercising original due date falls on or after payment. The amendment was merely discretion in a way that could be January 1, 1988. intended to clarify that proof of the act meaningfully affected by public FOR FURTHER INFORMATION CONTACT: Joan of withholding through secondary comment. Instead, this rescission of the Thomsen, (202) 622–3850 (not a toll-free evidence is not, per se, equivalent to agencies’ speed limit compliance call). proof of payment of the foreign tax. regulations is mandated by Section SUPPLEMENTARY INFORMATION: Treasury and the IRS have now 205(d) of the NHS Act. Therefore, notice concluded, however, that such and opportunity for comment are not Background clarification is not necessary. required under the regulatory policies On January 13, 1997, the IRS Continental Illinois v. Commissioner, and procedures of the Department of published in the Federal Register a supra. Transportation. notice of proposed rulemaking (REG– Therefore, in response to comments, In addition, good cause exists to 208288–90), 62 FR 1700, relating to the the proposed regulation is finalized dispense with the 30-day delayed filing requirements for returns claiming without its proposed amendment to effective date requirement of 5 U.S.C. the foreign tax credit (the ‘‘proposed § 1.905–2(b)(3). Thus, the final 553(d) because this final rule ‘‘grants or regulation’’). regulations are identical to the final recognizes an exemption or relieves a Written comments responding to the regulations currently in effect, except restriction’’ in accordance with 5 U.S.C. proposed regulation were received. A § 1.905–2(a)(2) no longer requires a 553(d)(1). In repealing the NMSL public hearing was requested and foreign receipt or return to be attached regulation for all States, all Federal scheduled but was later canceled when to a Form 1116 or Form 1118. speed limit provisions are terminated. the one requester withdrew the request Treasury and the IRS will continue to Consequently, the agencies are to testify. After consideration of all of review the foreign tax credit proceeding directly to a final rule which the written comments, the proposed substantiation rules to assure that they is effective upon its date of publication. regulation under section 905(b) is are functioning adequately. For Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3813 example, Treasury and the IRS are provides that such evidence of payment applicable for returns whose original concerned that U.S. holders of foreign of foreign taxes must be presented to the due date falls on or after January 1, securities, including American district director upon request. 1988. * * * Depositary Receipts (‘‘ADRs’’), may be Special Analyses * * * * * claiming foreign tax credits in situations Michael P. Dolan, It has been determined that this where an intermediary in the chain of Deputy Commissioner of Internal Revenue. ownership between the holder of a Treasury decision is not a significant foreign security or an ADR and the regulatory action as defined in Approved: January 13, 1998. issuer of the security (or the security Executive Order 12866. Therefore, a Donald C. Lubick, underlying the ADR) has taken actions regulatory assessment is not required. It Acting Assistant Secretary of the Treasury. inconsistent with the ownership of the has also been determined that section [FR Doc. 98–1816 Filed 1–26–98; 8:45 am] underlying security by the person 553(b) of the Administrative Procedures BILLING CODE 4830±01±U claiming the credit, such as a Act (5 U.S.C. chapter 5) does not apply disposition of such security. One to this regulation, and because the approach to address this issue would regulation does not impose a collection DEPARTMENT OF LABOR involve modifying the substantiation, of information on small entities, the documentation and reporting rules with Regulatory Flexibility Act (5 U.S.C. Occupational Safety and Health respect to payments on such securities chapter 6) does not apply. Pursuant to Administration and taxes withheld therefrom. For section 7805(f) of the Internal Revenue example, in order for a U.S. owner to be Code, the notice of proposed rulemaking 29 CFR Part 1926 entitled to a credit for foreign taxes preceding this regulation was submitted [Docket No. S±205] imposed on income with respect to a to the Chief Counsel for Advocacy of the security, financial intermediaries Small Business Administration for RIN 1218±AA40 comment on its impact on small (including custodians) could be Safety Standards for Scaffolds Used in required to substantiate that they have business. Drafting Information: The principal the Construction Industry (Aerial Lifts); not taken any action inconsistent with Effective Date and Office of beneficial ownership of the relevant author of this regulation is Joan Thomsen of the Office of the Associate Management and Budget Control security by such U.S. owner. Numbers Under Paperwork Reduction It should be noted that portfolio Chief Counsel (International), IRS. Act investors are not necessarily entitled to However, other personnel from the IRS foreign tax credits for the full amount and Treasury Department participated AGENCY: Occupational Safety and Health indicated on the Form 1099 as foreign in their development. Administration, Labor. taxes paid. Portfolio investors are only List of Subjects in 26 CFR Part 1 ACTION: Final rule; amendment; entitled to a foreign tax credit for the announcement of effective date and Income taxes, Reporting and amount of tax that is legally owed, OMB approval of information collection recordkeeping requirements. which may not be the same as the requirements. amount withheld. If, for example, a Adoption of Amendments to the portfolio investor is entitled to a refund Regulations SUMMARY: This document announces the of foreign tax withheld because of a effective date of a provision in the reduced treaty withholding rate, the Accordingly, 26 CFR part 1 is Occupational Safety and Health investor is only entitled to a foreign tax amended as follows: Administration’s construction standard for scaffolds that addresses credit for the reduced amount, whether PART 1ÐINCOME TAXES or not the investor files a refund claim manufacturer certification of ‘‘field with the foreign tax authorities. The IRS Paragraph 1. The authority citation modified’’ aerial lifts. The document has made changes to the Form 1116 for 26 CFR part 1 continues to read in also adds an entry to display that the Instructions and Publication 514 to part as follows: collection of information has been clarify this point and intends to make Authority: 26 U.S.C. 7805 * * * approved by the Office of Management similar changes to the Form 1118 and Budget under the Paperwork Instructions. Par. 2. Section 1.905–2 is amended by Reduction Act of 1995. revising the second through fourth EFFECTIVE DATE: The amendment in this Explanation of Provisions sentences in paragraph (a)(2) to read as final rule and § 1926.453(a)(2), Section 1.905–2(a)(1), 1.905–2(b)(1), (2), follows: published at 61 FR 46026, are effective and (3), and 1.905–2(c) § 1.905±2 Conditions of allowance of January 27, 1998. Sections 1.905–2(a)(1), 1.905–2(b)(1), credit. FOR FURTHER INFORMATION CONTACT: (2) and (3), and 1.905–2(c) are (a) * * * Laurence Davey, Directorate of unchanged from the current final (2) * * * Except where it is established Construction, Occupational Safety and regulations. to the satisfaction of the district director Health Administration, U.S. Department that it is impossible for the taxpayer to of Labor, Room N–3621, 200 Section 1.905–2(a)(2) furnish such evidence, the taxpayer Constitution Avenue, NW., Washington, Under former § 1.905–2(a)(2), must provide upon request the receipt DC 20210, telephone (202) 219–7198. taxpayers generally were required to for each such tax payment if credit is SUPPLEMENTARY INFORMATION: In the attach to their income tax returns either sought for taxes already paid or the August 30, 1996, Federal Register at 61 (1) the receipt for the foreign tax return on which each such accrued tax FR 46026, et seq., OSHA revised the payment or (2) a foreign tax return for was based if credit is sought for taxes standards for scaffolds in construction, accrued foreign taxes. Section 1.905– accrued. The receipt or return must be codified as subpart L of 29 CFR part 2(a)(2) removes the requirement that the either the original, a duplicate original, 1926. The effective date for the revised documentation be attached to the or a duly certified or authenticated subpart was November 29, 1996. income tax return. The regulation now copy. The preceding two sentences are However, in that same document, at 61 3814 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations

FR 46026 and 46103–46104, the Agency Authority: Section 107, Contract Work The interim rule increased the announced its intent to request Office of Hours and Safety Standards Act number of post offices where Global Management and Budget (OMB) (Construction Safety Act) (40 U.S.C. 333); Priority Mail would be available, approval for a provision addressing secs. 4, 6, 8, Occupational Safety and Health increased the number of destination Act of 1970 (29 U.S.C. 653, 655, 657); countries, and added variable weight- aerial lifts in § 1926.453(a)(2). OSHA Secretary of Labor’s Order 12–71 (36 FR stated that the effective date for 8754), 8–76 (41 FR 25059), or 1–90 (55 FR based rates to increase customer § 1926.453(a)(2) would be announced in 9033), as applicable; 29 CFR part 1911. convenience. the Federal Register at a later date, once The Postal Service received one letter OSHA received approval for the § 1926.5 [Amended] containing nine comments on the information collection requirements in 2. In § 1926.5, the table is amended by interim rule. that provision from OMB. The aerial lift adding the entry Comment one suggests that, for those provisions contain a requirement for ‘‘§ 1926.453(a)(2)...... 1218–0216’’ states where all post offices within the manufacturer certification of ‘‘field in numerical order. state are on the list of acceptance sites, just the state should be listed without modified’’ aerial lifts, which was [FR Doc. 98–1788 Filed 1–26–98; 8:45 am] showing the different facilities. This previously codified in § 1926.556, and BILLING CODE 4510±26±M which was redesignated at suggestion does not take into account § 1926.453(a)(2) in the final rule. that there may arise a case where a post office within a state may not be able to In accordance with the Paperwork POSTAL SERVICE Reduction Act of 1995 (44 U.S.C. 3501– accept Global Priority Mail at some time in the future. The present system of 3520), OMB has approved the 39 CFR Part 20 information collection and assigned listing the acceptance facilities allows OMB control number 1218–0216, which Expansion of Global Priority Mail the Postal Service to delete post offices expires on October 31, 2000. Under 5 when appropriate. Comment two suggests that ZIP Codes CFR 1320.5(b), an Agency may not AGENCY: Postal Service. be listed in numerical order rather than conduct or sponsor a collection of ACTION: Final rule. in alphabetical order of the acceptance information unless: (1) The collection SUMMARY: On March 29, 1996, the Postal facility. While both numerical and displays a valid control number, and (2) Service published in the Federal alphabetical listings are valid, neither is the agency informs potential persons Register, 61 FR 14025, an interim rule more valid than the other. The Postal who may respond to the collections of with a request for comments which Service elects to retain the alphabetical information that such persons are not expanded Global Priority Mail service listing. required to respond to the collection of by increasing the number of acceptance Comment three states that, in New information unless it displays a points, increasing the number of York State, Postal Codes 117/118 are no currently valid OMB control number. destination countries, and adding longer listed as acceptance sites, Accordingly, now that OMB has weight variable rates for items weighing whereas they were listed as acceptance approved the collections in up to 4 pounds. The Postal Service now sites for the original test. This was a § 1926.453(a)(2), OSHA is codifying the adopts the interim regulations, with typographical error; ZIP Codes 117/118 current OMB control number into amendments, as final. are acceptance sites. § 1926.5, which is the central section in Comment four asks for an explanation EFFECTIVE DATE: January 27, 1998. which OSHA displays its approved of certain abnormalities in the rate collections under the Paperwork FOR FURTHER INFORMATION CONTACT: R. structure for variable weights and the Reduction Act. The effective date of Jay Thabet, (202) 268–2269. volume rates. The differences between § 1926.453(a)(2) is January 27, 1998. SUPPLEMENTARY INFORMATION: On March weight steps does not have to be equal Authority and Signature 29, 1996, the Postal Service published or linear or based totally on cost an interim rule expanding Global changes. The competitions’ rates for This document was prepared under Priority Mail and requesting comments, similar products are a factor. The size the direction of Charles N. Jeffress, 61 FR 14025. Global Priority Mail is an and weight of the volume the USPS Assistant Secretary of Labor for expedited airmail letter service most wants to attract is another factor in Occupational Safety and Health, U.S. providing fast, reliable, and economical the determination of weight level Department of Labor, 200 Constitution delivery of all items mailable as letters increases. Avenue, N.W., Washington, DC 20210. or merchandise up to 4 pounds. Global Comment five asks for an explanation List of Subjects in 29 CFR Part 1926 Priority Mail items receive priority for the relationship between rates for handling in the United States and Canadian and European destinations. Construction; Occupational safety and destination countries. Service is limited The expected traffic to each country health; Reporting and recordkeeping to the 34 destination countries group, the competition that we face requirements. identified in the International Mail going to that country group, and the cost Signed at Washington, D.C., this 15th day Manual 226.2. Service is available from to get into each country group were of January, 1998. designated post offices identified in the factors used to determine rates. In the Charles N. Jeffress, International Mail Manual 226.32. example cited, competitors’ rates and Assistant Secretary of Labor. The weight limit for Global Priority delivery costs in the country were the Mail items is 4 pounds. The Postal most influential. Accordingly, the Occupational Safety Service offers two sizes of preprinted Comment six states that the and Health Administration amends 29 flat-rate envelopes. The rates for these relationship between the flat rate CFR part 1926 as set forth below. envelopes are based on a geographic rate envelopes and the variable weight rate PART 1926Ð[AMENDED] zone regardless of the actual weight. should be clarified and the relationship Although these envelopes are valid for between the flat rate envelope and the 1. The authority citation for subpart A weights of up to 4 pounds, the practical volume rate should be clarified. The flat of part 1926 continues to read as limitations of the envelopes limit the rate developed for envelopes that the follows: weight to less than 4 pounds. Postal Service provides is independent Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3815 of the variable weight rate and the allows the mailpiece to reach the reliable, and economical delivery of all volume rate. The Postal Service appropriate airmail facility in time to items mailable as letters or merchandise developed the flat rates as a make the scheduled airline departure on up to 4 pounds. Global Priority Mail convenience for the customer. To the day after the mailpiece is deposited. items receive priority handling in the receive either the variable weight or If the transportation network at a given United States and in destination volume rate options, the customer must post office does not allow for the countries. Service is available only to provide the appropriate packaging. The mailpiece to leave the United States on destination countries identified in envelopes the Postal Service provides the day after deposit, that post office 226.2, from post offices identified in are for the convenience of the customer does not accept Global Priority Mail. 226.3. and are not eligible for either the This restriction is in place to preserve variable weight or volume rate options. the integrity of a premium service for 226.12 Permissible Items Comment seven suggests a change in which the customer pays a premium fee. wording to Chapter 2 of the A transmittal letter making the All items sent as letter class mail (see International Mail Manual, part 226.62, changes in the pages of the International 221.1) are accepted in Global Priority to read * * * * sticker rate must have Mail Manual will be published and Mail provided that the contents are the DEC–10 sticker affixed to the transmitted automatically to mailable and fit securely in the address side of the package, for subscribers. Notice of issuance of the envelope. Global Priority Mail items clarification purposes. The Postal transmittal letter will be published in may contain dutiable merchandise Service accepts this comment and the Federal Register as provided by 39 unless the country of destination revises Chapter 2 of the International CFR 20.3. specifically prohibits dutiable Mail Manual, part 226.62. The Postal Service amends part 226 of merchandise in letters (see 224.51). Any Comment eight notes that section the International Mail Manual, which is item that is prohibited in international 226.82 of the International Mail Manual incorporated by reference in the Code of mail is prohibited in Global Priority does not state where the single piece Federal Regulations. See 39 CFR 20.1. Mail. Refer to the ‘‘Country Conditions rate packages can be mailed. In light of of Mailing’’ in the Individual Country this comment the Postal Service revises List of Subjects in 39 CFR Part 20 Listings for individual country Chapter 2 of the International Mail Foreign relations, Incorporation by prohibitions. Manual, part 226.82, to state that single reference, International postal services. piece variable weight option may be 226.13 Packaging deposited in the normal manner of PART 20Ð[AMENDED] deposit for Global Priority Mail. Items must fit comfortably within the Comment nine questions the legality The authority citation for 39 CFR Part flat-rate envelope without distorting or of not providing Global Priority Mail 20 continues to read as follows: bursting the container. Do not use service from every post office under the Authority: 5 U.S.C. 552(a); 39 U.S.C. 401, excessive tape to keep the envelopes jurisdiction of the United States Postal 407, 408. from bursting. Use only one piece of Service. The United States Postal 2. The International Mail Manual is tape to secure the flap. Service provides service throughout the amended to incorporate part 226, Global 226.2 Availability entire United States as mandated by 39 Priority Mail, as follows: USC 3623(d). There are some products and services that are not available at all 226 Global Priority Mail Global Priority Mail is available to the following countries. Countries postal retail units. Acceptance of 226.1 General passport applications is an example. In specifically identified will have service the case of Global Priority Mail, the 226.11 Definition only to specific cities within those service is offered at all post offices from Global Priority Mail is an expedited countries, as noted below: which transportation is available which airmail letter service providing fast,

COUNTRIES OF DESTINATION

Western Europe Pacific Rim North America South America Middle East

Austria Australia Canada Brazil 4 Israel.6 Belgium China 2 Mexico 3 Chile 5 Saudi Arabia.7 Denmark Hong Kong Finland Japan France (including Monaco) Korea, Republic of Germany New Zealand Great Britain and Northern Philippines Ireland 1 Singapore Iceland Taiwan Ireland Thailand Liechtenstein Vietnam Luxembourg Netherlands, The Norway Portugal Spain Sweden Switzerland 1 Includes England, Northern Ireland, Scotland, Wales, Guernsey, Jersey, and the Isle of Man. 2 Destinations in China are limited to Beijing, Dalian, Guangzhou, Qingdao, Shanghai, Shenzhen, Suzhou, Tianjin, Wuxi, Xiamen, and Zhuhai ONLY. 3816 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations

3 Destinations in Mexico are limited to Mexico City, Guadalajara, and Monterrey ONLY. 4 Destinations in Brazil are limited to Sao Paulo and Rio de Janeiro ONLY. 5 Destinations in Chile are limited to Santiago, Valparaiso, and VinÄa del Mar ONLY. 6 Destinations in Israel are limited to Jerusalem, Tel Aviv, and Haifa ONLY. 7 Destinations in Saudi Arabia are limited to Riyadh, Jeddah, and Dammam ONLY.

226.3 Mailing Locations CONNECTICUT Peoria: 615, 616 Hartford: 060, 061, 062 Quincy: 623, 634, 635 226.31 Acceptance Offices and Pickup Rockford: 610, 611 Service Locations New Haven: 063, 064, 065, 066 Stamford: 068, 069 Rock Island: 612 Waterbury: 067 Springfield: 625, 626, 627 Global Priority Mail service is South Suburban: 604 available only through the designated DELAWARE IOWA post offices and the additional post Wilmington: 197, 198, 199 offices listed in 226.32. Pickup Service Burlington: 526 is available for an additional fee. (See DISTRICT OF COLUMBIA (Washington, DC) Cedar Rapids: 522, 523, 524 Washington: 200, 202, 203, 204, 205 Davenport: 527, 528 226.83.) Des Moines: 500, 501, 502, 503, 509 226.32 Service Areas FLORIDA Dubuque: 520 Daytona Beach: 321 Mason City: 504 Service is available only from the Fort Myers: 339 Ottumwa: 525 metropolitan areas as defined by the ZIP Ft. Lauderdale: 333 Sioux City: 510, 511 Code ranges shown in Exhibit 226.32. If Gainesville: 326, 344 Waterloo: 506, 507 Global Priority Mail is presented at a Jacksonville: 320, 322 KANSAS non-participating retail unit, advise the Lakeland: 338 Manasota: 342 Fort Scott: 667 customer that the item cannot be Miami: 331, 332 Kansas City: 660, 661, 662 accepted as Global Priority Mail. Refer Mid-Florida: 327 Hays: 676 customer to the nearest Global Priority Orlando: 328, 329, 347 Salina: 674 Mail retail acceptance unit. Within South Florida: 330 Topeka: 664, 665, 666, 668 these service areas, prepaid items may St. Petersburg: 337 Wichita: 672 be given to carriers, deposited in Tallahassee: 323 KENTUCKY Express Mail collection boxes, or mailed Tampa: 335, 336, 346 West Palm Beach: 334, 349 Ashland: 411, 412 at post offices, stations, and branches. Bowling Green: 421, 422 GEORGIA Campton: 413, 414 Exhibit 226.32 Global Priority Mail Elizabeth: 427 Acceptance Cities and Three-Digit ZIP Albany: 317 Athens: 306 Louisville: 400, 401, 402, 471 Codes Atlanta: 303, 311 Lexington: 403, 404, 405, 406 Owensboro: 423 ALABAMA Augusta: 298, 308, 309 Columbus: 318, 319 Pikeville: 415, 416 Anniston: 362 Macon: 310, 312 LOUISIANA Birmingham: 352 North Metro: 300, 301, 302, 305 Baton Rouge: 707, 708 Huntsville: 356, 357, 358 Savannah: 299, 313, 314 New Orleans: 700, 701 Mobile: 366 Swainsboro: 304 Hammond: 704 Montgomery: 361, 368 Valdosta: 316 Thibodaux: 703 ARIZONA Waycross: 315 MAINE Phoenix: 850, 852, 853 INDIANA Bangor: 044, 046, 047 Tucson: 857 Bloomington: 474 Portland: 040, 041, 042, 043, 045, 048, 049 ARKANSAS Columbus: 472 Evansville: 424, 476, 477 MARYLAND Little Rock: 722 Fort Wayne: 467, 468 West Memphis: 723 Baltimore: 210, 211, 212, 214, 219 Gary: 463, 464 Cumberland: 215, 267 CALIFORNIA Indianapolis: 460, 461, 462 Easton: 216 Kokomo: 469 Industry: 917, 918 Frederick: 217 Lafayette: 479 Salisbury: 218 Inglewood: 902, 903, 904, 905 Muncie: 473 Long Beach: 906, 907, 908 Southern: 206, 207 South Bend: 465, 466 Suburban: 208, 209 Los Angeles: 900, 901 Terre Haute: 478 North Bay: 949 Washington: 475 MASSACHUSETTS Oakland: 945, 946, 947, 948, ILLINOIS Boston: 021, 022 Pasadena: 910, 911, 912 Brockton: 020, 023, 024 Salinas: 939 Bloomington: 617 Buzzards Bay: 025, 026 San Diego: 919, 920, 921 Carbondale: 629 Middlesex-Essex: 018, 019 San Francisco: 940, 941, 943, 944 Carol Stream: 601, 603 Pittsfield: 012 San Jose: 950, 951 Centralia: 628 Springfield: 010, 011, 013 Santa Ana: 926, 927, 928 Chicago: 606, 607, 608 Worcester: 014, 015, 016, 017 Van Nuys: 913, 914, 915, 916 East St. Louis: 622 Effingham: 624 MICHIGAN COLORADO Champaign: 618, 619 Detroit: 481, 482 Brighton: 806 Fox Valley: 605 Flint: 484, 485 Colorado Springs: 808, 809 Galesburg: 614 Gaylord: 497 Denver: 800, 801, 802, 803 Kankakee: 609 Grand Rapids: 493, 494, 495 Longmont: 805 La Salle: 613 Jackson: 492 Pueblo: 810 Palatine: 600, 602 Kalamazoo: 490, 491 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3817

Lansing: 488, 489 Queens: 110, 113, 114, 116 Southeastern: 189, 193, 194 Royal Oak: 480, 483 Rochester: 144, 145, 146 Wilkes-Barre: 182, 186, 187 Saginaw: 486, 487 Rockland: 109 Traverse City: 496 Staten Island: 103 PUERTO RICO/VIRGIN ISLANDS Syracuse: 130, 131, 132 San Juan: 006, 007, 008, 009 MINNESOTA Utica: 133, 134, 135 Detroit Lakes: 565 Watertown: 136 RHODE ISLAND Duluth: 558 Westchester: 105, 106, 107, 108 Providence: 027, 028, 029 Mankato: 560 Western Nassau: 115 Minneapolis: 553, 554 SOUTH CAROLINA Rochester: 559 NORTH CAROLINA Charleston: 294 Saint Cloud: 563 Asheville: 287, 288, 289 Columbia: 290, 291, 292 St. Paul: 550, 551, 540 Charlotte: 280, 281, 282, 297 Florence: 295 Thief River Falls: 567 Greensboro: 270, 271, 272, 273, 274 Greenville: 293, 296 Willmar: 562 Hickory: 286 Windom: 561 Raleigh: 275, 276, 277 SOUTH DAKOTA Aberdeen: 574 NORTH DAKOTA MISSISSIPPI Dakota Central: 572, 573 Grenada: 389 Bismarck: 585 Mobridge: 576 Gulfport: 395 Dickinson: 586 Pierre: 575 Hattiesburg: 394 Devils Lake: 583 Rapid City: 577 Jackson: 392 Fargo: 580, 581 Sioux Falls: 570, 571 McComb: 396 Grand Forks: 582 Jamestown: 584 TENNESSEE MISSOURI Minot: 587 Chattanooga: 307, 373, 374 Cape Girardeau: 636, 637, 638, 639 Williston: 588 Columbia: 384 Chillicothe: 646 OHIO Cookeville: 385 Harrisonville: 647 Jackson: 383 Kansas City: 640, 641 Akron: 442, 443 Johnson City: 376 Mid-Missouri: 650, 651, 652, 653 Athens: 457 Knoxville: 377, 378, 379 Saint Joseph: 644, 645 Canton: 446, 447 McKenzie: 382 Springfield: 648, 654, 655, 656, 657, 658 Chillicothe: 456 Memphis: 380, 381, 386 Cincinnati: 410, 450, 451, 452, 470 St. Louis: 620, 630, 631, 633 Nashville: 370, 371, 372 Cleveland: 440, 441 MONTANA Columbus: 430, 431, 432, 433 TEXAS Billings: 591 Dayton: 453, 454, 455 Abilene: 768, 795, 796 Lima: 458 NEBRASKA Amarillo: 791 Mansfield: 448, 449 Austin: 786, 787, 789 Steubenville: 439 Lincoln: 683, 684, 685 Beaumont: 776, 777 Toledo: 434, 435, 436 Norfolk: 686, 687 Bryan: 778 Youngstown: 444, 445 Omaha: 515, 516, 680, 681 Corpus Christi: 784 Zanesville: 437, 438 NEVADA Dallas: 751, 752, 753 Las Vegas: 891 OKLAHOMA El Paso: 799 Ardmore: 734 Fort Worth: 760, 761, 762, 764 NEW HAMPSHIRE Clinton: 736 Greenville: 754 Manchester: 030, 031, 032, 033, 034 Durant: 747 Houston: 770, 772 Portsmouth: 038, 039 Enid: 737 Longview: 756 Lawton: 735 Lubbock: 794 NEW JERSEY McAlester: 745 Lufkin: 759 Hackensack: 076 Muskogee: 744 North Houston: 773, 774, 775 Kilmer: 088, 089 Oklahoma City: 730, 731 North Texas: 750 Monmouth: 077 Ponca City: 746 Palestine: 758 Newark: 070, 071, 072, 073 Poteau: 749 San Angelo: 769 Paterson: 074, 075 Shawnee: 748 San Antonio: 780, 781, 782, 788 South Jersey: 080, 081, 082, 083, 084 Tulsa: 740, 741, 743 Texarkana: 755 Trenton: 085, 086, 087 Woodard: 738 Tyler: 757 West Jersey: 078, 079 Waco: 765, 766, 767 OREGON Wichita Falls: 763 NEW MEXICO Portland: 972 Albuquerque: 871 UTAH PENNSYLVANIA Provo: 845, 846, 847 NEW YORK Altoona: 166, 168 Salt Lake City: 840, 841, 843, 844 Albany: 120, 121, 122, 123 Bradford: 167 Binghamton: 137, 138, 139 Dubois: 158 VERMONT Bronx: 104 Erie: 164, 165 Burlington: 054, 056 Brooklyn: 112 Greensburg: 156 White River Junction: 035, 036, 037, 050, Buffalo: 140, 141, 142, 143 Harrisburg: 170, 171, 172, 178 051, 052, 053, 057, 058, 059 Elmira: 148, 149 Johnstown: 155, 157, 159 Glen Falls: 128 Lancaster: 173, 174, 175, 176 VIRGINIA Hicksville: 118 Lehigh Valley: 180, 181, 183 Charlottesville: 228, 229, 244 Jamestown: 147 New Castle: 160, 161, 162 Culpeper: 227 Long Island: 111 Oil City: 163 Farmville: 239 Mid-Hudson: 124, 125, 126, 127 Philadelphia: 190, 191 Northern Virginia: 201, 220, 221, 222, 223 Mid Island: 117, 119 Pittsburgh: 150, 151, 152, 153, 154 Norfolk: 233, 234, 235, 236, 237 New York: 100, 101, 102 Reading: 179, 195, 196 Richmond: 224, 225, 230, 231, 232, 238 Plattsburgh: 129 Scranton: 184, 185, 188 Winchester: 226 3818 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations

WASHINGTON Wheeling: 260 226.4 Postage Everett: 982 WISCONSIN 226.41 Flat-Rate Envelopes Postage Olympia: 985 Eau Claire: 547 Seattle: 980, 981 Green Bay: 543 Each Global Priority Mail flat-rate Tacoma: 983, 984 La Crosse: 546 envelope is charged at a flat rate. The Wenatchee: 988 Madison: 537 rate is based on the geographic rate zone Yakima: 989 Milwaukee: 530, 531, 532 regardless of its actual weight. Postage WEST VIRGINIA Oshkosh: 549 is required for each piece. (See Exhibit Racine: 534 Bluefield: 246, 247, 248 Spooner: 548 226.41.) Charleston: 250, 251, 252, 253 Huntington: 255, 256, 257 WYOMING Exhibit 226.41 Martinsburg: 254 Cheyenne: 820

FLAT-RATE ENVELOPE POSTAGE RATES

Destination Small Large

Western Europe and Middle East ...... $3.75 $6.95 Canada and Mexico ...... 3.75 6.95 Pacific Rim and South America ...... 4.95 8.95 Weight Limit 4 Lbs.

226.42 Variable Weight Option Form 3653, Global Priority Mail 226.52 Postal Marking Related to Postage—Single Piece Rates Statement of Mailings. Volume Rate Postage Global Priority Mail variable weight Exhibit 226.43 When pieces are paid at the volume rates are calculated in half (or fraction rate and paid by stamps or meter thereof) increments based on the weight VARIABLE WEIGHT STICKER OPTIONÐ impression, each piece must be legibly of each piece the destination geographic VOLUME RATES marked with the words ‘‘Volume Rate rate zone up to four pounds. (See Global Priority Mail.’’ If stamps are used Exhibit 226.42.) Western Pacific the endorsement must appear on the Weight Europe Rim and Canada address side of each piece and must be Exhibit 226.42 and Mex- level and Mid- South ico applied by a printing press, hand stamp dle East America or other similar printing device. If meter VARIABLE WEIGHT STICKER OPTIONÐ impression is used the endorsement 1¤2 lb ...... $5.95 $6.95 $5.00 SINGLE PIECE RATES 1.0 lb ..... 8.50 10.00 7.50 must be in the ad plate or the slug area. 1.5 lbs .... 10.00 13.50 10.00 If part of the slug, the abbreviation GPM Western Pacific Vol. Rate may be used. See DMM Weight Europe Rim and Canada 2.0 lbs .... 12.00 16.95 12.50 and Mex- 2.5 lbs .... 14.00 19.25 13.50 P030.4.14 for specification of size level and Mid- South ico dle East America 3.0 lbs .... 16.95 21.95 14.50 requirements. 3.5 lbs .... 19.95 25.50 15.50 226.53 Permit Imprint Content and 1¤2 lb ...... $7.00 $8.00 $5.95 4.0 lbs .... 22.50 27.75 16.50 Format 1.0 lb ..... 10.50 12.50 10.00 Weight 1.5 lbs .... 12.50 16.95 13.50 Limit All permit imprints on Global Priority 2.0 lbs .... 15.00 21.00 16.50 4 Mail must show city and state, ‘‘Global 2.5 lbs .... 17.50 23.95 18.00 Lbs. 3.0 lbs .... 19.95 27.25 19.50 Priority Mail,’’ U.S. Postage Paid, and 3.5 lbs .... 22.00 31.50 21.00 permit number. They may show the 4.0 lbs .... 24.75 34.50 22.50 226.5 Payment Methods mailing date, amount of postage paid or Weight 226.51 Postage Payment Methods the number of ounces for each postage. Limit 226.54 Meter Stamps Content 4 Nonidentical weight piece mailings Lbs. must have the applicable postage affixed At a minimum, a meter stamp must by adhesive stamps, meter stamps or if show the month, day, and year in the 226.43 Global Priority Mail Sticker— presented at a post office, postal postmark, city and state designation of Volume Rates validation imprinter (PVI labels). the licensing post office, the number, 226.431 Minimum Quantity Identical weight piece mailings may be and the amount of postage. See DMM Requirement paid by meter stamps, adhesive stamps, P030.4.6. PVI labels or permit imprint subject to 226.6 Preparation Requirements The mailer must have a minimum of certain standards. To use permit five or more pieces to one or more imprint, the mailing must consist of 200 226.61 Addressing Global Priority Mail countries. The or more pieces and be of identical All items must bear the complete minimum does not apply to each weight. The 200-piece criterion for delivery address of the addressee and geographic zone rate. (See Exhibit permit imprint applies to both volume the full name (no abbreviations) of the 226.43.) rate and flat-rate mail. Mailers may use destination country. See 122. 226.432 Mailing Statement permit imprint with nonidentical weight items only if authorized by the 226.62 Marking Postage for volume rate mail and USPS under a Manifest Mailing System Global Priority Mail items must be permit imprint must be computed on PS (MMS), in DMM P710. mailed in special envelopes (EP–15A, Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3819

EP–15B) or with the Global Priority Mail 226.82 Deposit of Mail MARAD is also reducing information sticker (DEC–10) provided by the Postal Global Priority Mail pieces paid by collection under these regulations. Service. (These supplies may be permit imprint and pieces claimed at DATES: This final rule is effective obtained by calling 800–222–1811.) the Global Priority Mail volume rates January 29, 1998. Unmarked pieces are subject to the must be deposited at a business mail FOR FURTHER INFORMATION CONTACT: applicable LC/AO airmail regular rates acceptance unit as authorized by the Michael P. Ferris, Director, Office of and treatment. Pieces paid at the Global postmaster in the designated Global Costs and Rates, Maritime Priority Mail sticker rate must have the Priority Mail sites for weighing. Single Administration, Washington, DC 20590, DEC–10 sticker affixed to the address piece variable weight option may be Tel. (202) 366–2324. side of the package. deposited in the normal manner of SUPPLEMENTARY INFORMATION: Section 226.63 Customs deposit for Global Priority Mail. Flat- 901(b)(1) of the Merchant Marine Act of rate envelopes with postage affixed may 1936 (the Act), as amended (46 App. A green customs label must be affixed be deposited in any Express Mail Street U.S.C. 1241(b)), cited as the Cargo if the package is 16 ounces or more, collection box or other such place where Preference Act of 1954, requires that at regardless of its contents. Only Express Mail is accepted. Metered mail least 50 percent of any equipment, documents and correspondence under must be deposited in locations under materials or commodities purchased by 16 ounces do not require a customs the jurisdiction of the licensing post the United States or for the account of form. office except as permitted under DMM any foreign nation without provision for 226.7 Size and Weight Limits P030. reimbursement, or acquired as the result of funds or credits from the United 226.83 Pickup Service 226.71 Size Limits States, shall be transported on privately 226.711 Flat-Rate Envelope Sizes On call and scheduled pickup service owned U.S.-flag commercial vessels, to are available for Global Priority Mail the extent that such vessels are available a. Small Size—6 x 10 inches. from the designated Global Priority Mail at fair and reasonable rates. In 1985, 1 1 b. Large Size—9 ⁄2 x 12 ⁄2 inches. acceptance cities. There is a charge of section 901 was amended to exclude 226.712 Package Sizes for Variable $4.95 for each pickup stop, regardless of certain programs from the application of Weight Option the number of pieces picked up. (See cargo preference and to raise the U.S.- DMM D010 for standards of pickup flag share to 75 percent on certain 1 a. Minimum length and height: 5 ⁄2 x service.) Pickup is not available for others. Upon request, MARAD provides 1 3 ⁄2 inches. Global Priority Mail pieces if paid by fair and reasonable rates (also referred to b. Minimum depth (thickness): .007 permit imprint or claimed at the volume as guideline rates) to U.S. shipper inches. rate. agencies. Section 901(b)(2) of the Act c. Maximum length: 24 inches. Stanley F. Mires, provides the authority for MARAD (by d. Maximum length, height, depth Chief Counsel, Legislative. delegation from the Secretary of (thickness) combined: 36 inches. [FR Doc. 98–1935 Filed 1–26–98; 8:45 am] Transportation) to issue regulations governing the administration of section 226.713 Rolls BILLING CODE 7710±12±P 901(b)(1). In 1989, MARAD issued a. Minimum length: 4 inches. regulations at 46 CFR part 382 (‘‘Rule’’), that initially became effective on b. Minimum length plus twice the DEPARTMENT OF TRANSPORTATION diameter combined: 63⁄4 inches. January 1, 1990. Under the 1990 Rule, MARAD c. Maximum length: 36 inches. Maritime Administration established fair and reasonable rates, so- d. Maximum length plus twice the called guideline rates, based on each diameter combined: 42 inches. 46 CFR Part 382 individual vessel’s costs which applied 226.72 Weight Limit [Docket No. R±158] to the ocean borne portion of cargo transportation. The guideline rate Items sent as Global Priority Mail in RIN 2133±AB19 consisted of four components: (1) envelopes and the variable weight Operating costs; (2) capital costs; (3) option must not exceed 4 pounds. Determination of Fair and Reasonable Guideline Rates for the Carriage of port and cargo handling costs; and (4) 226.73 Special Services Bulk and Packaged Preference brokerage and overhead. The operating cost component of the guideline rate for Mailers may obtain certificates of Cargoes on U.S.-Flag Commercial each participating vessel reflected actual mailing (see NO TAG). No other special Vessels historical vessel operating costs services such as registry, insurance, AGENCY: Maritime Administration, escalated to the current period by restricted delivery, return receipt, or Department of Transportation. utilizing factors for wage and non-wage recorded delivery are available. ACTION: Final rule. costs. All eligible annual operating costs 226.8 Mailer Preparation are added together for each vessel and SUMMARY: The regulations at 46 CFR 226.81 Mailer Requirement divided by the total number of operating part 382 prescribe the administrative days for that vessel to yield a daily Global Priority Mail claimed at the procedures and methodology for operating cost. volume rate must be separated by determining fair and reasonable rates for Each vessel’s actual reported fuel geographic rate zone (Western Europe, the carriage of dry and liquid bulk and consumption at sea and in port forms Pacific Rim, and Canada) when packaged preference cargoes on United the basis of the guideline rate’s fuel cost presented to the business mail entry States commercial cargo vessels. segment. The actual fuel consumption unit unless otherwise authorized by the MARAD is issuing this rule to prescribe of each vessel is multiplied by the USPS. All pieces in a permit imprint cost averaging as the methodology used corresponding projected number of mailing and metered mail must be for determining rates and to implement voyage days at sea and in port to facing the same direction. conforming procedural changes. calculate total units of fuel consumed. 3820 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations

Current fuel prices are applied to fuel based on the most current data from all Public Meetings consumed to produce the fuel segment available sources and verified from data After an initial review of the of the operating cost component. received on completed cargo preference comments received on the ANPRM, MARAD then adds the totals of the fuel voyages. The brokerage and overhead MARAD believed it would be beneficial and non-fuel operating cost segments to component of the guideline rate is the to meet with interested parties. MARAD produce the operating cost component aggregate of the cost components for held two meetings. On July 12, 1995, for the voyage. operating, capital and port and cargo members of the shipping community The capital cost component is handling, multiplied by an 8.5 percent and other interested parties met with presently calculated individually for allowance for broker’s commissions and each participating bulk vessel and MARAD. On July 14, 1995, MARAD met overhead. The total of these four on the same subject with representatives consists of an allowance for components is then divided by cargo depreciation and interest, plus a of the United States Department of tons (which cannot be less than 70 Agriculture (USDA) and the United reasonable return on investment. percent of the vessel’s cargo Depreciation is calculated by the States Agency for International deadweight) to determine the guideline Development (AID), the major straight-line method, based on a 20-year rate. vessel economic life and utilizing a government shipper agencies. Under the 1990 rule, whenever a As a result of MARAD’s experience in residual value of 2.5 percent. However, vessel carries preference cargo and if the owner acquired an existing vessel, determining guideline rates and the subsequently transports additional cargo information received from the ANPRM the vessel is depreciated by the straight- prior to its return to the United States, line method over the remaining period and meetings with interested parties, on MARAD reexamines the guideline rate February 28, 1997, MARAD published a of its 20-year economic life, but not that it calculated for the preference fewer than 10 years. Capitalized Notice of Proposed Rulemaking (NPRM) voyage. This reexamination may result to amend the Rule in order to improve improvements are depreciated straight- in the recalculation of the original line over the remainder of the 20-year the fair and reasonable rate-making guideline rate, incorporating the process. The following is a discussion of period, but not fewer than 10 years. additional voyage itinerary, costs and For the purpose of calculating interest proposed changes to 46 CFR part 382 revenues which occurred as a result of expense, MARAD assumes that original and the comments that were received the carriage of the additional cargo. If a vessel indebtedness is 75 percent of the during the comment period. vessel is scrapped or sold after owner’s capitalized vessel cost and that discharging a preference cargo, MARAD Comments principal payments are made in equal adjusts the guideline rate to reflect the annual installments over a 20-year Eight groups submitted comments in termination of the voyage after period. To compute the interest cost, the response to the NPRM of February 28, owner’s actual interest rate is applied to discharge. If the rate received by the 1997. The respondents were the the constructed outstanding debt on the operator for the preference cargo American Institute of Certified Public vessel. Where the owner has a variable exceeds the adjusted guideline rate for Accountants (AICPA), four U.S.-flag interest rate, MARAD uses the owner’s the one-way voyage, MARAD informs operators that frequently carry rate prevailing at the time of calculation, the shipper agency who may then preference cargoes, a U.S. liner operator, and if there is no interest rate available, require the operator to repay the the U.S. Agency for International MARAD selects an appropriate interest difference in the ocean freight. Development (AID), and United States rate. Advance Notice of Proposed Department of Agriculture’s Foreign MARAD allows a return on capital Rulemaking Agricultural Service (USDA). To cost (investment), with two facilitate discussion of the comments, components, return on equity and MARAD decided that revising the they will be discussed by subject matter. Rule could encourage development of a return on working capital. The rate of General return is based upon a five-year average modern and efficient merchant marine of the most recent rates of return for a and reduce government-wide cargo General comments ran the gamut from cross section of transportation industry preference shipping costs. As a result, supporting most of the proposals in the companies, including maritime on April 19, 1995, MARAD issued an NPRM to urging MARAD not to adopt companies. Equity in the vessel is Advance Notice of Proposed the rule. Some questioned the need for assumed to be the vessel’s constructed Rulemaking (ANPRM) (60 FR 19559), guideline rates or changes to the current net book value less constructed soliciting comments from the public. In procedures and their legality. One indebtedness. Working capital is the the ANPRM, MARAD identified three operator contended that when at least dollar amount necessary to cover alternative methodologies, in addition three bids are received for a preference operating and voyage expenses. The to the existing rate methodology, that it cargo the lowest should be assumed to annual depreciation, interest, return on was considering. The three alternatives be fair and reasonable. Another operator equity and return on working capital are were: Foreign Market, Cost Averaging, conjectured that averaging will divided by 300 operating days to and Market Based. introduce arbitrary biases and that it is determine a daily amount. The total of Seven sets of comments were received unfair for operators to be expected to these elements is multiplied by in response to the ANPRM. Commenters accept low rates when the market is estimated voyage days to determine the represented U.S. shipper agencies, poor but still be held to ceiling rates if capital cost component used in the fair vessel operators and industry the market improves. The same operator and reasonable rate calculation. associations. Comments were offered in postulated that some operators would The port and cargo handling cost support of, and in opposition to all four not be able to recover costs at the component of the guideline rate is alternatives, with no clear consensus. averaging rate. In addition, several determined for each voyage on the basis Commenters generally supported the operators were concerned that their of the actual cargo tender terms for the need for guideline rate reform and were knowledge of their competitors’ cost commodity, load and discharge ports, unanimous that any methodology must structure was insufficient for them to and lot size. Costs used to determine the encourage investment in efficient know how the averaging system would port and cargo cost component are vessels. affect their rates. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3821

The averaging methodology for MARAD has sought to develop a cost- category costs to operators and updates calculating fair and reasonable guideline based system which rewards efficiency on an ongoing basis. rates is supported by the legislative while holding rates in check during Averaging history of Section 901(b)(1) of the Act peak periods. Guideline rate procedures (Pub. L. 83–664 or the Cargo Preference have never guaranteed profitability and MARAD proposed that the operating Act of 1954). the Agency believes that the costs (including fuel consumption, The Cargo Preference Act of 1954 Comptroller’s opinion means that full capital costs and vessel speed) used in requires government agencies to take cost (plus profit) recovery in the the construction of the guideline rate be such steps as may be necessary and guideline rate is not required for all averaged for all vessels within specific practicable to assure that at least 50 vessels. MARAD also believes that the size categories. The averages would be percent (75 percent for specified bulk averaging methodology is fully computed twice a year, or more agricultural products) of the gross consistent with the Act and that it will frequently, if necessary. The impact of tonnage of certain government- be rare that an operator does not recover the change to averaging would be a sponsored cargoes, ‘‘which may be its costs after efficiently executing a reduction in the guideline rate levels transported on ocean vessels shall be preference voyage at the full guideline calculated for less efficient vessels and transported on privately-owned United rate. an increase in the guideline rate levels States-flag commercial vessels, to the MARAD’s goal in revising the Rule is of the more efficient vessels. Although extent such vessels are available at fair to encourage a modern and efficient commenters generally supported the and reasonable rates for United States- merchant marine while reducing principle of averaging, it was unclear to flag commercial vessels.’’ government-wide cargo preference one commenter whether capital costs House Report No. 80, 84th Cong., 1st costs. A United States General would be averaged. Another believed that the rule should specify how Sess. 3 (1955) sets out the reasons for Accounting Office (GAO) report entitled MARAD will decide which vessels’ passage of the Cargo Preference Act of CARGO PREFERENCE costs will be averaged and develop a 1954, as follows: REQUIREMENTS—Objectives Not method to prevent use of irrelevant cost Significantly Advanced When Used in Without some form of assurance of data. A third opposed averaging stating participation by United States-flag vessels in the U.S. Food Aid Programs, published that it would be unpredictable and the transportation of relief and aid cargoes, in September 1994, concluded that food inefficient, penalizing newer vessels, it became clear that the shipping of the aid programs were paying higher capital improvements and steam-turbine recipient and other maritime nations with shipping rates because guideline rate lower operating costs would be able to driven vessels. underbid American-flag vessels and procedures allowed less efficient Under the averaging system, both eventually transport much, if not all, of these operators to charge higher rates. The vessel operating and capital costs will cargoes to the irreparable detriment of the report hypothesized that using average be averaged as will fuel consumption American merchant marine. operating costs for similar sized ships rates and vessel speed. Some wording H.R. Rep. No. 80 also addressed instead of an individual ship’s operating changes have been made in the capital administration of the Cargo Preference costs ‘‘should reduce food aid cost sections of the final rule to clarify Act of 1954 and, as relevant here, transportation costs.’’ MARAD believes that capital costs are averaged. In regard discussed the meaning of ‘‘fair and that changing the Rule to use average to steam-turbine vessels, it is true that reasonable rates.’’ The question of how costs will be effective in encouraging any cost that is greater than the average ‘‘fair and reasonable rates for United efficient operation. In addition, creates a disadvantage to the operator of States-flag commercial vessels’’ should administrative and technical changes the higher cost vessel. MARAD shared be calculated was referred to the made to the rule will help reduce time the commenter’s concern about impact Comptroller General of the United spent on the program by all parties in on newer vessels that might enter the States by the House Merchant Marine a period of scarce resources. fleet and has provided a separate new and Fisheries Committee. The Finally, comments were received that vessel allowance. Because capital Comptroller General advised the relate to how the averaging system will improvements are generally undertaken Committee in a letter dated February 17, affect each individual operator. One to create efficiencies in other cost areas, 1955, (B–95832), that— operator requested that MARAD effective capital improvements should consider providing operators with yield a long-term advantage to the ‘‘fair and reasonable rates’’ as used in Pub. hypothetical rates based on recent cost L. 664 * * * would appear to call for operator. reasonable compensation to the operator, information and also allow an Regarding the use of inappropriate including a fair profit. However, it seems additional comment period. Another data that could cause the average to be apparent that the statute contemplates requested that MARAD undertake a somehow distorted, MARAD will pay average ‘‘fair and reasonable rates,’’ which thorough effort to educate operators on close attention to data provided to may or may not be profitable, or even the averaging process and its likely assure that it yields a meaningful compensatory, to a high-cost operator. impact on guideline rates. average. Clearly, if a vessel carried Quoted in H. Rep. No. 80, supra, p. MARAD does not believe that an preference cargo in this program during 18 (Emphasis in original). additional comment period will provide the prior year, it will be included in the The Committee agreed with the any significant benefit. However, before average. For other vessels, an operator’s Comptroller General’s construction of the final rule becomes effective, program participation will be a factor in the law and added, MARAD will contact each operator with determining inclusion in the average. ** * it should be understood that at any current costs on file to explain the cost However, other factors such as the one particular time market rates may be averaging system and discuss how it individual vessel’s program considerably less than [the fair and might affect rates. MARAD will also participation and cost structure will also reasonable rate ceiling], in which event the provide additional instructions and be considered. chartering agency should feel free to exercise explanations in a brochure explaining sound business judgment to secure the guideline rate procedures to the general Vessel Categories lowest rates possible for the Government. shipping community. In addition, MARAD proposed a four-category H. Rep. No. 80, Supra p. 18. MARAD will also provide the average system based on cargo deadweight 3822 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations capacity (CDWT) with the cargo LASH vessels are used outside of liner primarily with each other and have capacity determining which category of operations and subject to this rule, similar aggregate cost structures. costs were to be used. Six commenters MARAD finds no reason to exclude this MARAD’s proposal to use cargo raised issues concerning categories. The vessel type from the cost discipline that capacity rather than vessel size to comments concerning categories fall averaging by categories provides. determine which category of costs to use into three basic areas: Mixing vessel In regard to the appropriateness of was not generally well received. Two types within a category, how and why transoceanic tug and barge movements, commenters argued that the approach the categories were selected, and tugs and barges have regularly competed was less efficient and could result in alternative category suggestions. for transoceanic cargoes during the last inequities for cargoes just above and Two commenters opposed assigning several years. MARAD sees no reason below the category break. After vessels to categories without regard to why two vessel types competing for the reviewing the comments and doing vessel type. One commenter stated that same cargoes should not be subject to further analysis, MARAD has the cost structure of a LASH liner the same guideline rate methodology. reconsidered this approach and now operation bears no resemblance to the With respect to how size categories believes that categories based on vessel cost structure of bulk operators. The were selected, MARAD examined the size would be the most effective and fair other commenter argued that tug and sizes and costs of vessels that have to all concerned because costs are more barges are inappropriate for carried preference cargo, the number of closely related to vessel deadweight transoceanic voyages and should vessels of similar size, and the cargo than cargo deadweight. therefor not be included with vessels amounts carried on individual voyages One set of comments from industry which are fully capable. in the preference trade. and one from government proposed It is true that LASH liner operations MARAD also considered the vessel category sizes different from have cost structures which are not difference between vessel types (i.e., MARAD’s. Both proposed five different comparable to bulk operations. bulk carriers, tankers, tug/barges, and category sizes and one proposed However, from time to time LASH general cargo), and trading patterns in categories broken down by vessel vessels have competed for and carried arriving at the proposed vessel deadweight (DWT) in lieu of CDWT. bulk and bagged commodities outside of categories. The analysis placed vessels MARAD’s original proposal and the two liner operations. To the extent that in size categories where they compete alternatives are:

MARAD (CDWT) (DWT) Category (CDWT) Alternative #1 Alternative #2

I ...... <8,000 CDWT .. <12,000 CDWT <10,000 DWT. II ...... 8,000±19,999 ... 12,000±24,999 10,000±19,999. III ...... 20,000±34,999 25,000±37,999 20,000±29,999. IV ...... >35,000 ...... 38,000±50,000 30,000±49,999. V ...... None ...... >50,000 ...... =>50,000.

In response to the proposals, MARAD all instances. Although one commenter ships. As a result of comments received, constructed guideline rates using the objected to the change without stating a MARAD reconsidered this item and the averaging method with all three specific reason, two generally supported 10% delay factor for computing average different category size methods. The the change, as being in keeping with speed for tugs has been retained in the analysis showed a more even commercial practices. One suggested final rule. progression of rates from one cargo size that the return leg always terminate in One commenter asserted that a critical to another using the MARAD categories the U.S. Gulf, as that is where most problem with the transportation of bulk and that there is little difference cargo originates. The other suggested resulting from using CDWT instead of that the language in the rule be preference cargo is that the risk shifted DWT to establish the MARAD expanded to include specific reference to carriers by the use of ‘‘full berth categories. However, the review resulted to the practices of the owner and the terms’’ and other land-based in a modest shift in the break point prospects for subsequent employment. transportation requirements in between Category I and Category II from MARAD believes that the method of preference charter parties. In the NPRM, 8,000 CDWT to 10,000 DWT. Also, costs voyage construction published in the MARAD noted the differences in risk for vessels in the greater than 35,000 NPRM can adequately address these between load and discharge terms and DWT category did not display major concerns. Regarding always terminating indicated its intention to use delay variations due to vessel size. in the U.S. Gulf, in certain factors which reflect the inherent risks, Consequently, the final rule will have circumstances, e.g., consecutive voyages therefore no change has been made to four categories based on vessel size. from the U.S. West Coast, the U.S. Gulf the final rule. would not be the appropriate Voyage Parameters Finally, a government commenter termination area. The rule already requested that MARAD continue to The parameters of the pro forma authorizes MARAD to select ‘‘the most calculate one-way rates at the time of voyage used in the construction of the appropriate’’ port range, so expanding booking for vessels sold or scrapped fair and reasonable guideline rate were the language is not necessary. addressed by five commenters. Three Since speed would be averaged across prior to their return to the United States. comments were received concerning vessel types, MARAD proposed that the The final rule continues to provide for MARAD’s proposal for constructing separate weather delay factors in a one-way rate, but with a more precise voyages based upon MARAD selecting § 382.3(e)(6) be eliminated. However, definition of the circumstances when it the most appropriate port range for the one commenter pointed out that tug/ applies. The one-way rate will continue return leg of the preference voyage, barge units will still encounter greater to be calculated at the same time as the rather than a return to the load port in weather delays than self propelled full round-trip guideline rate. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3823

Guideline Rate Adjustments in the guideline rate shall be based on return on working capital is a voyage MARAD’s proposal to eliminate the actual cargo tonnage booked or related capital cost element and thus not backhaul adjustments elicited considered for booking on the voyage. part of the averaged costs. This comments from three operators and two Capital Costs proposed change elicited comments from two persons. One agreed with the government shippers. The comments Five changes designed to simplify or from the operators strongly favor change. The second commenter clarify rate calculations were proposed appeared to misunderstand the MARAD’s proposal, while the within this cost category. Comments government shippers opposed it. proposal. The final rule includes the pertaining to these changes and other proposed change in new § 382.3(b)(3). MARAD believes the proposal to issues related to capital cost were eliminate the backhaul adjustment received from six of the eight The rate of return used in the provides the operator with a greater commenters. calculation of capital costs also elicited ability to increase its commercial The first change adds a clarifying extensive responses from four carriage and U.S.-flag participation in cross reference in § 382.3(b)(2)(ii). In the commenters, even though no change the U.S. foreign trade. Further, MARAD final rule the paragraph explicitly was proposed. A government believes that increased commercial references paragraph (b)(2)(i) for the commenter objected to the ‘‘policy of carriage could help lower overall periods of depreciation to be used in guaranteeing’’ a return on investment, program costs, and therefore the determining interest expense in the suggesting that if the ‘‘guarantee’’ proposal is unchanged in the final rule. guideline rate. cannot be eliminated, it be based on a As a result of substitutions, voyage Three commenters expressed views rate of return for maritime companies variations, add-on cargoes, and similar on MARAD’s second proposal, only. The first part of this comment recalculations, MARAD averages two elimination of the 2.5 percent residual misinterprets the function of the fair guideline rate calculations for each value in the calculation of depreciation. and reasonable guideline rates in the cargo actually fixed. MARAD intends to Although two commenters supported preference market. Guideline rates substantially reduce these recalculations elimination, the third had a provide a ceiling on market rates and generally determine only one conceptional problem with the charged for the carriage of preference guideline rate for each preference cargo. elimination of residual value in the cargoes on U.S.-flag vessels. Far from The guideline rate based on the initially depreciation calculation. Because ‘‘guaranteeing’’ a rate of return, a requested vessel and cargo will also be MARAD believes that eliminating guideline rate limits the shipowner’s applicable to all other vessels in the residual value simplifies the guideline profitability. In addition, the same tonnage category that might rate process while conforming to Comptroller’s opinion specifically states actually carry the cargo and for cargo industry practice, residual value is that a reasonable profit should be amounts plus or minus five percent of eliminated from the depreciation included in the rate. Regarding the the original request. An exception calculation in § 382.3(b)(2)(i) of the final suggestion to base the rate of return on would be made when a vessel eligible rule. to receive the ‘‘new vessel allowance’’ is The third proposed change to the maritime companies only, MARAD substituted for an older vessel, or vice capital cost calculation concerns believes that a maritime profitability versa. situations where interest rates are not index would be too narrow to assure a Two government commenters and one available for certain capitalized items. reasonable return during all periods. operator also raised the issue of whether MARAD proposed the ten-year In general, the three operator rates would be recalculated when an Treasury-bill (T-bill) rate plus one commenters expressed the opposite outbound commercial cargo is added on percent as an appropriate and readily point of view from the above. They to a preference cargo. The government available substitute. One commenter generally expressed the belief that a commenters argued that additional supported the change while a second higher rate of return is necessary to revenue sources should always trigger a contended that a change would compensate for a high risk investment recalculation. The other commenter probably result in a reduction for some in ocean shipping. One commenter noted that add-on commercial cargo is operators. This concern is unfounded; suggested that the rate of return for similar to the backhaul adjustment and the rate will not be substituted when the working capital should be based on its elimination from the guideline operator provides an interest rate. short term business loan rates such as process would provide an incentive to Accordingly, § 382.3(b)(2)(ii) is prime plus a spread. bid on commercial cargo. MARAD will amended in the final rule to specify the Although these comments have an recalculate rates, if requested, for any ten-year T-bill rate plus one percent as element of truth, they also illustrate the add-on cargo which increases cargo size the rate used in the fair and reasonable dilemma of choosing an appropriate rate by more than five percent. rate calculation when no interest rate is available or for vessels without of return. MARAD believes that the Cargo Size (Seventy Percent Limitation) mortgage debt. suggestion to use a short term loan rate Three commenters provided views The fourth proposed change, which for the return on working capital is a regarding MARAD’s proposal to was supported by the commenters who reasonable suggestion. However, short- eliminate the seventy percent limitation voiced a view, related to the interest rate term loan rates are volatile and the in the current rule. This provision used to calculate capital costs when an suggestion ignores the question of a currently provides that, for the purposes owner has a variable interest rate. In the specific spread to use. In the end, the of calculating guideline rates, calculated final rule § 382.3(b)(2)(ii) has been Agency believes the current procedures cargo tonnage shall not be less than 70 amended to specify January 1 and July have worked well in the past and percent of the vessel’s cargo capacity. 1 as the dates on which the interest rates should continue to do so in the future. All commenters agreed with MARAD’s in effect would be used for the The final rule stipulates a rate of return proposal noting that the seventy percent calculation of fair and reasonable rates. on working capital and equity based on rule has limited competition. Therefore, The final proposed change to capital the five-year average of return on § 382.3(f) of the final rule will provide costs was the addition of a statement in stockholders’ equity for a cross section that the determination of cargo tonnage the new § 382.3(b)(3) noting that the of transportation companies. 3824 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations

New Vessel Allowance attestation engagement. In addition, rates are for ocean transportation only One goal of revising Part 382 has been there was strong sentiment from three and an allowance in the guideline rate to encourage newer and more efficient commenters for MARAD retaining the for inland transportation items is vessels to enter the cargo preference right to audit. It was never MARAD’s outside the scope of this rulemaking. intent to relinquish the right to request market. To this end, MARAD proposed Total Revenue Rates audits, but to alleviate some of the need including an allowance for acquisition When more than one cargo has been capital in the guideline rates for both for audit. However, it is MARAD’s intention in deciding which operator’s booked on a vessel subject to the newly constructed vessels and vessels guideline rate regulations or when there acquired prior to the fifth anniversary of data to audit in any given year to factor the level of CPA review into its are multiple load and/or discharge their construction. The proposal considerations. In consideration of the ports, calculating individual rates for provided that the allowance be included comments, the wording in § 382.2 of the particular parcels and/or destinations, for a period of five years after final rule has been changed to include as currently required by § 382.3(f) and acquisition by the owner. Comments the language suggested by the AICPA. (g), is impossible. Accordingly, MARAD were received from four persons on this The second proposed change in proposed calculating a ‘‘Total Revenue provision. Commenters believed that the reporting requirements was to require Rate’’ when this occurs. The guideline provision was insufficient and that a the operator to use the accounting rate would be calculated normally, but strong market would be necessary for treatment it already uses for its own the final rate would be expressed as the operator to benefit from the records and audited financial statements gross revenue for the total voyage, rather allowance. One commenter asserted that for its cost submissions to MARAD. One than as a rate per ton. If the revenue the allowance would only be received if commenter believed that drydocking from the sum of the individual parcels MARAD paid it directly, while another accruals should still be allowed even if does not exceed the total revenue supported the concept but only for a company expenses its drydocking calculated in the guideline, the newly constructed vessels. As a result of costs. Another remarked that reporting individual rates would be considered the comments, MARAD modified the consistency is critical when using fair and reasonable. new vessel allowance to provide a averaging and MARAD should review A shipper agency expressed concern longer allowance period for newer the reported data and provide guidance that total revenue rates could result in vessel owners. In the final rule, the to ensure consistent cost data. While it inequities to recipients or shipper annual new vessel allowance will equal would be advantageous if all operators agencies if a high fixture and a low ten percent of the vessel’s capitalized reported in the same manner and all fixture combine to result in an costs during the first year following operators accrued for drydocking costs, acceptable total revenue. One operator construction or acquisition, and will the Agency believes that the averaging expressed the belief that using a total decline by one percentage point each of process itself will even out the revenue rate for combined parcels the subsequent years until the vessel is drydocking costs in much the same way penalizes the operator for initiative in ten years old. No allowance will be as the accrual process. combining parcels and another asked included for vessels more than ten years MARAD also proposed three minor that the calculation method be specified of age. reporting changes. First, reporting the and shown by example. Responses to Information Collection Requirements Official Coast Guard Identification these concerns are drawn from Number (official number) would be experience with the total revenue MARAD proposed reducing reporting required; second, the DWT requirement concept, which has been used under and auditing requirements while would be amended to require only waiver authority. continuing to recognize the agency’s summer DWT in metric tons and Experience to date has not shown need for accurate cost and financial eliminate the requirement for Suez and operators frequently blending a high information. Two favorable comments Panama Canal net register tons; and, fixture rate with a low one. Typically, were received on MARAD’s proposals to finally, the definition of ‘‘operating day’’ combining cargoes allows an operator to reduce the amount and frequency of would be clarified. Only positive spread fixed costs more widely and bid data reporting. To implement these two comments were received on these a highly competitive rate for each cargo. concepts, the final rule amends proposed changes and the proposals are Using the total revenue approach allows § 382.2(b)(8) to authorize aggregate included in the final rule. MARAD to combine the fixed costs for schedule filings, and § 382.2(c) to the whole voyage with the variable costs Brokerage and Overhead change post-voyage filing to a for the individual parcels. But because semiannual requirement. Part 382.3(b)(5)(d) specifies that the voyage’s fixed costs and the parcels’ Two changes in reporting ‘‘allowance for broker’s commission and variable costs are not derived from the requirements were proposed to reduce overhead of 8.5 percent shall be added same tonnage, a rate per ton is not the audit burden on operators, the to the sum of the operating cost meaningful. Department of Transportation’s Office of component, the capital cost component, MARAD does not believe that total the Inspector General (OIG), and and the port and cargo handling cost revenue rates penalize operators for MARAD. The first change, intended to component.’’ Two comments were combining cargoes. Total revenue rates alleviate the need for auditing by the received on this component of the rate. actually reflect the practices of the OIG, allowed an operator to have its The first questioned whether 8.5% is an operators when they combine cargoes. submissions certified by an independent appropriate allowance. The second was Using a total revenue approach simply certified public accountant (CPA). One whether brokerage and overhead could requires comparing all the costs for all operator and the AICPA pointed out a be allowed on pass through items. parcels to be carried on the voyage to problem with the specific phrase used MARAD believes that the 6% allowance the total revenue proposed in the by MARAD. The AICPA recommended for overhead costs that is added to the operator’s bids, thereby obviating the replacement language specifying a 2.5% brokerage included in guideline need to artificially allocate fixed costs to report based on the independent CPA’s rates is still appropriate. Regarding one cargo or the other. performing an engagement consistent brokerage and overhead on pass through As requested, an example of a total with professional standards, i.e., an items, fair and reasonable guideline revenue rate follows: Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3825

CARGO

Amount Cargo metric tons Type Terms Load port Discharge port

Rice ...... 10,000 Bagged ...... FBT ...... Galveston, TX ...... Durban, South Africa. Wheat ...... 10,000 Bulk ...... VLFO (4000/1000) SHEX ...... New Orleans, LA ...... Beira, Mozambique. Corn ...... 10,000 Bulk ...... FBT ...... New Orleans, LA ...... Mombassa, Kenya.

VOYAGE

Port Activity Port time Distance Sea time Port costs Cargo costs

New Orleans, LA ...... Load wheat and corn ...... 8.38 ...... $35,000 $25,000 Bunker ...... 1.00 ...... Galveston, TX ...... Load rice ...... 8.49 390 1.25 35,000 180,000 Durban, South Africa ...... Discharge rice ...... 10.18 8234 28.32 25,000 100,000 Beira, Mozambique ...... Discharge wheat ...... 12.73 702 2.24 25,000 0 Mombassa, Kenya ...... Discharge corn ...... 8.49 1149 3.67 25,000 60,000 Bunker ...... 1.00 ...... 0.00 ...... U.S. Gulf ...... Return ...... 0.00 9986 31.92 0 0

Total Days ...... 48.25 ...... 85.40 145,000 385,000

FAIR AND REASONABLE RATE CALCULATION

Fuel Costs ...... $415,000 Vessel Operating Costs ...... $1,500,000 Port Costs ...... $145,000 Cargo Costs ...... $365,000 Other Cargo Costs ...... $20,000 Capital Costs ...... $740,000 Brokerage & Overhead ...... $270,725

Total ...... $3,455,725,000

Total Revenue Rate ...... $3,455,725

Average Rate per ton ...... $115.19

FIXTURE AND FAIR AND REASONABLE RATE COMPARISON

Fair and rea- Cargo Rate bid Amount Revenue sonable rate

Rice ...... $125.00 10,000 $1,250,000 Wheat ...... 90.00 10,000 900,000 Corn ...... 95.00 10,000 950,000

Total ...... 30,000 3,100,000 1 $3,455,725 Average ...... 103.33 1 Since voyage revenue is less than total revenue from the fair and reasonable rate, the individual bids are considered fair and reasonable.

The preceding example details the MARAD believes that the total components: (1) Operating costs; (2) areas where costs vary and overlap. In revenue approach represents the best capital costs; (3) port and cargo order to provide individual rates, both method for protecting the interests of all handling costs; and (4) brokerage and direct and overall voyage costs must be parties when cargoes are combined. overhead. The operating cost allocated to each cargo. This is very Furthermore, combining cargoes has component of the fair and reasonable difficult to accomplish fairly. Also, as become increasingly common in the rate will reflect average vessel operating this example illustrates, individual past two years. Consequently, in the costs for vessels within the specified fixture rates can be higher or lower than final rule, § 382.3 (f) and (g) will allow size categories based on the historical the average rate, and yet the operator’s the use of either a cost per ton or other data submitted in accordance with measure that MARAD determines total effort yields revenue that is fair § 382.2 of this rule. MARAD will update appropriate. and reasonable. The only unique aspect the operating costs to the current period, of the total revenue rate is the Revised Rate Methodology utilizing escalation factors for wage and elimination of the step which divides The guideline or fair and reasonable non-wage costs. The averages for each the total allowable costs by the cargo rate established by MARAD, which category of vessels will be calculated at tons to derive a rate per ton. applies only to the ocean borne portion least twice per year. To the extent of cargo transportation, consists of four vessels are time chartered or leased, 3826 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations operators will submit both operating debt, using the depreciation schedule in and port and cargo handling and and capital costs, including all § 382.3(b)(2)(ii). Where the owner has a multiply that sum by an 8.5 percent capitalized costs and interest rates for variable interest rate, the owner’s rate allowance for broker’s commissions and vessels subject to capital leases. prevailing when the average capital cost overhead. The total of these four Vessel costs will be placed in component is calculated will be used. In components, expressed as total revenue categories based on the vessel’s summer cases where there is no interest rate or as a rate per ton, whichever is most deadweight tons (DWT). The categories available, and for operators without applicable, will be the fair and will be as follows: vessel debt, MARAD will use the ten- reasonable rate. Category I—Less than 10,000 DWT year T-bill rate plus one percent. If a vessel is scrapped or sold after Category II—10,000—19,999 DWT Return on investment will have two discharging a preference cargo, and the Category III—20,000—34,999 DWT components, return on equity and vessel does not return to the United Category IV—Greater than 35,000 DWT return on working capital. The rate of States as a U.S.-flag vessel, the guideline return will be based upon a five-year All eligible annual operating costs for rate will be adjusted to reflect the average of the most recent rates of return vessels within a category will be added termination of the voyage after cargo for a cross section of transportation together and divided by the total discharge. If the rate received by the industry companies, including maritime number of operating days for those operator for the preference cargo companies. Equity used will be the vessels to yield a daily operating cost. exceeds the adjusted guideline rate for vessels’ constructed net book values less The cost will be indexed to the current the one-way voyage, the operator may constructed principal amounts. Working year and multiplied by estimated total be required to repay the difference in capital will be voyage based and be the voyage days to yield the operating cost ocean freight to the shipper agency. dollar amount necessary to cover segment for the voyage. In special circumstances, certain operating and voyage expenses. Fuel consumption will be determined procedures prescribed in this rule may A new vessel allowance will be be waived, provided the procedures on the basis of actual reported fuel included in the capital component of consumption at sea and in port for adopted are consistent with the Act and newly built vessels and vessels acquired with the intent of these regulations. vessels within the same category. The when five years of age or less. This average fuel consumptions of vessels in allowance, which will be paid until the Rulemaking Analysis and Notices the category will be multiplied by the vessel is ten years old, will equal ten projected number of voyage days at sea Executive Order 12866 (Regulatory percent of the vessel’s capitalized costs Planning and Review); DOT Regulatory and in port to yield total fuel consumed. during the first year following MARAD will obtain current spot market Policies and Procedures; Pub. L. 104– construction or acquisition, and will 121 fuel prices from published sources at decline by one percentage point each of bunkering ports, consistent with sound the subsequent years. The voyage This rulemaking is not considered an commercial practice, and apply them to allowance will be the annual amount economically significant regulatory fuel consumed to produce the fuel divided by 300 operating days and action under section 3(f) of E.O. 12866. segment of the operating cost multiplied by estimated voyage days. It is not considered to be a major rule component. The total of the fuel and The average annual depreciation, for purposes of Congressional review non-fuel operating cost segments will be interest, and return on equity for vessels under Pub. L. 104–121. It is anticipated added together to yield the operating in the category will be divided by 300 that savings to the Government of less cost component for the voyage. operating days to determine a daily than $1 million per year will result. The capital cost component will be an amount. The total of these elements will Accordingly, the program will not have average based on vessels in the be multiplied by estimated voyage days an annual effect on the economy of $100 applicable size category. It will consist and added to the return on working million or more. While this rule does of an allowance for depreciation and capital and the new vessel allowance to not involve any change in important interest and a reasonable return on determine the capital cost component Departmental policies, it is considered investment. Depreciation for vessels in used in the fair and reasonable rate significant under DOT Regulatory a category will be straight-line based on calculation. Policies and Procedures and E.O. 12866 a 20-year economic life. However, if the The port and cargo handling cost because it addresses a matter of owner acquired an existing vessel, the component will be determined for each considerable importance to the maritime vessel will be depreciated on a straight- voyage on the basis of vessels in the industry and may be expected to line basis over the remaining period of category and the actual cargo tender generate significant public interest. its 20-year economic life, but not fewer terms for the commodity, load and Accordingly, the Office of Management than 10 years. Capitalized discharge ports, and lot size. The costs and Budget has reviewed this rule. improvements will be depreciated will include applicable fees for When the NPRM was published, straight-line over the remainder of the wharfage and dockage of the vessel, MARAD estimated the potential savings 20-year period, but not fewer than 10 canal tolls, cargo loading and to the Government from this rulemaking years, commencing with the discharging, and all other voyage costs by recalculating 167 rates for the years capitalization date for those associated with the transportation of 1992 through 1995 using the revised improvements. preference cargo. Costs used to methodology. This sample reflected the For the purpose of calculating interest determine the port and cargo cost operators and countries in the complete expense, MARAD will assume that component will be based on the most data base. Extrapolating from the sample original vessel indebtedness is 75 current data from all available sources showed that averaging could have saved percent of the owner’s capitalized vessel and verified from data received on three million dollars in ocean freight for costs and that principal payments are completed cargo preference or preference cargoes during the period. made in equal annual installments over commercial voyages. The comments received on the NPRM the economic life of the vessel. To To determine the brokerage and expressed concern that this analysis was compute the interest cost, the owner’s overhead component of the fair and flawed because it contained vessels actual interest rates will be applied to reasonable rate, MARAD will add the which have since been either scrapped the vessel’s outstanding constructed cost components for operating, capital, or withdrawn from the preference trade. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3827

In response, MARAD recomputed the the costs derived for each category from summarizes the results of these average costs for 1993 and 1994 using the reduced sample which were then calculations and shows the percentage only vessels that are currently available used to calculate guideline rates using savings that would have been realized for the preference trade. Table I shows the averaging method. Table II using averaging.

TABLE I.ÐDAILY COSTS USED IN GUIDELINE RATE AVERAGES FOR CY 1993 AND 1994

Operating Capital Fuel (at Fuel (im- Speed Categories Year costs costs sea)* port)* (knots) Sample size

Category I ...... 1993 ...... $4,087 $1,224 $1,600 $222 6.25 8 (<10,000 vdwt) ...... 1994 ...... 3,321 1,294 1,600 195 6.25 8 Category II ...... 1993 ...... 6,077 3,337 3,468 275 8.25 15 (10±19,999 vdwt) ...... 1994 ...... 6,207 3,543 3,137 260 8.37 15 Category III ...... 1993 ...... 11,447 5,435 3,270 443 12.66 4 (20±35,000 vdwt) ...... 1994 ...... 10,686 4,604 4,366 674 13.79 6 Category IV ...... 1993 ...... 11,943 6,355 4,963 526 13.54 13 (>35,000 vdwt) ...... 1994 ...... 12,757 6,138 4,492 680 13.36 14

Extrapolating the estimated 1.05% averaging. This savings estimate is 1994 have forced operators to bid very savings based on actual fixtures during approximately one-third the savings low rates to obtain cargoes, thus forcing 1993 and 1994 to the period 1993 to estimated with the ship mix used in the many inefficient vessels out of the trade. August 1997, yields a savings of nearly initial analysis. The reason for this is Nevertheless, a million dollar savings is one million dollars as a result of that declining levels of cargoes since significant.

TABLE II.ÐSAVINGS IN SAMPLE RATES FROM USING AVERAGING SYSTEM FOR RATE CALCULATION

Fixture reve- Averaging Averaging vs Sample size nue savings guideline Metric tons

Category I ...... 18 6,098,662 ($96,481) ($692,251) 91,956 Category II ...... 22 20,953,285 0 ($1,017,582) 296,068 Category III ...... 10 20,155,736 ($611,594) ($835,651) 224,247 Category IV ...... 26 59,655,091 ($416,255) ($429,445) 1,003,997

Sample total ...... 76 106,862,774 ($1,124,330) ($2,974,929) 1,616,268

...... ¥1.05% ¥2.32% ......

Federalism information. The Office of Management governments, in the aggregate, or by the The Maritime Administration has and Budget (OMB) has reviewed and private sector, of $100 million or more analyzed this rulemaking in accordance approved the information collection and (adjusted annually for inflation). The with the principles and criteria record keeping requirements (approval Act also requires that the Maritime contained in Executive Order 12612 and number 2133–0514) in the current rule Administration identify and consider a has determined that it would not have under the Paperwork Reduction Act of reasonable number of regulatory sufficient federalism implications to 1995 (44 U.S.C. 3501 et seq.). Public alternatives and, from those alternatives, warrant the preparation of a Federalism comments were requested in the NPRM select the least costly, most cost- Assessment. at 62 FR 9150, published February 28, effective, or least burdensome 1997. Closing date for comments was alternative that will achieve the Regulatory Flexibility Act April 29, 1997. No comments were objectives of the rule. As stated above, received regarding this information The Maritime Administration certifies by this rule the Maritime collection. A subsequent 30-day notice that this regulation would not have a Administration is reducing regulatory significant economic impact on a was published July 21, 1997 by the burden, i.e., collection of information, substantial number of small entities. Office of the Secretary of Transportation on the public. This final rule does not There are approximately twenty-five at 62 FR 39046. Comments were due on vessel operators that participate in this or before August 20, 1997. No comments result in an annual expenditure by program, none of which are small were received as a result of this notice. State, local and tribal governments, in entities. In accordance with the Paperwork the aggregate, or by the private sector, of Reduction Act of 1995, MARAD $100 million or more and is the least Environmental Assessment received an extension from OMB of burdensome alternative that will This final rule has no environmental approval for three years for this achieve the objective of the rule. impact and an environmental impact information collection. List of Subjects in 46 CFR Part 382 statement is not required under the Unfunded Mandates National Environmental Policy Act of Agricultural commodities, Under the Unfunded Mandate Reform 1969. Government procurement, Loan Act (Pub.L. 104–4) the Maritime programs—foreign relations, Maritime Paperwork Reduction Act Administration must consider whether This rulemaking reduces the current this rule will result in an annual carriers, Reporting and record keeping requirement for the collection of expenditure by State, local and tribal requirements. 3828 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations

Accordingly, 46 CFR Chapter II is for calendar year 1997 and shall be Period Due date hereby amended by revising part 382, to updated not later than April 30 for each read as follows: subsequent calendar year. In instances April 1±September 30 ...... January 1. where a vessel has not previously October 1±March 31 ...... July 1. PART 382ÐDETERMINATION OF FAIR participated in the carriage of cargoes AND REASONABLE RATES FOR THE described in § 382.1, the information (1) Port expenses. Total expenses or CARRIAGE OF BULK AND PACKAGED shall be submitted not later than the fees, by port, for pilots, tugs, line PREFERENCE CARGOES ON U.S.- same date as the offer for carriage of handlers, wharfage, port charges, fresh FLAG COMMERCIAL VESSELS. such cargoes is submitted to the water, lighthouse dues, quarantine sponsoring Federal agency, and/or its service, customs charges, shifting Sec. expenses, and any other appropriate 382.1 Scope. program participant, and/or its agent and/or program’s agent, or freight port expense. 382.2 Data submission. (2) Cargo expense. Separately list forwarder. 382.3 Determination of fair and reasonable expenses or fees for stevedores, rates. (1) Vessel name and official number. 382.4 Waivers. elevators, equipment, and any other (2) Vessel DWT (summer) in metric appropriate expenses. Authority: 46 App. U.S.C. 1114, 1241(b); (3) Extra cargo expenses. Separately 49 CFR 1.66. tons. (3) Date built, rebuilt and/or list expenses or fees for vacuvators and/ § 382.1 Scope. purchased. or cranes, lightering (indicate tons moved and cost per ton), grain-to-grain The regulations in this part prescribe (4) Normal operating speed. the type of information that shall be cleaning of holds or tanks, and any (5) Daily fuel consumption at normal submitted to the Maritime other appropriate expenses. operating speed, in metric tons (U.S. Administration (MARAD) by operators (4) Canal expenses. Total expenses or gallons for tugs) and by type of fuel. interested in carrying bulk and fees for agents, tolls (light or loaded), packaged preference cargoes, and the (6) Daily fuel consumption in port tugs, pilots, lock tenders and boats, and method for calculating fair and while pumping and standing, in metric any other appropriate expenses. Indicate reasonable rates for the carriage of dry tons (U.S. gallons for tugs) and by type waiting time and time of passage. (including packaged) and liquid bulk of fuel. (d) Other requirements. Unless preference cargoes on U.S.-flag (7) Total capitalized vessel costs (list otherwise provided, operators shall use commercial vessels, except vessels and date capitalized improvements generally accepted accounting engaged in liner trades, which is separately), and applicable interest rates principles and MARAD’s regulations at defined as service provided on an for indebtedness (where capital leases 46 CFR part 232, Uniform Financial advertised schedule, giving relatively are involved, the operator shall report Reporting Requirements, for guidance in frequent sailings between specific U.S. the imputed capitalized cost and submitting cost data. Notwithstanding ports or ranges and designated foreign imputed interest rate). the general provisions in 46 CFR 232.2(c) for MARAD program ports or ranges. (8) Operating cost information, to be participants, each operator shall submit submitted in the format stipulated in 46 § 382.2 Data submission. cost data in the format that conforms CFR 232.1, on Form MA–172, Schedule (a) General. The operators shall with the accounting practices reflected 310. Operators are encouraged to submit information, described in in the operator’s trial balance and, if provide operating cost information for paragraphs (b) and (c) of this section, to audited statements are prepared, the similar vessels that the operator the Director, Office of Costs and Rates, audited financial statements. Data considers substitutable within a Maritime Administration, Washington, requirements stipulated in paragraph (b) category, as defined in § 382.3(a)(1), in D.C. 20590. To the extent a vessel is of this section that are not included the aggregate on a single schedule. time chartered, the operator shall also under those reporting instructions shall Information shall be applicable to the submit operating expenses for that be submitted in a similar format. If the most recently completed calendar year. vessel. All submissions shall be certified operator has already submitted to by the operators. A further review based (9) Number of vessel operating days MARAD, for other purposes, any data on the independent CPA performing an pertaining to data reported in paragraph required under paragraph (b) of this engagement consistent with professional (b)(8) of this section for the year ending section, its submission need not be standards, i.e., an attestation December 31. For purposes of this part, duplicated to satisfy the requirements of engagement, is recommended. an operating day means any day on this part. Submissions are subject to verification, which a vessel or tug/barge unit is in a (e) Presumption of confidentiality. at MARAD’s discretion, by the Office of seaworthy condition, fully manned, and MARAD will initially presume that the the Inspector General, Department of either in operation or standing ready to material submitted in accordance with Transportation. MARAD’s calculations begin pending operations. the requirements of this part is of the fair and reasonable rates for U.S.- (c) Required port and cargo handling privileged or confidential within the flag vessels shall be performed on the information. The port and cargo meaning of the Freedom of Information basis of cost data provided by the U.S.- handling costs listed in this paragraph Act (FOIA), 5 U.S.C. 552(b)(4). In the flag vessel operator, as specified herein. shall be provided semiannually for each event of a subsequent request for any If a vessel operator fails to submit the cargo preference voyage terminated portion of that data under the FOIA, required cost data, MARAD will not during the period. The report shall MARAD will inform the submitter of construct the guideline rate for the identify the vessel, cargo and tonnage, such request and allow the submitter affected vessel, which may result in and round-trip voyage itinerary the opportunity to comment. The such vessel not being approved by the including dates of arrival and departure submitter shall claim or reiterate its sponsoring Federal agency. at port or ports of loading and discharge. claim of confidentiality at that time by (b) Required vessel information. The The semiannual periods and the memorandum or letter, stating the basis following information shall be information to be submitted are as for such assertions of exemption from submitted not later than April 30, 1998, follows: disclosure. The Freedom of Information Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3829

Act Officer, or the Chief Counsel of cost of the vessel owner and imputed divided by 300 operating days, shall be MARAD, will inform the submitter of interest rate. If these items are not included. This amount shall be reduced the intention to disclose any furnished, MARAD will construct these by one percent of capitalized acquisition information claimed to be confidential, amounts. When vessels more than 10 costs each subsequent year. No after the initial FOIA request, or after years old are acquired, a depreciation allowance shall be included after the any appeal of MARAD’s initial decision, period of 10 years shall be used. tenth year following construction. respectively. Capitalized improvements made to (5) Voyage component. The annual (Approved by the Office of Management and vessels more than 10 years old shall be average depreciation, interest, and Budget under control number 2133–0514) depreciated over a 10-year period. When return on equity for vessels in each vessels more than 10 years old are category shall be divided by 300 vessel § 382.3 Determination of fair and reconstructed, MARAD will determine operating days to yield the daily cost reasonable rate. the depreciation period. factors. Total voyage days shall be Fair and reasonable rates for the (ii) Interest. The cost of debt shall be applied to the daily cost factors and carriage of preference cargoes on U.S.- determined by applying each vessel totaled with the return on working flag commercial vessels shall be owner’s actual interest rates to the capital and new vessel allowance for the determined as follows: outstanding vessel indebtedness. voyage to determine the daily capital (a) Operating cost component—(1) MARAD shall assume that original cost component. General. An operating cost component vessel indebtedness is 75 percent of the (c) Port and cargo handling cost for each category, based on average owners’ capitalized vessel costs, component. MARAD shall calculate an operating costs of participating vessels including capitalized improvements, estimate of all port and cargo handling within a vessel size category, shall be and that annual principal payments are costs on the basis of the reported cargo determined, at least twice yearly, on the made in equal installments over the tender terms. The port and cargo basis of operating cost data for the economic life of the vessels as handling cost component shall be based calendar year immediately preceding determined in accordance with on vessels in the category and the most the current year that has been submitted paragraph (b)(2)(i) of this section. Where current information available verified by in accordance with § 382.2. The an operator uses a variable interest rate, information submitted in accordance operating cost component shall include the operator’s actual interest rate at the with § 382.2(c), or as otherwise all operating cost categories, as specified time of calculation of the average capital determined by MARAD, such as by in 46 CFR 232.5, Form MA–172, cost component shall be used. The ten- analysis of independent data obtained Schedule 310, Operating Expenses. For year Treasury bill (T-bill) rate plus one from chartering agencies. purposes of these regulations, charter percent on the first business day of the (d) Brokerage and overhead hire expenses are not considered year or the first business day on or after component. An allowance for broker’s operating costs. MARAD shall index July 1 shall be used for operators commission and overhead expenses of such data yearly to the current period, without vessel debt and when the actual 8.5 percent shall be added to the sum of utilizing the escalation factors for wage rate is unavailable. the operating cost component, the and non-wage costs used in escalating (iii) Return on equity. The rate of capital cost component, and the port operating subsidy costs for the same return on equity shall be computed in and cargo handling cost component. period. the same manner as described in (e) Determination of voyage days. The (2) Fuel. Fuel costs within each paragraph (b)(3) of this section. For the following assumptions shall be made in category shall be determined based on purpose of determining equity, it shall determining the number of preference the average actual fuel consumptions, at be assumed that the vessel’s constructed cargo voyage days: sea and in port, and current fuel prices net book value, less outstanding (1) The voyage shall be round-trip in effect at the time of the preference constructed principal, is equity. The with the return in ballast to a port or cargo voyage(s). constructed net book values shall equal port range selected by MARAD as the (3) Vessel categories. Vessels shall be the owners’ capitalized cost minus most appropriate, unless the vessel is placed in categories by deadweight accumulated straight-line depreciation. scrapped or sold after discharge of the (3) Return on working capital. For capacities (DWT), as follows: preference cargo and does not return to each voyage a return on working capital the United States as a U.S.-flag vessel. Group I—under 10,000 DWT shall be included as a voyage related In this event, only voyage days from the Group II—10,000—19,999 DWT capital cost element, and thus not part load port to the discharge port, Group III—20,000—34,999 DWT of the averaged costs. Working capital Group IV—35,000 DWT and over. including time allowed to discharge, shall equal the dollar amount necessary shall be included. (b) Capital Component—(1) General. to cover 100 percent of the averaged (2) Cargo is loaded and discharged as An average capital cost component for operating costs and estimated voyage per cargo tender terms interpreted in each category shall be constructed, at costs for the voyage. The rate of return accordance with the ‘‘International least twice yearly, consisting of vessel shall be based on an average of the most Rules For the Interpretation of Trade depreciation, interest, and return on recent return of stockholders’ equity for Terms’’ (INCOTERMS) published by the equity. a cross section of transportation International Chamber of Commerce. (2) Items included. The capital cost companies, including maritime (3) Total loading and discharge time component shall include: companies. includes the addition of a factor to (i) Depreciation. The owners’ (4) New vessel allowance. Newly account for delays and days not worked. capitalized vessel costs, including constructed vessels and vessels acquired (4) One extra port day is included at capitalized improvements, shall be during or before their fifth year of age each anticipated bunkering port. depreciated on a straight-line basis over will receive an additional allowance for (5) An allowance shall be included for a 20-year economic life, except vessels acquisition capital as part of the capital canal transits, when appropriate. purchased or reconstructed when their cost element. For the first year following (6) Transit time shall be based on the age was greater than 10 years old. To the construction or acquisition by the average speed of vessels in the category. extent vessels are chartered or leased, operator, a daily amount equal to ten When calculating the vessels’ average the operator shall submit the capitalized percent of capitalized acquisition costs, speed, individual vessel speeds will be 3830 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations reduced by five percent for self- FOR FURTHER INFORMATION CONTACT: million per month for the first three propelled vessels and ten percent for Diane Law, (202) 418–7400. months of 1998 for the schools and tugs/barges to account for weather SUPPLEMENTARY INFORMATION: libraries support mechanism and conditions. ‘‘adjust future contribution assessments (f) Determination of cargo carried. I. Introduction quarterly based on its evaluation of The amount of cargo tonnage used to In this Third Order on schools and library demand for funds, calculate the rate shall be based on the Reconsideration (Order), we reconsider, within the limits of the spending caps. tender offer or charter party terms. In on our own motion, the Commission’s .. .’’ The Commission further held that, instances when separate parcels of decisions governing the amount of between January 1, 1998 and June 30, preference cargo are booked or money that may be collected during the 1998, the administrator ‘‘will only considered for booking on the same first six months of 1998 for the federal collect as much as required by demand, vessel, whether under a single program universal service support mechanisms but in no case more than $1 billion.’’ or different programs, a guideline rate for schools and libraries and rural For the rural health care support shall be provided based on the health care providers. We direct the mechanism, the Commission directed combined voyage. administrator to collect only as much as the administrator to collect $100 million (g) Total rate. The guideline rate shall required by demand, but in no event for the first three months of 1998. In be the total of the operating cost more than $25 million per quarter for addition, the Commission instituted component, the capital cost component, the first and second quarters of 1998 to annual caps on both support the port and cargo handling cost support the rural health care universal mechanisms, $2.25 billion for the component, and the broker’s service support mechanism. We direct schools and libraries support commission and overhead component. the administrator to collect only as mechanism and $400 million for the The fair and reasonable rate can be much as required by demand, but in no rural health care support mechanism. In expressed as total voyage revenue or be event more than $625 million for the setting forth a collection schedule, the divided by the amount of cargo to be first six months of 1998, to support the Commission sought to ensure that carried, as prescribed in paragraph (f) of schools and libraries universal service ‘‘funds will be available as needed this section, and expressed as cost per support mechanism. These actions will while avoiding the potential problems ton, whichever MARAD deems most reduce the financial burdens on arising from the accumulation of large appropriate. universal service contributors without amounts of funds in a federal universal jeopardizing the sufficiency of the service fund.’’ § 382.4 Waivers. support mechanisms. The Commission III. Discussion In special circumstances and for good may revise the collection caps if we cause shown, the procedures prescribed receive evidence of additional demand 3. We conclude that we should adjust in this part may be waived in keeping for services. The rules adopted in this downward the rate of collections for the with the circumstances of the present, Order will become effective February schools and libraries and rural health so long as the procedures adopted are 26, 1998. care support mechanisms during the first six months of 1998. We anticipate consistent with the Act and with the II. Background intent of this part. that this action will not jeopardize the 1. In the NECA Report and Order (62 sufficiency of the support mechanisms. By order of the Maritime Administrator. FR 41294 (Aug. 1, 1997)), the The annual caps were designed to Dated: January 21, 1998. Commission established the estimate the maximum, rather than the Joel C. Richard, administrative structure of the federal actual, amount of demand for the Secretary. universal service support mechanisms. schools and libraries and rural health [FR Doc. 98–1786 Filed 1–26–98; 8:45 am] The Commission directed the National care universal service support Exchange Carrier Association (NECA) to BILLING CODE 4910±81±P mechanisms. Based on what we have create an independent subsidiary, the learned about the status of preparatory Universal Service Administrative arrangements being made by schools, Company (USAC), to administer libraries, and rural health care providers FEDERAL COMMUNICATIONS temporarily portions of the support to obtain the benefit of the universal COMMISSION mechanisms. The Commission also service support mechanisms, we have directed NECA to create two no reason to believe that demand will 47 CFR Part 54 independent corporations, Schools and reach the maximum projection levels in [CC Docket No. 96±45; FCC 97±411] Libraries Corporation and Rural Health the initial implementation stages of Care Corporation, to administer portions these new support mechanisms. We do Universal Service Support of the schools and libraries and rural not want to impose unnecessary Mechanisms health support mechanisms. USAC, financial burdens on service provider Schools and Libraries Corporation, and contributors to universal service by AGENCY: Federal Communications Rural Health Care Corporation are requiring the administrator to collect Commission. required to submit to the Commission funds that exceed demand. We also ACTION: Final rule. quarterly projections of demand and wish to ensure the successful administrative expenses for their implementation of the schools and SUMMARY: The Commission authorized respective support mechanisms. libraries and rural health care support the Administrator of the universal 2. The schools and libraries and rural mechanisms. Accordingly, we find that service support mechanisms to require health care support mechanisms are it better serves the public interest to payment of quarterly contributions to newly created and have no historical reduce the collection amounts specified universal service in equal monthly data upon which to estimate accurately in the Order (62 FR 32862 (June 17, installments. This action was intended the demand for services in the initial 1997)) for the first six months of 1998, to ease contributor’s cash flow months of the support mechanisms. The as described below. problems. Commission specified that the 4. Rural Health Care. The rural health EFFECTIVE DATE: February 26, 1998. administrator should collect $100 care support mechanism supports the Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3831 difference, if any, between the urban additional burdens on the administrator. C. Description and Estimates of the and the rural rates for a They enable the administrator to carry Number of Small Entities to Which the telecommunications service of a out its existing responsibilities. In Rules Adopted in This Report and Order bandwidth up to and including 1.544 addition, certain carriers must file tariffs will Apply Mbps. The rural health care support in December 1997 that reflect the 10. Because the rules adopted herein mechanism also provides limited contribution factors. Moreover, the rules apply to the administrator of the support to health care providers that do adopted herein reduce the financial support mechanisms, the rules will not not have toll-free access to the Internet. burdens imposed on universal service directly affect small entities. It is In the initial stages of implementing the contributors by minimizing the amounts possible, however, that small entities rural health care support mechanism, collected in the first six months of 1998. will indirectly be affected by these we anticipate that demand will not Thus, we find that good cause exists to rules. In the FRFA at paragraphs 890– exceed $25 million per quarter during make the rules adopted herein effective 922 of the Order, we described and the first six months of 1998. We upon their publication in the Federal estimated the number of small entities therefore amend our previous decision, Register. that would be affected by the new and direct the administrator to collect universal service rules. The rules only as much as required by demand, V. Supplemental Final Regulatory but in no event more than $25 million Flexibility Analysis adopted herein may apply to the same per quarter for the first and second telecommunications carriers and quarters of 1998 for the rural health care 7. As required by section 603 of the entities affected by the universal service universal service support mechanism. Regulatory Flexibility Act (RFA), 5 rules. We therefore incorporate by 5. Schools and Libraries. The schools U.S.C. 603, an Initial Regulatory reference paragraphs 890–922 of the and libraries support mechanism Flexibility Analysis (IRFA) was Order. provides discounts to eligible schools incorporated in the Notice of Proposed D. Summary Analysis of the Projected and libraries for commercially available Rulemaking and Order Establishing Reporting, Recordkeeping, and Other telecommunications services, internal Joint Board (NPRM). In addition, the Compliance Requirements and connections, and access to the Internet. Commission prepared an IRFA in Significant Alternatives and Steps Because many schools and libraries will connection with the Recommended Taken to Minimize the Significant not begin the installation of internal Decision, seeking written public Economic Impact on a Substantial connections until the summer when comment on the proposals in the NPRM Number of Small Entities Consistent students are not present in instructional and Recommended Decision. (See 61 FR With Stated Objectives buildings, we anticipate that initial 63778, 63796). A Final Regulatory demand for the schools and libraries Flexibility Analysis (FRFA) was 11. In the FRFA to the Order, we support mechanism will not reach included in the Order. The described the projected reporting, projected maximums. We therefore Commission’s Supplemental Final recordkeeping, and other compliance conclude that demand from schools and Regulatory Flexibility Analysis (SFRFA) requirements and significant libraries in the second quarter of 1998 in this Order conforms to the RFA, as alternatives and steps taken to minimize is unlikely to exceed substantially amended. significant economic impact on a demand in the first quarter. substantial number of small entities Accordingly, we direct the A. Need for and Objectives of This consistent with stated objectives administrator to collect only as much as Report and Order and the Rules associated with the Administration required by demand, but in no event Adopted Herein section of the Order. Because the rules adopted herein may only marginally more than $625 million for the first six 8. The Commission is required by months of 1998. affect those requirements, we section 254 of the Act, as amended by incorporate by reference paragraphs IV. Procedural Matters the 1996 Act, to promulgate rules to 980–981 of the Order, which describe 6. According to the Administrative implement promptly the universal those requirements and provide the Procedure Act, substantive rules shall service provisions of section 254. On following analysis of the new not become effective until 30 days after May 8, 1997, the Commission adopted requirements adopted herein. Under the their publication in the Federal Register rules whose principle goal is to reform rules adopted herein, the administrator unless there is good cause to waive that our system of universal service support is instructed to collect during the first requirement. We find that good cause mechanisms so that universal service is six months of 1998 no more than $625 exists to waive the 30-day requirement preserved and advanced as markets million for the schools and libraries because the rules adopted herein are move toward competition. In this Order, support mechanism and $50 million for critical to the expeditious and efficient we reconsider one aspect of those rules. the rural health care support implementation of the new federal In order to reduce financial burdens on mechanism. universal service support mechanisms. all contributors to universal service, we The Commission’s regulations reconsider, on our own motion, the VI. Ordering Clauses implementing section 254 will take amounts that will be collected during 12. Accordingly, It is ordered that, effect January 1, 1998. The rules the first six months of 1998 for the pursuant to the authority contained in adopted herein are necessary to schools, libraries, and rural health care sections 1–4, 201–205, 218–220, 254, calculate the first quarter 1998 universal support mechanisms. 303(r), 403, and 405 of the service contribution factors and B. Summary and Analysis of the Communications Act of 1934, as primarily affect the administrator of the Significant Issues Raised by Public amended, 47 U.S.C. 151–154, 201–205, support mechanisms. In order to collect Comments in Response to the IRFA 218–220, 254, 303(r), 403, and 405, contributions in February 1998, the section 1.108 of the Commission’s rules, administrator must know what the 9. Other than those described in the 47 CFR 1.108, and section 553 of the contribution factors will be before Order, no additional comments were Administrative Procedure Act, 5 U.S.C. beginning the billing process in January filed in response to the IRFAs described 553, part 54 of the Commission’s rules, 1998. The rules, therefore, do not place above. 47 CFR part 54, is amended as set forth 3832 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations in the rule changes, effective February and Order in MM Docket No. 93–17, Commission’s Reference Center (Room 26, 1998. adopted January 5, 1998, and released 239), 1919 M Street, NW, Washington, Federal Communications Commission. January 9, 1998. The full text of this DC. The complete text of this decision Magalie Roman Salas, decision is available for inspection and may also be purchased from the copying during normal business hours Commission’s copy contractors, Secretary. in the FCC Dockets Branch (Room 230), International Transcription Services, Rule Changes 1919 M Street, NW., Washington, DC. Inc., 1231 20th Street, NW., For the reasons set forth in the The complete text of this decision may Washington, DC. 20036, (202) 857–3800, preamble, part 54 of title 47 of the Code also be purchased from the facsimile (202) 857–3805. Commission’s copy contractor, of Federal Regulations is amended as List of Subjects in 47 CFR Part 73 follows: International Transcription Service, (202) 857–3805, 1231 M Street, NW., Radio broadcasting. PART 54ÐUNIVERSAL SERVICE Washington, DC 20037. Part 73 of title 47 of the Code of 1. The authority citation for part 54 List of Subjects in 47 CFR Part 73 Federal Regulations is amended as follows: continues to read as follows: Radio broadcasting. Authority: 47 USC Secs. 1, 4(i), 201, 205, Federal Communications Commission. PART 73Ð[AMENDED] 214, and 254 unless otherwise noted. Douglas W. Webbink, 1. The authority citation for Part 73 § 54.507 Cap. Chief, Policy and Rules Division, Mass Media continues to read as follows: 2. Section 54.507 is amended by Bureau. revising the second sentence of [FR Doc. 98–1841 Filed 1–26–98; 8:45 am] Authority: 47 U.S.C. 154, 303, 334, 336. paragraph (a) to read as follows: BILLING CODE 6712±01±F § 73.202 [Amended] (a) * * * First, no more than $625 2. Section 73.202(b), the Table of FM million shall be collected or spent for Allotments under Wisconsin, is the funding period from January 1, 1998 FEDERAL COMMUNICATIONS amended by adding Soldiers Grove, through June 30, 1998. * ** COMMISSION Channel 290A. * * * * * 47 CFR Part 73 Federal Communications Commission. § 54.623 Cap. [MM Docket No. 97±210; RM±9166] John A. Karousos, 3. Section 54.623 is amended by Chief, Allocations Branch, Policy and Rules adding a new sentence at the end of Radio Broadcasting Services; Soldiers Division, Mass Media Bureau. paragraph (a) to read as follows: Grove, WI [FR Doc. 98–1840 Filed 1–26–98; 8:45 am] (a) * * * No more than $50 million BILLING CODE 6712±01±F shall be collected or spent for the AGENCY: Federal Communications funding period from January 1, 1998 Commission. through June 30, 1998. ACTION: Final rule. FEDERAL COMMUNICATIONS * * * * * COMMISSION SUMMARY: This document allots Channel [FR Doc. 98–1833 Filed 1–26–98; 8:45 am] 290A to Soldiers Grove, Wisconsin, as 47 CFR Part 73 BILLING CODE 6712±01±P that community’s first local FM broadcast service in response to a [MM Docket Nos. 96±232; 97±35; RM±8868; petition filed by Lyle Robert Evans d/b/ RM±8900; RM±9055; RM±9056] FEDERAL COMMUNICATIONS a Rural Radio Company. See 62 FR COMMISSION 54006, October 17, 1997. The Radio Broadcasting Services; Calhan, coordinates for Channel 290A at Canon City, Pueblo and Pueblo West, 47 CFR Part 73 Soldiers Grove are 43–28–16 and 90– CO [MM Docket No. 93±17; RM±8170] 40–21. There is a site restriction 11.8 AGENCY: kilometeres (7.3 miles) northeast of the Federal Communications Radio Broadcasting Services; communtiy. With this action, this Commission. Rosendale, NY proceeding is terminated. A filing ACTION: Final rule. window for Channel 290A at Soldiers AGENCY: Federal Communications SUMMARY: This document grants Grove, Wisconsin, will not be opened at Commission. allotment proposals in the above- this time. Instead, the issue of opening ACTION: Final rule; petition for referenced, interrelated proceedings a filing window for this channel will be reconsideration. regarding the communities of Pueblo, addressed by the Commission in a Pueblo West, Canon City and Calhan, subsequent order. SUMMARY: This document dismisses a Colorado, in response to petitions for Petition for Reconsideration filed by the EFFECTIVE DATE: February 23, 1998. rule making filed on behalf of Pueblo State University of New York directed to FOR FURTHER INFORMATION CONTACT: Broadcasters, Inc. (MM Docket No. 96– the Memorandum Opinion and Order in Kathleen Scheuerle, Mass Media 232; RM–8868) and Calhan Radio, Inc. this proceeding. 61 FR 14981 (April 4, Bureau, (202) 418–2180. (MM Docket No. 97–35; RM–8900), as 1996). With this action, the proceeding SUPPLEMENTARY INFORMATION: This is a well as counter-proposals filed in each is terminated. summary of the Commission’s Report proceeding by Pueblo Broadcasters, Inc. EFFECTIVE DATE: January 27, 1998. and Order, MM Docket No. 97–210, (RM–9055 and RM–9056 respectively), FOR FURTHER INFORMATION CONTACT: adopted December 17, 1997, and as set forth infra (see Supplementary Robert Hayne, Mass Media Bureau, released January 9, 1998. The full text Information). See 61 FR 65008, (202) 418–2177. of this Commission decision is available December 10, 1996, and 62 FR 4224, SUPPLEMENTARY INFORMATION: This is a for inspection and copying during January 29, 1997. With this action the synopsis of the Memorandum Opinion normal business hours in the proceeding is terminated. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3833

DATES: Effective March 2, 1998. A filing for Channel 283A at Canon City are 38– 27 NL and 90–05–47 WL. With this window for Channel 284A at Calhan, 23–35 and 105–21–07; coordinates used action, this proceeding is terminated. Colorado, will not be opened at this for Channel 284A at Calhan are 39–01– EFFECTIVE DATE: March 2, 1998. A filing time. Instead, the issue of opening a 42 and 104–15–44. window for Channel 297A at Tylertown, filing window for this channel will be List of Subjects in 47 CFR Part 73 Mississippi, will not be opened at this addressed by the Commission in a time. Instead, the issue of opening a separate Order. Radio broadcasting. filing window for this channel will be FOR FURTHER INFORMATION CONTACT: Part 73 of Title 47 of the Code of addressed by the Commission in a Nancy Joyner, Mass Media Bureau, (202) Federal Regulations is amended as subsequent order. 418–2180. Questions related to the follows: FOR FURTHER INFORMATION CONTACT: Pam application filing process should be PART 73Ð[AMENDED] Blumenthal, Mass Media Bureau, (202) addressed to the Audio Services 418–2180. Division, (202) 418–2700. 1. The authority citation for part 73 SUPPLEMENTARY INFORMATION: This is a SUPPLEMENTARY INFORMATION: This is a continues to read as follows: synopsis of the Commission’s Report synopsis of the Commission’s Report Authority: 47 U.S.C. 154, 303, 334, 336. and Order, MM Docket No. 97–45, and Order involving two consolidated, adopted January 7, 1998, and released interrelated proceedings consisting of § 73.202 [Amended] January 16, 1998. The full text of this MM Docket No. 96–232 and MM Docket 2. Section 73.202(b), the Table of FM Commission decision is available for No. 97–35, adopted December 31, 1997, Allotments under Colorado, is amended inspection and copying during normal and released January 16, 1998. The full by adding Calhan, Channel 284A. business hours in the FCC Reference text of this Commission decision is 3. Section 73.202(b), the Table of FM Center (Room 239), 1919 M Street, NW, available for inspection and copying Allotments under Colorado, is amended Washington, DC. The complete text of during normal business hours in the by removing Channel 280A and adding this decision may also be purchased FCC’s Reference Center (Room 239), Channel 283A at Canon City. from the Commission’s copy contractor, 1919 M Street, NW., Washington, DC. 4. Section 73.202(b), the Table of FM ITS, Inc., (202) 857–3800, 1231 20th The complete text of this decision may Allotments under Colorado, is amended Street, NW, Washington, DC 20036. also be purchased from the by removing Channel 283C2 at Pueblo. Commission’s copy contractor, 5. Section 73.202(b), the Table of FM List of Subjects in 47 CFR Part 73 International Transcription Service, Allotments under Colorado, is amended Radio broadcasting. Inc., 1231 20th Street, NW., by adding Pueblo West, Channel 280C1. Part 73 of title 47 of the Code of Washington, DC 20036, (202) 857–3800. Federal Communications Commission. Federal Regulations is amended as The Commission, at the request of John A. Karousos, follows: Pueblo Broadcasters, Inc., reallots Channel 283C2 from Pueblo to Pueblo Chief, Allocations Branch, Policy and Rules Division, Mass Media Bureau. PART 73Ð[AMENDED] West, Colorado, as a Class C1 channel, and modifies the authorization for [FR Doc. 98–1838 Filed 1–26–98; 8:45 am] 1. The authority citation for Part 73 Station KYZX(FM), to specify operation BILLING CODE 6712±01±P continues to read as follows: on Channel 280C1 at Pueblo West, Authority: 47 U.S.C. 154, 303, 334, 336. pursuant to the provisions of § 1.420 (g) FEDERAL COMMUNICATIONS and (i) of the Commission’s Rules (MM COMMISSION § 73.202 [Amended] Docket No. 96–232; RM–8868; RM– 2. Section 73.202(b), the Table of FM 9055). The allotment of Channel 280C1 47 CFR Part 73 Allotments under Mississippi, is to Pueblo West will provide that [MM Docket No. 97±45; RM±8961] amended by adding Channel 297A at community with its first local aural Tylertown. transmission service without depriving Radio Broadcasting Services; Federal Communications Commission. Pueblo of local FM service. Tylertown, MS Additionally, to accommodate the John A. Karousos, Chief, Allocations Branch, Policy and Rules reallotment and upgrade at Pueblo West, AGENCY: Federal Communications Division, Mass Media Bureau. Channel 283A is substituted for Channel Commission. [FR Doc. 98–1837 Filed 1–26–98; 8:45 am] 280A at Canon City, Colorado, and the ACTION: Final rule. license for Station KSTY(FM) is BILLING CODE 6712±01±P modified accordingly. The latter SUMMARY: The Commission, at the substitution will enable Station request of TRL Broadcasting Company, KSTY(FM) to increase its effective allots Channel 297A at Tylertown, FEDERAL COMMUNICATIONS radiated power to six kilowatts and Mississippi, as the community’s second COMMISSION expand its coverage area. Further, in local FM service. See 62 FR 06929, 47 CFR Part 73 response to the counterproposal request February 14, 1997. Channel 297A can be of Pueblo Broadcasters, Inc., Channel allotted to Tylertown in compliance [MM Docket No. 90±466; RM±7327, RM± 284A is allotted to Calhan, Colorado, with the Commission’s minimum 7987, RM±7988, RM±8705] rather than Channel 280A as requested distance separation requirements with a by Calhan Radio, Inc., to provide a first site restriction of 5.3 kilometers (3.3 Radio Broadcasting Services; Hondo, local aural transmission service to that miles) southeast in order to avoid short- Hollywood Park, Dilley, Bandera, community, and to accommodate the spacing conflicts with the licensed Pleasanton, Karnes City, TX allotment of Channel 280C1 to Pueblo operation of Station WBBU(FM), AGENCY: Federal Communications West (MM Docket No. 97–35; RM–8900; Channel 297A, Baker, Louisiana, and Commission. RM–9056). Coordinates used for Station WKXI(FM), Channel 298C1, ACTION: Final rule; petition for Channel 280C1 at Pueblo West are 38– Magee, Mississippi. The coordinates for reconsideration. 34–52 and 104–31–52; coordinates used Channel 297A at Tylertown are 31–05– 3834 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations

SUMMARY: This document denies the FEDERAL COMMUNICATIONS § 73.202 [Amended] petition for reconsideration filed by COMMISSION 2. Section 73.202(b), the Table of FM Reding Broadcasting Company of the Allotments under Wisconsin, is Report and Order, 57 FR 56515 47 CFR Part 73 amended by adding Channel 246A at (November 30, 1992), in which the Two Rivers. Commission dismissed Reding’s [MM Docket No. 97±52; RM±8987 and RM± Federal Communications Commission. 9098] counterproposal proposal requesting the John A. Karousos, substitution of 253C2 for Channel 252A Radio Broadcasting Services; Chief, Allocations Branch, Policy and Rules at Pleasanton, Texas and the Kellnersville and Two Rivers, WI Division, Mass Media Bureau. modification of Station KBUC-FM’s [FR Doc. 98–1893 Filed 1–26–98; 8:45 am] (formerly KBOP-FM) license AGENCY: Federal Communications BILLING CODE 6712±01±P accordingly, the substitution of Channel Commission. 276A for Channel 252A at Bandera, ACTION: Final rule. Texas; the allotment of Channel 276C2 FEDERAL COMMUNICATIONS to Karnes City, Texas; and the SUMMARY: This document allots Channel COMMISSION substitution of Channel 290A for 246A to Two Rivers, Wisconsin, as that 47 CFR Part 73 Channel 253A at Hondo, Texas. This community’s second local FM broadcast document affirms the Report and service in response to a petition filed by Order’s determination that Reding’s First Congregational Services. See 62 FR [MM Docket No. 97±221; RM±9181] counterproposal was unacceptable for 6929, February 14, 1997. The filing because under the Commission’s coordinates for Channel 246A at Two Radio Broadcasting Services; Satellite Rules and the FM Agreement between Rivers are 44–09–06 and 87–34–06. The Beach, FL the United States and Mexico in effect counterproposal filed by Value Radio AGENCY: Federal Communications at the time of filing, Reding’s proposals Corporation proposing the allotment of Commission. for Channel 276A at Bandera, and Channel 246A at Kellnersville, ACTION: Final rule. Channel 290A at Hondo were short- Wisconsin, has been dismissed. With this action, this proceeding is spaced to Mexican FM allotments. With SUMMARY: Action in this document terminated. A filing window for this action, this proceeding is allots Channel 253A to Satellite Beach, Channel 246A at Two Rivers will not be terminated. Florida, as that community’s first local opened at this time. Instead, the issue of service in response to a petition filed by EFFECTIVE DATE: January 27, 1998. opening a filing window for this Satellite Beach Community channel will be addressed by the FOR FURTHER INFORMATION CONTACT: Broadcasters. See 62 FR 58937, October Commission in a subsequent order. Victoria M. McCauley, Mass Media 31, 1997. The coordinates for Channel Bureau, (202) 418–2130. EFFECTIVE DATE: March 2, 1998. 253A at Satellite Beach are 28–10–24 and 80–36–12. With this action, this SUPPLEMENTARY INFORMATION: This is a FOR FURTHER INFORMATION CONTACT: proceeding is terminated. A filing synopsis of the Commission’s Kathleen Scheuerle, Mass Media window for Channel 253A at Satellite Memorandum Opinion and Order, MM Bureau, (202) 418–2180. Beach, Florida, will not be opened at Docket No 90–466, adopted December SUPPLEMENTARY INFORMATION: This is a this time. Instead, the issue of opening 30, 1997, and released January 9, 1998. summary of the Commission’s Report a filing window for this channel will be The full text of this Commission and Order, MM Docket No. 97–52, addressed by the Commission in a decision is available for inspection and adopted January 7, 1998, and released subsequent order. copying during normal business hours January 16, 1998. The full text of this EFFECTIVE DATE: March 2, 1998. in the FCC Reference Center (Room Commission decision is available for 239), 1919 M Street, NW., Washington inspection and copying during normal FOR FURTHER INFORMATION CONTACT: DC. The complete text of this decision business hours in the Commission’s Kathleen Scheuerle, Mass Media may also be purchased from the Reference Center (Room 239), 1919 M Bureau, (202) 418–2180. Commission’s copy contractors, Street, NW, Washington, DC. The SUPPLEMENTARY INFORMATION: This is a International Transcription Service, complete text of this decision may also summary of the Commission’s Report Inc., (202) 857–3800, 1231 20th Street, be purchased from the Commission’s and Order, MM Docket No. 97–221, NW., Suite 140, Washington, DC 20036. copy contractors, International adopted January 7, 1998, and released Transcription Services, Inc., 1231 20th January 16, 1998. The full text of this List of Subjects in 47 CFR Part 73 Street, NW., Washington, DC. 20036, Commission decision is available for (202) 857–3800, facsimile (202) 857– inspection and copying during normal Radio broadcasting. 3805. business hours in the Commission’s Federal Communications Commission. List of Subjects in 47 CFR Part 73 Reference Center (Room 239), 1919 M Douglas W. Webbink, Street, NW, Washington, DC. The Chief, Policy and Rules Division, Mass Media Radio broadcasting. complete text of this decision may also Bureau. Part 73 of title 47 of the Code of be purchased from the Commission’s [FR Doc. 98–1839 Filed 1–26–98; 8:45 am] Federal Regulations is amended as copy contractors, International Transcription Services, Inc., 1231 20th BILLING CODE 6712±01±F follows: Street, NW., Washington, DC 20036, PART 73Ð[AMENDED] (202) 857–3800, facsimile (202) 857– 3805. 1. The authority citation for Part 73 continues to read as follows: List of Subjects in 47 CFR Part 73 Authority: 47 U.S.C. 154, 303, 334 and 336. Radio broadcasting. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3835

Part 73 of title 47 of the Code of may be imminent. Threats have been likely due to its apparent isolation from Federal Regulations is amended as made indicating that habitat would be other members of D. merriami. follows: destroyed if the Service attempted to list The San Bernardino kangaroo rat, a the San Bernardino kangaroo rat. member of the family Heteromyidae, PART 73Ð[AMENDED] Because of the need to make protective was first described by Rhoades in 1894 1. The authority citation for Part 73 measures afforded by the Act under the name Dipodomys parvus from specimens collected by R.B. Herron in continues to read as follows: immediately available to this subspecies and its habitat, the Service finds that an Reche Canyon, San Bernardino County, Authority: 47 U.S.C. 154, 303, 334, 336. emergency rule action is justified. This California (Hall 1981). Elliot reduced D. § 73.202 [Amended] emergency rule provides Federal parvus to a subspecies of D. merriami protection pursuant to the Act for this (D. merriami parvus) in 1901. The San 2. Section 73.202(b), the Table of FM subspecies for a period of 240 days. A Bernardino kangaroo rat appears to be Allotments under Florida, is amended proposed rule to list the San Bernardino separated from Merriam’s kangaroo rat by adding Satellite Beach and Channel kangaroo rat, requesting data and (D. merriami merriami) at the 253A. comment from the public, is being northernmost extent of its range near Federal Communications Commission. published concurrently in this same Cajon Pass by a 8 to 13 kilometer (km) John A. Karousos, Federal Register issue under the (5 to 8 mile (mi)) gap of unsuitable Chief, Allocations Branch, Policy and Rules proposed rule section. habitat. The San Bernardino kangaroo Division, Mass Media Bureau. DATES: This emergency rule is effective rat may have in the distant past also [FR Doc. 98–1891 Filed 1–26–98; 8:45 am] on January 27, 1998, and expires on intergraded with D. merriami collinus to BILLING CODE 6712±01±P September 24, 1998. the south in the vicinity of Menifee ADDRESSES: The complete file for this (Lidicker 1960, Hall 1981). rule is available for inspection, by The historical range of this subspecies DEPARTMENT OF THE INTERIOR appointment, during normal business extends from the San Bernardino Valley hours at the U.S. Fish and Wildlife in San Bernardino County to the Fish and Wildlife Service Service, Carlsbad Field Office, 2730 Menifee Valley in Riverside County Loker Avenue West, Carlsbad, California (Lidicker 1960, Hall 1981). Within this 50 CFR Part 17 92008. range, the San Bernardino kangaroo rat was known from over 25 localities RIN 1018±AE59 FOR FURTHER INFORMATION CONTACT: (McKernan 1993). From the early 1880’s Field Supervisor, at the above address to the early 1930’s, the San Bernardino Endangered and Threatened Wildlife (telephone 760/431–9440). and Plants; Emergency Rule To List kangaroo rat was a common resident of the San Bernardino Kangaroo Rat as SUPPLEMENTARY INFORMATION: the San Bernardino and San Jacinto Endangered Background valleys of southern California (Lidicker 1960). AGENCY: Fish and Wildlife Service, The San Bernardino kangaroo rat In most heteromyids, soil texture is a Interior. (Dipodomys merriami parvus) is one of primary factor in determining species’ ACTION: Emergency rule. 19 recognized subspecies of Merriam’s distributions (Brown and Harney 1993). kangaroo rat (D. merriami), a San Bernardino kangaroo rats are found SUMMARY: The U.S. Fish and Wildlife widespread species distributed primarily on sandy loam substrates, Service (Service) exercises its throughout arid regions of the western characteristic of alluvial fans and flood emergency authority to determine the United States and northwestern Mexico plains, where they are able to dig San Bernardino kangaroo rat (Hall 1981, Williams et al. 1993). In simple, shallow, burrows (McKernan (Dipodomys merriami parvus) to be an coastal southern California, D. merriami 1997). Based on the distribution of endangered species pursuant to the is the only species of kangaroo rat with suitable (i.e., sandy) soils and the Endangered Species Act of 1973, as four toes on each of its hind feet. The historical collections of this subspecies, amended (Act). This subspecies occurs San Bernardino kangaroo rat has a body the historical range is thought to have primarily in alluvial scrub habitats with length of about 95 millimeters (mm) (3.7 encompassed an area of approximately appropriate vegetative cover and inches (in)) and a total length of 230 to 128,000 hectares (ha) (320,000 acres substrate composition. The historic 235 mm (9 to 9.3 in). The hind foot (ac)) (Service, unpub. GIS maps, 1997). range of the San Bernardino kangaroo measures less than 36 mm (1.4 in) in Although the entire area of the historical rat has been reduced by approximately length. The body color is weakly range would not have been occupied 96 percent due to agricultural and urban ochraceous (yellow) with a heavy due to variability in vegetation and development. All of the remaining overwash of dusky brown. The tail soils, the San Bernardino kangaroo rat populations of the San Bernardino stripes are medium to dark brown and was widely distributed across this area. kangaroo rat are threatened by habitat the foot pads and tail hairs are dark By the 1930’s, the habitat had been loss, degradation, and fragmentation brown. The animal’s flanks and cheeks reduced to approximately 11,200 ha due to sand and gravel mining are dusky (Lidicker 1960). The San (28,000 ac)(McKernan 1997). operations, flood control projects, urban Bernardino kangaroo rat is considerably Currently, the San Bernardino development, and vandalism. In darker and much smaller than either of kangaroo rat occupies approximately addition, the three largest remaining the other two subspecies of Merriam’s 1,299 ha (3,247 ac) of suitable habitat populations of the San Bernardino kangaroo rat in southern California, D. divided unequally among seven kangaroo rat are threatened by habitat merriami merriami and D. merriami locations, which are widely separated loss resulting from a change in the collinus. Lidicker (1960) noted that the from one another (McKernan 1997). natural stream flow regime including San Bernardino kangaroo rat is one of Four of these locations (City Creek (8 ha seasonal flooding and associated the most highly differentiated (20 ac)), Etiwanda (2 ha (5 ac)), Reche modification of plant succession subspecies of D. merriami and that ‘‘it Canyon (2 ha (5 ac)), and South patterns. The threat of vandalism to seems likely that it has achieved nearly Bloomington (.8 ha (2 ac)) support only large portions of the remaining habitat species rank.’’ This differentiation is small, remnant, populations. The 3836 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations remaining three locations (the Santa and supports the highest densities of the Insects, when available, have been Ana River (690 ha (1,725 ac)), Lytle and San Bernardino kangaroo rat. The documented to constitute as much as 50 Cajon washes (456 ha (1,140 ac)), and mature phase is rarely affected by percent of a kangaroo rat’s diet San Jacinto River (140 ha (350 ac)) flooding and supports the highest plant (Reichman and Price 1993). Females are contain the largest extant concentrations cover (Smith 1980). These flood events known to increase ingestion of foods of kangaroo rats and blocks of suitable break out of the main river channel with higher water content during habitat. randomly, resulting in a braided lactation, presumably to compensate for The three largest remaining blocks of appearance to the floodplain. This the increased water loss associated with occupied habitat (i.e., Santa Ana River, dynamic nature to the habitat leads to milk production (Reichman and Price Lytle/Cajon creeks, and San Jacinto a situation where not all the alluvial 1993). Dipodomys merriami is known River) (1,286 ha (3,215 ac)) are scrub habitat is suitable for the kangaroo for its ability to live indefinitely without distributed across a mosaic of rat at any point in time. The San water on a diet consisting entirely of dry approximately 5,479 ha (13,697 ac) of Bernardino kangaroo rat, like other seeds (Reichman and Price 1993). typically suitable, alluvial soils, which subspecies of Merriam’s kangaroo rat, are dominated by sage scrub and prefers open habitats characterized by Previous Federal Action chaparral. Virtually all remaining low shrub canopy cover (mostly 7 to 22 vegetative associations (except about percent) and rarely occurs in dense The San Bernardino kangaroo rat was 1,286 ha (3,215 ac)) are more mature vegetation (McKernan 1997). The older designated by the Service as a category than the open, early successional habitat seral stages of the floodplain often are 2 candidate species for Federal listing as structure required by the San not suitable for this subspecies. endangered or threatened in 1991 (56 Bernardino kangaroo rat. Existing and The range of the San Bernardino FR 58804). Category 2 comprised taxa proposed hydrological modifications kangaroo rat is partially overlapped by for which information in the possession eliminate habitat renewal and obstruct the distribution of the Stephens’ of the Service indicated that proposing population recovery over these highly kangaroo rat (Dipodomys stephensi) and to list as endangered or threatened was fragmented wash habitats (Hanes et al. is entirely overlapped by the range of possibly appropriate, but for which 1989, McKernan 1997). Thus, the the Pacific kangaroo rat (D. simulans). conclusive data on biological residual 4 percent of historical habitat Where these species occur in proximity, vulnerability and threat(s) were not (5,479 ha (13,697 ac)), supports only they are usually concentrated in available to support a proposed rule. about 1,286 ha (3,215 ac), that are ever different areas. The Stephens’ kangaroo Based on a review of status and likely to provide habitat, absent habitat rat typically is associated with open, distribution of the San Bernardino renewal through large-scale flood or arid, grassland associations (Lackey kangaroo rat, the subspecies was intensive management intervention. It is 1967, O’Farrell et al. 1986, O’Farrell and upgraded to a category 1 candidate for estimated that 400 ha (1,000 ac) are Uptain 1987, O’Farrell 1990), and listing in 1994 (59 FR 58982). Category likely to support suitable habitat in the occurs on a variety of soil types. The future, considering that 54 percent of Pacific kangaroo rat typically inhabits 1 candidate species were those where remaining flood plain habitats are denser shrub cover on a variety of soil the Service had sufficient information proposed for development in the types. All three of these species can be on biological vulnerability and threat(s) foreseeable future. identified from one another based on to support proposals to list them as Currently, the San Bernardino morphological characters. endangered or threatened species. Upon kangaroo rat is found primarily Home ranges for the Merriam’s publication of the February 28, 1996, associated with a variety of sage scrub kangaroo rat average 0.33 hectares (ha) notice of review (61 FR 7596), the vegetation, where the common element (0.8 ac) for males and 0.31 ha (0.8 ac) Service ceased using category is the presence of sandy soils for females (Behrends et al. 1986). Long designations and included the San (McKernan 1997). Where the San sallies (bursting movements) of 100 Bernardino kangaroo rat as a candidate Bernardino kangaroo rat occurs in meters (m) (328 feet (ft)) or more beyond species. The San Bernardino kangaroo alluvial scrub, the subspecies reaches its these ranges are not uncommon. rat was retained as a candidate species highest densities in early and Although outlying areas of their home in the September 19, 1997, notice of intermediate seral stages (McKernan ranges may overlap, adults actively review (62 FR 49401). 1997). Alluvial scrub includes elements defend small core areas near their The processing of this proposed rule from chaparral, coastal sage, and desert burrows (Jones 1993). Home range conforms with the Service’s final listing communities. Three successional phases overlap between males and between priority guidance published in the of alluvial scrub have been described: males and females is extensive, but Federal Register on December 5, 1996 pioneer, intermediate, and mature female-female overlap is slight (Jones (61 FR 64475) and extended on October alluvial scrub, depending on elevation 1993). and distance from the main channels, McKernan (1993) has found pregnant 23, 1997 (62 FR 55268). The guidance and the time since previous flooding San Bernardino kangaroo rat females clarifies the order in which the Service (Smith 1980, Hanes et al. 1989). from February through October, and will process rulemakings. The guidance Vegetative cover generally increases immatures from April through calls for giving highest priority to with distance from the active stream September. Some females may produce handling emergency situations (Tier 1), channel. The pioneer, or youngest more than one litter per year. Litter size second highest priority (Tier 2) to phase, is subject to frequent averages between 2 and 3 young resolving the listing status of the disturbance, and vegetation is usually (Eisenberg 1993). outstanding proposed listings, third disturbed by annual floods (Smith 1980, Similar to other kangaroo rats, the San priority (Tier 3) to new proposals to add Hanes et al. 1989). The intermediate Bernardino kangaroo rat is primarily species to the list of threatened and phase, defined as the area between the granivorous and often stores large endangered plants and animals and active channel and mature terraces, is quantities of seeds in surface caches fourth priority (Tier 4) to designating subject to periodic flooding at longer (Reichman and Price 1993). Green critical habitat and processing delistings intervals. The vegetation on vegetation and insects are also and reclassifications. This emergency intermediate terraces is relatively open, important seasonal food sources. rule constitutes a Tier 1 action. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3837

Summary of Factors Affecting the the Army Corps of Engineers, United conservation plan that attempts to Species States Bureau of Land Management reconcile conflicts among competing Section 4 of the Act and regulations (BLM), San Bernardino Valley Water land uses, including the conservation of (50 CFR Part 424) promulgated to Conservation District, San Bernardino the San Bernardino kangaroo rat. implement the listing provisions of the County Flood Control District, and two However, this conservation plan has not private sand mining operations (Service Act set forth the procedures for adding been finalized and is not currently in unpub. GIS maps 1997). species to Federal lists. A species may effect. Though 371 ha (927 ac) of BLM At least 80 percent of the remaining be determined to be an endangered or land potentially are available for water occupied habitat along the Santa Ana percolation ponds, no ponds have been threatened species due to one or more River is indirectly at risk because of the of the five factors described in Section constructed recently. projected changes in hydrology due to Sand and gravel mining poses a 4(a)(1) of the Act. These factors and Seven Oaks Dam (Service unpub. GIS their application to the San Bernardino significant and imminent threat to the maps 1997) being constructed by the San Bernardino kangaroo rat. Two sand kangaroo rat (Dipodomys merriami Army Corps of Engineers (U.S. Army parvus) are as follows: mining operations collectively threaten Corps of Engineers 1988). An indirect approximately 552 ha (1,381 ac) of A. The Present or Threatened effect of operation of the Seven Oaks alluvial scrub habitat in this area Destruction, Modification, or Dam will be the long-term succession of (Lilburn 1997a and 1997b, P&D Curtailment of Its Habitat or Range various stages of alluvial scrub, Technologies 1988, Service unpub. GIS including much of a 775-acre mitigation All occupied habitat of the maps 1997). Based on the distribution of area, into even aged stands of habitat soils and vegetative cover, a minimum subspecies, which encompasses scrub through time due to a reduction approximately 1,300 ha (3,250 ac), is of 150 ha (375 ac) of approved and in scouring and deposition of fresh proposed project areas is occupied by threatened by the direct and indirect sands by floods. Curtailed hydrologic effects of sand and gravel mining, the San Bernardino kangaroo rat disturbance, where soil moisture is (Service unpub. GIS maps 1997). The highway construction, flood control adequate, will allow shrub densities that operations, urban and industrial area affected by sand mining represents exceed the low to moderate densities approximately 22 percent of the development, water conservation tolerated by the subspecies to develop activities, and vandalism (McKernan population along the Santa Ana River (Hanes et al. 1989, McKernan 1997). (Service unpub. GIS maps 1997, 1997, Service unpub. GIS maps 1997). Past and ongoing activities of the San McKernan 1997). Loss and fragmentation of San Bernardino County Flood Control One proposed sand and gravel mining Bernardino kangaroo rat habitat is District pose a threat to approximately expansion is expected to receive expected to continue as southern 400 ha (1,000 ac) of alluvial scrub California’s human population expands. habitat in this area. Based on the certification under the California In the 1950’s, the population of distribution of soils and vegetative Environmental Quality Act (CEQA) in Riverside and San Bernardino counties cover, approximately 176 ha (440 ac) of the next 2–4 months. A grading permit combined was about 400,000. Over 2.5 this area is occupied by the San would be issued shortly thereafter. This million people reside in this region, and Bernardino kangaroo rat (Service unpub. project would further fragment habitat. by the year 2000, the human population GIS maps 1997). Activities that impact In addition, this operator has repeatedly of San Bernardino and Riverside this subspecies and its habitat include and publicly threatened to destroy counties is expected to increase to the construction of levees and sediment habitat if the Service proposes to list the nearly 4 million (California Department removal. The area at risk due to these kangaroo rat. of Finance 1993). Further habitat losses activities supports approximately 25 Additional impacts will occur due to resulting from development or alteration percent of the population along the a large pipeline project (P&D of the landscape will likely have a Santa Ana River (Service unpub. GIS Technologies 1992). Approximately 60 significant adverse effect on the viability maps 1997, McKernan 1997). ha (150 ac) of alluvial scrub in the Santa of remaining San Bernardino kangaroo The BLM and San Bernardino Valley Ana River will be impacted by this rat populations. Additionally, habitat Water Conservation District lands are project. Based on the distribution of loss from intentional destruction of San managed, in part, for the development soils and vegetative cover, a minimum Bernardino kangaroo rat habitat has or operation of water spreading basins of 24 ha (60 ac) of this project area is been threatened if the species were to be for groundwater recharge. Although the occupied by the San Bernardino listed. San Bernardino kangaroo rat can occupy kangaroo rat (Service unpub. GIS maps portions of areas modified by spreading 1997). This project has been reviewed Santa Ana River basins, the flooded area is essentially and certified under the CEQA and, The largest remaining population of lost to this animal due to the periodic therefore, poses an imminent threat. The the San Bernardino kangaroo rat occurs presence of standing water and the area directly threatened by this pipeline along the Santa Ana River. The flood degradation of habitat. Based on the project represents 3 percent of the Santa plain terrace habitat encompasses about distribution of soils and vegetative Ana River population. The indirect 1,637 ha (4,092 ac), of which cover, approximately 140 ha (350 ac) of effects of this project include further approximately 690 ha (1,725 ac) are this area is occupied by the San fragmentation of kangaroo rat habitat. occupied by the San Bernardino Bernardino kangaroo rat (Service unpub. Other activities that threaten the San kangaroo rat (McKernan 1997). The GIS maps 1997). The area affected by Bernardino kangaroo rat in this region occupied habitat extends more or less spreading basins represents include the closure of Norton Air Force continuously from the vicinity of approximately 20 percent of the Base (San Bernardino County) and the Norton Air Force Base to the Greenspot population along the Santa Ana River proposed development of this site into Road Bridge north of Mentone (Service (Service unpub. GIS maps 1997, the San Bernardino International unpub. GIS maps 1997, McKernan McKernan 1997). The San Bernardino Airport (U.S. Department of the Air 1997). Approximately 66 percent of Valley Water Conservation District and Force 1993). Habitat for the San flood plain terrace habitat is directly at BLM are coordinating with the Service Bernardino kangaroo rat on Norton Air risk due to the combined activities of and others to develop a regional Force Base will be reduced by 3838 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations approximately 2 to 5 percent and parking lot for Glen Helen Regional suitable and occupied habitat occurring (Conservation Management Plan 1997). Park. The construction of the levee outside the flood control berms are continues to impact approximately 22 occasionally disced due to agricultural Lytle and Cajon Creeks ha (55 ac) of habitat by precluding activities (Arthur Davenport, pers. obs. The second largest remaining scouring events and the reestablishment 1995). Discing adversely affects the population of the San Bernardino of alluvial scrub vegetation. Given the subspecies by destroying its burrows kangaroo rat occurs along Lytle and attributes of the area, the entire site was and habitat. Cajon creeks, from near Interstate 15 likely occupied by the San Bernardino Urban and commercial development downstream on both drainages for kangaroo rat prior to construction of the into the flood plain of the San Jacinto approximately 8 km (5 mi) (McKernan levee. The levee also threatens habitat River continues to threaten the San 1997). This area contains approximately occupied by the San Bernardino Bernardino kangaroo rat. Although flood 2,688 ha (6,722 ac) of alluvial scrub kangaroo rat on the opposite side of the control berms have been in place for habitat, of which approximately 456 ha Cajon Creek due to the alteration in the years, suitable and occupied habitat (1,140 ac) are occupied. Of the alluvial hydrological system. The levee likely occurs outside the berms. Though scrub habitat, approximately 47 percent will divert flood flows into the opposite degraded due to agricultural activities, is directly threatened by the combined bank and cause erosion of the Calmat occupied habitat outside the berms is activities associated with sand mining conservation bank, which was critical to the maintenance of the operations, State Route 30, San established to help conserve listed and species along the San Jacinto River Bernardino County Flood Control sensitive species in the area. The total because it provides a source population District, and urban development (e.g., amount of occupied habitat anticipated for recolonization of habitat within the The Villages at Lytle Creek) (Service to be lost is, at a minimum, berms following flood events. unpub. GIS maps 1997). Based on an approximately 44 ha (110 ac) (Service The San Bernardino kangaroo rat is evaluation of soils and vegetative cover, unpub. GIS maps 1997). The area also impacted by the maintenance and a minimum of 34 percent of the affected by flood control activities expansion of spreading basins within its occupied habitat in this area is equates to approximately 10 percent of habitat. Maintenance of spreading threatened due to the combined effects the occupied habitat in this area. basins results in the destruction of of these activities (Service unpub. GIS habitat and San Bernardino kangaroo maps 1997). San Jacinto River rats that occur along the margins The joint draft environmental impact The third largest remaining (Arthur Davenport, pers. obs. 1995). report for The Villages at Lytle Creek population of San Bernardino kangaroo Similarly, the expansion of spreading and a sand mining operation (T&B rat occurs in Riverside County. Here, the basins results in a direct loss of suitable Planning Consultants 1996) describe vast majority of alluvial floodplain has and occupied habitat. Eastern Municipal some of the threats facing the San been impacted by flood control Water District has proposed Bernardino kangaroo rat in this area. activities, agricultural and urban ‘‘reconstructing’’ previously authorized The proposed urban community, The development, and sand and gravel groundwater recharge facilities in the Villages at Lytle Creek, will remove mining in this area. Approximately 295 San Jacinto River (U.S. Army Corps of approximately 728 ha (1,821 ac) of ha (737 ac) of alluvial scrub remains in Engineers 1997), including a new alluvial scrub habitat (Michael this area and approximately 140 ha (350 location for the recharge area. This Brandman Associates 1994, T&B ac) is occupied along the San Jacinto project encompasses approximately 2.6 Planning Consultants 1996). Based on River. ha (6.5 ac) of alluvial scrub, and impacts the distribution of soils and vegetative Flood control activities that impact approximately 2 percent of occupied cover, at least 132 ha (330 ac) of this this species include grading of occupied habitat in the area (140 ha (350 ac)). project area is occupied by the San habitat. Evidence of extensive grading Both sand and gravel mining threaten Bernardino kangaroo rat (Service unpub. exists throughout the remaining alluvial the San Bernardino kangaroo rat in the GIS maps 1997). In addition to the scrub vegetation within the flood San Jacinto River area. The operations of upland development, the document control berms along the San Jacinto sand mining continue to impact discloses the proposed channelization River in the vicinity of the City of San occupied habitat. One mine site consists of a portion of Lytle Creek. The area Jacinto (Arthur Davenport, Service, pers. of 100 ha (250 ac) and occurs entirely affected by The Villages at Lytle Creek obs. 1995). Flood control structures that in the flood plain of the San Jacinto represents approximately 29 percent of impact this species include concrete River (Army Corps of Engineers 1996, the remaining occupied habitat of the channels and flood confining berms. Pre-discharge Notification 96–00397– Lytle/Cajon population. The construction of a concrete channel RRS). Based on the distribution of soils Proposed improvements to State appears to have isolated a small and vegetative cover, a minimum of 40 Route 30 also threaten the San population of San Bernardino kangaroo ha (100 ac) of the project site is Bernardino kangaroo rat in the Lytle and rat located along Bautista Creek from the occupied by the San Bernardino Cajon Creek area. Approximately 2.8 ha rest of the population along the San kangaroo rat. Sand mining affects (7 ac) of habitat will be directly removed Jacinto River. The construction of berms approximately 28 percent of the due to this project (San Bernardino too far into the flood plain is occupied habitat in the San Jacinto Association of Governments 1996). detrimental to the San Bernardino River area. Based on the distribution of soils and kangaroo rat in that the construction of vegetative cover, all of the project area the berms causes a loss of habitat by B. Overutilization for Commercial, in this area (i.e., 2.8 ha (7 ac)) is increasing the severity of scouring and Recreational, Scientific, or Educational occupied by the San Bernardino land erosion. Purposes. kangaroo rat (Service unpub. GIS maps Continuing, intermittent, agricultural This factor is not known to be 1997). The area affected by State Route activities, such as dry-land farming applicable. 30 represents approximately 0.1 percent along the edges of the San Jacinto River of the occupied habitat in this area. in the vicinity of Hemet and the City of C. Disease or Predation. San Bernardino County Flood Control San Jacinto, also impact the San Disease is not known to be affecting District (District) constructed a levee Bernardino kangaroo rat. Patches of the San Bernardino kangaroo rat at this Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3839 time. However, fragmentation of habitat throughout the State. The initial focus of The San Bernardino kangaroo rat is is likely to promote higher levels of the program is the coastal sage scrub not protected under the CESA. The predation by urban-associated animals community. Within this program, the Federal and State Acts together can (e.g., domestic cats) as the interface California Department of Fish and Game afford some measure of protection to the between natural habitat and urban areas (CDFG) included the long-term San Bernardino kangaroo rat in those is increased (Churcher and Lawton conservation of alluvial scrub, which is areas where the species coexists with 1987). Domestic cats are known to be in part occupied by the San Bernardino other species already listed as predators of native rodents (Hubbs 1951, kangaroo rat. However, participation in threatened or endangered. Eriastrum George 1974), and predation by cats has NCCP is voluntary. San Bernardino and densifolium ssp. sanctorum (Santa Ana been documented for the San Riverside counties have signed planning River woolly star) and Dodecahema Bernardino kangaroo rat (McKernan, agreements (Memoranda of leptoceras (slender-horned spineflower) pers. comm., 1994). Understanding (MOUs)) to develop are listed as endangered under the Act and the CESA, and the coastal California D. The Inadequacy of Existing multispecies plans that meet NCCP gnatcatcher (Polioptila californica Regulatory Mechanisms criteria, but have not enrolled in the NCCP program during the interim. The californica) is listed as threatened under The decline of the San Bernardino MOUs do not provide protection to the Act. All three species can occur in kangaroo rat is partially due to the candidate species during the planning habitats similar to those preferred by the inherent weakness of the existing laws process. San Bernardino kangaroo rat. However, and regulations that could serve to Reclamation of mined areas in the the distribution of D. leptoceras and E. protect the animal and its habitat. State of California is required under the densifolium ssp. sanctorum is spotty Existing regulatory mechanisms that Surface Mining and Reclamation Act and discontinuous, and only overlaps may provide some protection for the (SMCRA). The County of San with a small portion of the habitat San Bernardino kangaroo rat include: (1) Bernardino also requires that mining occupied by the San Bernardino The CEQA and National Environmental companies submit a reclamation plan kangaroo rat. The coastal California Policy Act (NEPA); (2) the California for County approval. The primary gnatcatcher, although known to occur Natural Community Conservation purpose of these ordinances is to within alluvial scrub habitat, has largely Planning Program; (3) the Surface provide for erosion control measures been extirpated from San Bernardino Mining and Reclamation Act (SMCRA); and to restore slopes to a moderate County within the range of the San (4) the Act in those cases where the San slope. However, reclamation is not Bernardino kangaroo rat and, therefore, Bernardino kangaroo rat occurs in occurrence with the listed species habitat occupied by other listed species; likely to resolve the problem of maintaining or mitigating for the loss of provides little ancillary protection. In (5) the California Endangered Species Riverside County, coastal California Act (CESA); (6) conservation provisions species or ecosystem functions in a biologically meaningful way because of gnatcatchers are not currently known to under the Federal Clean Water Act; (7) occur at any sites occupied by the San land acquisition and management by change in topography and altered hydrology. The feasibility of artificially Bernardino kangaroo rat. Federal, State, or local agencies or by The San Bernardino kangaroo rat creating a viable alluvial scrub plant private groups and organizations; and could potentially be affected by projects community suitable for the San (8) local laws and regulations. Many of requiring a permit from the Army Corps these have limited protection authority Bernardino kangaroo rat has not yet of Engineers (Corps) under section 404 since the San Bernardino kangaroo rat is been demonstrated. of the Clean Water Act. Although the not federally listed. The BLM designated an Area of objective of the Clean Water Act is to The majority of the known Critical Environmental Concern (ACEC) ‘‘restore and maintain the chemical, populations of the San Bernardino in the Santa Ana River in 1994. The physical, and biological integrity of the kangaroo rat occur on privately owned ACEC is composed of three parcels of Nation’s waters’’ (Pub. L. 92–500), no land. Local lead agencies responsible land that total 304 hectares (760 acres). specific provisions exist that adequately under CEQA and NEPA have made The purpose of the ACEC is to protect address the need to conserve candidate determinations that have, or would, and enhance the habitat of federally species. A majority of the remaining adversely affect this taxon and its listed plant species occurring in the populations occur outside areas habitat. Examples of projects that have area, such as Santa Ana River wooly-star delineated as waters of the United States been completed or are currently (Eriastrum densifolium ssp. sanctorum), and, therefore, are not regulated. undergoing the review process under and sensitive species such as the San Moreover, numerous activities for CEQA and/or NEPA and will impact Bernardino kangaroo rat, while which the Corps potentially has this species include Seven Oaks Dam, providing for the administration of jurisdiction, including sand and gravel State Route 30 Improvement Project, existing valid rights (BLM 1996). mining and flood control projects, have Metropolitan Water District Inland Although the establishment of the ACEC proceeded without their overview (see Feeder Pipeline, Calmat Company, is important in regard to conservation of Factor A). Sunwest Materials, Robertson’s Ready sensitive habitats and species in this As a result of Fish and Wildlife Mix, San Jacinto Aggregates, and The area, the administration of valid existing Coordination Act activities, the Corps, Villages at Lytle Creek. Past, present, rights conflicts with BLM’s conservation in 1988, initiated a section 7 and proposed mitigation for impacts to abilities in this area. Existing rights consultation on Eriastrum densifolium this species and its habitat have been include a withdrawal of Federal lands ssp. sanctorum for the proposed Seven inadequate to stop or reverse its decline. in this area for water conservation Oaks Dam project on the Santa Ana CEQA decisions are also subject to over- through an act of Congress, February 20, River. About 310 ha (775 ac) of alluvial riding social and economic 1909 (Public, No. 248). The entire ACEC scrub habitat has been designated for considerations. is included in this withdrawn land and preservation as mitigation for impacts to In 1991, the State of California may be available for water conservation Eriastrum densifolium ssp. sanctorum established a Natural Community measures such as the construction of resulting from the construction of the Conservation Planning Program (NCCP) percolation basins, subject to dam. Approximately 80 ha (200 ac) of to address conservation needs compliance with the Act. this appears to be currently suitable for 3840 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations the San Bernardino kangaroo rat documented (Soule´ et al. 1992, Andren finds that the emergency action is to list (Service unpub. GIS maps 1997). 1994, Bolger et al. 1997). the San Bernardino kangaroo rat as However, the preserved area represents Isolated populations are subject to endangered. This taxon is endangered less than 7 percent of the alluvial scrub extirpation by manmade or natural by one or more of the following factors: found in the entire Santa Ana River events, such as floods and drought. Habitat destruction, degradation, and basin and approximately 12 percent of Furthermore, small populations may fragmentation resulting from sand and the basin habitat occupied by the San experience a loss of genetic variability gravel mining, flood control projects, Bernardino kangaroo rat. Thus, the and experience inbreeding depression urban development, vandalism, and mitigation preserve, while providing (Lacy 1997). Contributing to the inadequate regulatory mechanisms. some benefit, is likely not adequate to fragmentation of San Bernardino Because of these factors, the San conserve the subspecies. kangaroo rat habitat are railroad tracks, Bernardino kangaroo rat is in imminent Local and county zoning designations roads, and flood control channels. These danger of extinction throughout all or a are subject to change and do not structures appear to function as significant portion of its range. specifically address the conservation movement barriers to the San Threatened status does not appear and management needs of the San Bernardino kangaroo rat, preventing appropriate considering the extent of Bernardino kangaroo rat. However, movement between areas of suitable decline of the populations of this taxon numerous jurisdictions in western habitat. and the vulnerability of those Riverside and San Bernardino counties All remaining population segments populations remaining. are at risk due to their small size and are beginning a multi-species habitat Reasons for Emergency Determination conservation planning process, isolation. This is especially true for the Under section 4(b)(7) of the Act and including coastal sage scrub-associated four smallest populations (i.e., City Creek, Reche Canyon, Etiwanda, and 50 CFR 424.20, the Secretary may species and benefit to the kangaroo rat South Bloomington). Urbanization determine a species to be endangered or may result. Commitments for funding exists throughout most of the San threatened by an emergency rule that and implementation of the strategy and Bernardino kangaroo rat’s range and the shall cease 240 days following appropriate changes in land-use remaining larger blocks of occupied publication in the Federal Register. The regulations to protect potential habitat (i.e., Santa Ana River, Lytle/ reasons why this rule is necessary are preserves during the planning process Cajon, and San Jacinto River) now discussed below. If at any time after this have not been made. function independently of each other. rule has been published the Secretary The Riverside County Habitat This isolation of occupied patches determines that substantial evidence Conservation Agency is implementing places the entire population of San does not exist to warrant such a rule, it an approved habitat conservation plan Bernardino kangaroo rat at risk because shall be withdrawn. for the federally endangered Stephens’ recolonization of suitable habitat As discussed under Factor A, of the kangaroo rat that involves the following local extirpation has been seven remaining populations, only three establishment of permanent preserves in precluded. The extirpation of are of relatively large (viable) size. Much western Riverside County (Riverside populations from local catastrophes, of the remaining habitat for the San County Habitat Conservation Agency such as flooding, is becoming more Bernardino kangaroo rat is potentially 1996). Because the San Bernardino probable as urban development further threatened by vandalism as well as kangaroo rat occupies a largely different constricts the remaining populations to construction of approved projects. habitat type than that of the Stephens’ the active portion of the flood plain. The Threats of vandalism to San Bernardino kangaroo rat, the conservation plan for largest remaining populations are now kangaroo rat habitat have been made. the Stephens’ kangaroo rat will not restricted entirely to flood plain habitats Intentional herbicide application and benefit the San Bernardino kangaroo rat. and vulnerable to extirpation by grading were mentioned as possible Despite extensive surveys, no current naturally occurring events. ways to eliminate suitable habitat. records of San Bernardino kangaroo rats Flood control structures alter both the Along the Santa Ana River, at least 80 occur within any of the reserves magnitude and distribution of flooding. percent of the remaining occupied established for Stephens’ kangaroo rat In the absence of flood scouring, habitat is indirectly at risk because of (A. Davenport, pers. comm. 1997). sediments and organic matter the projected changes in hydrology due E. Other Natural or Manmade Factors accumulate over time, contributing to to Seven Oaks Dam. Approximately 25 Affecting Its Continued Existence. senescence of the alluvial scrub percent of the population along the community and its conversion to coastal Santa Ana River is further threatened by Habitat for the San Bernardino sage scrub or chaparral (Smith 1980, levee construction and maintenance and kangaroo rat has been severely reduced Wheeler 1991, Jigour and McKernan sediment removal activities of the San and fragmented by development and 1992). The dense canopy of these Bernardino County Flood Control related activities in the San Bernardino communities does not provide the open District. About 20 percent of the habitat and San Jacinto Valleys. Habitat environment required by San is managed, in part, for operation of fragmentation results in loss of habitat, Bernardino kangaroo rat, thereby water spreading basins. Finally, two reduced habitat patch size, and an reducing the habitat suitability for the proposed sand mining operations increasing distance between patches of species (Beatley 1976, McKernan 1997). collectively threaten approximately 22 habitat. As discussed by Andren (1994) Within the active channels, the confined percent of the population along the regarding highly fragmented landscapes, flood events scour too frequently to Santa Ana River. These proposed sand reduced habitat patch size and isolation maintain suitable San Bernardino and gravel mining expansions are will exacerbate the effect of habitat loss kangaroo rat habitat. expected to receive certification under on a species’ persistence. That is, the The Service has carefully assessed the the CEQA in 2–4 months. A grading loss of species, or decline in population best scientific and commercial permit would be issued shortly size, will be greater than expected from information available regarding the past, thereafter. The projects and sand and habitat loss alone. The loss of native present, and future threats faced by this gravel mining operations also have the vertebrates, including rodents, due to subspecies in developing this rule. effect of fragmenting the habitat, further habitat fragmentation is well Based on this evaluation, the Service reducing the security of this species. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3841

Along Lytle Creek and Cajon Wash, a maximum extent prudent and and it is the only mandatory legal minimum of 34 percent of the occupied determinable, the Secretary designate consequence of a critical habitat habitat in this area is threatened due to critical habitat at the time a species is designation. Any action that would the combined effects of sand and gravel designated to be endangered or adversely modify San Bernardino mining, flood control activities, and the threatened. The Service finds that kangaroo rat critical habitat would proposed development of The Villages designation of critical habitat is not likely jeopardize the continued at Lytle Creek. At least 28 percent of the prudent for the San Bernardino existence of the subspecies because the occupied habitat in the San Jacinto kangaroo rat. The Service’s regulations biological threshold for either River area is threatened by urban (50 CFR 424.12(a)(1)) state that determination would be the same. Thus, development, flood control activities, designation of critical habitat is not if the San Bernardino kangaroo rat is agricultural activities or sand and gravel prudent when one or both of the listed, activities occurring on all lands mining. following situations exist: (1) the under Federal jurisdiction or ownership Attempts to work with stakeholders species is threatened by taking or other that may adversely affect the San have met with little success. When human activity, and identification of Bernardino kangaroo rat would prompt advised of the sensitivity of alluvial critical habitat can be expected to the requirement for consultation scrub habitats in the San Bernardino increase the degree of threat to the pursuant to section 7(a)(2) of the Act region in 1992, one local official species, or (2) such designation of and the implementing regulations threatened to destroy existing habitat critical habitat would not be beneficial pertaining thereto, regardless of whether areas by aerial herbicide application to the species. critical habitat has been designated. (Edna Rey, Service, pers. comm., 1997). Critical habitat designation for the Furthermore, the designation of critical Finally, the Service has been informed San Bernardino kangaroo rat is not habitat would have no regulatory effect that an area of approximately 1,440 ha prudent because an increase in the on activities that are not subject to a (3,560 ac) (approximately 26 percent) of degree of threat to the species is Federal nexus. the total remaining alluvial scrub expected. This subspecies is found in The Service acknowledges that habitat may be at risk of vandalism. fragmented habitat composed of various critical habitat designation, in some Statements have been made advising the sage scrub shrub vegetation in the situations, may provide some value to Service repeatedly that an attempt to list presence of sandy soils. The designation the species by identifying areas the San Bernardino kangaroo rat would of critical habitat, including the important for species conservation and elicit preemptive grading to protect required publication of maps providing calling attention to those areas in corporate assets (Pete Sorensen, Service, precise locations, would bring special need of protection. Critical pers. comm. 1996). unnecessary attention to those areas of habitat designation of unoccupied An emergency posing a significant the range that are occupied by this habitat may also benefit this subspecies risk to the well-being and continued kangaroo rat and encourage acts of by alerting Federal action agencies to survival of the San Bernardino kangaroo vandalism or intentional destruction of potential sites for reintroduction and rat exists as the result of the immediate habitat. This attention would likely lead allow them to evaluate proposals that threat of destruction of a significant to an increase in activities (such as may affect these areas. However, in this portion of the subspecies’ remaining discing or blading) by landowners who the case, any benefit provided by habitat by sand and gravel mining do not want listed species on their designation of critical habitat for the activities. For these reasons, the Service property (see Factor A, above). San Bernardino kangaroo rat would be finds that the San Bernardino kangaroo Therefore, given the limited/habitat accomplished more effectively through rat is in imminent danger of extinction specific distribution of the San the recovery process and the jeopardy throughout all or a significant portion of Bernardino kangaroo rat, and the prohibition of section 7. Designating its range and warrants immediate possibility that a significant portion of critical habitat for this kangaroo rat protection under the Act. the species’ remaining habitat could be would not address vegetation seral stage rapidly vandalized and destroyed, the management or control urban Critical Habitat Service concludes that it is not prudent development, all of which need to be Critical habitat is defined in section to designate critical habitat for that addressed in the recovery of this 3(5)(A) of the Act as: (i) the specific reason alone. subspecies. areas within the geographical area The designation of critical habitat is Accordingly, the Service concludes occupied by a species, at the time it is also not prudent due to an expected lack that designation of critical habitat listed in accordance with the Act, on of benefit to the species. Although a would not be beneficial to the species which are found those physical or majority of San Bernardino kangaroo rat and could increase the degree of threat biological features (I) essential to the habitat occurs on privately owned from taking. Therefore, designation of conservation of the species and (II) that lands, many activities that pose threats critical habitat for the San Bernardino may require special management to the continued existence of this kangaroo rat is not prudent at this time. consideration or protection and; (ii) subspecies are funded, permitted, or The Service will continue in its efforts specific areas outside the geographical carried out by Federal agencies (e.g., to obtain more information on the San area occupied by a species at the time section 404 of the Clean Water Act, Bernardino kangaroo rat biology and it is listed, upon a determination that flood control, impoundment, and other ecology, including essential habitat such areas are essential for the stream and wetland modification characteristics particularly in regard to conservation of the species. projects). Section 7 of the Act requires stream flow regimes, current and ‘‘Conservation’’ means the use of all that Federal agencies refrain from historical distribution, and existing and methods and procedures needed to contributing to the destruction or potential sites that can contribute to bring the species to the point at which adverse modification of critical habitat conservation of the species. The listing under the Act is no longer in any action authorized, funded or information resulting from this effort necessary. carried out by such agency. This will be used to identify measures Section 4(a)(3) of the Act, as requirement is in addition to the section needed to achieve conservation of the amended, and implementing regulations 7 prohibition against jeopardizing the species, as defined under the Act. Such (50 CFR 424.12) require that, to the continued existence of a listed species, measures could include, but are not 3842 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations limited to, development of conservation San Bernardino (San Bernardino the effect of listing on proposed and agreements with the State, other Federal County). Because the San Bernardino ongoing activities within a species’ agencies, local governments, private kangaroo rat occurs on Norton Air Force range, and to assist the public in landowners and organizations. Base (San Bernardino County), the base identifying measures needed to protect will likely be involved through the the species. The Service believes that, Available Conservation Measures transfer of Federal lands to a non- based on the best available information, Conservation measures provided to Federal entity and the conversion of this the following actions would not be species listed as endangered or area to a civilian airport. The BLM has likely to result in a violation of section threatened under the Endangered jurisdiction over a portion of the habitat 9: Species Act include recognition, occupied by the San Bernardino (1) Possession, delivery, or movement, recovery actions, requirements for kangaroo rat along the Santa Ana River. including interstate transport and Federal protection, and prohibitions The Forest Service will likely be import into or export from the United against certain activities. Recognition involved because populations of the San States, involving no commercial through listing encourages and results Bernardino kangaroo rat occur within or activity, dead specimens of this taxa in conservation actions by Federal, near the boundaries of the Cleveland that were collected prior to the date of State, and private agencies, groups, and National Forest and San Bernardino publication in the Federal Register of individuals. The Act provides for National Forest. The Bureau of the final regulation adding this taxa to possible land acquisition and Reclamation may be involved through the list of endangered species; cooperation with the States and requires the potential funding of water (2) Road kills or injuries by vehicles that recovery actions be carried out for reclamation and flood control projects. on designated public roads. all listed species. The protection The Bureau of Indian Affairs may be Potential activities involving the San required of Federal agencies and the involved with this taxon at Soboba Bernardino kangaroo rat that the Service prohibitions against certain activities Indian Reservation (Riverside County). believes likely would be considered a involving listed plants and animals are The Federal Housing Administration violation of section 9 include, but are discussed, in part, below. could potentially be involved through not limited to, the following: Section 7(a) of the Act, as amended, loans for housing projects in the region. (1) Take of San Bernardino kangaroo requires Federal agencies to evaluate The Federal Energy Regulatory rat without a permit, which includes their actions with respect to any species Commission could be involved in harassing, harming, pursuing, hunting, that is proposed or listed as endangered projects affecting existing or proposed shooting, wounding, killing, trapping, or threatened and with respect to its transmission lines in the Santa Ana capturing, or collecting, or attempting critical habitat, if any is being River or Etiwanda Creek areas. any of these actions, except in designated. Regulations implementing The Act and implementing accordance with applicable State fish this interagency cooperation provision regulations found at 50 CFR 17.21 set and wildlife conservation laws and of the Act are codified at 50 CFR Part forth a series of general trade regulations; 402. Section 7(a)(4) of the Act requires prohibitions and exceptions that apply (2) Possess, sell, deliver, carry, Federal agencies to confer informally to all endangered wildlife. These transport, or ship illegally taken San with the Service on any action that is prohibitions, in part, make it illegal for Bernardino kangaroo rats; likely to jeopardize the continued any person subject to the jurisdiction of (3) Interstate and foreign commerce existence of a proposed species or result the United States to take (includes (commerce across State and in destruction or adverse modification harass, harm, pursue, hunt, shoot, international boundaries) and import/ of proposed critical habitat. If a species wound, kill, trap, capture, collect, or to export (as discussed earlier in this is subsequently listed, section 7(a)(2) attempt any of these), import or export, section) without appropriate permits; requires Federal agencies to ensure that ship in interstate commerce in the (4) Destruction or alteration of San activities they authorize, fund, or carry course of commercial activity, or sell or Bernardino kangaroo rat habitat by out are not likely to jeopardize the offer for sale in interstate or foreign discing, grading, sand or gravel mining, continued existence of such a species or commerce any listed species. It also is flooding, vehicle operation, or other to destroy or adversely modify its illegal to possess, sell, deliver, carry, activities that result in the destruction critical habitat. If a Federal action may transport, or ship any such wildlife that or significant degradation of vegetative affect a listed species or its critical has been taken illegally. Certain composition, substrate composition, or habitat, the responsible Federal agency exceptions apply to agents of the other activity that impacts breeding, must enter into formal consultation with Service and State conservation agencies. feeding, or availability of cover; the Service. Permits may be issued to carry out (5) Alteration of hydrology that results Federal agencies expected to have otherwise prohibited activities in adverse modification of San involvement with the San Bernardino involving endangered and threatened Bernardino kangaroo rat habitat (e.g., kangaroo rat or its habitat include the wildlife under certain circumstances. establishment of inappropriate stages of Corps and the Environmental Protection Regulations governing permits are at 50 vegetation). Agency due to their permit authority CFR 17.22, 17.23 and 17.32. Such Questions regarding whether specific under section 404 of the Clean Water permits are available for scientific activities will constitute a violation of Act. The Federal Aviation purposes, to enhance the propagation or section 9 or to obtain approved Administration has jurisdiction over survival of the species, or for incidental guidelines for actions within the areas with potentially suitable San take in connection with otherwise kangaroo rat habitat should be directed Bernardino kangaroo rat habitat in the lawful activities. to the Service’s Carlsbad Field Office vicinity of Redlands Municipal Airport It is the policy of the Service (59 FR (see ADDRESSES section). Requests for and Norton Air Force Base in San 34272) to identify to the maximum copies of the regulations concerning Bernardino County. The Federal extent practical at the time a species is listed animals and inquiries regarding Highway Administration will likely be listed, those activities that would or prohibitions and permits may be involved through potential funding of would not constitute a violation of addressed to the U.S. Fish and Wildlife highway construction projects near section 9 of the Act. The intent of this Service, Endangered Species Permits, Devore, Rancho Cucamonga, Rialto, and policy is to increase public awareness of 911 NE. 11th Avenue, Portland, Oregon Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Rules and Regulations 3843

97232–4181 (telephone 503/231–6241; the Office of Management and Budget Regulation Promulgation facsimile 503/231–6243). under 44 U.S.C. 3501 et seq. Accordingly, the Service amends part National Environmental Policy Act References Cited 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as The Service has determined that an A complete list of references cited in follows: Environmental Assessment or this rule is available upon request from Environmental Impact Statement, as the Carlsbad Field Office of the U.S. PART 17Ð[AMENDED] defined under the authority of the Fish and Wildlife Service (see 1. The authority citation for part 17 National Environmental Policy Act of ADDRESSES section). continues to read as follows: 1969, need not be prepared in connection with regulations adopted Author Authority: 16 U.S.C. 1361–1407; 16 U.S.C. 1531–1544; 16 U.S.C. 4201–4245; Pub. L. 99– pursuant to section (4)(a) of the The primary author of this proposed 625, 100 Stat. 3500; unless otherwise noted. Endangered Species Act of 1973, as rule is Arthur Davenport of the Carlsbad 2. Amend § 17.11(h) by adding the amended. A notice outlining the Field Office (see ADDRESSES section). Service’s reasons for this determination following, in alphabetical order under was published in the Federal Register List of Subjects in 50 CFR Part 17 Mammals, to the List of Endangered and on October 25, 1983 (48 FR 49244). Threatened Wildlife to read as follows: Endangered and threatened species, Required Determinations Exports, Imports, Reporting and § 17.11 Endangered and threatened wildlife. recordkeeping requirements, This rule does not contain collections Transportation. * * * * * of information that require approval by (h) * * *

Species Vertebrate popu- Historic range lation where endan- Status When listed Critical Special Common name Scientific name gered or threatened habitat rules

MAMMALS

******* Kangaroo rat, San Dipodomys merriami U.S.A. (CA) ...... NA ...... E 631 NA NA Bernardino. parvus.

*******

Dated: January 20, 1998. Jamie Rappaport Clark, Director, Fish and Wildlife Service. [FR Doc. 98–2011 Filed 1–26–98; 8:45 am] BILLING CODE 4310±55±P 3844

Proposed Rules Federal Register Vol. 63, No. 17

Tuesday, January 27, 1998

This section of the FEDERAL REGISTER ahead on (202) 690–2817 to facilitate request and conducted an on-site contains notices to the public of the proposed entry into the comment reading room. evaluation of Mexico’s plant health issuance of rules and regulations. The FOR FURTHER INFORMATION CONTACT: Mr. programs in the Mexicali Valley with purpose of these notices is to give interested James A. Petit de Mange, Import regard to Karnal bunt. The evaluation persons an opportunity to participate in the consisted of a review of Mexico’s Karnal rule making prior to the adoption of the final Specialist, Phytosanitary Issues rules. Management Team, PPQ, APHIS, USDA, bunt survey activities, laboratory and 4700 River Road Unit 140, Riverdale, testing procedures for the examination MD 20737–1236; (301) 734–6799; fax of samples collected during the surveys, DEPARTMENT OF AGRICULTURE (301) 734–5786; e-mail: and the administration of laws and [email protected]. regulations intended to prevent the Animal and Plant Health Inspection introduction of Karnal bunt into the SUPPLEMENTARY INFORMATION: Service Mexicali Valley’s wheat-growing areas Background from the rest of Mexico and from 7 CFR Part 319 The regulations in ‘‘Subpart—Wheat outside the country. After reviewing the documentation provided by Mexico and [Docket No. 97±060±1] Diseases’’ (7 CFR 319.59 through 319.59–2, referred to below as the the data gathered during the on-site RIN 0579±AA88 regulations), restrict the importation visit, we believe that Mexico has into the United States of certain seeds, demonstrated, in accordance with the Karnal Bunt Status of the Mexicali plants, and plant products from certain standards established by the North Valley of Mexico countries or localities in order to American Plant Protection Organization prevent the introduction of foreign for pest-free areas, that the wheat- AGENCY: Animal and Plant Health growing areas of the Mexicali Valley are Inspection Service, USDA. strains of flag smut and Karnal bunt, two fungal diseases of wheat (Triticum free from Karnal bunt. We believe, ACTION: Proposed rule. spp.). Specific provisions relating to therefore, that there is no longer any biological justification for that area of SUMMARY: We are proposing to amend foreign strains of flag smut are located in paragraph (a) of § 319.59–2 of the Mexico to be listed with the countries the wheat diseases regulations by and localities considered to be affected recognizing a wheat-growing area regulations, and specific provisions concerning Karnal bunt are found in with Karnal bunt. within the Mexicali Valley of Mexico as Therefore, we are proposing to amend being free from the wheat disease Karnal paragraph (b) of that section. Under § 319.59–2(b) of the § 319.59–2(b) of the regulations by bunt. Surveys conducted by Mexican adding an exception for the Karnal bunt plant health authorities in that area of regulations, wheat seeds, plants, straw (except straw without heads that has free area of the Mexicali Valley to the the Mexicali Valley since 1990 have entry for Mexico on the list of countries shown the area to be free from Karnal been processed or manufactured into articles such as decorative wall and localities affected with Karnal bunt. bunt, and Mexican authorities are This proposed action would mean that enforcing restrictions designed to hangings, clothing, or toys), chaff, and products of the milling process other wheat seed, straw, and the other wheat protect the area from the introduction of products described in § 319.59–2(b)(1) Karnal bunt. This proposed change than flour (i.e., bran, thistle sharps, and pollards) are designated as prohibited of the regulations from the Karnal bunt would have the effect of removing free area of the Mexicali Valley would certain restrictions on the importation articles if they are from Afghanistan, India, Iraq, Mexico, or Pakistan, which no longer be considered prohibited into the United States of wheat seed, articles under the wheat diseases straw, and other wheat products from are countries in which Karnal bunt is considered to exist. Prohibited articles regulations. However, the importation of the Karnal bunt free area of the Mexicali wheat plants into the United States from Valley. may be imported into the United States only by the U.S. Department of the Karnal bunt free area of the Mexicali DATES: Consideration will be given only Agriculture for experimental or Valley would continue to be prohibited to comments received on or before scientific purposes in accordance with under the regulations in ‘‘Subpart— March 30, 1998. § 319.59–2(c). Nursery Stock, Plants, Roots, Bulbs, ADDRESSES: Please send an original and The Government of Mexico has Seeds, and Other Plant Products’’ (7 three copies of your comments to requested that the Animal and Plant CFR 319.37 through 319.37–14). Docket No. 97–060–1, Regulatory Health Inspection Service (APHIS) Specifically, § 319.37–2(a) lists Poaceae Analysis and Development, PPD, recognize the Mexicali Valley area of (vegetative parts of all grains and APHIS, Suite 3C03, 4700 River Road Mexico as free from Karnal bunt. In grasses) from all foreign places except Unit 118, Riverdale, MD 20737–1238. support of its request, the Mexican Canada as prohibited articles due to a Please state that your comments refer to Government submitted the results of wide diversity of plant diseases. Docket No. 97–060–1. Comments annual surveys conducted in the wheat- For the purposes of the regulations, received may be inspected at USDA, producing areas of the Mexicali Valley we would define the Karnal bunt free room 1141, South Building, 14th Street since 1990 by Mexico’s national plant area of the Mexicali Valley as those and Independence Avenue SW., protection organization, Sanidad portions of the municipality of Mexicali, Washington, DC, between 8 a.m. and Vegetal. in the State of Baja California, and the 4:30 p.m., Monday through Friday, APHIS has reviewed the municipality of San Luis Rio Colorado, except holidays. Persons wishing to documentation submitted by the in the State of Sonora, that constitute inspect comments are requested to call Government of Mexico in support of its the Distrito de Desarrollo Rural 002, Rio Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3845

Colorado (Rural Development District subpart, is cited at the beginning of the a reference to § 319.59–2 of the 002, Colorado River). The area described part. regulations, where the updated lists of in that definition encompasses the We are proposing to amend countries and localities considered wheat-growing area of the Mexicali § 319.59(a) to correct three erroneous affected with foreign strains of flag smut Valley that has been the subject of the references within that paragraph to and Karnal bunt are located. ongoing Karnal bunt surveys described other paragraphs in the subpart. Executive Order 12866 and Regulatory above and falls completely within the Specifically, there are two references to Flexibility Act area into which the movement of provisions in § 319.59–2(b) that provide potential Karnal bunt host material is for the importation of otherwise This proposed rule has been reviewed prohibited by Mexican plant health prohibited articles; those provisions are under Executive Order 12866. The rule regulations to prevent the introduction actually located in paragraph § 319.59– has been determined to be significant of Karnal bunt. 2(c). The third erroneous reference is to for the purposes of Executive Order Because the remainder of Mexico has articles designated in § 319.59–2(a) as 12866 and, therefore, has been reviewed not been recognized as being free from prohibited articles. Although that by the Office of Management and Karnal bunt, we would include two paragraph does contain a list of Budget. additional conditions on the prohibited articles, there is also a list of This proposed rule would amend the importation into the United States of prohibited articles in § 319.59–2(b). We wheat diseases regulations by wheat seed, straw, and other wheat would, therefore, change that reference recognizing a wheat-growing area products from the Mexicali Valley. so that it refers to prohibited articles within the Mexicali Valley of Mexico as First, we would require that the designated in § 319.59–2 (a) and (b). being free from the wheat disease Karnal articles be offered for entry at the port We are also proposing to amend bunt. This proposed change is based on of Calexico, CA, which is staffed by paragraph (b) of § 319.59, which surveys conducted by Mexican plant APHIS inspectors and lies across the provides for the disposition of articles health authorities in that area of the border from the northern boundary of that have been refused importation in Mexicali Valley since 1990 that have the Karnal bunt free area of the Mexicali accordance with the requirements of the shown the area to be free from Karnal Valley. That port of entry is served by regulations. That paragraph currently bunt, and on the enforcement by both a main road and a rail line that states that such articles shall be Mexican authorities of restrictions pass through the Karnal bunt free area, promptly removed from the United designed to protect the area from the so any wheat or other articles from the States or abandoned by the importer for introduction of Karnal bunt. This Karnal bunt free area would remain destruction. Although the phrase proposed change would have the effect within that area during their movement ‘‘abandoned by the importer for of removing certain restrictions on the to the United States for entry. Once the destruction’’ could be construed as importation into the United States of articles arrive at the port of Calexico, indicating that the importer would be wheat seed, straw, and other wheat CA, the shipment would have to be relieved of any further responsibility for products from the Karnal bunt free area made available to an APHIS inspector the articles after abandoning them, the of the Mexicali Valley. for examination and would remain at importer is actually responsible for the This proposed rule would primarily the port of entry until an inspector costs of destruction. We are, therefore, affect wheat growers in the United released the shipment or authorized its proposing to amend the paragraph to States. There were 292,464 farms further movement pending release. make it clear that when an article is to growing wheat in the United States in Second, we would require that wheat be destroyed rather than reexported, the 1992, and 96 percent of those farms or other articles offered for entry be costs of destroying the article are the would be considered small entities. accompanied by a phytosanitary responsibility of the importer. (According to the standard set by the certificate issued by Mexico’s national We are proposing to update the list of Small Business Administration for plant protection organization. That countries in § 319.59–2(a)(2) by agricultural producers, a producer with certificate would have to include a removing a reference to the ‘‘Union of less than $0.5 million annually in sales statement confirming that the wheat or Soviet Socialist Republics’’ and adding qualifies as a small entity.) We have, other articles were grown in the the 15 successor States to the former therefore, examined the potential designated Karnal bunt free area of the Soviet Union in its place. We would economic impact of the proposed action Mexicali Valley and remained in that also update several country names that on small entities, as required by the area prior to and during their movement are currently included on the list of Regulatory Flexibility Act, and in doing to the United States. The phytosanitary countries. so, have assessed the anticipated costs certificate would be reviewed by an Finally, we are proposing to make and benefits of the proposed action, as APHIS inspector at the port of entry to minor changes for the sake of required by Executive Order 12866. ensure that the wheat or other articles consistency in two other subparts in The United States produced an offered for entry into the United States part 319, namely ‘‘Subpart—Foreign average of 2,330 million bushels of were indeed grown and harvested in the Cotton and Covers’’ (§§ 319.8 through wheat per year between 1992 and 1996. area of Mexico that has been shown to 319.8–27) and ‘‘Subpart—Packing Of this amount, hard red winter wheat be free of Karnal bunt and did not leave Materials’’ (§§ 319.69 through 319.69– (grown primarily in Kansas, Oklahoma, that area while in transit to the port of 5). Each of those subparts contains a list and Texas) accounted for about 39 entry. of countries that is intended to agree percent of production; hard red spring with the list of countries found in wheat (grown primarily in North Other Changes § 319.59–2 of the regulations. However, Dakota, Minnesota, and Montana) As part of this proposed rule, we after the lists in those two subparts were accounted for about 24 percent of would make several other changes to established, they were not updated to production; soft red winter wheat update the regulations. First, we would reflect subsequent amendments to (grown primarily in Missouri, Illinois, remove the authority citation that ‘‘Subpart—Wheat Diseases.’’ Therefore, and Ohio) accounted for about 19 appears at the beginning of ‘‘Subpart— we would amend § 319.8–10(d) and percent of production; white wheat Wheat Diseases.’’ The authority that § 319.69(b)(1) to remove the inaccurate (grown primarily in Washington and applies to all of part 319, including the lists of countries and replace them with Oregon) accounted for about 14 percent 3846 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules of production; and durum wheat (grown Mexico produced an average of about wheat-producing States, Baja California primarily in North Dakota, Arizona, 137 million bushels of wheat per year and Sonora. The Mexicali Valley California, and Montana) accounted for between 1994 and 1996, most of which produced 445,967 metric tons of wheat about 4 percent of production. was grown in the States of Baja in 1995; about 53 percent (236,171 The United States is a net exporter of California, Guanajuato, Sinaloa, and metric tons) of that wheat was shipped wheat, accounting for about 11.4 Sonora. Mexico is a net importer of to markets elsewhere in Mexico. Nearly percent of world wheat production and wheat, having imported in 1996 an all of the Mexicali Valley’s wheat is approximately 32 percent of world amount of wheat equal to about 53 sown in October and November and wheat exports. Of the average 2,330 percent of production while exporting harvested from late May to early July. million bushels of wheat produced per less than 4 percent of production; Table 1 below shows the classes of year between 1992 and 1996, an average imports made up about 35 percent of wheat grown in the Mexicali Valley of 51 percent of that wheat was exported Mexico’s total wheat supply in 1996. from the United States, while wheat The Mexicali Valley, from which between 1994 and 1996 and the average imports have accounted for less than 1 wheat could be exported to the United production share and use distribution of percent of the total U.S. wheat supply States under this proposed rule, is each class. in recent years. located in two of Mexico’s leading

TABLE 1.ÐWHEAT CLASS, PRODUCTION SHARE, AND USE DISTRIBUTION OF MEXICALI VALLEY WHEAT; 1994±1996 AVERAGES

Production Use distribution (percent) Wheat class share (per- cent) Food Feed Seed Other

Hard Red Winter ...... 61.3 65.0 25.0 3.2 6.8 White ...... 36.2 61.5 24.6 2.6 11.3 Durum ...... 2.2 38.5 2.1 58.8 0.6 Soft Red Winter ...... 0.3 33.2 13.9 36.0 16.9

Between 1994 and 1997, producers in example, a 20 percent diversion of spectrum, a 100 percent diversion of the Mexicali Valley shipped an average Mexicali Valley wheat production from Mexicali Valley wheat production from of 9 million bushels each year to other markets in other countries or the other markets to the United States markets in Mexico; we have used that domestic Mexican market to the United would be expected to result in a price amount in Table 2, below, as an States would be expected to result in a decrease of 0.45 percent in the United estimate of the total amount of wheat price decrease of 0.09 percent in the States. U.S. wheat producers would lose potentially available for export to U.S. United States. U.S. producers would about $29.56 million (or about $101.00 markets. Table 2 summarizes the lose about $5.92 million (which, when per farm), while consumers would gain estimated economic impacts in the distributed among the 292,464 wheat about $29.64 million, for a net benefit in United States, based on a price elasticity farms noted above, amounts to about this scenario of about $74,500. In all of ¥0.63, of different levels of wheat $20.25 per farm), while consumers cases, consumer gains slightly outweigh exports from the Mexicali Valley and would gain about the same amount, for producer losses. from the estimated producer losses and a net benefit in this scenario of about consumer gains that would result. For $3,000. At the other end of the

TABLE 2.ÐPOTENTIAL IMPACT IN THE UNITED STATES OF THE REDIRECTION OF MEXICALI VALLEY WHEAT TO U.S. MARKETS (PRICE ELASTICITY IS ¥0.63)

Percentage of Mexicali Valley-origin wheat shipments diverted from other (domestic or export) markets to the U.S. market: 20 40 60 80 100

Imports (millions of bushels) ...... 1.8 3.6 5.4 7.2 9.0 Percent change in price ...... (0.09) (0.17) (0.27) (0.36) (0.45) Percent change in quantity ...... (0.04) (0.08) (0.13) (0.17) (0.22) Decrease in producer surplus (millions of dollars) ...... (5.92) (11.83) (17.75) (23.66) (29.56) Increase in consumer surplus (millions of dollars) ...... 5.92 11.84 17.77 23.70 29.64 Total surplus (millions of dollars) ...... 0.003 0.0119 0.0268 0.0477 0.0745

How likely even a 20 percent ship their wheat to the United States. Valley producers to sell their wheat in diversion of Mexicali Valley wheat to However, the Mexican government is Mexico. the U.S. market would be, however, is considering a transportation subsidy for Prices for Mexicali Valley wheat may unclear. The production area of the growers in northwestern Mexico to well prove to be a determining factor Mexicali Valley is closer to markets in offset the transportation advantage that with regard to the level of potential the United States than it is to markets growers in central Mexico have in exports, as the costs of production in the in central Mexico, which means that marketing their crops in Mexico City. Mexicali Valley are much higher than lower transportation costs may Such a subsidy may encourage Mexicali U.S. production costs. The cost of encourage Mexicali Valley producers to Mexicali Valley wheat averaged Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3847 between $2.47 and $3.54 per bushel, Mexico in particular, by reaffirming the would have to state that the wheat or with total economic costs (which United States’ continuing commitment other articles had been grown in the include fertilizers, irrigation, harvest to using scientifically valid principles as designated Karnal bunt free area of the costs, interest on credit, etc.) ranging the basis for regulation. Mexicali Valley. between $227.60 to $247.50 per acre. Under these circumstances, the We are soliciting comments from the The cost of wheat grown in the United Administrator of the Animal and Plant public (as well as affected agencies) States, on the other hand, averaged Health Inspection Service has concerning our proposed information $2.47 per bushel, with total economic determined that this action would not collection and recordkeeping costs averaging $155 per acre. With its have a significant economic impact on requirements. We need this outside higher production costs and the added a substantial number of small entities. input to help us: cost of transportation across the border Executive Order 12988 (1) Evaluate whether the proposed into the United States, it may prove information collection is necessary for difficult for Mexicali Valley wheat to This proposed rule has been reviewed the proper performance of our agency’s compete in the U.S. market. under Executive Order 12988, Civil functions, including whether the The actual extent of any decrease in Justice Reform. If this proposed rule is information will have practical utility; wheat prices in the United States adopted: (1) All State and local laws and (2) Evaluate the accuracy of our resulting from action proposed in this regulations that are inconsistent with estimate of the burden of the proposed document would depend to a great this rule will be preempted; (2) no information collection, including the degree upon the size of the price retroactive effect will be given to this validity of the methodology and elasticity of demand, the magnitude of rule; and (3) administrative proceedings assumptions used; the change in supply, and the size of the will not be required before parties may (3) Enhance the quality, utility, and baseline price. For lower price file suit in court challenging this rule. clarity of the information to be elasticities, both losses and gains would Paperwork Reduction Act collected; and be higher. We expect that the amount of (4) Minimize the burden of the In accordance with section 3507(d) of wheat exported from the Mexicali information collection on those who are the Paperwork Reduction Act of 1995 Valley would not be large and would to respond, (such as through the use of (44 U.S.C. 3501 et seq.), the information not, therefore, change wheat production appropriate automated, electronic, collection or recordkeeping and consumption patterns in the United mechanical, or other technological requirements included in this proposed States. Further, the increase in wheat collection techniques or other forms of rule have been submitted for approval to supplies in the United States from an information technology, e.g., permitting the Office of Management and Budget increase in imports from Mexico would electronic submission of responses.) (OMB). Please send written comments likely be offset to some extent by an Estimate of burden: Public reporting to the Office of Information and increase in exports of wheat from the burden for this collection of information Regulatory Affairs, OMB, Attention: United States to Mexico. Nevertheless, is estimated to average 1.2 hours per Desk Officer for APHIS, Washington, DC allowing the importation of wheat from response. the Mexicali Valley would likely have a 20503. Please state that your comments Respondents: Mexican plant health net positive impact on the overall refer to Docket No. 97–060–1. Please authorities, growers/exporters of wheat economy, since consumer benefits at send a copy of your comments to: (1) products in the Mexicali Valley. any level of imports would be slightly Docket No. 97–060–1, Regulatory Estimated number of respondents: 20. higher than producer losses. Analysis and Development, PPD, Estimated number of responses per The only significant alternative to this APHIS, suite 3C03, 4700 River Road respondent: 5. proposed rule would be to make no Unit 118, Riverdale, MD 20737–1238, Estimated annual number of changes in the wheat diseases and (2) Clearance Officer, OIRM, USDA, responses: 100. regulations, i.e., to continue to prohibit room 404–W, 14th Street and Estimated total annual burden on the importation of wheat and wheat Independence Avenue SW., respondents: 120 hours. products from Mexico. We have rejected Washington, DC 20250. A comment to Copies of this information collection that alternative because we believe that OMB is best assured of having its full can be obtained from Clearance Officer, Mexico has demonstrated that the effect if OMB receives it within 30 days OIRM, USDA, room 404-W, 14th Street wheat-growing areas of the Mexicali of publication of this proposed rule. and Independence Avenue SW., Valley are free from Karnal bunt, which This proposed rule would amend the Washington, DC 20250. means that there is no longer any wheat diseases regulations by biological justification for that area of recognizing a wheat-growing area List of Subjects in 7 CFR Part 319 Mexico to be listed with the countries within the Mexicali Valley of Mexico as Bees, Coffee, Cotton, Fruits, Honey, and localities considered to be affected being free from the wheat disease Karnal Imports, Incorporation by reference, with Karnal bunt. Maintaining a bunt. This proposed change would have Nursery Stock, Plant diseases and pests, prohibition on the importation of wheat the effect of removing certain Quarantine, Reporting and and wheat products from the Mexicali restrictions on the importation into the recordkeeping requirements, Rice, Valley in light of that area’s United States of wheat seed, straw, and Vegetables. demonstrated freedom from Karnal bunt other wheat products from the Karnal Accordingly, 7 CFR part 319 is would run counter to the United States’ bunt free area of the Mexicali Valley. proposed to be amended as follows: obligations under international trade Because the remainder of Mexico is agreements and would likely be still considered to be affected with PART 319ÐFOREIGN QUARANTINE challenged through the World Trade Karnal bunt, we would require that a NOTICES Organization. Conversely, our proposal phytosanitary certificate accompany to declare the wheat-growing areas of wheat and other wheat-related articles 1. The authority citation for part 319 the Mexicali Valley free from Karnal offered for entry from the Karnal bunt would continue to read as follows: bunt would likely have a beneficial free area of the Mexicali Valley. That Authority: 7 U.S.C. 150dd, 150ee, 150ff, effect on international trade in general, certificate would have to be issued by 151–167, 450, 2803, and 2809; 21 U.S.C. 136 and trade between the United States and Mexican plant health authorities, and and 136a; 7 CFR 2.22, 2.80, and 371.2(c). 3848 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

§ 319.8±10 [Amended] e. A new paragraph (b)(3) would be from all countries by paragraph (a)(1) of 2. In Subpart—Foreign Cotton and added to read as set forth below. this section, and except wheat straw, Covers, § 319.8–10(d) would be f. In paragraph (c)(2), the reference ‘‘7 hulls, and chaff, which are restricted amended by removing the words CFR 319.37–14(b)’’ would be removed importation by § 319.59 from any ‘‘§ 319.59 (notice of quarantine No. 59 and the reference ‘‘§ 319.37–14(b)’’ country or locality listed in § 319.59–2. relating to the flag smut disease)’’ and added in its place. * * * * * adding the words ‘‘§ 319.59–2(a)(2)’’ in Done in Washington, DC, this 21st day of § 319.59±2 Prohibited articles. their place, and footnote 5 and its January 1998. reference in the text would be removed. (a) * * * Terry L. Medley, (2) Afghanistan, Algeria, Armenia, § 319.8±11 [Amended] Australia, Azerbaijan, Bangladesh, Administrator, Animal and Plant Health Inspection Service. 3. In Subpart—Foreign Cotton and Belarus, Bulgaria, Chile, China, Cyprus, Covers, § 319.8–11(a) introductory text, Egypt, Estonia, Falkland Islands, [FR Doc. 98–1808 Filed 1–26–98; 8:45 am] footnote 6 and its reference in the text Georgia, Greece, Guatemala, Hungary, BILLING CODE 3410±34±P would be redesignated as footnote 5. India, Iran, Iraq, Israel, Italy, Japan, Kazakstan, Kyrgyzstan, Latvia, Libya, DEPARTMENT OF AGRICULTURE § 319.8±17 [Amended] Lithuania, Moldova, Morocco, Nepal, 4. In Subpart—Foreign Cotton and North Korea, Oman, Pakistan, Portugal, Agricultural Marketing Service Covers, § 319.8–17(d), footnote 7 and its Romania, Russia, Spain, Tajikistan, reference in the text would be Tanzania, Tunisia, Turkey, 7 CFR Part 1209 redesignated as footnote 6. Turkmenistan, South Africa, South 5. The authority citation for Korea, Ukraine, Uzbekistan, and [FV±97±705RO] ‘‘Subpart—Wheat Diseases’’ would be Venezuela. Mushroom Promotion, Research, and removed. (b) * * * Consumer Information Order; (3) The following area of the Mexicali § 319.59 [Amended] Referendum Order 6. In Subpart—Wheat Diseases, Valley in Mexico has been determined § 319.59 would be amended as follows: to be free from Karnal Bunt: Those AGENCY: Agricultural Marketing Service, a. In paragraph (a), in the first portions of the municipality of Mexicali, USDA. sentence, the reference ‘‘§ 319.59–2(b)’’ in the State of Baja California, and the ACTION: Referendum order. would be removed and the reference municipality of San Luis Rio Colorado, ‘‘§ 319.59–2(c)’’ would be added in its in the State of Sonora, that are included SUMMARY: This action gives notice that place. in the Distrito de Desarrollo Rural (Rural a referendum will be conducted to b. In paragraph (a), in the last Development District) 002 Rio Colorado. determine whether mushroom sentence, the reference ‘‘§ 319.59–2(a)’’ Except for wheat (Triticum spp.) plants, producers and importers favor would be removed and the reference which are prohibited importation under continuance of the Mushroom ‘‘§ 319.59–2(a) and (b)’’ added in its § 319.37–2(a), any articles described in Promotion, Research, and Consumer place, and the reference ‘‘§ 319.59–2(b)’’ paragraph (b)(1) of this section that are Information Order (Order). In order to would be removed and the reference from that designated area may be continue, the Order must be approved ‘‘§ 319.59–2(c)’’ added in its place. imported into the United States subject by a majority of producers and c. In paragraph (b), in the first to the following conditions: importers voting in the referendum and sentence, the words ‘‘abandoned by the (i) The articles are offered for entry at that majority must represent more than importer for destruction’’ would be the port of Calexico, CA; and 50 percent of the mushrooms produced removed and the words ‘‘destroyed as (ii) The articles offered for entry are and imported by those voting in the deemed necessary by an inspector at the made available for examination by an referendum. This action announces the expense of the importer’’ would be inspector and remain at the port until voting period, representative period, added in their place. released, or authorized further and agents. d. In paragraph (b), in the last movement pending release, by an DATES: The referendum will be sentence, the words ‘‘abandoned for inspector; and conducted by mail ballot from February (iii) The articles are accompanied by destruction by’’ would be removed and 24 through March 13, 1998. Faxed a phytosanitary certificate issued by the the words ‘‘destroyed as deemed ballots will be accepted. The Mexican national plant protection necessary by an inspector at the expense representative period for establishing organization that certifies that the of’’ would be added in their place. voter eligibility shall be the period from articles are from the area of the Mexicali 7. In Subpart—Wheat Diseases, July 1, 1996, through June 30, 1997. § 319.59–2 would be amended as Valley described in this paragraph and ADDRESSES: Copies of the Mushroom follows: remained within that area prior to and a. In the introductory text of during their movement to the United Promotion, Research, and Consumer paragraph (a), the words ‘‘in paragraph States. Information Order may be obtained from: Referendum Agent, Research and (b)’’ would be removed and the words * * * * * Promotion Branch, Fruit and Vegetable ‘‘in paragraph (c)’’ added in their place. 8. In Subpart—Packing Materials, Programs, AMS, USDA, 1400 b. In paragraph (a)(1)(i), the word § 319.69(b)(1) would be revised to read Independence Avenue, Room 2535-S, ‘‘Triticums’’ would be removed and the as follows: word ‘‘Triticum’’ added in its place. Stop Code 0244, Washington, DC c. Paragraph (a)(2) would be revised to § 319.69 Notice of quarantine. 20090–6456, telephone number (888) read as set forth below. * * * * * 720–9917, fax (202) 205–2800. d. In paragraph (b)(2), the words (b) * * * FOR FURTHER INFORMATION CONTACT: ‘‘(except for that portion of the Mexicali (1) Cereal straw, hulls, and chaff (such Stacey L. Bryson, Research and Valley described in paragraph (b)(3) of as oats, barley, and rye) from all Promotion Branch, Fruit and Vegetable this section),’’ would be added after the countries, except rice straw, hulls, and Programs, AMS, USDA, 1400 word ‘‘Mexico’’. chaff, which are prohibited importation Independence Avenue, Room 2535-S, Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3849

Stop Code 0244, Washington, DC a majority of the producers and the Secretary of Agriculture to conduct 20090–6456, telephone (202) 720–6930 importers voting in the referendum, the referendum. or (888) 720–9917. which majority, on average, annually Ballots to be cast in the referendum, SUPPLEMENTARY INFORMATION: A produces and imports into the United and any related material relevant to the referendum will be conducted among States more than 50 percent of the referendum, will be mailed by the mushroom producers and importers to mushrooms annually produced and referendum agents to all known determine whether the continuance of imported by all those voting in the mushroom producers and importers. the Mushroom Promotion, Research, referendum, the Secretary shall Only mushroom producers and and Consumer Information Order terminate or suspend the collection of importers who either produced or (Order) [7 CFR 1209] is favored by assessments under the Order and imported, on average, over 500,000 persons voting in the referendum. The suspend or terminate activities under pounds of mushrooms annually during Order is authorized under the the Order as soon as practicable. the representative period will be eligible Mushroom Promotion, Research, and In accordance with the Paperwork to vote in the referendum. Persons who Consumer Information Act (Act) [7 Reduction Act of 1995 [Pub. L. 104–13], have received an exemption from U.S.C. 6101–6112]. the referendum ballot has been assessment for the entire representative The representative period for approved by the Office of Management period are ineligible to vote. and Budget (OMB) and has been establishing voter eligibility for the List of Subjects in 7 CFR Part 1209 referendum shall be the period from assigned OMB number 0581–0093. July 1, 1996, through June 30, 1997. There are approximately 138 eligible Administrative practice and Paragraph (b)(2) of § 1926 of the Act voters. It will take an average of 15 procedure, Advertising, Agricultural requires that the Order be approved by minutes for each voter to read the voting research, Marketing agreements, a majority of producers and importers instructions and complete the Mushrooms, Reporting and voting in the referendum which referendum ballot. The total burden on recordkeeping requirements. majority, on average, annually produces the total number of voters will be 34.5 Authority: 7 U.S.C. 6101–6112. hours. and imports into the United States more Dated: January 21, 1998. than 50 percent of mushrooms annually Referendum Order Enrique E. Figueroa, produced and imported by all those persons voting in the referendum. Only It is hereby directed that a referendum Acting Administrator, Agricultural Marketing Service. mushroom producers and importers be conducted among mushroom who either produced or imported, on producers and importers to determine [FR Doc. 98–1908 Filed 1–26–98; 8:45 am] average, over 500,000 pounds of whether they favor the continuance of BILLING CODE 3410±02±P mushrooms annually during the the Order. The representative period for establishing voter eligibility for the representative period will be eligible to DEPARTMENT OF AGRICULTURE vote in the referendum. Persons who referendum shall be the period from have received an exemption from July 1, 1996, through June 30, 1997. A Animal and Plant Health Inspection assessment for the entire representative referendum shall be conducted by mail Service period are ineligible to vote. The ballot from February 24 through March referendum shall be conducted by mail 13, 1998. Faxed ballots will be accepted. 9 CFR Part 71 ballot from February 24 through March By interim final rule, referendum 13, 1998. Faxed ballots will be accepted. procedures were published in the [Docket No. 97±099±1] Section 1926 of the Act provides that Federal Register on December 23, 1997 the Secretary of Agriculture (Secretary) [62 FR 66973]. Comments concerning EIA; Handling Reactors at Livestock shall conduct a referendum effective 5 the provisions of the rule must be Markets years after the date on which the Order received by January 22, 1998. The became effective. The Order became Procedure for the Conduct of Referenda AGENCY: Animal and Plant Health effective on January 8, 1993. The in Connection with the Mushroom Inspection Service, USDA. referendum must be conducted among Promotion, Research, and Consumer ACTION: Proposed rule. mushroom producers and importers to Information Order [7 CFR 1209.300– ascertain whether they favor 1209.307] shall be used to conduct the SUMMARY: We are proposing to amend continuation, termination, or referendum. Ballots will be mailed to all the regulations pertaining to livestock suspension of the Order. Persons voting known mushroom producers and facilities under State or Federal in the referendum will certify their importers on or before February 17, veterinary supervision to require that eligibility to vote and will designate 1998. Eligible voters who do not receive any livestock facility accepting equines their status either as a mushroom a ballot by mail may call the following classified as reactors to equine producer or importer. Producers and toll-free telephone number to receive a infectious anemia must quarantine these importers will be required to certify the ballot: 1 (888) 720–9917. All ballots will animals at all times at least 200 yards pounds of mushrooms they either be subject to verification. Ballots must from all equines that are not reactors to produced or imported during the be received by the referendum agents by this disease. Currently, livestock representative period. mail or fax no later than March 13, facilities accepting reactors to equine The Order shall continue in effect if 1998, to be counted. infectious anemia are required to it is approved by a simple majority of Stacey L. Bryson and Martha B. quarantine the reactors that will remain producers and importers voting in the Ransom, Research and Promotion at the facility for longer than 24 hours referendum and that majority represents Branch, Fruit and Vegetable Programs, at least 200 yards away from all other more than 50 percent of the mushrooms Agricultural Marketing Service, U.S. animals. This proposed amendment produced and imported by those voting Department of Agriculture, Room 2535– would help to prevent the interstate in the referendum. If the Secretary S, Stop Code 0244, P.O. Box 96456, spread of equine infectious anemia, a determines that suspension or Washington, D.C. 20090–6456, are contagious, vector-borne disease termination of the Order is favored by designated as the referendum agents of affecting equines. 3850 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

DATES: Consideration will be given only naturally, the disease is spread by insect While in the past such short-term to comments received on or before vectors. Although, theoretically, EIA mixing of healthy and infected horses March 30, 1998. could be spread by any type of blood- was not believed to contribute ADDRESSES: Please send an original and consuming insect, such as mosquitoes significantly to EIA spread, we now three copies of your comments to and deer flies, the disease is generally believe that allowing healthy horses to Docket No. 97–099–1, Regulatory spread by large horse flies. EIA spreads come into close contact with EIA Analysis and Development, PPD, when a blood-consuming insect is reactors for any length of time could APHIS, suite 3C03, 4700 River Road interrupted during a feeding on an allow for infection of the healthy horses. Unit 118, Riverdale, MD 20737–1238. infected animal and then resumes Therefore, to help prevent the interstate Please state that your comments refer to feeding on an uninfected animal while spread of EIA, we are proposing to Docket No. 97–099–1. Comments the infected blood is still on the insect’s prohibit the mixing of healthy and received may be inspected at USDA, mouthparts. While mosquitoes have infected horses at approved livestock room 1141, South Building, 14th Street finely structured mouthparts that facilities for any period of time. Thus, and Independence Avenue SW., directly penetrate small blood vessels, we are proposing to amend the Washington, DC, between 8 a.m. and the mouthparts of horse flies and deer quarantine requirement in 4:30 p.m., Monday through Friday, flies include scissorlike blades that cut § 71.20(a)(16)(ii) to remove the except holidays. Persons wishing to and slash the horse’s skin leaving quarantine exception for EIA reactors inspect comments are requested to call relatively large amounts of blood on the that will be in the approved livestock ahead on (202) 690–2817 to facilitate mouthparts. Research has shown that facility for less than 24 hours. EIA entry into the comment reading room. deer flies and smaller species of horse reactors would need to be quarantined flies are not as easily disrupted from at least 200 yards away from non-EIA- FOR FURTHER INFORMATION CONTACT: Dr. their bloodmeals on horses as are large reactor horses at all times. James P. Davis, Senior Staff horse flies. The large flies cause painful Currently, § 71.20(a)(16)(ii) also Veterinarian, National Animal Health bites that trigger a physiological requires that EIA reactors be Programs Staff, VS, APHIS, 4700 River response from the horse. If disrupted by quarantined at least 200 yards away Road Unit 36, Riverdale, MD 20737– the horse while feeding, the horse fly from all other animals in the approved 1231, (301) 734–5970; or E-mail: may then move to another horse to livestock facility. This requirement [email protected]. complete the bloodmeal.1 exists because it was formerly believed SUPPLEMENTARY INFORMATION: Regulations pertaining to the that insect vectors could spread EIA to Background interstate movement of animals affected healthy horses as far as 200 yards away with EIA are located in 9 CFR part 75. from reactors if other animals were The regulations in subchapter C, According to these regulations, EIA located between the reactors and the ‘‘Interstate Transportation of Animals reactors may be moved interstate only healthy horses. We previously believed (Including Poultry) and Animal for immediate slaughter, to a diagnostic that a fly could move from a reactor to Products,’’ of chapter I, title 9, of the or research facility, to the animal’s feed on a nonequine animal or animals Code of Federal Regulations contain home farm, or to an approved stockyard located nearby and then move on to a provisions designed by the Animal and for sale for immediate slaughter. healthy horse, infecting it. However, as Plant Health Inspection Service (APHIS) Approximately 1,600 horses in the stated previously, we now know that to prevent the dissemination of animal United States test positive for EIA each EIA transmission by insect vector occurs diseases in the United States. Part 71 of year. Currently, 40 percent of these only when an insect is feeding on an subchapter C includes general animals move through livestock markets infected horse, is interrupted during the provisions. Section 71.20 pertains to on their way to slaughter. feeding, and then moves on to feed on APHIS approval of livestock facilities, Section 71.20(a)(16)(ii) currently a healthy horse while the infected blood which include stockyards, livestock specifies that approved livestock is still on the insect’s mouthparts. Horse markets, buying stations, concentration facilities must place any EIA reactor in flies are not known to feed on points, or any other premises under a quarantined pen at least 200 yards nonequine animals when horses are State or Federal veterinary supervision from all non-EIA-reactor horses and available because these flies prefer the where livestock are assembled. Section other animals, unless the EIA reactor relatively supple skin of horses. 71.20(a) includes an agreement that will be moving out of the facility within Moreover, the likelihood that blood livestock facilities must execute to 24 hours of arrival. The purpose of from an infected horse would still be on obtain APHIS approval, and quarantining the EIA reactors is to the insect’s mouthparts after the insect subparagraph (16) of the agreement prevent EIA transmission: Because the had fed on another animal is slight. For pertains to livestock facilities that types of flies that transmit EIA generally these reasons, we now believe that the accept horses. (According to the remain in the immediate vicinity of the possibility of disease transmission definitions in § 71.1, ‘‘horses’’ includes horses with which they are associated, occurring under these circumstances is ‘‘horses, asses, mules, ponies, and quarantining EIA reactors at least 200 extremely unlikely. We are proposing to zebras.’’ Throughout this document, the yards away from healthy horses is amend § 71.20(a)(16)(ii) to remove the same definition applies.) According to effective in preventing EIA spread. words ‘‘or other animals.’’ We believe § 71.20(a)(16), approved livestock However, as described above, the that, in the interest of preventing EIA facilities may elect either to accept or regulations currently allow an EIA spread, it is only necessary to require not accept horses that are reactors to reactor to be mixed in with healthy EIA reactors to be quarantined at least equine infectious anemia (EIA). horses if the EIA reactor will be at the 200 yards away from all equines that are EIA is a contagious, potentially fatal livestock facility for less than 24 hours. not reactors. disease affecting horses that is spread by infected blood coming into contact with 1 Information regarding research on EIA Executive Order 12866 and Regulatory the blood in a healthy animal. transmission may be obtained by contacting Dr. Tim Flexibility Act Cordes, Senior Staff Veterinarian, Equine Programs, Therefore, humans can spread EIA from VS, APHIS, USDA, 4700 River Road Unit 36, This proposed rule has been reviewed horse to horse through unsafe Riverdale, MD 20737–1231; (301) 734–3279; or e- under Executive Order 12866. The rule vaccination or blood-testing practices; mail: [email protected]. has been determined to be not Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3851 significant for the purposes of Executive have a significant economic impact on FEDERAL ELECTION COMMISSION Order 12866 and, therefore, has not a substantial number of small entities. been reviewed by the Office of 11 CFR Part 114 Management and Budget. Executive Order 12372 [Notice 1998±3] The regulations in 9 CFR part 71 This program/activity is listed in the require that any horses classified as EIA Catalog of Federal Domestic Assistance Definition of ``Member'' of a reactors and accepted by a facility for under No. 10.025 and is subject to Membership Association sale are to be placed in quarantined Executive Order 12372, which requires pens at least 200 yards from all non- AGENCY: Federal Election Commission. intergovernmental consultation with EIA-reactor horses or other animals, ACTION: Notice of Proposed Rulemaking; State and local officials. (See 7 CFR part unless moving out of the facility within technical correction. 3015, subpart V.) 24 hours of arrival. The proposed rule would remove the ‘‘less-than-24-hours’’ Executive Order 12988 SUMMARY: On December 22, 1997, the exemption: Quarantine would be Commission published a Notice of required regardless of the length of time This proposed rule has been reviewed Proposed Rulemaking (‘‘NPRM’’) setting between an EIA reactor’s arrival and under Executive Order 12988, Civil out proposed revisions to its rules departure from a facility. The proposed Justice Reform. If this proposed rule is defining who qualifies as a ‘‘member’’ of rule would also amend the regulations adopted: (1) All State and local laws and a membership association. The term is by requiring that EIA reactors be regulations that are in conflict with this defined twice in the Commission’s quarantined at least 200 yards away rule will be preempted; (2) no rules, and the definitions are identical. from all equines that are not reactors, retroactive effect will be given to this The NPRM sought comment on three rather than at least 200 yards away from rule; and (3) administrative proceedings alternative definitions, but inadvertently all other animals. will not be required before parties may omitted one portion of one alternative Facilities that buy and sell horses are file suit in court challenging this rule. from one of the parallel definitions. This included in the Small Business technical revision to the NPRM corrects Administration’s SIC (Standard Paperwork Reduction Act that oversight. Industrial Classification) category FOR FURTHER INFORMATION CONTACT: Ms. This proposed rule contains no ‘‘Livestock Services, Except Veterinary.’’ Susan E. Propper, Assistant General information collection or recordkeeping Firms in this category with annual Counsel, or Ms. Rita A. Reimer, requirements under the Paperwork receipts of less than $5 million are Attorney, 999 E Street, N.W., considered small entities. It is likely Reduction Act of 1995 (44 U.S.C. 3501 Washington, DC 20463, (202) 219–3690 that most, if not all, of the et seq.). or (800) 424–9530. approximately 200 facilities that buy List of Subjects in 9 CFR Part 71 SUPPLEMENTARY INFORMATION: On and sell horses are ‘‘small’’ under this December 22, 1997, the Commission definition. Animal diseases, Livestock, Poultry published a Notice of Proposed Most facilities that buy and sell horses and poultry products, Quarantine, Rulemaking seeking comment on three already have quarantine pens, in Reporting and recordkeeping alternative revisions (Alternatives A, B accordance with current regulations. requirements, Transportation. and C) to its rules defining who The estimated 20 percent that do not Accordingly, 9 CFR part 71 is qualifies as a ‘‘member’’ of a have quarantine pens could build or membership association. 62 FR 66832. proposed to be amended as follows: modify existing pens for quarantine use Each Alternative describes a range of at a relatively minor cost: APHIS PART 71ÐGENERAL PROVISIONS financial and organizational estimates that, at most, construction of attachments that would be sufficient to a quarantine pen would cost about 1. The authority citation for part 71 confer membership status. $1,000. would continue to read as follows: A membership association can solicit However, costs of quarantine pen contributions from its members to a construction are not attributable to this Authority: 21 U.S.C. 111–113, 114a, 114a– separate segregated fund established by proposed rule because quarantine, per 1, 115–117, 120–126, 134b, and 134f; 7 CFR the association, and can include express se, is not a new requirement. Only those 2.22, 2.80, and 371.2(d). electoral advocacy in communications facilities that accept EIA reactors and § 71.20 [AMENDED] to its members. 2 U.S.C. 441b(b)(2)(A), that always move all EIA reactors within 441b(b)(4)(C). The Commission’s rules 24 hours of arrival would need to 2. In § 71.20, paragraph (a) would be for both activities are identical. Those construct or modify pens for quarantine amended in paragraph (16)(ii) of the governing solicitations are found at 11 purposes as a consequence of this sample agreement by removing the CFR 114.1(e), and those governing proposed rule. As no facility can always words ‘‘or other animals, unless moving communications are found at 11 CFR be certain of movement of EIA reactors out of the facility within 24 hours of 100.8(b)(4)(iv). within 24 hours, no costs should be arrival’’. In keeping with the statutory and incurred strictly because of this regulatory scheme, the Commission Done in Washington, DC, this 20th day of proposed rule. Moreover, by requiring January 1998. intended that all three alternatives all EIA reactors at approved livestock would apply to both 11 CFR facilities to be quarantined, the horse Terry L. Medley, 100.8(b)(4)(iv) and 114.1(e). However, industry in general would benefit from Administrator, Animal and Plant Health the NPRM as published inadvertently a further reduction in the risk of EIA Inspection Service. omitted Alternative C for paragraph transmission. [FR Doc. 98–1778 Filed 1–26–98; 8:45 am] 114.1(e)(2)(ii), although it included it for Under these circumstances, the BILLING CODE 3410±34±P parallel paragraph 100.8(b)(4)(iv)(B)(2). Administrator of the Animal and Plant See 62 FR 66837, 66838 (Dec. 22, 1997). Health Inspection Service has Under Alternative C, a person would be determined that this action would not considered a ‘‘member’’ of a 3852 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules membership association if the person Administration (FAA), Transport Availability of NPRMs was required to pay on a regular basis Airplane Directorate, ANM–103, Any person may obtain a copy of this a specific amount of annual dues that Attention: Rules Docket No. 97–NM– NPRM by submitting a request to the are predetermined by the association. 99–AD, 1601 Lind Avenue, SW., Accordingly, the Commission is Renton, Washington 98055–4056. FAA, Transport Airplane Directorate, publishing this technical correction to Comments may be inspected at this ANM–103, Attention: Rules Docket No. the NPRM. location between 9:00 a.m. and 3:00 97–NM–99–AD, 1601 Lind Avenue, p.m., Monday through Friday, except SW., Renton, Washington 98055–4056. § 114.1 [Corrected] Federal holidays. Discussion On page 66838 of the December 22, The service information referenced in 1997 Federal Register, at the bottom of the proposed rule may be obtained from The FAA has received reports of the first column, following proposed McDonnell Douglas Corporation, 3855 fatigue cracks in the fuselage skin and Alternative B for paragraphs (e)(2)(ii)– Lakewood Boulevard, Long Beach, doubler at the corners of the forward (iv), insert the following: California 90846, Attention: Technical service door doorjamb on Model DC–9– Alternative C for paragraph (e)(2)(ii). Publications Business Administration, 31 series airplanes. These cracks were (2) Are required to pay on a regular Department C1-L51 (2–60). This discovered during inspections basis a specific amount of annual dues information may be examined at the conducted as part of the Supplemental that are predetermined by the FAA, Transport Airplane Directorate, Structural Inspection Document (SSID) association. 1601 Lind Avenue, SW., Renton, program, required by AD 96–13–03, amendment 39–9671 (61 FR 31009, June Dated: January 22, 1998. Washington; or at the FAA, Transport 19, 1996). Investigation revealed that Joan D. Aikens, Airplane Directorate, Los Angeles Aircraft Certification Office, 3960 such cracking was caused by fatigue- Chairman, Federal Election Commission. Paramount Boulevard, Lakewood, related stress. Fatigue cracking in the [FR Doc. 98–1890 Filed 1–26–98; 8:45 am] California. fuselage skin or doubler at the corners BILLING CODE 6715±01±U FOR FURTHER INFORMATION CONTACT: of the forward service door doorjamb, if Wahib Mina, Aerospace Engineer, not detected and corrected in a timely Airframe Branch, ANM–120L, FAA, Los manner, could result in rapid DEPARTMENT OF TRANSPORTATION Angeles Aircraft Certification Office, decompression of the fuselage and consequent reduced structural integrity Federal Aviation Administration 3960 Paramount Boulevard, Lakewood, California 90712; telephone (562) 627– of the airplane. 14 CFR Part 39 5324; fax (562) 627–5210. Explanation of Relevant Service SUPPLEMENTARY INFORMATION: Information [Docket No. 97±NM±99±AD] Comments Invited RIN 2120±AA64 The FAA has reviewed and approved Interested persons are invited to McDonnell Douglas Service Bulletin Airworthiness Directives; McDonnell participate in the making of the DC9–53–288, dated February 10, 1997. Douglas Model DC±9±31 Series proposed rule by submitting such The service bulletin describes the Airplanes written data, views, or arguments as following procedures: they may desire. Communications shall 1. Performing a one-time visual AGENCY: Federal Aviation identify the Rules Docket number and inspection to determine if the corners of Administration, DOT. be submitted in triplicate to the address the forward service door doorjamb have ACTION: Notice of proposed rulemaking specified above. All communications been modified; (NPRM). received on or before the closing date 2. For airplanes on which the for comments, specified above, will be SUMMARY: This document proposes the modification specified in Service considered before taking action on the adoption of a new airworthiness Bulletin DC9–53–288 has not been proposed rule. The proposals contained directive (AD) that is applicable to accomplished: Performing a low in this notice may be changed in light certain McDonnell Douglas Model DC– frequency eddy current (LFEC) or x-ray of the comments received. inspection to detect cracks of the 9–31 series airplanes. Comments are specifically invited on This proposal would require a one- fuselage skin and doubler at all corners the overall regulatory, economic, time visual inspection to determine if of the forward service door doorjamb; environmental, and energy aspects of all corners of the forward service door 3. Conducting repetitive inspections, the proposed rule. All comments doorjamb have been modified or modifying the corner skin of the submitted will be available, both before previously, various follow-on repetitive doorjamb of the forward service door and after the closing date for comments, inspections, and modification, if and performing follow-on action high in the Rules Docket for examination by frequency eddy current (HFEC) necessary. This proposal is prompted by interested persons. A report inspections, if no cracking is detected; reports of fatigue cracks found in the summarizing each FAA-public contact fuselage skin and doubler at the corners concerned with the substance of this 4. Performing repetitive HFEC of the forward service door doorjamb. proposal will be filed in the Rules inspections to detect cracks on the skin The actions specified by the proposed Docket. adjacent to any corner that has been AD are intended to detect and correct Commenters wishing the FAA to modified; and such fatigue cracking, which could acknowledge receipt of their comments 5. Modifying any crack that is found result in rapid decompression of the submitted in response to this notice to be 2 inches or less in length at all fuselage and consequent reduced must submit a self-addressed, stamped corners that have not been modified and structural integrity of the airplane. postcard on which the following performing follow-on repetitive HFEC DATES: Comments must be received by statement is made: ‘‘Comments to inspections. March 13, 1998. Docket Number 97–NM–99–AD.’’ The Accomplishment of the modification ADDRESSES: Submit comments in postcard will be date stamped and will minimize the possibility of cracks triplicate to the Federal Aviation returned to the commenter. in the fuselage skin and doubler. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3853

Explanation of Requirements of estimated to be $60 per airplane, per Applicability: Model DC–9–31 series Proposed Rule inspection cycle. airplanes, as listed in McDonnell Douglas Should an operator be required to Service Bulletin DC9–53–288, dated February Since an unsafe condition has been accomplish the modification, it would 10, 1997, certificated in any category. identified that is likely to exist or take approximately 30 work hours per Note 1: This AD applies to each airplane develop on other products of this same airplane to accomplish, at an average identified in the preceding applicability type design, the proposed AD would provision, regardless of whether it has been labor rate of $60 per work hour. require a one-time visual inspection to modified, altered, or repaired in the area Required parts would cost determine if all corners of the forward subject to the requirements of this AD. For approximately $4,800 per airplane. service door doorjamb have been airplanes that have been modified, altered, or Based on these figures, the cost impact repaired so that the performance of the modified previously, various follow-on of any necessary modification is requirements of this AD is affected, the repetitive inspections, and modification, estimated to be $6,600 per airplane. owner/operator must request approval for an if necessary. The one-time visual alternative method of compliance in inspection, follow-on repetitive Regulatory Impact accordance with paragraph (f) of this AD. The inspections, and modification would be request should include an assessment of the The regulations proposed herein effect of the modification, alteration, or repair required to be accomplished in would not have substantial direct effects accordance with the service bulletin on the unsafe condition addressed by this on the States, on the relationship AD; and, if the unsafe condition has not been described previously. between the national government and eliminated, the request should include Differences Between the Proposed Rule the States, or on the distribution of specific proposed actions to address it. and the Relevant Service Information power and responsibilities among the Compliance: Required as indicated, unless various levels of government. Therefore, accomplished previously. Operators should note that, although in accordance with Executive Order To detect and correct fatigue cracking in the service bulletin specifies that the 12612, it is determined that this the fuselage skin or doubler at the corners of manufacturer must be contacted for the forward service door doorjamb, which proposal would not have sufficient disposition of certain conditions, this could result in rapid decompression of the federalism implications to warrant the proposal would require the repair of fuselage and consequent reduced structural preparation of a Federalism Assessment. those conditions to be accomplished in integrity of the airplane, accomplish the For the reasons discussed above, I accordance with a method approved by following: certify that this proposed regulation (1) the FAA. Note 2: Where there are differences is not a ‘‘significant regulatory action’’ between the service bulletin and the AD, the Cost Impact under Executive Order 12866; (2) is not AD prevails. Note 3: The words ‘‘repair’’ and ‘‘modify/ There are approximately 64 a ‘‘significant rule’’ under the DOT Regulatory Policies and Procedures (44 modification’’ in this AD and the referenced McDonnell Douglas Model DC–9–31 service bulletin are used interchangeably. series airplanes of the affected design in FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant Note 4: This AD will affect Principal the worldwide fleet. The FAA estimates Structural Element (PSE) 53.09.033 of the that 51 airplanes of U.S. registry would economic impact, positive or negative, DC–9 Supplemental Inspection Document be affected by this proposed AD, that it on a substantial number of small entities (SID). would take approximately 1 work hour under the criteria of the Regulatory (a) Prior to the accumulation of 50,000 total per airplane to accomplish the proposed Flexibility Act. A copy of the draft landings, or within 3,225 landings after the one-time visual inspection, and that the regulatory evaluation prepared for this effective date of this AD, whichever occurs later, perform a one-time visual inspection to average labor rate is $60 per work hour. action is contained in the Rules Docket. A copy of it may be obtained by determine if the corners of the forward Based on these figures, the cost impact service door doorjamb have been modified. of the one-time visual inspection of the contacting the Rules Docket at the location provided under the caption Perform the inspection in accordance with proposed AD on U.S. operators is McDonnell Douglas Service Bulletin DC9– ADDRESSES. estimated to be $3,060, or $60 per 53–288, dated February 10, 1997. airplane. List of Subjects in 14 CFR Part 39 (b) For airplanes identified as Group 1 in McDonnell Douglas Service Bulletin DC9– The cost impact figure discussed Air transportation, Aircraft, Aviation above is based on assumptions that no 53–288, dated February 10, 1997: If the visual safety, Safety. inspection required by paragraph (a) of this operator has yet accomplished any of AD reveals that the corners of the forward the proposed requirements of this AD The Proposed Amendment service door doorjamb have not been action, and that no operator would Accordingly, pursuant to the modified, prior to further flight, perform a accomplish those actions in the future if authority delegated to me by the low frequency eddy currrent (LFEC) or x-ray this AD were not adopted. Administrator, the Federal Aviation inspection to detect cracks of the fuselage Should an operator be required to Administration proposes to amend part skin and doubler at all corners of the forward accomplish the LFEC or x-ray service door doorjamb, in accordance with 39 of the Federal Aviation Regulations McDonnell Douglas Service Bulletin DC9– inspection, it would take approximately (14 CFR part 39) as follows: 1 work hour per airplane to accomplish, 53–288, dated February 10, 1997. (1) Group 1, Condition 1. If no crack is at an average labor rate of $60 per work PART 39ÐAIRWORTHINESS detected during any LFEC or x-ray inspection hour. Based on these figures, the cost DIRECTIVES required by paragraph (b) of this AD, impact of any necessary LFEC or x-ray accomplish the requirements of either inspection is estimated to be $60 per 1. The authority citation for part 39 paragraph (b)(1)(i) or (b)(1)(ii) of this AD, in airplane, per inspection cycle. continues to read as follows: accordance with the service bulletin. Should an operator be required to Authority: 49 U.S.C. 106(g), 40113, 44701. (i) Option 1. Repeat the LFEC inspection accomplish the HFEC inspection, it required by this paragraph thereafter at § 39.13 [Amended] would take approximately 1 work hour intervals not to exceed 3,225 landings, or the x-ray inspection required by this paragraph per airplane to accomplish, at an 2. Section 39.13 is amended by adding the following new airworthiness thereafter at intervals not to exceed 3,075 average labor rate of $60 per work hour. landings; or Based on these figures, the cost impact directive: (ii) Option 2. Prior to further flight, modify of any necessary HFEC inspection is McDonnell Douglas: Docket 97–NM–99–AD. the corner skin of the forward service door 3854 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules doorjamb in accordance with the service accordance with a method approved by the compliance with this AD, if any, may be bulletin. Prior to the accumulation of 28,000 Manager, Los Angeles ACO. obtained from the Los Angeles ACO. landings after accomplishment of the (2) Option 2. Prior to further flight, modify (g) Special flight permits may be issued in modification, perform a high frequency eddy the corner skin of the forward service door accordance with sections 21.197 and 21.199 current (HFEC) inspection to detect cracks on doorjamb in accordance with the service of the Federal Aviation Regulations (14 CFR the skin adjacent to the modification, in bulletin. Prior to the accumulation of 28,000 21.197 and 21.199) to operate the airplane to accordance with the service bulletin. landings after accomplishment of the a location where the requirements of this AD (A) If no crack is detected on the skin modification, perform an HFEC inspection to can be accomplished. adjacent to the modification during the HFEC detect cracks on the skin adjacent to the Issued in Renton, Washington, on January required by this paragraph, repeat the HFEC modification, in accordance with the service inspection thereafter at intervals not to bulletin. 20, 1998. exceed 20,000 landings. (i) If no crack is detected on the skin Darrell M. Pederson, (B) If any crack is detected on the skin adjacent to the modification during the HFEC Acting Manager, Transport Airplane adjacent to the modification during any required by this paragraph, repeat the HFEC Directorate, Aircraft Certification Service. HFEC inspection required by this paragraph, inspection thereafter at intervals not to [FR Doc. 98–1858 Filed 1–26–98; 8:45 am] prior to further flight, repair it in accordance exceed 20,000 landings. BILLING CODE 4910±13±U with a method approved by the Manager, Los (ii) If any crack is detected on the skin Angeles Aircraft Certification Office (ACO), adjacent to the modification during any FAA, Transport Airplane Directorate. HFEC inspection required by this paragraph, (2) Group 1, Condition 2. If any crack is prior to further flight, repair it in accordance DEPARTMENT OF TRANSPORTATION found during any LFEC or x-ray inspection with a method approved by the Manager, Los required by paragraph (b) of this AD, and the Angeles Aircraft Certification Office (ACO), Federal Aviation Administration crack is 2 inches or less in length: Prior to FAA, Transport Airplane Directorate. further flight, modify/repair the corners of (d) Group 2, Condition 2. For airplanes 14 CFR Part 71 the doorjamb of the forward service door in identified as Group 2 in McDonnell Douglas [Airspace Docket No. 97±AEA±45] accordance with the service bulletin. Prior to Service Bulletin DC9–53–288, dated February the accumulation of 28,000 landings after 10, 1997: If the visual inspection required by Proposed Amendment to Class E accomplishment of the modification, perform paragraph (a) of this AD reveals that the Airspace; Blacksburg, VA a HFEC inspection to detect cracks on the corners of the forward service door doorjamb skin adjacent to the modification, in have been modified previously in accordance AGENCY: Federal Aviation accordance with the service bulletin. with McDonnell Douglas DC–9 Structural Administration (FAA), DOT. (i) If no crack is detected during the HFEC Repair Manual, using an aluminum doubler, ACTION: inspection required by this paragraph, repeat prior to the accumulation of 28,000 landings Notice of proposed rulemaking. after accomplishment of that modification, or the HFEC inspection thereafter at intervals SUMMARY: This notice proposes to not to exceed 20,000 landings. within 3,225 landings after the effective date (ii) If any crack is detected during any of this AD, whichever occurs later, perform amend the Class E airspace area at HFEC inspection required by this paragraph, an HFEC inspection to detect cracks on the Blacksburg, VA. The development of a prior to further flight, repair it in accordance skin adjacent to the modification, in new Standard Instrument Approach with a method approved by the Manager, Los accordance with McDonnell Douglas Service Procedure (SIAP) based on the Global Angeles ACO. Bulletin DC9–53–288, dated February 10, Positioning System (GPS) at Virginia (3) Group 1, Condition 3. If any crack is 1997. Tech Airport has made this proposal found during any LFEC or x-ray inspection (1) If no crack is detected on the skin necessary. Additional controlled required by paragraph (b) of this AD, and the adjacent to the modification during the HFEC required by this paragraph, repeat the HFEC airspace extending upward from 700 crack is greater than 2 inches in length: Prior feet Above Ground Level (AGL) is to further flight, repair it in accordance with inspection thereafter at intervals not to a method approved by the Manager, Los exceed 20,000 landings. needed to accommodate the SIAP and Angeles ACO. (2) If any crack is detected on the skin for instrument Flight Rules (IFR) (c) Group 2, Condition 1. For airplanes adjacent to the modification during any operations at the airport. identified as Group 2 in McDonnell Douglas HFEC inspection required by this paragraph, DATES: Comments must be received on Service Bulletin DC9–53–288, dated February prior to further flight, repair it in accordance or before February 26, 1998. 10, 1997: If the visual inspection required by with a method approved by the Manager, Los ADDRESSES: Send comments on the paragraph (a) of this AD reveals that the Angeles Aircraft Certification Office (ACO), corners of the forward service door doorjamb FAA, Transport Airplane Directorate. proposal in triplicate to: Manager, have been modified previously in accordance (e) Group 2, Condition 3. For airplanes Airspace Branch, AEA–520, Docket No. with the McDonnell Douglas DC–9 Structural identified as Group 2 in McDonnell Douglas 97–AEA–45, F.A.A. Eastern Region, Repair Manual, using a steel doubler, Service Bulletin DC9–53–288, dated February Federal Building #111, John F. Kennedy accomplish either paragraph (c)(1) or (c)(2) of 10, 1997: If the visual inspection required by Int’l Airport, Jamaica, NY 11430. this AD in accordance with McDonnell paragraph (a) of this AD reveals that the The official docket may be examined Douglas Service Bulletin DC9–53–288, dated corners of the forward service door doorjamb in the Office of the Regional Counsel, February 10, 1997. have been modified previously, but not in AEA–7, F.A.A. Eastern Region, Federal (1) Option 1. Prior to the accumulation of accordance with McDonnell Douglas # Structural Repair Manual, prior to further Building 111, John F. Kennedy 6,000 landings after accomplishment of that International Airport, Jamaica, New modification, or within 3,225 landings after flight, repair the corners in accordance with the effective date of this AD, whichever a method approved by the Manager, Los York 11430. occurs later, perform an HFEC inspection to Angeles ACO. An informal docket may also be detect cracks on the skin adjacent to the (f) An alternative method of compliance or examined during normal business hours modification, in accordance with the service adjustment of the compliance time that in the Airspace Branch, AEA–520, bulletin. provides an acceptable level of safety may be F.A.A. Eastern Region, Federal Building (i) If no crack is detected during the HFEC used if approved by the Manager, Los #111, John F. Kennedy International inspection required by paragraph (c)(1) of Angeles ACO. Operators shall submit their Airport, Jamaica, NY 11430. this AD, repeat the HFEC inspection requests through an appropriate FAA FOR FURTHER INFORMATION CONTACT: thereafter at intervals not to exceed 3,000 Principal Maintenance Inspector, who may Mr. landings. add comments and then send it to the Francis T. Jordan, Jr., Airspace (ii) If any crack is detected during any Manager, Los Angeles ACO. Specialist, Airspace Branch, AEA–520, HFEC inspection required by paragraph (c)(1) Note 5: Information concerning the F.A.A. Eastern Region, Federal Building of this AD, prior to further flight, repair it in existence of approved alternative methods of #111, John F. Kennedy International Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3855

Airport, Jamaica, New York 11430; airspace designations for airspace areas AEA VA E5 Blacksburg, VA [Revised] telephone: (718) 553–4521. extending upward from 700 feet or more Virginia Tech Airport, Blacksburg, VA SUPPLEMENTARY INFORMATION: above the surface of the earth are (Lat. 37°12′28′′N., long 80°24′29′′W.) published in Paragraph 6005 of FAA That airspace extending upward from 700 Comments Invited Order 7400.9E, dated Spetember 10, feet above the surface within a 10-mile radius Interested parties are invited to 1997, and effective September 16, 1997, of Virginia Tech Airport and within 4 miles participate in this proposed rulemaking which is incorporated by reference in 14 each side of the 297° bearing from the airport by submitting such written data, views, CFR 71.1. The Class E airspace extending from the 10-mile radius to 17 miles or arguments as they may desire. designation listed in this document northwest of the airport, excluding the Comments that provide the factual basis portions that coincide with the Roanoke, VA, would be published subsequently in the and Dublin, VA, Class E airspace areas. supporting the views and suggestions Order. presented are particularly helpful in * * * * * The FAA has determined that this Issued in Jamaica, New York, on December developing reasoned regulatory proposed regulation only involves an decisions on the proposal. Comments 9, 1997. established body of technical Franklin D. Hatfield, are specifically invited on the overall regulations for which frequent and Manager, Air Traffic Division, Eastern Region. regulatory, economic, environmental, routine amendments are necessary to and energy-related aspects of the keep them operationally current. [FR Doc. 98–1925 Filed 1–26–98; 8:45 am] proposal. Communications should Therefore, this proposed regulation—(1) BILLING CODE 4910±13±M identify the airspace docket number and is not a ‘‘significant regulatory action’’ be submitted in triplicate to the address under Executive Order 12866; (2) is not DEPARTMENT OF TRANSPORTATION listed above. Commenters wishing the a ‘‘significant rule’’ under DOT FAA to acknowledge receipt of their Regulatory Policies and Procedures (44 Federal Aviation Administration comments on this notice must submit FR 11034; February 26, 1979); and (3) with those comments a self-addressed, does not warrant preparation of a 14 CFR Part 71 stamped postcard on which the regulatory evaluation as the anticipated [Airspace Docket No. 97±AEA±46] following statement is made: impact is so minimal. Since this is a ‘‘Comments to Airspace Docket No. 97– routine matter that would only affect air Proposed Amendment to Class E AEA–45.’’ The postcard will be date/ traffic procedures and air navigation, it time stamped and returned to the Airspace; Danville, VA is certified that this proposed rule commenter. All communications would not have significant economic AGENCY: Federal Aviation received on or before the closing date impact on a substantial number of small Administration (FAA), DOT. for comments will be considered before entities under the criteria of the ACTION: Notice of proposed rulemaking. taking action on the proposed rule. The Regulatory Flexibility Act. proposal contained in this notice may SUMMARY: This notice proposes to be changed in light of comments List of Subjects in 14 CFR Part 71 amend the Class E airspace area at received. All comments submitted will Danville, VA. The amendment of the be available for examination in the Airspace, Incorporated by reference, Navigation (air). Instrument Landing System (ILS) and Rules Docket both before and after the the Very High Frequency closing date for comments. A report The Proposed Amendment Omnidirectional Range (VOR) Standard summarizing each substantive public Instrument Approach Procedures (SIAP) contact with the FAA personnel In consideration of the foregoing, the Federal Aviation Administration at Danville Regional Airport has made concerned with this rulemaking will be this proposal necessary. Additional filed in the docket. proposes to amend 14 CFR Part 71 as follows: controlled airspace extending upward Availability of NPRMs from 700 feet Above Ground Level (AG) is needed to accommodate the SIAP and Any person may obtain a copy of this PART 71ÐDESIGNATION OF CLASS A, CLASS B, CLASS C, CLASS D, AND for Instrument Flight Rules (IFR) Notice of Proposed Rulemaking (NPRM) operations at the airport. by submitting a request to the Office of CLASS E AIRSPACE AREAS; the Regional Counsel, AEA–7, F.A.A. AIRWAYS; ROUTES; AND REPORTING DATES: Comments must be received on Eastern Region, Federal Building #111, POINTS or before February 26, 1998. John F. Kennedy International Airport, ADDRESSES: Send comments on the 1. The authority citation for Part 71 proposal in triplicate to: Manager, Jamaica, NY 11430. Communications continues to read as follows: must identify the notice number of this Airspace Branch, AEA–520, Docket No. NPRM. Persons interested in being Authority: 49 U.S.C. 106(g), 40103, 40113, 97–AEA–46, F.A.A. Eastern Region, # placed on a mailing list for future 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– Federal Building 111, John F. Kennedy 1963 Comp., p. 389. NPRMs should also request a copy of Int’l Airport, Jamaica, NY 11430. Advisory Circular No. 11–2A, which § 71.1 [Amended] The official docket may be examined describes the application procedure. in the Office of the Regional Counsel, 2. The incorporated by reference in 14 AEA–7, F.A.A. Eastern Region, Federal The Proposal CFR 71.1 of Federal Aviation Building #111, John F. Kennedy Int’l The FAA is considering an Administration Order 7400.9E, Airspace Airport, Jamaica, NY 11430. amendment to 14 CFR Part 71 to amend Designations and Reporting Powers, An informal docket may also be the Class E airspace area at Blacksburg, dated September 10, 1997, and effective examined during normal business hours VA. A GPS RWY 12 SIAP has been September 16, 1997, is amended as in the Airspace Branch, AEA–520, developed for the Virginia Tech Airport. follows: F.A.A. Eastern Region, Federal Building Additional controlled airspace Paragraph 6005 Class E airspace areas #111, John F. Kennedy Int’l Airport, extending upward from 700 feet AGL is extending upward from 700 feet or more Jamaica, NY 11430. needed to accommdate the SIAP and for above the surface of the earth. FOR FURTHER INFORMATION CONTACT: Mr. IFR operations at the airport. Class E * * * * * Francis T. Jordan, Jr., Airspace 3856 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

Specialist, Airspace Branch, AEA–520, controlled airspace extending upward Paragraph 6005 Class E airspace areas F.A.A. Eastern Region, Federal Building from 700 feet AGL is needed to extending upward from 700 feet or more #111, John F. Kennedy Int’l Airport, accommodate the amended SIAPs and above the surface of the earth. Jamaica, NY 11430; telephone (718) for IFR operations at the airport. Class * * * * * 553–4521. E airspace designations for airspace AEA VA E5 Danville, VA [Revised] areas extending upward from 700 feet or SUPPLEMENTARY INFORMATION: Danville Regional Airport, Danville, VA more above the surface of the earth are (Lat. 36°34′24′′N., long. 79°20′07′′W.) Comments Invited published in Paragraph 6005 of FAA That airspace extending upward from 700 Interested parties are invited to Order 7400.9E, dated September 10, feet above the surface within a 10-mile radius participate in this proposed rulemaking 1997, and effective September 16, 1997, of Danville Regional Airport. which is incorporated by reference in 14 by submitting such written data, views, * * * * * or arguments as they may desire. CFR 71.1. The Class E airspace Issued in Jamaica, New York, on December Comments that provide the factual basis designation listed in this document 9, 1997 supporting the views and suggestions would be published subsequently in the Franklin D. Hatfield, Order. presented are particularly helpful in Manager, Air Traffic Division, Eastern Region. developing reasoned regulatory The FAA has determined that this [FR Doc. 98–1926 Filed 1–26–98; 8:45 am] decisions on the proposal. Comments proposed regulation only involves an BILLING CODE 4910±13±M are specifically invited on the overall established body of technical regulatory, economic, environmental, regulations for which frequent and and energy-related aspects of the routine amendments are necessary to DEPARTMENT OF TRANSPORTATION proposal. Communications should keep them operationally current. identify the airspace docket number and Therefore, this proposed regulation—(1) Federal Aviation Administration be submitted in triplicate to the address is not a ‘‘significant regulatory action’’ listed above. Commenters wishing the under Executive Order 12866; (2) is not 14 CFR Part 71 FAA to acknowledge receipt of their a ‘‘significant rule’’ under DOT [Airspace Docket No. 97±AEA±47] comments on this notice must submit Regulatory Policies and Procedures (44 with those comments a self-addressed, FR 11034; February 26, 1979); and (3) Proposed Revocation of Class E stamped postcard on which the does not warrant preparation of a Airspace; Pennington Gap, VA following statement is made: regulatory evaluation as the anticipated ‘‘Comments to Airspace Docket No. 97– impact is so minimal. Since this a AGENCY: Federal Aviation AEA–46.’’ The postcard will be date/ routine matter that would only affect air Administration (FAA), DOT. time stamped and returned to the traffic procedures and air navigation, it ACTION: Notice of proposed rulemaking. commenter. All communications is certified that this proposed rule received on or before the closing date would not have significant economic SUMMARY: This notice proposes to for comments will be considered before impact on a substantial number of small remove the Class E airspace area at Lee taking action on the proposed rule. The entities under the criteria of the County Airport, Pennington Gap, VA. proposal contained in this notice may Regulatory Flexibility Act. The Nondirectional Radio Beacon (NDB) be changed in light of comments or Global Positioning System (GPS) received. All comments submitted will List of Subjects in 14 CFR Part 71 Standard Instrument Approach be available for examination in the Procedure (SIAP) was canceled on Airspace, Incorporation by reference, Rules Docket both before and after the September 11, 1997. This was the only Navigation (air). closing date for comments. A report SIAP to Lee County, Airport. summarizing each substantive public The Proposed Amendment Consequently, the need for Class E contact with the FAA personnel airspace no longer exists for Instrument concerned with this rulemaking will be In consideration of the foregoing, the Flight Rules (IFR) operations at the filed in the docket. Federal Aviation Administration airport. Adoption of this proposal proposes to amend 14 CFR Part 71 as Availability of NPRMs would result in the affected area follows: reverting to Class G airspace. Any person may obtain a copy of this DATES: Comments must be received on Notice of Proposed Rulemaking (NPRM) PART 71ÐDESIGNATION OF CLASS A, or before February 26, 1998. by submitting a request to the Office of CLASS B, CLASS C, CLASS D, AND the Regional Counsel, AEA–7, F.A.A. CLASS E AIRSPACE AREAS; ADDRESSES: Send comments on the Eastern Region, Federal Building #111, AIRWAYS; ROUTES; AND REPORTING proposal in triplicate to: Manager, John F. Kennedy Int’l Airport, Jamaica, POINTS Airspace Branch, AEA–520, Docket No. NY 11430. Communications must 97–AEA–47, F.A.A. Eastern Region, # identify the notice number of this 1. The authority citation for Part 71 Federal Building 111, John F. Kennedy NPRM. Persons interested in being continues to read as follows: Int’l Airport, Jamaica, NY 11430. placed on a mailing list for future Authority: 49 U.S.C. 106(g), 40103, 40113, The official docket may be examined NPRMs should also request a copy of 40120; E.O. 10854; 24 FR 9565, 3 CFR, 1959– in the Office of the Regional Counsel, Advisory Circular No. 11–2A, which 1963 Comp., p. 389. AEA–7, F.A.A. Eastern Region, Federal # describes the application procedure. Building 111, John F. Kennedy § 71.1 [Amended] International Airport, Jamaica, New The Proposal 2. The incorporation by reference in York 11430. The FAA is considering an 14 CFR 71.1 of Federal Aviation An informal docket may also be amendment to 14 CFR Part 71 to amend Administration Order 7400.9E, Airspace examined during normal business hours the Class E airspace area at Danville, Designations and Reporting Points, in the Airspace Branch, AEA–520, VA. The ILS RWY 2 SIAP and the VOR dated September 10, 1997, and effective F.A.A. Eastern Region, Federal Building RWY 20 SIAP for Danville Regional September 16, 1997, is amended as #111, John F. Kennedy International Airport have been amended. Additional follows: Airport, Jamaica, NY 11430. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3857

FOR FURTHER INFORMATION CONTACT: Pennington Gap, VA. The NDB or GPS Paragraph 6005 Class E airspace areas Mr. Francis T. Jordon, Jr., Airspace A SIAP has been canceled, negating the extending upward from 700 feet or more Specialist, Airspace Branch, AEA–520, need for airspace to accommodate IFR above the surface of the earth. F.A.A. Eastern Region, Federal Building operations. The area will be removed * * * * * # 111, John F. Kennedy International from appropriate aeronautical charts. AEA VA E5 Pennington Gap, VA Airport, Jamaica, New York 11430; Class E airspace designations for [Removed] telephone: (718) 553–4521. airspace areas extending upward from * * * * * SUPPLEMENTARY INFORMATION: 700 feet or more above the surface are Issued in Jamaica, New York, on December published in Paragraph 6005 of FAA 29, 1997. Comments Invited Order 7400.9E, dated September 10, Franklin D. Hatfield, Interested parties are invited to 1997, and effective September 16, 1997, Manager, Air Traffic Division, Eastern Region. participate in this proposed rulemaking which is incorporated by reference in 14 [FR Doc. 98–1927 Filed 1–26–98; 8:45 am] CFR 71.1. The Class E airspace by submitting such written data, views, BILLING CODE 4910±13±M or arguments as they may desire. designation listed in this document will Comments that provide the factual basis be removed subsequently from the supporting the views and suggestions Order. DEPARTMENT OF TRANSPORTATION presented are particularly helpful in The FAA has determined that this developing reasoned regulatory proposed regulation only involves an Federal Aviation Administration decisions on the proposal. Comments established body of technical are specifically invited on the overall regulations for which frequent and 14 CFR Part 71 regulatory, economic, environmental, routine amendments are necessary to [Airspace Docket No. 97±AEA±48] and energy-related aspects of the keep them operationally current. proposal. Communications should Therefore, this proposed regulation—(1) Proposed Amendment to Class E identify the airspace docket number and is not a ‘‘significant regulatory action’’ Airspace; Galax, VA be submitted in triplicate to the address under Executive Order 12866; (2) is not AGENCY: Federal Aviation listed above. Commenters wishing the a ‘‘significant rule’’ under DOT Administration (FAA), DOT. FAA to acknowledge receipt of their Regulatory Policies and Procedures (44 comments on this notice must submit FR 11034; February 26, 1979); and (3) ACTION: Notice of proposed rulemaking. with those comments a self-addressed, does not warrant preparation of a SUMMARY: This notice proposes to stamped postcard on which the regulatory evaluation as the anticipated amend the Class E airspace area at following statement is made: impact is so minimal. Since this is a Galax, VA. The development of a new ‘‘Comments to Airspace Docket No. 97– routine matter that would only affect air Standard Instrument Approach AEA–47.’’ The postcard will be date/ traffic procedures and air navigation, it Procedure (SIAP) based on the Global time stamped and returned to the is certified that this proposed rule Positioning System (GPS) at Twin commenter. All communications would not have significant economic County Airport has made this proposal received on or before the closing date impact on a substantial number of small necessary. Additional controlled for comments will be considered before entities under the criteria of the airspace extending upward from 700 taking action on the proposed rule. The Regulatory Flexibility Act. feet Above Ground Level (AGL) is proposal contained in this notice may List of Subjects in 14 CFR Part 71 needed to accommodate the SIAP and be changed in light of comments for Instrument Flight Rules (IFR) received. All comments submitted will Airspace, Incorporation by reference, operations at the airport. be available for examination in the Navigation (air). DATES: Comments must be received on Rules Docket both before and after the or before February 26, 1998. closing date for comments. A report The Proposed Amendment ADDRESSES: Send comments on the summarizing each substantive public In consideration of the foregoing, the proposal in triplicate to: Manager, contact with the FAA personnel Federal Aviation Administration Airspace Branch, AEA–520, Docket No. concerned with this rulemaking will be proposes to amend 14 CFR Part 71 as 97–AEA–48, F.A.A. Eastern Region, filed in the docket. follows: Federal Building #111, John F. Kennedy Availability of NPRMs PART 71ÐDESIGNATION OF CLASS A, Int’l Airport, Jamaica, NY 11430. Any person may obtain a copy of this CLASS B, CLASS C, CLASS D, AND The official docket may be examined Notice of Proposed Rulemaking (NPRM) CLASS E AIRSPACE AREAS; in the Office of the Regional Counsel, by submitting a request to the Office of AEA–7, F.A.A. Eastern Region, Federal AIRWAYS; ROUTES; AND REPORTING # the Regional Counsel, AEA–7, F.A.A. POINTS Building 111, John F. Kennedy Eastern Region, Federal Building #111, International Airport, Jamaica, New John F. Kennedy International Airport, 1. The authority citation for Part 71 York 11430. Jamaica, NY 11430. Communications continues to read as follows: An informal docket may also be must identify the notice number of this Authority: 49 U.S.C. 106(g), 40103, 40113, examined during normal business hours NPRM. Persons interested in being 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– in the Airspace Branch, AEA–520, placed on a mailing list for future 1963 Comp., p. 389. F.A.A. Eastern Region, Federal Building # NPRMs should also request a copy of 111, John F. Kennedy International Advisory Circular No. 11–2A, which § 71.1 [Amended] Airport, Jamaica, NY 11430. describes the application procedure. 2. The incorporation by reference in FOR FURTHER INFORMATION CONTACT: 14 CFR 71.1 of Federal Aviation Mr. Francis T. Jordan, Jr., Airspace The Proposal Administration Order 7400.9E, Airspace Specialist, Airspace Branch, AEA–520, The FAA proposes to amend 14 CFR Designations and Reporting Points, F.A.A. Eastern Region, Federal Building part 71 to remove the Class E airspace dated September 10, 1997, and effective ι111, John F. Kennedy International extending upward from 700 feet above September 16, 1997, is amended as Airport, Jamaica, New York 11430; the surface at Lee County Airport, follows: telephone (718) 553–4521. 3858 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

SUPPLEMENTARY INFORMATION: more above the surface are published in That airspace extending upward from 700 feet above the surface within a 13-mile radius Comments Invited Paragraph 6005 of FAA Order 7400.9E, dated September 10, 1997, and effective of Twin County Airport, excluding the Interested parties are invited to September 16, 1997, which is portion that coincides with the Stuart, VA, participate in this proposed rulemaking Dublin, VA, and Marion, VA, Class E incorporated by reference in 14 CFR airspace areas. by submitting such written data, views, 71.1. The Class E airspace designation or arguments as they may desire. listed in this document would be * * * * * Comments that provide the factual basis Issued in Jamaica, New York, on December published subsequently in the Order. 29, 1997. supporting the views and suggestions The FAA has determined that this Franklin D. Hatfield, presented are particularly helpful in proposed regulation only involves an developing reasoned regulatory established body of technical Manager, Air Traffic Division, Eastern Region. decisions on the proposal. Comments regulations for which frequent and [FR Doc. 98–1928 Filed 1–26–98; 8:45 am] are specifically invited on the overall routine amendments are necessary to BILLING CODE 4910±13±M regulatory, economic, environmental, keep them operationally current. and energy-related aspects of the Therefore, this proposed regulation—(1) proposal. Communications should is not a ‘‘significant regulatory action’’ DEPARTMENT OF TRANSPORTATION identify the airspace docket number and under Executive Order 12866; (2) is not Federal Aviation Administration be submitted in triplicate to the address a ‘‘significant rule’’ under DOT listed above. Commenters wishing the Regulatory Policies and Procedures (44 14 CFR Part 71 FAA to acknowledge receipt of their FR 11034; February 26, 1979); and (3) comments on this notice must submit does not warrant preparation of a [Airspace Docket No. 97±AEA±49] with those comments a self-addressed, regulatory evaluation as the anticipated stamped postcard on which the Proposed Amendment to Class E impact is so minimal. Since this is a Airspace; Wilmington, DE following statement is made: routine matter that would only affect air ‘‘Comments to Airspace Docket No. 97– traffic procedures and air navigation, it AGENCY: Federal Aviation AEA–48.’’ The postcard will be date/ is certified that this proposed rule Administration (FAA) DOT. time stamped and returned to the would not have significant economic ACTION: Notice of proposed rulemaking. commenter. All communications impact on a substantial number of small received on or before the closing date entities under the criteria of the SUMMARY: This notice proposes to for comments will be considered before Regulatory Flexibility Act. amend the Class E airspace area at taking action on the proposed rule. The Wilmington, DE. The development of a proposal contained in this notice may List of Subjects in 14 CFR Part 71 new Standard Instrument Approach be changed in light of comments Airspace, Incorporation by reference, Procedure (SIAP) based on the Global received. All comments submitted will Navigation (air). Positioning System (GPS) at New Castle be available for examination in the County Airport has made this proposal Rules Docket both before and after the The Proposed Amendment necessary. Additional controlled closing date for comments. A report In consideration of the foregoing, the airspace extending upward from 700 summarizing each substantive public Federal Aviation Administration feet Above Ground Level (AGL) is contact with the FAA personnel proposes to amend 14 CFR Part 71 as needed to accommodate the SIAP and concerned with this rulemaking will be follows: for Instrument Flight Rules (IFR) filed in the docket. operations at the airport. Availability of NPRMs PART 71ÐDESIGNATION OF CLASS A, DATES: Comments must be received on CLASS B, CLASS C, CLASS D, AND or before February 26, 1998. Any person may obtain a copy of this CLASS E AIRSPACE AREAS; ADDRESSES: Send comments on the Notice of Proposed Rulemaking (NPRM) AIRWAYS; ROUTES; AND REPORTING proposal in triplicate to: Manager, by submitting a request to the Office of POINTS the Regional Counsel, AEA–7, F.A.A. Airspace Branch, AEA–520, Docket No. Eastern Region, Federal Building #111, 1. The authority citation for Part 71 97–AEA–49, F.A.A. Eastern Region, # John F. Kennedy International Airport, continues to read as follows: Federal Building 111, John F. Kennedy Jamaica, NY 11430. Communications Int’l Airport, Jamaica, New York 11430. Authority: 49 U.S.C. 106(g), 40103, 40113, The official docket may be examined must identify the notice number of this 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– NPRM. Persons interested in being 1963 Comp., p. 389. in the Office of the Regional Counsel, placed on a mailing list for future AEA–7, F.A.A. Eastern Region, Federal # NPRMs should also request a copy of § 71.1 [Amended] Building 111, John F. Kennedy Advisory Circular No. 11–2A, which 2. The incorporation by reference in International Airport, Jamaica, NY describes the application procedure. 14 CFR 71.1 of Federal Aviation 11430. Administration Order 7400.9E, Airspace An informal docket may also be The Proposal Designation and Reporting Points, dated examined during normal business hours The FAA is considering an September 10, 1997, and effective in the Airspace Branch, AEA–520, amendment to 14 CFR part 71 to amend September 16, 1997, is amended as F.A.A. Eastern Region, Federal Building the Class E airspace area at Galax, VA. follows: #111, John F. Kennedy International A GPS RWY 18 SIAP has been Airport, Jamaica, NY 11430. Paragraph 6005 Class E airspace areas developed for the Twin County Airport. extending upward from 700 feet or more FOR FURTHER INFORMATION CONTACT: Additional controlled airspace above the surface of the earth. Mr. Francis T. Jordan, Jr., Airspace extending upward from 700 feet AGL is Specialist, Airspace Branch, AEA–520, * * * * * needed to accommodate the SIAP and F.A.A. Eastern Region, Federal Building for IFR operations at the airport. Class AEA VA E5 Galax, VA [Revised] #111, John F. Kennedy International E airspace designations for airspace Twin County Airport, VA Airport, Jamaica, New York 11430; areas extending upward from 700 feet or (lat. 36°45′58′′N., long. 80°49′25′′W.) telephone: (718) 553–4521. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3859

SUPPLEMENTARY INFORMATION: more above the surface are published in (lat. 39°31′13′′N., long. 75°43′14′′W.) Comments Invited Paragraph 6005 of FAA Order 7400.9E, That airspace extending upward from 700 dated September 10, 1997, and effective feet above the surface within a 6.7-mile Interested parties are invited to September 16, 1997, which is radius of New Castle County Airport and ° participate in this proposed rulemaking incorporated by reference in 14 CFR within 4 miles each side of the 258 bearing by submitting such written data, views, 71.1. The Class E airspace designation from the airport extending from the 6.7-mile or arguments as they may desire. radius to 10 miles west of the airport and listed in this document would be within a 6.6-mile radius of Summit Airpark Comments that provide the factual basis published subsequently in the Order. supporting the views and suggestions and within 2.2 miles each side of a line The FAA has determined that this bearing 345° from a point a lat. 39°23′36′′N., presented are particularly helpful in proposed regulation only involves an long. 75°40′35′′W., extending from said point developing reasoned regulatory established body of technical to the 6.6-mile radius of Summit Airpark, decisions on the proposal. Comments regulations for which frequent and excluding the portion that coincides with the are specifically invited on the overall routine amendments are necessary to Toughkenamon, PA, Class E airspace area. regulatory, economic, environmental, keep them operationally current. * * * * * and energy-related aspects of the Therefore, this proposed regulation—(1) Issued in Jamaica, New York, on December proposal. Communications should is not a ‘‘significant regulatory action’’ 29, 1997. identify the airspace docket number and under Executive Order 12866; (2) is not Franklin D. Hatfield, be submitted in triplicate to the address a ‘‘significant rule’’ under DOT Manager, Air Traffic Division, Eastern Region. listed above. Commenters wishing the Regulatory Policies and Procedures (44 [FR Doc. 98–1929 Filed 1–26–98; 8:45 am] FAA to acknowledge receipt of their FR 11034; February 26, 1979); and (3) BILLING CODE 4910±13±M comments on this notice must submit does not warrant preparation of a with those comments a self-addressed, regulatory evaluation as the anticipated stamped postcard on which the impact is so minimal. Since this is a DEPARTMENT OF TRANSPORTATION following statement is made: routine matter that would only affect air ‘‘Comments to Airspace Docket No. 97– traffic procedures and air navigation, it Federal Aviation Administration AEA–49.’’ The postcard will be date/ is certified that this proposed rule time stamped and returned to the would not have significant economic 14 CFR Part 71 commenter. All communications impact on a substantial number of small [Airspace Docket No. 97±AEA±50] received on or before the closing date entities under the criteria of the for comments will be considered before Regulatory Flexibility Act. Proposed Amendment to Class E taking action on the proposed rule. The Airspace; Andover, NJ proposal contained in this notice may List of Subjects in 14 CFR Part 71 be changed in light of comments Airspace, Incorporation by reference, AGENCY: Federal Aviation received. All comments submitted will Navigation (air). Administration (FAA), DOT. be available for examination in the ACTION: Notice of proposed rulemaking. Rules Docket both before and after the The Proposed Amendment SUMMARY: This notice proposes to closing date for comments. A report In consideration of the foregoing, the amend the Class E airspace area at summarizing each substantive public Federal Aviation Administration Andover, NJ. The development of a new contact with the FAA personnel proposes to amend 14 CFR Part 71 as Standard Instrument Approach concerned with this rulemaking will be follows: Procedure (SIAP) based on the Global filed in the docket. PART 71ÐDESIGNATION OF CLASS A, Positioning System (GPS) at Aeroflex- Availability of NPRMs CLASS B, CLASS C, CLASS D, AND Andover Airport has made this proposal Any person may obtain a copy of this CLASS E AIRSPACE AREAS; necessary. Additional controlled Notice of Proposed Rulemaking (NPRM) AIRWAYS; ROUTES; AND REPORTING airspace extending upward from 700 by submitting a request to the Office of POINTS feet Above Ground Level (AGL) is the Regional Counsel, AEA–7, F.A.A. needed to accommodate the SIAP and # 1. The authority citation for Part 71 for Instrument Flight Rules (IFR) Eastern Region, Federal Building 111, continues to read as follows: John F. Kennedy International Airport, operations at the airport. Jamaica, NY 11430. Communications Authority: 49 U.S.C. 106(g), 40103, 40113, DATES: Comments must be received on 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– or before February 26, 1998. must identify the notice number of this 1963 Comp., p. 389. NPRM. Persons interested in being ADDRESSES: Send comments on the placed on a mailing list for future § 71.1 [Amended] proposal in triplicate to: Manager, NPRMs should also request a copy of 2. The incorporation by reference in Airspace Branch, AEA–520, Docket No. Advisory Circular No. 11–2A, which 14 CFR 71.1 of Federal Aviation 97–AEA–50, F.A.A. Eastern Region, describes the application procedure. Administration Order 7400.9E, Airspace Federal Building #111, John F. Kennedy Int’l Airport, Jamaica, NY 11430. The Proposal Designations and Reporting Points, dated September 10, 1997, and effective The official docket may be examined The FAA is considering an September 16, 1997, is amended as in the Office of the Regional Counsel, amendment to 14 CFR part 71 to amend follows: AEA–7, F.A.A. Eastern Region, Federal the Class E airspace area at Wilmington, Building #111, John F. Kennedy DE. A GPS RWY 9 SIAP has been Paragraph 6005 Class E airspace areas International Airport, Jamaica, New developed for the New Castle County extending upward from 700 feet or more above the surface of the earth. York 11430. Airport. Additional controlled airspace An informal docket may also be extending upward from 700 feet AGL is * * * * * examined during normal business hours needed to accommodate the SIAP and AEA DE E5 Wilmington, DE [Revised] in the Airspace Branch, AEA–520, for IFR operations at the airport. Class New Castle County Airport, DE F.A.A. Eastern Region, Federal Building E airspace designations for airspace (lat. 39°40′43′′N., long. 75°36′24′′W.) #111, John F. Kennedy International areas extending upward from 700 feet or Summit Airpark, DE Airport, Jamaica, NY 11430. 3860 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

FOR FURTHER INFORMATION CONTACT: Mr. for the Aeroflex-Andover Airport. Paragraph 6005 Class E airspace areas Francis T. Jordan, Jr., Airspace Additional controlled airspace extending upward from 700 feet or more Specialist, Airspace Branch, AEA–520, extending upward from 700 feet AGL is above the surface of the earth. F.A.A. Eastern Region, Federal Building needed to accommodate the SIAP and * * * * * # 111, John F. Kennedy International for IFR operations at the airport. Class AEA NJ E5 Andover, NJ [Revised] Airport, Jamaica, New York 11430, E airspace designations for airspace telephone: (718) 553–4521. Aeroflex-Andover Airport, NJ areas extending upward from 700 feet or (lat. 41°00′31′′N., long. 74°44′17′′W.) SUPPLEMENTARY INFORMATION: more above the surface of the earth are That airspace extending upward from 700 published in Paragraph 6005 of FAA Comments Invited feet above the surface within a 10-mile radius Order 7400.9E, dated September 10, of Aeroflex-Andover Airport, excluding the Interested parties are invited to 1997, and effective September 16, 1997, portion that coincides with the Sussex, NJ, participate in this proposed rulemaking which is incorporated by reference in 14 Blairstown, NJ, and New York, NY, Class E by submitting such written data, views, CFR 71.1. The Class E airspace airspace areas. or arguments as they may desire. designation listed in this document * * * * * Comments that provide the factual basis would be published subsequently in the Issued in Jamaica, New York, on December supporting the views and suggestions Order. 29, 1997. presented are particularly helpful in The FAA has determined that this Franklin D. Hatfield, developing reasoned regulatory proposed regulation only involves an Manager, Air Traffic Division, Eastern Region. decisions on the proposal. Comments established body of technical are specifically invited on the overall [FR Doc. 98–1930 Filed 1–26–98; 8:45 am] regulations for which frequent and BILLING CODE 4910±13±M regulatory, economic, environmental, routine amendments are necessary to and energy-related aspects of the keep them operationally current. proposal. Communications should Therefore, this proposed regulation—(1) identify the airspace docket number and is not a ‘‘significant regulatory action’’ DEPARTMENT OF DEFENSE be submitted in triplicate to the address under Executive Order 12866; (2) is not listed above. Commenters wishing the a ‘‘significant rule’’ under DOT Department of the Navy FAA to acknowledge receipt of their Regulatory Policies and Procedures (44 comments on this notice must submit FR 11034; February 26, 1979); and (3) 32 CFR Parts 721 and 722 with those comments a self-addressed, does not warrant preparation of a stamped postcard on which the regulatory evaluation as the anticipated Removal of Rules on Standards of following statement is made: impact is so minimal. Since this is a Conduct and Reporting Procedures on ‘‘Comments to Airspace Docket No. 97– routine matter that would only affect air Defense Related Employment AEA–50.’’ The postcard will be date/ traffic procedures and air navigation, it AGENCY: Department of the Navy, DOD. time stamped and returned to the is certified that this proposed rule commenter. All communications would not have significant economic ACTION: Final rule; removal. received on or before the closing date impact on a substantial number of small for comments will be considered before entities under the criteria of the SUMMARY: The Department of the Navy taking action on the proposed rule. The Regulatory Flexibility Act. (DON) is removing rules for employee proposal contained in this notice may standards of conduct and reporting be changed in light of comments List of Subjects in 14 CFR Part 71 procedures for defense-related received. All comments submitted will Airspace, Incorporation by reference, employment (32 CFR Parts 721 and be available for examination in the Navigation (air). 722). Both rules have been superseded, Rules Docket both before and after the and in that they no longer have any closing date for comments. A report The Proposed Amendment effect, are removed immediately. summarizing each substantive public In consideration of the foregoing, the Providing for a comment period before contact with the FAA personnel Federal Aviation Administration final action in this case would be concerned with this rulemaking will be proposes to amend 14 CFR Part 71 as unnecessary, impracticable, and filed in the docket. follows: contrary to public interest. However, Availability of NPRMs DON will accept and consider PART 71ÐDESIGNATION OF CLASS A, comments from interested persons in Any person may obtain a copy of this CLASS B, CLASS C, CLASS D, AND evaluating the effect of this action. Notice of Proposed Rulemaking (NPRM) CLASS E AIRSPACE AREAS; by submitting a request to the Office of DATES: Effective Date of Removal: AIRWAYS; ROUTES; AND REPORTING January 27, 1998. the Regional Counsel, AEA–7, F.A.A. POINTS Eastern Region, Federal Building #111, Comment date: Comments on this John F. Kennedy International Airport, 1. The authority citation for Part 71 removal action should be submitted in Jamaica, NY 11430. Communications continues to read as follows: writing to the address shown below on must identify the notice number of this Authority: 49 U.S.C. 106(g), 40103, 40113, or before March 30, 1998. NPRM. Persons interested in being 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– ADDRESSES: Interested parties should placed on a mailing list for future 1963 Comp., p. 389. submit written comments to Department NPRMs should also request a copy of § 71.1 [Amended] of the Navy, Office of the Judge Advisory Circular No. 11–2A, which Advocate General, Administrative Law describes the application procedure. 2. The incorporation by reference in Division (Code 13), 200 Stovall Street, 14 CFR 71.1 of Federal Aviation Alexandria, Virginia, 22332–2400. The Proposal Administration Order 7400.9E, Airspace The FAA is considering an Designations and Reporting Points, FOR FURTHER INFORMATION CONTACT: amendment to 14 CFR part 71 to amend dated September 10, 1997, and effective Lieutenant Commander Mike Quinn, the Class E airspace area at Andover, NJ. September 16, 1997, is amended as (703) 604–8200. A GPS RWY 3 SIAP has been developed follows: SUPPLEMENTARY INFORMATION: Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3861

A. Background Providing a period of public comment DEPARTMENT OF TRANSPORTATION On April 12, 1989, President Bush in this case would be unnecessary, Coast Guard issued Executive Order (E.O.) 12674, impracticable, and contrary to the public interest. This determination is ‘‘Principles of Ethical Conduct for 33 CFR Parts 154 and 155 Government Officers and Employees.’’ based on several factors. First, removal Section 201(a) of E.O. 12674 made the of these Parts is entirely administrative [USCG±98±3350] Office of Government Ethics (OGE) and corrective in nature, not requiring Review of Cap Increases; Response responsible for promulgating ‘‘a single, the exercise of agency discretion. Plans for Marine Transportation- comprehensive, and clear set of Second, this action has already been related (MTR) Facilities and Tank executive-branch standards of conduct substantially delayed, and further delay Vessels that shall be objective, reasonable, and is unwarranted. Finally, to allow these Parts to remain in the Code of Federal enforceable.’’ AGENCY: Coast Guard, DOT. Regulations any longer may mislead and The OGE issued uniform standards of ACTION: Request for comments. ethical conduct for all employees of the confuse the public and past or present DON employees regarding applicable executive branch, codified at 5 CFR Part SUMMARY: Current Coast Guard response 2635, on August 7, 1992 (57 FR 35006). ethics rules and post-government plan regulations for MTR facilities and These regulations became effective on employment reporting requirements. tank vessels contain requirements for February 3, 1993. C. Matters of Regulatory Procedure on-water oil removal capacity (referred Section 301(a) of E.O. 12674 allows to as caps) that plan-holders agency heads to supplement, where Executive Order 12866, Regulatory transporting or transferring groups I necessary and appropriate, the OGE Planning and Review through IV petroleum oil are required to standards of conduct. The Secretary of Removal of these Parts does not meet meet in planning for a worst case Defense, in consultation and the definition of ‘‘significant regulatory discharge. The original caps were set in conjunction with the OGE, issued action’’ for purposes of E.O. 12866. 1993 and were scheduled to increase by supplemental ethical rules applicable to Regulatory Flexibility Act 25% on February 18, 1998, provided the all Department of Defense (DOD) Coast Guard completed a review of the Components in August 1993. These Removal of these Parts will not have cap increases and determined the cap supplemental rules, codified in 32 CFR a significant economic impact on a increases were practicable. The Coast Parts 83 and 84, state that the DOD substantial number of small entities for Guard’s review of the cap increases is ‘‘shall have a single source of standards purposes of the Regulatory Flexibility on-going. Therefore, the Coast Guard of ethical conduct and ethics guidance, Act (5 U.S.C. chapter 6). will not implement the cap increases as including direction in the areas of Paperwork Reduction Act originally scheduled, and the 1993 caps financial and employment disclosure will remain in effect pending the results systems, post-employment rules, Removal of these rules will not of the review. The Coast Guard requests enforcement, and training.’’ See, 32 CFR impose collection of information comments on the practicability of the 83.4(a) and 84.1(a). requirements for purposes of the cap increases. Paperwork Reduction Act (44 U.S.C. With promulgation of the OGE DATES: Comments must be received on chapter 35, 5 CFR Part 1320). regulations and the DOD ‘‘Joint Ethics or before April 27, 1998. Regulation,’’ the DON’s standards of List of Subjects ADDRESSES: You may mail comments to conduct contained in 32 CFR part 721 the Docket Management Facility, have been completely superseded. The 32 CFR Part 721 [USCG–98–3350], U.S. Department of Secretary of the Navy formally cancelled Conflict of interests, Government Transportation, Room PL–401, 400 the DON’s standards of conduct employees, Military personnel, Seventh Street, SW., Washington, DC instruction on April 11, 1997. For these Reporting and recordkeeping 20590–0001, or deliver them to room reasons, the Navy is now removing and requirements. PL–401, located on the Plaza Level of reserving 32 CFR part 721. the Nassif Building at the same address Similarly, the rule contained in 32 32 CFR Part 722 between 10 a.m. and 5 p.m., Monday CFR part 722 no longer has any meaning Conflict of interests, Government through Friday, except Federal holidays. or effect. Part 722 contains requirements contracts, Government employees, The telephone number is 202–366– and procedures for the filing of form DD Military personnel, Reporting and 9329. 1787 by certain present, former or recordkeeping requirements. retired DON personnel in reporting The Docket Management Facility employment with DOD prime PARTS 721 AND 722Ð[REMOVED AND maintains the public docket for this contractors. Authority for this rule was RESERVED] request for information. Comments, and documents as indicated in this formerly found in 10 U.S.C. 2397. The Under the authority of Sec. 4304, National Defense Authorization Act for preamble, will become part of this Public Law 104–106, 110 Stat. 186, and docket and will be available for Fiscal Year 1997 (Pub. L. 104–106, Sec. E.O. 12674, and for the reasons set forth 4304) repealed this statutory provision. inspection or copying at room PL–401, in the preamble, remove and reserve located on the Plaza Level of the Nassif The reporting requirement that this Part parts 721 and 722 of title 32 of the Code implements no longer exists. Building at the above address between of Federal Regulations. 10 a.m. and 5 p.m., Monday through B. Determination to Remove Without Dated: January 13, 1998. Friday, except Federal holidays. You Prior Public Comment Michael I. Quinn, may also access the public docket on the This removal action is being issued as Lieutenant Commander, Judge Advocate internet at http://dms.dot.gov. a final rule, without a public comment General’s Corps, U.S. Navy, Federal Register FOR FURTHER INFORMATION CONTACT: period, as an exception to the DON’s Liaison Officer. LCDR John Caplis, Project Manager, standard practice of soliciting comments [FR Doc. 98–1922 Filed 1–26–98; 8:45 am] Office of Response (G–MOR), at 202– during the rulemaking process. BILLING CODE 3810±FF±P 267–6922; e-mail: 3862 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules [email protected]. Note: necessary for the particular requirements will occur through the Comments to the docket may only be circumstances of any spill, regardless of public notice and comment process and accepted by mail to the address under what has been contracted for the will not become effective until 90 days ADDRESSES. This telephone is equipped advance. after publication of a Federal Register to record messages on a 24-hour basis. The 1998 cap, a 25% increase from notice reporting the results of the SUPPLEMENTARY INFORMATION: the 1993 levels, was proposed as a review. planning target for increasing response Regulatory History capabilities. This increase was Request for Comments The regulatory history for these discussed by the Vessel Response Plan The Coast Guard encourages regulations are recounted in the Negotiated Rulemaking Committee as an interested persons to submit specific preambles of the final rules entitled incentive to expand response comments with regard to the ‘‘Vessel Response Plans’’ (61 FR 1052, capabilities within the United States to requirements of 33 CFR 154.1045(m) January 12, 1996) and ‘‘Response Plans an obtainable and desirable level by for Marine Transportation-Related 1998. The Coast Guard concurred with and 33 CFR 155.1050(o). The Coast Facilities’’ (61 FR 7890, February 29, the recommendation from the Guard is seeking comments to 1996). Committee to evaluate the proposed cap determine if the proposed increase to increase before the increase would be the cap remains practicable. Responses Background and Purpose implemented to determine if it remains to the following questions regarding the One important goal of the Oil practicable. proposed cap increase will be helpful in Pollution Act of 1990 (OPA 90) is to The Coast Guard believes that in determining the practicality of these increase the overall oil spill response certain geographic areas existing requirements: capability in the United States. To response capabilities already exceed the (1) Is a 25% cap increase practicable? achieve this goal, minimum on-water oil 1998 proposed cap. Several states have Nationally? Regionally? removal capacities were developed enacted state requirements that meet or through two rulemakings and public exceed the 1998 caps. However, the (2) Have there been advances or meetings, including Negotiated Coast Guard understands that in other improvements in the efficiency of Rulemaking Committee meetings. As a regions plan-holders may have great mechanical recovery designs that result, 33 CFR 154.1045(m) and 33 CFR difficulty in meeting the 1998 increase. should be considered in determining a 155.1050(o) set out caps which an Additionally, the Coast Guard believes, new cap? owner or operator must ensure since 1993, significant advances have (3) Have there been improvements in available, through contract or other occurred in the use and availability of oil tracking technologies that should be approved means, in planning for a worst high rate response techniques and considered in determining a new cap? case discharge. These caps were technology within the United States. (4) Have there been improvements in established taking into account 1993 The Coast Guard intends to take into technology and availability of response account these factors when reassessing high rate response technologies such as resources. the 1998 cap. dispersants, in situ burning, etc., that In 1993, the Coast Guard set the caps should be considered in determining a at the present levels based on the Reason for Equipment Caps Review new cap? following reasons. First, in many In accordance with the regulations 33 (5) Have there been large increases in geographic areas of the U.S., on-water CFR 154.1045(n) and 33 CFR the availability of private resources recovery capability and containment 155.1050(p), the Coast Guard is required within specific regions of the country? and protection resources simply did not to conduct a review of the 25% cap Persons submitting comments should exist for responding to a large spill— increase. During the review, which is especially from a very large or ultra ongoing, the Coast Guard will determine include their name and address, identify large crude carrier. Second, the Coast if the increase is practicable; if not, the this request for information (USCG 98– Guard believed Congress intended to Coast Guard will propose an alternative XXX), and give the reason for each encourage the development and cap which may be higher or lower. The comment. Please submit two copies of enlargement of the response review is to include, but not be limited all comments and attachments in an community, but not to cause significant, to, the following topics: unbound format, no larger than 81⁄2 by adverse economic impacts. To support a. Increases in skimming efficiencies 11 inches, suitable for copying and this, the Coast Guard set a nationwide and improvements in design electronic filing, to the DOT Docket criteria as opposed to geographic- technologies; Management Facility at the address specific criteria as an incentive to b. Advances in oil tracking under ADDRESSES. If you want improve the overall response capability technology; acknowledgment of receipt of your in the United States. Third, the caps c. Improvements in high rate response comments, enclose a stamped, self- acknowledged a reasonable and techniques; addressed postcard or envelope. The practical limit to the amount of 1993 d. Other applicable technologies; Coast Guard will consider all comments technology resources that could be e. Increases in the availability of received during the comment period, constructively used during the first private response resources. and may propose a new cap based on stages of a spill response. Lastly, the The regulations also state that the the comments. Coast Guard intended that the caps scheduled cap increase would occur on Dated: January 21, 1998. would ensure a baseline recovery February 18, 1998, unless the review is capability, and would not limit the not completed by the Coast Guard. The Joseph J. Angelo, resources brought to bear during an Coast Guard can not complete the Acting Assistant Commandant for Marine actual oil discharge. Owners or review by February 18, 1998, and will Safety and Environmental Protection. operators were and still are expected to not implement the cap increase as [FR Doc. 98–1887 Filed 1–26–98; 8:45 am] activate the response resources scheduled. Any changes or additional BILLING CODE 4910±14±M Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3863

ENVIRONMENTAL PROTECTION As provided in EPA’s regulations at on October 30, 1997, which marked the AGENCY 40 CFR Part 2, and in accordance with start of a 120-day public comment normal Air docket procedures, if copies period. EPA’s proposed decision to 40 CFR Part 194 of any docket materials are requested, a certify WIPP is based on an extensive [FRL±5954±7] reasonable fee may be charged for independent technical review and photocopying. evaluation (including confirmatory RIN 2060±AE30 FOR FURTHER INFORMATION CONTACT: Tom audits and inspections) of the DOE’s CCA and supplemental materials based Opportunity to Comment on EPA's Peake, Office of Radiation and Indoor on the requirements specified in the Analysis of Air Drilling as it Relates to Air, (202) 564–9310 or call EPA’s 24- WIPP Compliance Criteria at 40 CFR EPA's Proposed Rule: ``40 CFR Part hour toll-free WIPP Information Line, 1– part 194. 194, Criteria for the Certification and 800–331–WIPP. SUPPLEMENTARY INFORMATION: The public has raised air drilling for Re-certification of the Waste Isolation petroleum exploration as a potential Pilot Plant's (WIPP) Compliance with Background scenario that should have been the 40 CFR Part 191 Disposal The Department of Energy (DOE) is considered by the DOE in its submission Regulations: Certification Decision'' developing the Waste Isolation Pilot of the Certification Compliance AGENCY: Environmental Protection Plant (WIPP) near Carlsbad in Application CCA. In the CCA, DOE Agency. southeastern New Mexico as a potential assumes that mud is the fluid used in ACTION: Notice of availability. deep geologic repository for disposal of conjunction with drilling for resources. transuranic (TRU) radioactive waste. As EPA has received comments indicating SUMMARY: The Environmental Protection defined by the WIPP LWA, as amended, that the use of air (instead of mud) is a Agency (EPA) is announcing the TRU waste consists of materials drilling technique that should be availability of EPA’s analysis of the containing elements having atomic considered in the performance of the practice of air drilling during petroleum numbers greater than 92 (with half-lives WIPP. EPA has analyzed the potential exploration and its impact on the ability greater than twenty years), in for air drilling, and the potential of the Waste Isolation Pilot Plant to concentrations greater than 100 impacts that air drilling could have on contain radioactive waste within federal nanocuries of alpha-emitting TRU the performance of the WIPP. This environmental and public health limits. isotopes per gram of waste. Most TRU analysis is now available for public EPA’s analysis of air drilling is now waste consists of items contaminated review in EPA’s dockets. available for review in the public during the production of nuclear The Agency concludes from its dockets listed in ADDRESSES. weapons, e.g., rags, equipment, tools, analysis of the impacts of air drilling DATES: EPA is requesting public and organic and inorganic sludges. that no adverse consequences would comment on EPA’s review of air On October 23, 1997, the result on the ability of the WIPP site to drilling. Comments must be received by Environmental Protection Agency (EPA) meet the Agency radioactive waste EPA’s official docket on or before announced its proposed decision to disposal standards at 40 CFR 191. February 27, 1998. issue to the Secretary of the Department Therefore, the Agency’s proposed ADDRESSES: EPA’s official docket for all of Energy (DOE) a ‘‘certification of decision of October 23, 1997, to issue rulemaking activities under the Waste compliance’’ that the WIPP will comply the DOE a certification of compliance Isolation Pilot Plant Land Withdrawal with EPA’s radioactive waste disposal remains unchanged. Act, as amended, is located in standards at 40 CFR part 191, subject to Dated: January 21, 1998. Washington, DC, in the Air Docket, several conditions related to: (1) Waste Richard D. Wilson, characterization (to determine the Room M1500, Mailcode 6102, U.S. EPA, Acting Assistant Administrator for Air and 401 M Street, SW, Washington, DC radionuclides and other contents of Radiation. waste disposal containers); (2) quality 20460. Information on EPA’s radioactive [FR Doc. 98–1913 Filed 1–26–98; 8:45 am] assurance programs at DOE waste waste disposal standards (40 CFR part BILLING CODE 6560±50±P 191), the compliance criteria (40 CFR generator sites; (3) implementation of part 194), and EPA’s proposed decision passive institutional controls (PICs) to certify WIPP is filed in the official (intended to warn future generations EPA Air Docket, Dockets No. R–89–01, about the hazards of the radioactive DEPARTMENT OF THE INTERIOR A–92–56, and A–93–02, respectively, waste buried in the WIPP); and (4) panel and is available for review at the seals (used to contain the waste within Fish and Wildlife Service following three EPA WIPP docket compartments in the facility). In locations in New Mexico: in Carlsbad at addition, DOE is required to report to 50 CFR Part 17 the Municipal Library, Hours: Mon– EPA any change in the activities or Thu, 10–9, Fri–Sat, 10–6, and Sun 1–5; conditions at the WIPP that differ from RIN 1018±AE53 in Albuquerque at the Government those described in the Compliance Endangered and Threatened Wildlife Publications Department, Zimmerman Certification Application (CCA), and to and Plants; Proposed Endangered Library, University of New Mexico, immediately inform EPA of any Status for Erigeron decumbens var. Hours: Mon–Thu, 8–9, Fri, 8–5, Sat– activities or conditions at the WIPP that decumbens (Willamette Daisy) and Sun, 1–5; and in Santa Fe at the might cause the WIPP to exceed the Fender's Blue Butterfly (Icaricia Fogelson Library, College of Santa Fe, containment requirements of the icarioides fenderi) and Proposed Hours: Mon–Thu, 8–12 Midnight, Fri, disposal regulations. This proposal, Threatened Status for Lupinus 8–5, Sat, 9–5, and Sun, 1–9. entitled ‘‘Criteria for the Certification and Recertification of the Waste sulphureus ssp. kincaidii (Kincaid's Note: The dockets in New Mexico contain Isolation Pilot Plant’s Compliance with lupine) only major items from the official Air docket in Washington, DC, plus all those documents the 40 CFR Part 191 Disposal AGENCY: Fish and Wildlife Service, added to the official docket since the October Regulations: Certification Decision; Interior. Proposed Rule,’’ was published in the 1992 enactment of the WIPP Land ACTION: Proposed rule. Withdrawal Act, Pub. L. No. 102–579 (LWA). Federal Register at 62 FR 58791–58838 3864 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

SUMMARY: The U.S. Fish and Wildlife Columbia Rivers. In addition to its arundinaceae (tall fescue), Bromus Service (Service) proposes endangered Oregon occurrences, L. sulphureus ssp. japonicus (Japanese brome) and status pursuant to the Endangered kincaidii is also known from one small Anthoxanthum odoratum (sweet vernal Species Act (Act) of 1973, as amended, site in southern Washington. grass) (USFWS 1993). Another for a plant and a butterfly, Erigeron The alluvial soils of the Willamette endangered species, Lomatium decumbens var. decumbens (Willamette Valley and southern Washington host a bradshawii (Bradshaw’s lomatium) also daisy) and Fender’s blue butterfly mosaic of grassland, woodland, and grows in wet prairie habitat. Atypically, (Icaricia icarioides fenderi), and forest communities. Fender’s blue one population of E. decumbens var. proposes threatened status for a plant, butterfly, Lupinus sulphureus ssp. decumbens occurs on top of a dry, stony Lupinus sulphureus ssp. kincaidii kincaidii, and Erigeron decumbens var. butte in an upland prairie. (Kincaid’s lupine). These species are decumbens occupy native grassland The impact of humans on the restricted to native prairie in the habitats within the Willamette Valley. botanical communities of the Willamette Valley of Oregon and are Based on the limited available evidence, Willamette Valley date back several currently known from a few small Franklin and Dyrness (1973) asserted centuries to the Kalapooya Indians, who remnants of a formerly widespread that most Willamette Valley grasslands cleared and burned lands used for distribution. In addition to its Oregon are seral (one stage in a sequential hunting and food gathering. Early occurrences, L. sulphureus ssp. progression), requiring natural or accounts by David Douglas in 1826 kincaidii is also known from one small human-induced disturbance for their indicate extensive burning of the valley site in southern Washington. The three maintenance. Johannessen et al. (1971) floor, from its northern end at the falls taxa are threatened by one or more of indicated that the vast majority of of the Willamette River to its southern the following—commercial and/or Willamette Valley grasslands would be extremities near Eugene. Burned areas residential development, agriculture, forested if left undisturbed. Important were documented by Douglas as being silviculture, road improvement, over- exceptions to this successional pattern so complete as to limit the forage collection, herbicide use, and naturally are grass balds on valley hillsides, available for his horse and to reduce occurring demographic and random which may be climax grasslands due to game availability (Douglas 1972). environmental events. This proposal, if the presence of deep, fine-textured, self- Accounts by other early explorers made final, would invoke the Federal mulching soils or xeric (very dry) support Douglas’ observations and protection and recovery provisions of lithosoils (Franklin and Dyrness 1973). suggest a pattern of annual burning by the Act for these plant and butterfly Two native prairie types occur in the the Kalapooya (Johannessen et al. 1971). species. Willamette Valley, wet prairie and The Kalapooya land practices resulted upland prairie. Fender’s blue butterfly in the maintenance of extensive wet and DATES: Comments from all interested and Lupinus sulphureus ssp. kincaidii parties must be received by March 30, dry prairie grasslands, which may have are typically found in native upland 1998. Public hearing requests must be facilitated their hunting efforts and prairie with the dominant species being received by March 13, 1998. limited the potential for sneak attacks Festuca rubra (red fescue) and/or by enemies (Clarke 1905, Douglas 1972, ADDRESSES: Comments and materials Festuca idahoensis (Idaho fescue) and Minto 1900, Smith 1949). Although concerning this proposal should be sent Calochortus tolmiei (Tolmie’s much of the woody vegetation was to the State Supervisor, U.S. Fish and mariposa), Silene hookeri (Hooker’s prevented from becoming established on Wildlife Service, Oregon State Office, catchfly), Fragaria virginiana the grasslands by this treatment, the 2600 SE 98th Ave., Suite 100, Portland, (broadpetal strawberry), Sidalcea random survival of young fire-resistant Oregon 97266. Comments and materials virgata (rose checker-mallow), and species such as Quercus garryana received will be available for public Lomatium spp. (common lomatium) (Oregon white oak) accounted for the inspection, by appointment, during serving as herbaceous indicator species widely spaced trees on the margins of normal business hours at the above (Hammond and Wilson 1993). These the valley (Habeck 1961). After 1848, address. dry, fescue prairies make up the burning decreased sharply through the FOR FURTHER INFORMATION CONTACT: Dr. majority of habitat for Fender’s blue efforts of settlers to suppress large-scale Andrew F. Robinson, Jr., Botanist; or butterfly and L. sulphureus ssp. fires. Consequently, the open, park-like Diana Hwang, Fish and Wildlife kincaidii. Although Fender’s blue nature of the valley floor was lost, Biologist, U.S. Fish and Wildlife Service butterfly and L. sulphureus ssp. replaced by agricultural fields, dense (see ADDRESSES section above or kincaidii are occasionally found on oak and fir forests, and scrub lands telephone 503–231–6179, FAX 503– steep, south-facing slopes and barren following logging. 231–6195). rocky cliffs, neither of these species The Willamette basin covers SUPPLEMENTARY INFORMATION: appear capable of occupying the most approximately 2,600,000 hectares (ha) xeric oatgrass communities on these (6,400,000 acres (ac)), which was Background south facing slopes. estimated in the mid-1880’s to consist of Fender’s blue butterfly (Icaricia The primary habitat for Erigeron one-sixth prairie and five-sixths forest icarioides fenderi), Lupinus sulphureus decumbens var. decumbens is native (Lang 1885). The extent of the prairie ssp. kincaidii (Kincaid’s lupine), and wetland prairie. This habitat is component can be analyzed through Erigeron decumbens var. decumbens characterized by the seasonally-wet historical information from land survey (Willamette daisy) are restricted to the Deschampsia caespitosa (tufted records. Natural grasslands described by Willamette Valley of Oregon. The valley hairgrass) community that occurs in Federal land surveyors in the 1850’s is a 209 kilometer (km) long (130 miles low, flat regions of the Willamette were broken down into three distinct (mi)) and 32–64 km (20–40 mi) wide Valley where flooding creates anaerobic types—oak savannah, upland prairie, alluvial flood plain with an overall and strongly reducing soil conditions. and wet prairie (Habeck 1961). Of the northward gradient (Orr et al. 1992). This wet prairie community includes estimated 409,000 ha (1,010,000 ac) of The valley is narrow and flat at its Juncus spp. (rush) and Danthonia historic native grasslands extant prior to southern end, widening and becoming californica (California oatgrass) as co- 1850, approximately 277,000 ha hilly near its northern end at the dominant native species, as well as the (685,000 ac) appears to have consisted confluence of the Willamette and introduced species Festuca of upland prairie and 132,000 ha Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3865

(325,000 ac) of wet prairie (E. Alverson, kincaidii, and less than one half of this broad haloes around the black spots on The Nature Conservancy, Eugene, pers. habitat (84 sites) is currently occupied the hindwings of Boisduval’s blue comm., 1994). by Fender’s blue butterfly and/or L. butterfly. This extensive resource was rapidly sulphureus ssp. kincaidii and/or The historic distribution of Fender’s depleted through the conversion of Erigeron decumbens var. decumbens. blue butterfly is not precisely known native prairie to agricultural use during Within this available habitat, E. due to the limited information collected settlement. Within 30 years of passage decumbens var. decumbens occupies 28 on this species prior to its description of the Donation Land Act of 1850, most sites across 116 ha (286 ac), L. in 1931. Although the type specimens prairie lands were occupied by sulphureus ssp. kincaidii occupies 51 for this butterfly were collected in 1929 European-American settlers who sites across 145 ha (357 ac), while by Ralph W. Macy, only a limited quickly subdivided their original land Fender’s blue butterfly occupies 31 sites number of collections were made grants to accommodate the rapid across 165 ha (408 ac). Similar losses between the time of the subspecies’ increase in population (Lang 1885). The have occurred for wet prairie habitats, discovery and Macy’s last observation level, open tracts of prairie were the first but estimates of current acreage are not on May 23, 1937, in Benton County, to go under the plow (Lang 1885) and available. Oregon (Hammond and Wilson 1992a). only boggy, flood-prone areas prevented A lack of information on the identity of complete conversion of the native Fender’s Blue Butterfly the butterfly’s host plant caused grassland community to cropped Fender’s blue butterfly is one of about researchers to focus their survey efforts monoculture. Limitations on a dozen subspecies of Boisduval’s blue on common lupine species known to development imposed by seasonal butterfly (Icaricia icarioides). Icaricia occur in the vicinity of Macy’s flooding and a high water table were, icarioides is found in western North collections. As a result, no Fender’s blue however, overcome after 1936, when the America; subspecies fenderi is restricted butterflies were observed during 20 U.S. Army Corps of Engineers (Corps) to the Willamette Valley (Dornfeld 1980; years of widespread investigation. initiated water projects to provide flood R. H. T. Mattoni, University of Finally, Fender’s blue butterfly was control and security for expanded California, pers. comm. to C. Nagano rediscovered in 1989 by Dr. Paul agricultural activity. 1997; J. Emmel, Hemet, California, pers. Hammond at McDonald Forest, Benton Fender’s blue butterfly, Lupinus comm. to C. Nagano 1997). Fender’s County, Oregon on an uncommon sulphureus ssp. kincaidii and Erigeron blue butterfly was described by Ralph species of lupine, Lupinus sulphureus decumbens var. decumbens likely once W. Macey (1931) as Plebejus maricopa ssp. kincaidii. Based on this additional occurred over a large distribution fenderi based on specimens he had information, recent surveys have throughout the historic native prairie, collected in Yamhill County, Oregon. determined that the animal is confined and have been eliminated from these The species maricopa is currently to the Willamette Valley and currently areas as native prairie habitat has been considered to be a synonym of the occupies 31 sites in Yamhill, Polk, converted to agriculture or otherwise species icarioides (Miller and Brown Benton, and Lane Counties (Hammond developed. Native prairie vegetation in 1981). The species icaricia has been and Wilson 1993; Schultz 1996). One the Willamette Valley was decimated by determined to be a member of the genus population at Willow Creek is found in the rapid expansion of agriculture Icaricia, rather than the genus Plebejus wet, Deschampsia-type prairie, while during the 140-year period from the (Miller and Brown 1981; R. H. T. the remaining sites are found on drier 1850’s to the present. With extensive Mattoni, pers. comm. to C. D. Nagano upland prairies characterized by changes in the fire regime, disturbance 1997). Subspecies fenderi was Festuca spp. Sites occupied by Fender’s forces that maintained native prairies considered to be a synonym of the blue butterfly are located almost were substantially altered. Fire pardalis blue butterfly (Icaricia exclusively on the western side of the suppression allowed shrub and tree icarioides pardalis), an inhabitant of the valley, within 33 km (21 mi) of the species to overtake grasslands, while central California Coast Range near San Willamette River. agricultural practices hastened the Francisco (Downey 1975; Miller and Although only limited observations decline of native prairie species through Brown 1981); however Fender’s blue have been made of the early life stages habitat loss and increased grazing butterfly is a distinct taxon based on of Fender’s blue butterfly, the life cycle (Johannessen, et al. 1971; Franklin and adult characters and geographic of the species likely is similar to other Dyrness 1973). Refugia from these forces distribution (Dornfeld 1980; Hammond subspecies of Icaricia icarioides (R. H. of change were limited to fence rows and Wilson 1993; R. H. T. Mattoni and T. Mattoni, pers. comm. to C. Nagano and intervening strips of land along J. Emmel, pers. comm. to C. D. Nagano 1997; G. Pratt, Riverside, California, agricultural fields and roadsides. 1997). pers. comm. to C. Nagano 1997; Although large prairie expanses Fender’s blue butterfly is a small Hammond and Wilson 1993). Adult dominated by native species had been sized butterfly with a wingspan of butterflies lay their eggs on perennial lost by the early 1900’s, many remnant approximately 2.5 centimeter (cm) (1 Lupinus sp. (Ballmer and Pratt 1988), grasslands with a large native species inch (in)). The upper wings of the males the foodplant of the caterpillar during component have been recently are brilliant blue in color and the May and June. Newly hatched larvae identified. These remnants, even though borders and basal areas are black. The feed for a short time, reaching their dominated by exotic species, support upper wings of the females are second instar in the early summer, at the only remaining occurrences of completely brown colored. The which point they enter an extended native prairie species in the Willamette undersides of the wings of both sexes diapause (maintaining a state of Valley. Current estimates of the are creamish tan with black spots suspended activity). Diapausing larvae remaining native upland prairie in the surrounded with a fine white border or remain in the leaf litter at or near the Willamette Valley total less than 400 ha halo. The dark spots on the underwings base of the host plant through the fall (1,000 ac) (Alverson, pers. comm. 1994). of the males are small on Fender’s blue and winter and some individuals likely This estimate represents only one-tenth butterfly; surrounded with wide white become active again in March or April of one percent of the original upland haloes on the pembina blue butterfly of the following year. Some larvae may prairie once available to Fender’s blue (Icaricia icarioides pembina); the be able to extend diapause for more than butterfly, Lupinus sulphureus ssp. underside is very pale whitish gray with one season depending upon the 3866 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules individual and environmental other species of butterflies and moths and flies (P. Hammond, pers. comm. conditions (R. H. T. Mattoni pers. (Longcore et al. 1997). 1994). Seed set and seed production are comm. to C. Nagano 1997). Once low, with few (but variable) numbers of Lupinus Sulphureus ssp. Kincaidii diapause is broken, the larvae feed and flowers producing fruit from year to grow through three to four additional Lupinus sulphureus ssp. kincaidii was year and each fruit containing an instars, enter their pupal stage, and then first described in 1924 by C.P. Smith as average of 0.3–1.8 seeds (Liston et al. emerge as adult butterflies in April and L. oreganus var. kincaidii from a 1994). Seeds are dispersed from fruits May. Behavioral observations of collection made in Corvallis, Oregon that open explosively upon drying. Fender’s blue butterfly indicate the (Kuykendall and Kaye 1993a). Phillips Erigeron Decumbens var. Decumbens larvae are alert to potential predators, (1955) transferred the taxon to a with individuals dropping from their subspecies status as L. sulphureus ssp. Thomas Nuttall (1840) based his feeding position on lupine leaves to the kincaidii. Hitchcock et al. (1961) description of Erigeron decumbens on a base of the plant at the slightest sign of retained the position noted by Phillips specimen he collected in the summer of disturbance (C. Schultz, University of (1955), but preferred the combination as 1835. The autonym E. decumbens var. Washington, pers. comm. 1994). The life a varietal rank, L. sulphureus var. decumbens was automatically cycle of Fender’s blue butterfly may be kincaidii. established by Cronquist (1947) when completed in one year. Lupinus sulphureus ssp. kincaidii he described E. decumbens var. The larvae of many species of occupies 51 sites throughout the robustior. Recent revisions of the lycaenid butterflies, including Icaricia Willamette Valley and one site in Erigeron genus (Strother and Ferlatte icarioides, possess specialized glands southern Washington. The northern 1988, Nesom 1989) treat the plant as a that secrete a sweet solution sought by limit of L. sulphureus ssp. kincaidii is variety, E. decumbens var. decumbens. some ant species who may actively Lewis County, Washington, while it According to Strother and Ferlatte ‘‘tend’’ and protect them from predators ranges south to Douglas County, Oregon, (1988), Erigeron decumbens var. and parasites (Ballmer and Pratt 1988; a latitudinal span of over 400 km (250 decumbens is geographically limited to G. Pratt pers. comm. to C. Nagano 1997). mi). This distribution implies a close the Willamette Valley. They also restrict Although other subspecies of association with native upland prairie the morphologically similar E. Boisduval’s blue butterfly are tended by sites that are characterized by heavier decumbens var. robustior to Humboldt ants during their larval stage (Downey soils and mesic to slightly xeric soil and western Trinity Counties, 1962, 1975; Thomas Reid Associates moisture levels. At the southern limit of California. Intermediate specimens of 1982; R. H. T. Mattoni and G. Pratt, pers. its range, the subspecies occurs on well- Erigeron from southern Oregon are comm. to C. Nagano 1997), limited developed soils adjacent to serpentine considered by Strother and Ferlatte observations of Fender’s blue butterfly outcrops where the plant is often found (1988) to be robust specimens of E. larvae in the field have failed to under scattered oaks (Kuykendall and eatonii var. plantagineus. document such a mutualistic Kaye 1993a). A review of herbarium specimens by association (Hammond 1994). However, With its low-growing habit and Clark et al. (1993) shows a historical this may be due to the nocturnal activity unbranched inflorescence, Lupinus distribution of Erigeron decumbens var. patterns of the larvae of Icaricia sulphureus ssp. kincaidii is easily decumbens throughout the Willamette icarioides as it appears that this species distinguished from other sympatric Valley. Collections were frequent has an obligate relationship with ants members of the genus Lupinus. Its between 1881 and 1934, yet from 1934 (G. Pratt pers. comm. to C. Nagano aromatic flowers have a slightly to 1980 no collections or observations 1997). Non-native Argentine ants reflexed, distinctly ruffled banner and were made (Clark et al. 1993). The (Iridomyrmex humilis) have been are yellowish-cream colored, often species was rediscovered in 1980 in observed tending Fender’s blue butterfly showing shades of blue on the keel. The Lane County, Oregon, and has since larvae during indoor rearing trials upper calyx lip is short, yet unobscured been identified at 28 sites in Polk, (Schultz, pers. comm. 1994). by the reflexed banner when viewed Marion, Linn, Benton, and Lane The near absence of Fender’s blue from above. The leaflets tend to be a counties, Oregon. With 28 occurrences butterfly at sites without Lupinus deep green with an upper surface that and 115 ha (284 ac) of occupied habitat, sulphureus ssp. kincaidii suggest that L. is often glabrous. The plants are 4–8 E. decumbens var. decumbens has the laxiflorus (spurred lupine) and L. decimeters (dm) (16–32 in) tall, with most restricted range of the species albicaulis (sickle keeled lupine) are single to multiple unbranched flowering proposed for listing herein. secondary foodplants used by the stems and basal leaves that remain after Erigeron decumbens var. decumbens animal (Hammond and Wilson 1993k). flowering (Kuykendall and Kaye 1993). is a perennial herb, 15–60 mm (0.6–2.4 Fender’s blue butterfly inhabits two Lupinus sulphureus ssp. kincaidii is a in.) tall, with erect to sometimes sites that contain only L. laxiflorus, long-lived perennial species, with a prostrate stems at the base. The basal where it is the primary foodplant maximum reported age of 25 years (M. leaves often wither prior to flowering (Schultz 1996) and L. laxiflorus co- Wilson, Oregon State University, in litt., and are mostly linear, 5–12 cm (2–5 in.) occurs with L. sulphureus ssp. kincaidii 1993). Individual plants are capable of long and 3–4 mm (0.1–0.2 in.) wide. at two additional sites (Hammond and spreading by rhizomes producing Flowering stems produce 2–5 heads, Wilson 1993). Fender’s blue butterfly clumps of plants exceeding 20 meters each of which is daisy-like, with occupies six sites containing only L. (m) (65.62 feet (ft)) in diameter (P. pinkish to pale blue ray flowers and albicaulis, where it is the primary Hammond, independent consultant, yellow disk flowers. Ray flowers often foodplant. However, the butterfly is pers. comm. 1994). The long rhizomes fade to white with age (Siddall and declining at two of these sites. Lupinus do not produce adventitious roots, Chambers 1978). The morphologically albicaulis and L. laxiflorus may possess apparently do not separate from the similar E. eatonii occurs east of the physical or biochemical properties that parent clump, and the clumps may be Cascade Mountains, while the sympatric render them less suitable for Fender’s short-lived, regularly dying back to the species Aster hallii flowers later in the blue butterfly than L. sulphureus ssp. crown (Kuykendall and Kaye 1993a). summer. Erigeron decumbens var. kincaidii. This phenomenon in Self-incompatible, L. sulphureus ssp. decumbens can be confused with A. foodplants has been documented in kincaidii is pollinated by solitary bees hallii in their vegetative state, but close Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3867 examination reveals the reddish stems decumbens var. decumbens and Summary of Factors Affecting the of A. hallii in contrast to the green stems Lupinus sulphureus ssp. kincaidii. Species of E. decumbens var. decumbens (Clark Fender’s blue butterfly was initially Section 4 of the Endangered Species et al. 1993). assigned to category 3A taxa in the Act and regulations (50 CFR Part 424) As with many species in the family Notice of Review published by the promulgated to implement the listing Asteraceae, Erigeron decumbens var. Service on January 6, 1989 (54 FR 572). provisions of the Act set forth the decumbens produces large quantities of The best available information at that procedures for adding species to the wind-dispersed seed. Flowering time indicated that this butterfly was Federal lists. A species may be typically occurs in June and July with likely extinct because the subspecies determined to be an endangered or pollination carried out by syphrid flies was last observed in 1937. Category 3A threatened species due to one or more and solitary bees. Seeds are released in taxa were taxa for which the Service had of the five factors described in Section July and August. Although the seeds are pervasive evidence of extinction, 4(a)(1). These factors and their wind-dispersed, the short stature of this however if rediscovered, such taxa species likely precludes the long- application to Fender’s blue butterfly might be reconsidered for listing. The (Icaricia icarioides fenderi), Lupinus distance travel of many of these seeds. rediscovery of this butterfly in May Erigeron decumbens var. decumbens is sulphureus Dougl. ssp. kincaidii (Smith) 1989 prompted the Service to change Phillips (Kincaid’s lupine), and Erigeron capable of vegetative spreading and is the status of the subspecies to a category commonly found in large clumps decumbens Nutt. var. decumbens 2 candidate in the Notice of Review (Willamette daisy) are as follows. scattered throughout a site (Clark et al. published on November 21, 1991 (56 FR 1993). 58830). In the Notice of Review A. The Present or Threatened Previous Federal Action published on February 28, 1996 (61 FR Destruction, Modification, or Curtailment of its Habitat or Range Erigeron decumbens var. decumbens 7596), the Service retained Fender’s was initially included as a category 2 blue butterfly as a candidate for listing. The primary loss of habitat for candidate in a Notice of Review The 1997 Notice of Review also retained Fender’s blue butterfly, Lupinus published by the Service on December Fender’s blue butterfly as a candidate sulphureus ssp. kincaidii, and Erigeron 15, 1980 (45 FR 82506). Category 2 for listing. decumbens var. decumbens has resulted candidates were those species for which The processing of this proposed from the extensive alteration of native the Service had information in its listing rule conforms with the Service’s prairie in the Willamette Valley that has possession indicating that listing may be final listing priority guidance for fiscal occurred over the last 140 years, appropriate, but for which additional year (FY) 1997 that was published in the described in the ‘‘Background’’ section information was needed to support the Federal Register on December 5, 1996 above. As a result, over 99 percent of the preparation of a proposed rule. On (61 FR 64475–64481), and the Service’s native prairie in the Willamette Valley, November 28, 1983, the Service extension of the FY 1997 guidance the only known habitat area of Fender’s published a Notice of Review upgrading published in the Federal Register on blue butterfly, L. sulphureus ssp. this species to category 1 status (48 FR October 23, 1997 (62 FR 55268). The kincaidii, and E. decumbens var. 53649). Category 1 taxa were taxa for guidance clarifies the order in which the decumbens, has been lost (E. Alverson, which the Service had sufficient data in Service will process rulemakings pers. comm. 1994). its possession to support preparation of following two related events—(1) the Within the 84 remnants of native listing proposals. Subsequently, E. lifting, on April 26, 1996, of the prairie occupied by these species in the decumbens var. decumbens was moratorium on final listings imposed on Willamette Valley, Fender’s blue reassigned category 2 candidacy by a April 10, 1995 (Public Law 104–6), and butterfly occurs at 31 sites (Hammond Notice of Review published on (2) the restoration of significant funding and Wilson 1993, Schultz 1996), September 27, 1985 (50 FR 39527). On for listing through passage of the Lupinus sulphureus ssp. kincaidii February 21, 1990 the Service published omnibus budget reconciliation law on occurs at 51 sites (Kuykendall and Kaye a Notice of Review (55 FR 6202) that April 26, 1996, following severe funding 1993a), and Erigeron decumbens var. reinstated E. decumbens var. constraints imposed by a number of decumbens occurs at 28 sites (Clark et decumbens as a category 1 candidate continuing resolutions between al. 1993). In this collection of sites, and also designated Lupinus sulphureus November 1995 and April 1996. The Fender’s blue butterfly and L. ssp. kincaidii as a category 2 candidate guidance calls for giving highest priority sulphureus ssp. kincaidii are found in (55 FR 6121). The Service published a to handling emergency situations (Tier close association, occurring together at a Notice of Review on February 28, 1996 1) and second highest priority (Tier 2) total of 24 sites. Erigeron decumbens (61 FR 7596), updating the candidate to resolving the listing status of the var. decumbens co-occurs with L. species list and changing the policy on outstanding proposed listings. Tier 3 sulphureus ssp. kincaidii at only one candidates to discontinue the use of includes the processing of new site and with Fender’s blue butterfly at candidate categories. Erigeron proposed listings for species facing high only this same site, Baskett Butte. decumbens var. decumbens was magnitude threats. This proposed rule Typically these sites are small, with retained as a candidate species; for Fender’s blue butterfly (Icaricia extirpation likely in the near future. however, Lupinus sulphureus ssp. icarioides fenderi), Lupinus sulphureus Activities that destroy, modify or curtail kincaidii and other former category 2 ssp. kincaidii (Kincaid’s lupine), and the habitat of L. sulphureus ssp. candidates were not. The 1997 Notice of Erigeron decumbens var. decumbens kincaidii, E. decumbens var. Review retained Erigeron decumbens (Willamette daisy) falls under Tier 3. decumbens, and Fender’s blue butterfly var. decumbens as a candidate species; According to the Listing Priority are discussed below. Lupinus sulphureus ssp. kincaidii was Guidance, the Service is operating The immediacy of the threat of habitat not included as a candidate. Since this under a more balanced listing program loss in the last remaining 84 remnants Notice of Review was published, the and may process Tier 3 actions. of native prairie occupied by these Service has reevaluated the available Processing of this proposed rule is in species has been well documented. information and determined that listing accordance with the current Listing Habitat at 80 percent of the sites (e.g., is warranted for both Erigeron Priority Guidance. 68 sites) is rapidly disappearing due to 3868 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules agriculture practices, development other 29 are upland prairie remnants upland native prairie in the Willamette activities, forestry practices, grazing, supporting populations of Fender’s blue Valley (Hammond 1994). Native species roadside maintenance, and commercial butterfly and L. sulphureus ssp. were severely damaged, however, by the Christmas tree farms. kincaidii. application of grass-specific herbicide At least eleven prairie remnants are Examples of this type of threat are the that eliminated grasses and severely likely to be impacted by agricultural Dallas-Oakdale Avenue sites 1 and 2 damaged other herbaceous species prior activities. Five of these are wetland covering about 2 ha (5 ac) occupied by to tree planting activities. prairies occupied by Erigeron Fender’s blue butterfly and L. Approximately 1 ha (2.5 ac) was decumbens var. decumbens and the sulphureus ssp. kincaidii near the town sprayed with herbicide. The saddle remaining six are upland prairies of Dallas in Polk County that is expected section of Coburg Ridge (area-2) that occupied by Lupinus sulphureus ssp. to be lost due to housing development received aerial application of the kincaidii and Fender’s blue butterfly. planned at that site (Hammond 1996). herbicide is used by Fender’s blue The types of impacts include examples The loss of native prairie habitat is butterfly due to the presence of Lupinus such as a wheat field boundary further exemplified by the destruction laxiflorus, an alternate host plant, but adjustment near Buell in Polk County of a site supporting 6,000 plants in Lane this site does not contain L. sulphureus (Mill Creek-Hwy 22 at Buell) that is County, formerly the largest occurrence ssp. kincaidii (Schultz 1996). Loss of likely to lead to loss of a population of of E. decumbens var. decumbens, such alternate host plant sites further Fender’s blue butterfly and L. plowed under in 1986 prior to the limits the habitat that is available to sulphureus ssp. kincaidii (Hammond development of an industrial and support Fender’s blue butterfly. 1994). By 1996, this boundary residential site (Kagan and Yamamoto Additional tree-planting efforts by an adjustment was implemented with a 1987). Construction of a single driveway adjacent Coburg Ridge landowner diminished population of L. sulphureus resulted in the loss of one site occupied threatens to alter a different portion of ssp. kincaidii and Fender’s blue by Fender’s blue butterfly and L. the grassland in area-2, which has butterfly still present; however, no sulphureus ssp. kincaidii in Kings displayed the highest levels of butterfly Fender’s blue butterflies were observed Valley (Hammond 1994). Future activity in previous years (Schultz at this site in 1997 (Hammond, pers. highway construction potentially 1996). This site received spot herbicide comm. 1997). The majority of the threatens the Nielson Road site of L. application during the planting efforts, habitat supporting populations of each sulphureus ssp. kincaidii located in a rather than the aerial broadcast method of these species are habitat remnants, highway expansion corridor in Lane of the first case; therefore, the e.g., small habitat patches remaining County (Oregon Natural Heritage immediate effects to the habitat were after other habitat loss has occurred. Program 1996). The population of not as severe. However, tree saplings Small habitat patches that occur along Fender’s blue butterfly and L. were planted and as the trees grow they State and County roadsides face greater sulphureus ssp. kincaidii at Wren in will eventually shade out the native threats from agriculture than those Benton County occurs at two sites and prairie species, resulting in the loss of occurring along non-roadside areas. covers about 9 ha (22 ac, however, only butterfly habitat. Herbicide spraying While in past decades many roadside a portion of the population (7.4 ha) associated with reforestation after habitats were less disturbed, today occurs on land owned by The Nature logging has also altered habitat and roadside stretches of habitats adjoining Conservancy (TNC). Heavy clearing and caused a decline of a L. sulphureus ssp. grass seed farms are now being disked mowing activities on private lands kincaidii population on Bureau of Land and/or sprayed with herbicides to kill adjacent to the TNC property has caused Management (BLM) properties. The all roadside vegetation (A. Robinson, the decline of the lupine and is reducing other large sized occurrence of the U.S. Fish and Wildlife Service, pers. the butterfly population at the Wren site butterfly and L. sulphureus ssp. comm. 1997). Grass seed farms use to a non-viable state (Hammond and kincaidii is in Benton County on herbicide spraying to create bare soil as Wilson 1993). At the Willow Creek McDonald State Forest and adjacent a common practice to prevent the Main site, Fender’s blue butterfly and L. private lands that could be similarly spread of weeds from roadsides into the sulphureus ssp. kincaidii occur together. affected by surrounding silvicultural grass seed fields. Many of these areas This site is actively managed for the operations. are inhabited by populations of E. benefit of the species and the lands are Grazing is currently impacting 12 of decumbens var. decumbens. considered relatively secure from the occupied habitat patches, with five Urban development has caused development threats. Although this TNC of these being wetlands occupied by additional loss of prairie habitat (Clark site is considered a secure habitat area, Erigeron decumbens var. decumbens. et al. 1993; Hammond 1992, 1994, 1996; extensive damage to habitat occupied by Most of the habitat occupied by Kuykendall and Kaye 1993; Liston et al. Fender’s blue butterfly and L. Fender’s blue butterfly and Lupinus 1994; Schultz, 1996; Sidall and sulphureus ssp. kincaidii occurred in sulphureus ssp. kincaidii at the Oak Chambers 1978). Destruction of upland 1996 during pipeline repair work Ridge south site in Yamhill County has prairie habitat occupied by Fender’s conducted on a utility corridor been lost due to heavy grazing blue butterfly and Lupinus sulphureus easement. Two other moderately sized (Hammond 1996). Another site of L. ssp. kincaidii at several sites since 1992 habitat patches occupied by E. sulphureus ssp. kincaidii, covering has caused the butterflies at these sites decumbens var. decumbens face habitat about 4.6 ha (11 ac) at Crabtree Hill in to either completely die out or to be loss from trash dumping (at the Grande Lane County, is being damaged by reduced to low, non-viable numbers Ronde site) and urbanization (at the extensive livestock grazing. The (Hammond 1994, 1996). Future losses west Eugene site) (Clark et al. 1993). Crabtree Hill population of 6,000 plants for 48 prairie remnants are projected as Silvicultural activities for timber is the largest known L. sulphureus ssp. a result of urban development. This is production have threatened 6 percent (5 kincaidii population. the largest single factor currently sites) of the remaining 84 prairie The next most common threat to these threatening the survival of these prairie occurrences. The Coburg Ridge area-2 species is roadside maintenance species. Nineteen of these remnants are site in Lane County is the largest site activities. At least 30 sites occur along wetland prairies supporting Erigeron occupied by Fender’s blue butterfly and roadsides and are impacted by decumbens var. decumbens and the is among the best examples of remnant maintenance activities. Examples Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3869 include the populations of Fender’s blue nearby are no longer considered viable endangered nymphalid butterfly (Gall, butterfly and Lupinus sulpheureus ssp. due to the loss of the source butterfly 1984a and 1984b), it is likely that kincaidii at the Oak Ridge north site that populations and considerable numbers Fender’s blue butterfly could be were recently lost due to road of L. sulphureus ssp. kincaidii plants. adversely affected due to its isolated, maintenance activities. When planned Hammond (1994) stated that these two possibly small populations. There is an developments are completed on the Oak roadside occurrences are not expected international commercial trade for Ridge south site, the butterfly and to persist for more than a few additional butterfly species proposed for listing, as lupine will essentially be extirpated years. The Service does not know if the well as other imperiled or rare from the Oak Ridge area (Hammond two roadside occurrences still exist. butterflies (C.D. Nagano, J. Mendoza, 1996). Two sites on Oregon Department In summary, habitat loss from a wide and C. Schroeder, USFWS, pers. obs., of Transportation (ODOT) property and variety of causes (urbanization, 1992–1997) and specimens of Fender’s one site on land owned by the City of agriculture, silvicultural practices, and blue butterfly are known to have Corvallis receive only limited protection roadside maintenance) is a severe recently been offered for trade (C. and could potentially be impacted by problem faced by Fender’s blue Nagano pers. obs.). Some collectors and future development and highway butterfly, Lupinus sulphureus ssp. dealers closely monitor listing activities maintenance activities. Publicly-owned kincaidii, and Erigeron decumbens var. by the Service and they are known to roadside sites receive varying degrees of decumbens at a majority of their have stockpiled rare butterflies in protection on a district by district basis. occurrences. Development and land anticipation of their becoming Although some roadside sites have been alteration in the Willamette Valley has designated as endangered or threatened marked as no-spray zones by the Native been so extensive that all the species (C.D. Nagano and J. Mendoza, Plant Society of Oregon, this protective occurrences of the three species on the pers. obs., 1992). Collecting from small measure is not always effective. The valley floor have essentially been colonies or repeated handling and roadside portion of a L. sulphureus ssp. relegated to small patches of habitat, marking (particularly of females and in kincaidii population in Kings Valley except for three hilltop areas (Baskett years of low abundance) could seriously continues to receive herbicide Slough National Wildlife Refuge, damage the populations through loss of application during roadside weed Coburg Ridge, and McDonald State individuals and genetic variability (Gall control activities, despite efforts to Forest) that, because of their 1984b; Murphy 1988; Singer and restrict spraying. Other roadside sites topography, have not been subjected to Wedlake 1981). Collection of females receive only sporadic protection during agricultural and urban development dispersing from a colony also can herbicide application. Privately activities occurring on the valley floor. reduce the probability that new colonies managed roadside occurrences do not Only 16 out the 84 remnant prairie sites will be founded. Collectors pose a threat fare much better; extensive mowing at that are occupied by one or more of because they may be unable to recognize the Wren sites in Benton County and Fir these species are currently not when they are depleting butterfly Butte Road roadside sites in Lane threatened with destruction of habitat. colonies below the thresholds of County have caused declines in However, herbivory, exotic weed survival or recovery, especially when Fender’s blue butterfly and L. species competition, and/or succession they lack appropriate biological training sulphureus ssp. kincaidii populations threaten all of these 16 sites (see Factor or the area is visited for a short period (Hammond 1994). With frequent weed E below for more information). As of time (Collins and Morris 1985). habitat loss continues on these prairie There likely is high interest by control efforts ongoing, as well as remnants, populations of the three collectors in Fender’s blue butterfly due highway and driveway construction, species in these 64 areas are likely to be to its unique history of assumed small roadside occurrences of Fender’s extirpated. At least 12 of 31 sites extinction. The rediscovery in 1989 of blue butterfly, L. sulphureus ssp. occupied by Fender’s blue butterfly, 47 this animal generated a great deal of kincaidii, and Erigeron decumbens var. of 51 sites occupied by L. sulphureus publicity and interest, which in turn decumbens are unlikely to persist. ssp. kincaidii, and 24 of 28 sites increases demand by collectors. Between 1994 and 1996, Fender’s blue occupied by E. decumbens var. Collectors often highly prize rare butterfly populations disappeared from decumbens occur on private lands and, butterflies (Morris et al. 1991) and at (or are considered no longer viable) at without further action, are expected to times take all wild specimens obtainable least seven small roadside sites (Liberty be lost in the near future. The threat of for use in trade (U. S. Department of Road, Monmouth Falls City Road, Fern extinction for these species is high, Justice, in litt. 1993). The populations of Corner, Grant Creek, and McTimmonds given the expected continuing Fender’s blue butterfly that remain face Valley in Polk County, and two sites at extirpation of small populations, the strong pressure from some members of Wren) and populations at many of the continued habitat loss on moderate sites the collecting community. Since many remaining roadside sites continue to and large sites, and the continuing of the Fender’s blue butterfly decline. degradation of habitat, even on secure populations occur along public Between 1990 and 1992, three sites sites (see Factor E below for more roadsides, the species is easily acquired occupied by both Fender’s blue butterfly information about continuing and the extremely limited numbers and and Lupinus sulphureus ssp. kincaidii degradation of habitat). distribution of many of the remaining were lost in the McTimmond’s Valley to populations make this species B. Overutilization for Commercial, the expansion of Christmas tree farming vulnerable to collectors. operations (Hammond 1994). Recreational, Scientific, or Educational Due to their unattractive weedy like Conversion of these three sites Purposes appearance, the threat to Erigeron destroyed approximately 3 ha (7 ac) of Rare butterflies, such as Fender’s blue decumbens var. decumbens and/or habitat along roadside and private land butterfly are highly prized by insect Lupinus sulphureus ssp. kincaidii from that comprised the nucleus of two collectors. Although there are no studies collection for horticultural purposes Fender’s blue butterfly populations and on the impact of the removal of may be less than the threat from a substantial number of L. sulphureus individuals from natural populations of collectors faced by Fender’s blue ssp. kincaidii plants. The two roadside this animal, based on studies of another butterfly. Although no current evidence occurrences of the butterfly that remain lycaenid butterfly (Duffey 1968), and an exists of such horticultural collection or 3870 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules other overutilization for scientific Oregon was initiated with the passage of protection on State-managed lands purposes for either E. decumbens var. the Oregon Wildflower Law (ORS under the Oregon Endangered Species decumbens or L. sulphureus ssp. 564.010–564.040). This law was Act. The ODOA is able to regulate the kincaidii, the threat posed by collecting designed to protect specific showy import, export, or trafficking of State- for personal herbarium specimens is botanical groups including lilies, listed plant species when they are in significant due to their rarity and the shooting stars, orchids, and transit (under ORS 564.1200). The relative accessability of roadside rhododendrons from collection and ODOA’s ability to protect plant populations. trade by horticulturists interested in the populations, such as restricting take cultivation of these species. It also under the Oregon Endangered Species C. Disease or Predation prohibits the collection of wildflowers Act, is limited to ‘‘land owned or leased Although most lepidopteran larvae from ‘‘within 500 feet of the centerline by the State, or for which the State suffer significant mortality from of any public highway’’ (ORS 564.020 holds a recorded easement’’ (ORS parasitoid attack, no instances of (2)). Although protective in spirit, the 564.115). ‘‘Nothing in ORS 564.100 to parasitism (Hammond 1993) or disease Oregon Wildflower Law carries minimal 564.130 is intended * * * to require the (R. H. T. Mattoni, pers. comm. to C. D. penalties and is rarely enforced. As a owner of any commercial forest land or Nagano 1997) have been documented means of protecting Lupinus sulphureus other private land to take action to for Fender’s blue butterfly. ssp. kincaidii and Erigeron decumbens protect a threatened species or Lupinus sulphureus ssp. kincaidii var. decumbens populations, the endangered species’’ on his lands (ORS evidently hosts a number of herbivore effectiveness of the law is doubtful. 564.135(1)). As a result, populations of and parasite species. Gall-forming In 1987, Oregon Senate Bill 533 was L. sulphureus ssp. kincaidii and E. insects attack unopened flowers and the passed to augment the legislative decumbens var. decumbens on private bases of woody stems. Weevils lay eggs actions available for the protection of lands receive minimal protection from in the developing floral embryos and the State’s threatened and endangered their State status as endangered or their offspring stimulate the fruit to species, both plant and animal. This threatened. produce callous tissue as a food source. bill, known as the Oregon Endangered ODOT owns and manages roadside Misdirection of the developing fruit by Species Act, mandates responsibility for habitat where Lupinus sulphureus ssp. weevil larvae effectively prevents viable threatened and endangered species in kincaidii and Erigeron decumbens var. seed formation in the parasitized fruits Oregon to two State agencies—the decumbens are present. The Oregon (Kuykendall and Kaye 1993b). Weevil Oregon Department of Agriculture Endangered Species Act requires the damage at some sites (e.g., Willow (ODOA) for plant species (ORS 564.105) protection of these State-listed species. Creek) can be high, with some plants and the Oregon Department of Fish and ODOT has responded, in conjunction suffering 90 percent loss of mature fruits Wildlife (ODFW) for ‘‘wildlife’’ species with Oregon State University (E. Alverson, pers. comm. 1994). (ORS 496.172). researchers and the Native Plant Society Herbivory has been documented at all As reauthorized in 1995 (HB 2120), of Oregon, by providing road crews with three Fern Ridge Reservoir sites. Loss of the Oregon Endangered Species Act maps of these areas and instruction to floral parts through herbivory can also does not include invertebrate animals in avoid herbicide use. significantly reduce reproduction. the definition of ‘‘wildlife.’’ Therefore, Lupinus sulphureus ssp. kincaidii, Larvae of the silvery blue butterfly Fender’s blue butterfly receives no Erigeron decumbens var. decumbens, (Glaucopsyche lygdamus) graze flowers protection under the Oregon and Fender’s blue butterfly occurrences for pollen and in doing so effectively Endangered Species Act. The Oregon within the Service’s National Wildlife destroy them. Silvery blue larvae can Natural Heritage Program is the only Refuges receive protection within the reach high population densities at some State agency ‘‘which tracks locations of boundaries of the refuge. All three of the sites and may reduce the and works to protect the rare, threatened species occur together only at Baskett fecundity of L. sulphureus ssp. and endangered invertebrates of Slough National Wildlife Refuge, which kincaidii, but do not appear to cause the Oregon’’ (Oregon Natural Heritage actively manages habitat for the benefit death of mature individual plants (C. Program 1993). The Heritage program of the species. Schultz, pers. comm. 1994). has created a Sensitive Species Under section 7 of the Endangered Evidence of insect herbivory on invertebrate list, which includes Species Act, Federal agencies are Erigeron decumbens var. decumbens is Fender’s blue butterfly as a ‘‘priority 1 required to consult with the Service if limited. Insect species collected on E. species.’’ Priority 1 species are ‘‘taxa any action they regulate, fund or carry decumbens var. decumbens in 1993 threatened or endangered throughout out may jeopardize the continued included sap-sucking insects range’’ (Oregon Natural Heritage existence of an endangered or (Hemiptera), a bruchid beetle, thrips, Program 1993). The program can assist threatened species. Species that are and mites (Clark et al. 1993). Other planning agencies in managing lands for candidates for listing receive no formal threats from herbivory include the benefit of rare invertebrate taxa, but regulatory protection under the Act. The consumption of E. decumbens var. it has no regulatory authority over rare BLM and the Forest Service (FS) manage decumbens by cattle; no plants were invertebrates (Jimmy Kagan, Oregon lands occupied by Lupinus sulphureus found in areas currently or recently Natural Heritage Program, pers. comm. ssp. kincaidii. This species on BLM grazed during surveys conducted in 1997). properties is given some protection 1986 (Kagan and Yamamoto 1987) and For plant species, the Oregon through a general conservation only one site was observed to support E. Endangered Species Act directs the agreement that applies to all Federal decumbens var. decumbens in the ODOA to maintain a strong program to candidate species. The population of L. presence of cattle in 1993 (Clark et al. conserve and protect native plant sulphureus ssp. kincaidii that occurs in 1993). species classified by the State as the Umpqua National Forest is not threatened or endangered. Erigeron covered under any conservation D. The Inadequacy of Existing decumbens var. decumbens, as a State- agreement and receives no official Regulatory Mechanisms listed endangered species and Lupinus protection under the Act. In 1963, the protection of natural sulphureus ssp. kincaidii as a State- On Corps lands, discretion for the botanical resources by the State of listed threatened species receive protection and management of State- Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3871 listed and Federal candidate species lies nationwide permit, unless a threatened Erigeron decumbens var. decumbens at the local level. Funds may be or endangered species or other occupies three large sites. Two of those available in some years to proactively significant resources would be adversely sites, one occurring on Corps property manage these species. Lupinus affected by the proposed activity. In and the other on land owned by TNC, sulphureus ssp. kincaidii, Erigeron such cases, conferencing and are being managed to benefit native decumbens var. decumbens, and consultation requirements of section 7 prairie species and are relatively secure. Fender’s blue butterfly have received of the Act do pertain to the Corps’ The third site on private land is not habitat protection, as well as support for regulatory process. managed for native prairie species and research activity from the Corps through Disking and some other farming, is not protected from habitat loss. allocation of personnel and supplies to ranching and silviculture practices can The small occurrences of the three these projects. This protection and degrade or destroy wetland habitat taxa in this proposed rule, cooperation is voluntary for candidate without a permit from the Corps predominantly roadside and fence line/ species and is dependent on because these activities are exempt from boundary sites, face an immediate threat continuation of sufficient funding. regulation under the Clean Water Act of destruction from a variety of activities Populations of Erigeron decumbens (33 CFR 323.4 (a)). The discontinuous including development, agriculture, var. decumbens occur in seasonally configuration of the existing wet prairies silvicultural practices, roadside flooded wet prairies with hydric soils further obscures these wetland losses. maintenance, and herbicide application. (Clark et al. 1993). Under section 404 of Occurrences of Lupinus sulphureus ssp. The degree to which habitat loss the Clean Water Act, the Corps regulates kincaidii, and Fender’s blue butterfly in threatens Fender’s blue butterfly, the discharge of fill into waters of the upland (non-wetland) areas receive no Lupinus sulphureus ssp. kincaidii, and United States, including navigable protection under section 404 of the Erigeron decumbens var. decumbens waters, wetlands (e.g., wet prairies), and Clean Water Act. becomes evident when the size of the other waters (33 CFR parts 320–330). populations is examined. Of the 51 sites The primary inadequacies in existing The Clean Water Act requires project occupied by L. sulphureus ssp. regulations pertain to populations of proponents to obtain a permit from the kincaidii, 40 consist of small area Fender’s blue butterfly, Lupinus Corps prior to undertaking many occurrences, less than 3.4 ha (8.3 ac) in sulphureus ssp. kincaidii, and Erigeron activities (e.g., grading, discharge of soil size. The Fender’s blue butterfly, decumbens var. decumbens that occur or other fill material, etc.) that would occupying a subset of the lupine sites, on private lands that currently have no result in the filling of wetlands subject shows a similar pattern with 23 of its 31 to the Corps’ jurisdiction. The Corps connection to Federal authority or populations found on parcels of 3.4 ha promulgated nationwide permit number funding. Privately owned lands where (8.3 ac) or less. All of the small site 26 (NWP 26) to address fill of isolated populations of these species occur occurrences of the Fender’s blue or headwater wetlands. Under the 1996 constitute a significant portion of the butterfly are likely to be extirpated reauthorized NWP 26 (61 FR 65873), range of these species and play a within the next five years because project proposals that involve the fill of substantial role in their continued habitat may not be large enough to wetlands less than one third of an acre existence. support viable populations. Of the 28 are considered authorized. Fill areas E. Other Natural or Manmade Factors sites occupied by E. decumbens var. between 0.33 acre and 1 acre require Affecting its Continued Existence decumbens, 17 are less than 3.4 ha (8.3 only notification to the Corps. When ac) in size. These small occurrences placement of fill would adversely Larger sites (greater than 10 ha (25 account for a majority of the known modify between 1 to 3 acres of wetland, ac)) currently support relatively stable populations for all three species. the Corps circulates a predischarge populations of Fender’s blue butterflies, Given the impact of such habitat notification to the Service and other Lupinus sulphureus ssp. kincaidii, and losses on these small habitat patches, interested parties for comment to Erigeron decumbens var. decumbens the extirpation of most of the small determine whether or not an individual and provide the greatest potential for Fender’s blue butterfly populations is permit should be required for the long-term persistence of the species if anticipated within five years. Lupinus proposed fill activity and associated their current condition can be sustained sulphureus ssp. kincaidii may survive impacts. or improved. However, few of these for a time in these small sites; Individual Corps permits are required larger sites are secure from threats due nonetheless, extirpation of L. for discharge of material that would fill to habitat loss. The only large site sulphureus ssp. kincaidii at most, if not or adversely modify greater than 3 acres occupied by each of the species that is all, of their 40 small sites is also of wetlands. The review process for considered relatively secure from anticipated in the future. Similarly, individual permits is more rigorous than habitat loss is Baskett Slough National these habitat losses are expected to also for nationwide permits. Unlike Wildlife Refuge in Polk County, cause extirpation of the 17 small nationwide permits, an analysis of although the habitat condition is populations of Erigeron decumbens var. cumulative wetland impacts is required declining from invasion by alien plants decumbens. Should these smaller for individual permit applications. (Hammond 1996, Hammond 1994, populations disappear, only 8 habitat Resulting permits may include special Hammond and Wilson 1993). The two areas of Fender’s blue butterfly (a 75 conditions that require potential remaining large butterfly sites (Coburg percent reduction in number of sites), avoidance or mitigation for Ridge area—1 and 2, and McDonald 11 habitat areas of L. sulphureus ssp. environmental impacts. On nationwide State Forest 1) and the one remaining kincaidii (a 78 percent reduction in permits, the Corps has discretionary large lupine site (McDonald State Forest number of sites), and 11 habitat areas of authority to instead require an 1) are not considered secure because E. decumbens var. decumbens (a 61 individual permit if the Corps believes these sites face loss or degradation of percent reduction of sites) will remain. that resources are sufficiently important, habitat through adjacent silviculture The importance of these sites, regardless of the wetland’s size. In operations, ecological succession to particularly for the Fender’s blue practice, however, the Corps generally shrub and forest, and competition from butterfly, lies in their potential to serve does not require an individual permit alien species (Hammond 1994, as corridors among larger, neighboring when a project qualifies for a Kuykendall and Kaye 1993a). populations. The loss of these sites and 3872 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules the loss of accompanying potential erosion (Meincke 1980). A natural expansion and invasion due to a lack of habitat, severely compromises the change in a waterway course was disturbance that disrupts successional ability of any of the species to disperse apparently responsible. Shultz (1996) progress. Otherwise secure habitat on from larger sites (Hammond and Wilson stated that large fluctuations in Corps lands is being heavily invaded by 1993, Schultz 1996). Larger populations populations evident in her 3-year study the alien plant Arrhenatherum elatius, will remain isolated, with no from 1993 to 1995 indicate that Fender’s and the butterfly population is opportunities for migration and/or blue butterfly populations are strongly alarmingly small (Schultz 1996). Prime recolonization if local conditions influenced by random variation in habitat occupied by Erigeron become unfavorable. Thus, the status of weather conditions from year to year; decumbens var. decumbens at Baskett the species as a whole declines. these large fluctuations make Fender’s Butte is rapidly being overgrown with A less visible threat to the smaller blue butterfly extremely susceptible to alien grass and trees (Hammond 1996). occurrences is the decrease in vigor and loss of habitat and host plants due to About 25 percent of the large Coburg viability experienced by populations of human-caused events or invasive alien Ridge site occupied by Fender’s blue few individuals. For the Fender’s blue plants. butterfly and Lupinus sulphureus ssp. butterfly, small numbers and localized A serious long-term threat to all kincaidii is threatened by the profuse populations increase the risk of loss Fender’s blue butterfly, Lupinus shrub growth of Cytisus scoparius through random genetic or demographic sulphureus ssp. kincaidii, and Erigeron (Hammond 1996). Regardless of the size factors. (Gilpin and Soule’ 1986, decumbens var. decumbens occurrences of the site, invasion by non-native Kuykendall and Kaye 1993b, Lacy is the change in community structure plants is a threat at all of the sites 1992). Eighteen of the 31 Fender’s blue due to succession. Currently, succession occupied by any of the three species butterfly sites contain 50 or fewer has been documented for 70 of the 84 proposed for listing in this rule. individuals. The threat of extinction due relic prairie sites occupied by one or The application of pesticides and to naturally occurring genetic or more of these species proposed for biological control agents to control demographic events can play a listing. Invasion by alien plant species insect pests, such as gypsy moths, is significant role in the instability of the has been documented at 36 of these 84 also a threat to Fender’s blue butterfly. species as a whole. The isolation of prairie sites. The natural transition of Although the sensitivity of Fender’s these small populations due to habitat grassland to forest in the absence of blue butterfly larvae to specific fragmentation precludes recolonization disturbance means that prairie sites left insecticides is not known, the potential from larger populations and could result unmanaged likely will eventually be result from use of gypsy moth control in the permanent loss of occurrences lost (Clark et al. 1993; Franklin and agents on habitats occupied by the once populations fall below a critical Dyrness 1973; Hammond and Wilson Fender’s blue butterfly should not be level. 1993; Johannsesen et al. 1971; dismissed (Hammond 1994). The use of This pattern of extinction and Kuykendall and Kaye 1993). In addition, microbial insecticides, such as Bacillus recolonization of connected colonies of the presence of tall, fast-growing alien thuringiensis (Bt) has been shown to butterflies has been disrupted by the species speeds the conversion of open have significant residual toxic impacts extensive fragmentation of remaining upland prairie to dense, rank grasslands on native butterflies under field habitat and the disruption of the and shrublands. Invasive woody species conditions even with heavy rain and disturbance regimes that have of concern include the alien plants ultraviolet light exposure (Schriber and maintained them. The remnant Rubus discolor (Himalayan blackberry) Gage 1995). populations, now small in numbers, are and Cytisus scoparius (Scotch broom), Taken together as a category, other either unconnected or exchange and the native Toxicodendron natural and manmade factors have a individuals to a very limited degree. diversiloba (poison oak). Non-native profound effect on the remaining With their limited dispersal abilities, grass species aggressive enough to populations of Fender’s blue butterflies, low numbers and dwindling habitat, a suppress L. sulphureus ssp. kincaidii Lupinus sulphureus ssp. kincaidii, and majority of the remaining populations of and E. decumbens var. decumbens Erigeron decumbens var. decumbens. Fender’s blue butterfly likely face include Holcus lanatus (velvet grass), Nearly all of the populations are permanent extirpation. The small Dactylis glomerata (orchard grass), threatened by either alien species, population sizes at several sites pose Brachypodium sylvaticum (false-brome), successional transition of habitat, or their own threat to the survival of and Arrhenatherum elatius (tall oat- demographic and genetic factors as a Fender’s blue butterfly as demographic grass) (Hammond 1996). result of small population size. and genetic problems can push a The degree of the threat of succession Populations of Fender’s blue butterfly at population to extinction (Hammond and at roadside sites varies considerably all of the 31 sites are currently Wilson 1993). depending on the vegetation control threatened by one of these factors. The Random human and environmental employed by each County at each site. same holds true for all 28 sites of E. events may also affect the small Fender’s blue butterfly populations at decumbens var. decumbens and for all populations of these species and cause small roadside sites are weak (low 51 sites of L. sulphureus ssp. kincaidii. future extirpations. The impact of such numbers) and are close to extinction Although progressing on a slower time events are magnified by the size of the either through degradation of habitat scale, the encroachment of alien plants, populations. It is much easier to cause from invasion of alien grasses, the successional advance of tree and the extirpation of a population succession by shrubs and trees, or shrub species and other naturally occupying a small area than one through development activities occurring random events will, if occupying a larger area. Due to the small (Hammond 1996). One roadside site at unchecked, lead to reductions in area occupied by many of the remaining Oak Ridge that was previously population size, reductions in populations, randomly occurring considered stable has declined since population viability and, ultimately, the natural events can play a role in 1992, and is being invaded by large extinction of these native prairie extirpation. One small population of thickets of Rubus ssp. (blackberry) and species. Erigeron decumbens var. decumbens Cytisus scoparius (Hammond 1996). The Service has carefully assessed the previously found on Finley National Non-roadside sites in general face the best scientific and commercial Wildlife Refuge was recently lost due to greatest threat from succession/weed information available regarding the past, Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3873 present, and future threats faced by var. decumbens, Lupinus sulphureus the value and demand for specimens. these species in determining to propose ssp. kincaidii, or Fender’s blue butterfly Trade of illegally captured or held this rule. Threats to Fender’s blue at this time. Service regulations (50 CFR butterflies and other invertebrates has butterfly are more imminent than 424.12(a)(1)) state that the designation lead to several arrests and convictions threats to Lupinus sulphureus kincaidii of critical habitat is not prudent when for violations of the Lacey Act since the butterfly, with its biology and one or both of the following situations (Claiborne 1997; Hoekwater 1997; shorter life span, will exhibit more rapid exist—(1) The species is threatened by Mendoza 1995; U. S. Department of declines in numbers and in the face of taking or other human activity, and Justice 1993, 1994, 1995a, 1995b; threats will be extirpated more quickly identification of critical habitat can be Williams 1996). However, with the at any one location. Because of its expected to increase the degree of threat designation of critical habitat, precise longer life span, small numbers of L. to the species or (2) such designation of pinpointing of localities would result sulphureus ssp. kincaidii plants are critical habitat would not be beneficial from publication of critical habitat likely to persist longer in any given to the species. descriptions and maps in the Federal habitat area than are small numbers of The listing of Lupinus sulphureus ssp. Register. Since the access to many sites butterflies. Threats to Erigeron kincaidii and Erigeron decumbens var. is not actively protected, managed or decumbens var. decumbens are also decumbens in and of itself contributes monitored closely enough to prevent more imminent than threats to L. to a certain level of risk from over- trespass or restrict access, the disclosure sulphureus ssp. kincaidii because of the collection. This is because listing of critical location information on rare fewer populations of E. decumbens var. acknowledges the rarity of a species, species increases collection activities on decumbens. Secondly, many of the which then creates a certain level of the animal, even for butterflies that have populations of E. decumbens var. demand by collectors. Easily accessible been designated as endangered or decumbens grow along roadsides roadside populations with few threatened species. adjacent to agricultural activities individuals would be particularly Since many of the extant populations (especially grass seed farms) where susceptible to indiscriminate collection of Fender’s blue butterfly are comprised herbicide spraying to create bare soil is by persons interested in rare plants and/ of a small number of individuals (less common practice. Based on this or butterflies if not for the fact that than a few hundred individuals, and at evaluation, Fender’s blue butterfly and location information is not readily seven sites only five individuals), one E. decumbens var. decumbens are in available. person seeking to augment a private or danger of extinction throughout all or a Designation of critical habitat for scientific collection could extirpate a significant portion of their respective Lupinus sulphureus ssp. kincaidii, population with the removal of a few ranges, while L. sulphureus ssp. Erigeron decumbens var. decumbens, individuals. Several populations are kincaidii is likely to become endangered and Fender’s blue butterfly is not along roadsides, which make them within the foreseeable future. Therefore, considered prudent, because the particularly accessible. Therefore, the Service proposes to list Fender’s disclosure of precise maps and designation of critical habitat would blue butterfly (Icaricia icarioides descriptions of critical habitat in the increase the vulnerability of smaller fenderi) and E. decumbens var. Federal Register would likely subject sites, thereby increasing the risk of decumbens (Willamette daisy) as these populations to loss of individuals extinction at these smaller sites from endangered and to list L. sulphureus and over-collection, resulting in the collection. ssp. kincaidii (Kincaid’s lupine) as further decline of the species. The In addition to the threat of over- threatened. Fender’s blue butterfly is also collection, critical habitat designation vulnerable to acts of vandalism, which may also make Fender’s blue butterfly Critical Habitat may damage or eliminate populations of and its habitat prone to visitation and Critical habitat is defined in section this animal. impact by non-collectors curious about 3(5)(A) of the Act as (i) the specific areas In the case of Fender’s blue butterfly, any of the three species discussed in within the geographical area occupied both criteria apply. As discussed under this proposed rule. Curiosity seekers by a species, at the time it is listed in ‘‘Summary of Factors Affecting the may inadvertently trample host plants accordance with the Act, on which are Species,’’ this animal and its habitat are and crush eggs, larvae or adult found those physical or biological vulnerable to several activities, butterflies. Fender’s blue butterfly co- features (i) essential to the conservation especially the removal of specimens for occurs with Lupinus sulphureus ssp. of the species and (II) that may require scientific or personal collections. The kincaidii at 14 sites and also occurs with special management considerations or Service is concerned about the impacts Erigeron decumbens var. decumbens at protection; and (ii) specific areas of the illicit commercial trade on 1 site. Publication of critical habitat outside the geographical area occupied Fender’s blue butterfly. Specimens of descriptions and maps for L. sulphureus by a species at the time it is listed, upon this species are known to have recently ssp. kincaidii, E. decumbens var. a determination that such areas are been offered for trade by a butterfly decumbens, or Fender’s blue butterfly essential for the conservation of the collector. Unauthorized collecting is an would place all three species at an species. The term ‘‘conservation’’ means activity that can be difficult to control increased risk of harm from trampling or the use of all methods and procedures because it can be done in an habitat destruction. For example, in the needed to bring the species to the point inconspicuous and discreet manner. spring of 1997, naturalists intent on at which listing under the Act is no The international trade of butterflies, observing the endangered Palos Verdes longer necessary. including listed species, is an blue butterfly (Glaucopsyche lygdamus Section 4(a)(3) of the Act, as established practice and the value of a palosverdesensis) trampled and amended, requires that to the maximum specimen is commensurate with the damaged its habitat in their quest to extent prudent and determinable, the quality of the specimen and its rarity. obtain photographs of the animal (C. Secretary propose critical habitat at the High prices for prized specimens can Nagano, pers. obs. 1997). time a species is determined to be provide an incentive for illegal take and Designation of critical habitat could threatened or endangered. The Service trade. Listing in itself increases the also increase the vulnerability of finds that designation of critical habitat publicity and interest in a species’ Fender’s blue butterfly habitat to is not prudent for Erigeron decumbens rarity, and thus may directly increase intentional destruction by landowners 3874 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules who do not want a protected species on second largest is at Willow Creek Main Aside from consideration under their property. In the mid-1980’s, a managed by TNC (764 individuals on section 7, the Act does not provide any landowner disked the habitat of the now 3.8 ha). The largest population of additional protection to lands endangered Quino checkerspot butterfly Erigeron decumbens ssp. decumbens designated as critical habitat. (Euphydryas editha quino) and occurs at Willow Creek Preserve Designating critical habitat does not eliminated the species from the site after managed by TNC (2,080 individual create a management plan for the areas being informed about its presence (C. plants on 20.3 ha) and the second and where the listed species occurs; does Nagano, pers. obs.). third occur on Corps land (Fisher Butte not establish numerical population Furthermore, the designation of has 1,500 plants on 20.3 ha and Fisher goals or prescribe specific management critical habitat provides limited benefit Butte Dike has 1,000 plants on 4.1 ha). actions (inside or outside of critical in addition to the protection and All of the large populations of Lupinus habitat); and does not have a direct awareness that these three taxa will sulphureus ssp. kincaidii occur on effect on areas not designated as critical receive by virtue of their listing. Section private lands and designating critical habitat. 7(a)(2) of the Act requires Federal habitat for L. sulphureus ssp. kincaidii Critical habitat designation would agencies in consultation with the would reveal locations of the Fender’s provide limited benefit on private lands. Service, to ensure that any action blue butterfly. The primary reasons are that critical authorized, funded, or carried out by The BLM, FS, Corps, and the Service habitat designation provides protection such agency, does not jeopardize the are aware of the presence and locations only on Federal lands or on private continued existence of a federally listed of the three species on their properties. lands if there is Federal involvement species, or does not destroy or adversely The Corps and Service are managing the through authorization or funding of, or modify designated critical habitat. The lands that are under their jurisdiction to participation in, a project or activity. In occurrences of these three species are so restore habitat for the three species and other words, a designation of critical closely associated to their habitat year- are monitoring the existing populations. habitat on private lands does not round that any designated critical Extant populations of Fender’s blue compel or require private landowners to undertake recovery or active habitat areas would overlap areas of butterfly and Lupinus sulphureus ssp. species’ presence and occurrence. management for the species. Also, kincaidii occur on State lands managed Therefore, when a species is listed, an Federal actions on private lands are by ODOT and Oregon State University analysis to determine jeopardy under likely to be limited, but nevertheless (OSU) College of Forestry. The ODOT is section 7(a)(2) would consider take would require section 7 consultation if aware of locations of Fender’s blue associated with habitat impacts. Such such actions may affect listed species. In butterfly, L. sulfureus ssp. kincaidii, and an analysis would closely parallel any addition, private landowners with Erigeron decumbens ssp. decumbens analysis of habitat impacts conducted to sizeable or significant populations of the sites, and are currently managing these determine adverse modification of Fender’s blue butterfly, Lupinus sites to avoid impacts from State road critical habitat. As a result, a sulfureus ssp. kincaidii, and Erigeron maintenance activities. The ODOT is a determination of adverse modification decumbens var. decumbens are aware of of critical habitat for Fender’s blue non-Federal representative of the the populations of the species on their butterfly or Lupinus sulfureus ssp. Federal Highway Administration (FHA) lands. Landowners and managers of kincaidii or Erigeron decumbens ssp. for the purposes of section 7 smaller sites will be notified with decumbens is highly likely to be consultation. Therefore, any ODOT publication of the proposed rule. In the accompanied with a determination of activities funded by the FHA that may case of The Nature Conservancy, jeopardy. Listing of these species will affect listed species would require management and conservation activities ensure that section 7 consultation section 7 consultation. The OSU have been implemented. occurs and potential impacts to the Department of Botany and Plant Smaller roadside sites may benefit species and its habitat are considered Pathology has been working from critical habitat designation by for any Federal action that may affect cooperatively with OSU College of increasing awareness of locations to these species. In the case of Fender’s Forestry to conserve habitats at County road maintenance crews. blue butterfly, the listing of L. sulfureus McDonald State Forest where L. However, the benefit of critical habitat ssp. kincaidii will also ensure that sulphureus ssp. kincaidii and Fender’s designation of these smaller sites would Federal agencies consult even when blue butterfly occur in butterfly be small to negligible when compared to Federal actions may affect unoccupied meadows on OSU lands (Mark Wilson, the increased risks and vulnerability potentially suitable habitat for the pers. comm. 1997). these smaller sites may face from butterfly. Other Federal agencies will be collection or vandalism with disclosure It is the intent of critical habitat notified with this proposed rule. of their locations. designation to provide additional Therefore, agencies such as the In summary, the Service believes that benefits to the species through increased Department of Housing and Urban any benefit potentially provided by awareness and management activities. Development (HUD) would be subject to designation of critical habitat for Benefits resulting from designation of section 7 consultation under the Act. Fender’s blue butterfly, Lupinus critical habitat are anticipated to be Agencies, such as HUD, with any sulphureus ssp. kincaidii, or Erigeron limited because Federal, State, and actions that may impact listed species decumbens var. decumbens would be conservation group land managers with whether occurring on Federal, State, or outweighed by the increase in threats to moderate and larger extant populations private lands, would be subject to the species and their habitat from illegal of Fender’s blue butterfly and Erigeron section 7 consultation under the Act. collecting and vandalism caused by decumbens ssp. decumbens have known Since activities on Federal lands and such designation. Therefore, the Service of the occurrence of these species and federally funded activities would be has determined that designation of have initiated management activities in subject to section 7 consultation and critical habitat for Fender’s blue several cases. The largest populations of recovery planning with listing, butterfly, Lupinus sulphureus ssp. the Fender’s blue butterfly occur at protection of habitat will be addressed kincaidii, or Erigeron decumbens var. Baskett Slough National Wildlife Refuge through the consultation and recovery decumbens is not prudent. Protection of (1,400 individuals on 50 ha) and the processes. Fender’s blue butterfly habitat, Lupinus Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3875 sulphureus ssp. kincaidii, and Erigeron HUD is involved in the issuance of Lupinus sulphureus ssp. kincaidii and decumbens var. decumbens will be housing loans. The BLM, FS, and Corps Erigeron decumbens var. decumbens are addressed through the section 7 manage lands known to contain extant not common in cultivation or in the consultation process and through populations of the three species in this wild. recovery actions. proposed rule. In all of these cases, the The Act and implementing consultation and conservation regulations also set forth a series of Available Conservation Measures requirements placed upon Federal general prohibitions and exceptions that Conservation measures provided to agencies by the Act would be initiated. apply to all endangered wildlife. These species listed as endangered or Furthermore, opportunities for land prohibitions, codified at 50 CFR 17.21, threatened under the Act include acquisition, conservation agreements in part, make it illegal for any person recognition, recovery actions, and other recovery strategies would be subject to the jurisdiction of the United requirements for Federal protection, and bolstered by listing these species as States to take (includes harass, harm, prohibitions against certain activities. endangered or threatened. pursue, hunt, shoot, wound, kill, trap, Recognition through listing encourages The Act and its implementing capture, collect; or to attempt any of and results in conservation actions by regulations set forth a series of general these), import or export, ship in Federal, State, and private agencies, prohibitions and exceptions that apply interstate commerce in the course of groups, and individuals. The Act to all endangered and threatened plants. commercial activity, or sell or offer for provides for possible land acquisition All prohibitions of section 9(a)(2) of the sale in interstate or foreign commerce and cooperation with the States and Act, implemented by 50 CFR 17.61 for any listed species. It also is illegal to requires that recovery actions be carried endangered plants and 50 CFR 17.71 for possess, sell, deliver, carry, transport, or out for all listed species. The protection threatened plants, apply. These ship any such wildlife that has been required of Federal agencies and the prohibitions, in part, make it illegal for taken illegally. Certain exceptions apply prohibitions against taking and harm of any person subject to the jurisdiction of to agents of the Service and State animals and certain activities involving the United States to import or export, conservation agencies. listed plants are discussed, in part, transport in interstate or foreign Permits may be issued to carry out below. commerce in the course of a commercial otherwise prohibited activities Section 7(a) of the Act, as amended, activity, sell or offer for sale in interstate involving endangered wildlife under requires Federal agencies to evaluate or foreign commerce, or remove and certain circumstances. Regulations their actions with respect to any species reduce the species to possession from governing permits are codified at 50 that is proposed or listed as endangered areas under Federal jurisdiction. In CFR 17.22 and 17.23. Such permits are or threatened and with respect to its addition, for plants listed as available for scientific purposes, to critical habitat, if any is being endangered, the Act prohibits the enhance the propagation or survival of designated. Regulations implementing malicious damage or destruction of the species, and/or for incidental take in this interagency cooperation provision areas under Federal jurisdiction and the connection with otherwise lawful of the Act are codified at 50 CFR Part removal, cutting, digging up, or activities. 402. Section 7(a)(4) requires Federal damaging or destroying of such plants It is the policy of the Service, as agencies to confer informally with the in knowing violation of any State law or published in the Federal Register on Service on any action that is likely to regulation, including State criminal July 1, 1994 (59 FR 34272), to identify jeopardize the continued existence of a trespass law (see 16 U.S.C. § 1538 to the maximum extent practicable at proposed species or result in (a)(2)(B). Section 4(d) of the Act allows the time a species is listed, those destruction or adverse modification of for the provision of such protection to activities that would or would not proposed critical habitat. If a species is threatened species through regulation. constitute a violation of section 9 of the listed subsequently, section 7(a)(2) This protection may apply to Lupinus Act. The intent of this policy is to requires Federal agencies to ensure that sulphureus ssp. kincaidii in the future if increase public awareness of the effect activities they authorize, fund, or carry a special regulation is promulgated after of the listing on proposed and ongoing out are not likely to jeopardize the opportunity for public notice and activities within the range of a species. continued existence of such a species or comment. Seeds from cultivated Erigeron decumbens var. decumbens, to destroy or adversely modify its specimens of threatened plants are and Lupinus sulphureus ssp. kincaidii critical habitat. If a Federal action is exempt from these prohibitions are known to occur on Federal lands likely to adversely affect a listed species provided that their containers are under the jurisdiction of the Service, or its critical habitat, the responsible marked ‘‘Of Cultivated Origin.’’ Certain Corps, BLM, or FS. In the event of Federal agency must enter into formal exceptions to the prohibitions apply to listing, occurrences of these species on consultation with the Service. agents of the Service and State Federal lands would be protected from As a result of the occupation of conservation agencies. collection, damage or destruction under roadside habitat by Erigeron decumbens The Act and 50 CFR 17.62, 17.63, and section 9 of the Act. State law provides var. decumbens, Lupinus sulphureus 17.72 also provide for the issuance of some protection to populations on State- ssp. kincaidii, and Fender’s blue permits to carry out otherwise owned lands as discussed previously. In butterfly, the FHA would become prohibited activities involving appropriate cases, collection of these involved with these species in the event endangered and threatened plants under species could be allowed through the of full or partial funding of state certain circumstances. Such permits are issuance of a Federal endangered highway maintenance by the Federal available for scientific purposes and to species permit. The Service is not aware government. Such maintenance enhance the propagation or survival of of any otherwise lawful activities being activities would be subject to review the species. For threatened plants, conducted or proposed by the public under the Act. Additionally, sites permits also are available for botanical that will be affected by this listing and supporting occurrences of E. decumbens or horticultural exhibition, educational result in a violation of Section 9. var. decumbens, L. sulphureus ssp. purposes, or special purposes consistent As a listed wildlife species, Fender’s kincaidii, and Fender’s blue butterfly on with the purposes of the Act. It is blue butterfly would receive more private holdings would be subject to anticipated that few trade permits extensive protection under the Act than review under section 7 of the Act if would ever be sought or issued because described for the plant species above. 3876 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

Section 9 prohibits the take of any listed Questions regarding whether specific National Environmental Policy Act wildlife species by any person subject to activities will constitute a violation of the jurisdiction of the United States. section 9 should be directed to the State The Fish and Wildlife Service has The Service believes that, based on the Supervisor of the Service’s Oregon State determined that Environmental Assessments and Environmental Impact best available information, the following Office (see ADDRESSES section). Requests actions would not be violations of for copies of the regulations concerning Statements, as defined under the section 9: listed plant and animal species and authority of the National Environmental (1) Possession, delivery, or movement, general inquiries regarding prohibitions Policy Act of 1969, need not be including interstate transport and and permits may be addressed to the prepared in connection with regulations import or export from the United States, U.S. Fish and Wildlife Service, adopted pursuant to section 4(a) of the involving no commercial activity, of Endangered Species Permits, 911 N.E. Endangered Species Act of 1973, as dead specimens of Fender’s blue 11th Avenue, Portland, Oregon 97232– amended. A notice outlining the butterfly that were collected prior to the 4181 (telephone 503–231–2063; FAX Service’s reasons for this determination date of publication in the Federal 503–231–6243). was published in the Federal Register Register of a final regulation adding this on October 25, 1983 (48 FR 49244). Public Comments Solicited taxon to the list of endangered species; Required Determinations (2) Actions that may affect Fender’s The Service intends that any final This rule does not contain collections blue butterfly and are authorized, action resulting from this proposal will of information that require approval by funded, or carried out by a Federal be as accurate and as effective as the Office of Management and Budget agency when the action is conducted in possible. Therefore, comments or under 44 U.S.C. 3501 et seq. accordance with section 7 of the Act; suggestions from the public, other (3) Land actions or management concerned governmental agencies, the References Cited carried out under a habitat conservation scientific community, industry, or any A complete list of all references cited plan approved by the Service pursuant other interested party concerning this herein, as well as others, is available to section 10(a)(1)(B) of the Act, or an proposed rule are hereby solicited. upon request from the Oregon State approved conservation agreement; and, Comments particularly are sought (4) Scientific research carried out Office (see ADDRESSES above). concerning: under a recovery permit issued by the Author. The primary author of this Service pursuant to section 10(a)(1)(A) (1) Biological, commercial trade, or proposed rule is Richard VanBuskirk, of the Act. other relevant data concerning any Fish and Wildlife Biologist (see threat (or lack thereof) to these species; Potential activities involving Fender’s ADDRESSEES section). Assistance with blue butterfly that the Service will likely (2) The location of any additional the portions of this proposed rule consider a violation of section 9 populations of these species and the dealing with Fender’s blue butterfly include, but are not limited to, the reasons why any habitat should or were completed by Chris Nagano, staff following: should not be determined to be critical entomologist, U.S. Fish and Wildlife (1) Take of Fender’s blue butterfly habitat pursuant to section 4 of the Act; Service, Carlsbad Field Office, 2730 without a recovery permit pursuant to (3) Additional information concerning Loker Avenue West, Carlsbad, California section 10(a)(1)A) or an incidental take 92008. permit pursuant to section 10(a)(1)(B) of the range, distribution, and population the Act (this includes harassing, size of these species; and List of Subjects in 50 CFR Part 17 harming, pursuing, hunting, shooting, (4) Current or planned activities in the Endangered and threatened species, wounding, killing, trapping, capturing, subject area and their possible impacts Exports, Imports, Reporting and or collecting, or attempting any of these on Erigeron decumbens var. decumbens, recordkeeping requirements, actions); Lupinus sulphureus ssp. kincaidii, and (2) Possess, sell, deliver, carry, Fender’s blue butterfly. Transportation. transport, or ship illegally taken Final promulgation of the regulation Proposed Regulation Promulgation specimens of Fender’s blue butterfly, on these species will take into except for properly documented antique Accordingly, the Service hereby consideration the comments and any proposes to amend part 17, subchapter specimens of this taxon at least 100 additional information received by the years old, as defined by section 10(h)(1) B of chapter I, title 50 of the Code of Service. Such communications may lead Federal Regulations, as set forth below: of the Act; to a final regulation that differs from (3) The unauthorized release of this proposal. PART 17Ð[AMENDED] biological control agents that attack, damage, or kill any stage of this taxa; The Endangered Species Act provides for one or more public hearings on this 1. The authority citation for part 17 (4) The removal or destruction of the continues to read as follows: foodplants being utilized by Fender’s proposal, if requested. Requests must be blue butterfly, defined as Lupinus received within 45 days of the date of Authority: 16 U.S.C. 1361–1407; 16 U.S.C. sulphureus ssp. kincaidii, L. albicaulis, publication of the proposal in the 1531–1544; 16 U.S.C. 4201–4245; Pub. L. 99– 625, 100 Stat. 3500, unless otherwise noted. and L. laxiflorus; and, Federal Register. Such requests must be (5) Destruction or alteration of made in writing and addressed to State 2. Amend section 17.11(h) by adding Fender’s blue butterfly habitat by Supervisor, U.S. Fish and Wildlife the following, in alphabetical order, grading, leveling, plowing, mowing, Service, Oregon State Office (see under INSECTS, to the List of burning, herbicide or pesticide spraying, ADDRESSES above). Endangered and Threatened Wildlife to intensively grazing, or otherwise Required Determinations read as follows: disturbing grasslands that result in the death or injury of adult butterflies and/ This rule does not contain collections § 17.11 Endangered and threatened or their larvae or eggs, or that impair the of information that require approval by wildlife. species’ essential breeding, foraging, or the Office of Management and Budget * * * * * sheltering. under 44 U.S.C. 3501 et seq. (h) * * * Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3877

Species Vertebrate popu- Historic range lation where endan- Status When Critical Special Common name Scientific name gered or threatened listed habitat rules

******* INSECTS

******* Fender's blue butter- Icaricia icarioides U.S.A. (OR) ...... NA ...... E ...... NA NA fly. fenderi.

*******

3. Amend section 17.12(h) by adding of Endangered and Threatened Plants to § 17.12 Endangered and threatened plants. the following, in alphabetical order, read as follows: * * * * * under FLOWERING PLANTS, to the List (h) * * *

Species Historic range Family Status When listed Critical Special Scientific name Common name habitat rules

******* FLOWERING PLANTS

******* Erigeron decumbens Willamette daisy ...... U.S.A. (OR) ...... Asteraceae ...... E ...... NA NA var. decumbens.

******* Lupinus sulphureus Kincaid's lupine ...... U.S.A. (OR, WA) ..... Fabaceae ...... T ...... NA NA ssp. kincaidii.

*******

Dated: December 30, 1997. rat has been reduced by approximately above address. The public hearing will Jamie Rappaport Clark, 96 percent due to agricultural and urban be held at the San Bernardino Hilton, Director, Fish and Wildlife Service. development. Of the remaining 285 E. Hospitality Lane, San [FR Doc. 98–1851 Filed 1–26–98; 8:45 am] occupied habitat, a minimum of 90 Bernardino, California. BILLING CODE 4310±55±P percent is threatened by habitat loss, FOR FURTHER INFORMATION CONTACT: degradation, and fragmentation due to Field Supervisor, Carlsbad Field Office, sand and gravel mining operations, at the address listed above (telephone DEPARTMENT OF THE INTERIOR flood control projects, and urban 760/431–9440). development. In addition, all of the Fish and Wildlife Service remaining populations of San SUPPLEMENTARY INFORMATION: Bernardino kangaroo rat are threatened Background 50 CFR Part 17 by seasonal flood events due to current For a thorough discussion of RIN 1018±AE59 restriction of the subspecies to these active flood plain habitats. Additional biological information, previous Federal action, a summary of the factors Endangered and Threatened Wildlife data and information on the status of affecting the species, the reasons why and Plants; Proposed Rule to List the this animal, which may assist the critical habitat is not being proposed, San Bernardino Kangaroo Rat as Service in making a final decision on and conservation measures available to Endangered; and Notice of Public this proposed action, is solicited. listed and proposed species, consult the Hearing DATES: Comments from all interested emergency rule on the San Bernardino parties must be received by March 30, AGENCY: Fish and Wildlife Service, kangaroo rat published in this same 1998. A public hearing has been Interior. Federal Register, separate part. scheduled for Tuesday, March 3, 1998, ACTION: Proposed rule. from 2–4 P.M. and 6–8 P.M. Public Comments Solicited SUMMARY: The U.S. Fish and Wildlife ADDRESSES: Comments and materials The Service intends that any final Service (Service) proposes to make the concerning this proposal should be action resulting from this proposal will provisions of the emergency rule listing submitted to the Field Supervisor, U.S. be as accurate and as effective as the San Bernardino kangaroo rat Fish and Wildlife Service, Carlsbad possible. Therefore, comments or (Dipodomys merriami parvus) as an Field Office, 2730 Loker Avenue West, suggestions from the public, other endangered species pursuant to the Carlsbad, California 92008. Comments concerned governmental agencies, the Endangered Species Act of 1973, as and materials received will be available scientific community, industry, or any amended (Act), permanent. The historic for public inspection, by appointment, other interested party concerning this range of the San Bernardino kangaroo during normal business hours at the proposed rule are hereby solicited. 3878 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

Comments particularly are sought the number of parties present at the List of Subjects in 50 CFR Part 17 concerning: hearing necessitates such a limitation. (1) Biological, commercial trade, or There are no limits to the lengths of Endangered and threatened species, other relevant data concerning any written comments or materials Exports, Imports, Reporting and threat (or lack thereof) to this presented at the hearing or mailed to the recordkeeping requirements, subspecies; Service. Written comments carry the Transportation. (2) The location of any additional same weight as oral comments. The Proposed Regulation Promulgation populations of this subspecies; comment period closes on March 30, (3) Additional information concerning 1998. Written comments should be Accordingly, the Service hereby the range, distribution, and population submitted to the Service Office listed in proposes to amend part 17, subchapter size of this subspecies; and the ADDRESSES section. (4) Current or planned activities in the B of chapter I, title 50 of the Code of subject area and their possible impacts National Environmental Policy Act Federal Regulations, as set forth below: on this subspecies. The Fish and Wildlife Service has PART 17Ð[AMENDED] Any final decision on this proposal determined that an Environmental will take into consideration the Assessment or Environmental Impact 1. The authority citation for part 17 comments and any additional Statement, as defined under the continues to read as follows: information received by the Service, and authority of the National Environmental such communications may lead to a Policy Act of 1969, need not be Authority: 16 U.S.C. 1361–1407; 16 U.S.C. final regulation that differs from this prepared in connection with regulations 1531–1544; 16 U.S.C. 4201–4245; Pub. L. 99– proposal. adopted pursuant to section (4)(a) of the 625, 100 Stat. 3500; unless otherwise noted. The Endangered Species Act provides Endangered Species Act of 1973, as 2. Amend § 17.11(h) by adding the for a public hearing on this proposal, if amended. A notice outlining the following, in alphabetical order under requested. In anticipation of public Service’s reasons for this determination interest, the Service has scheduled a was published in the Federal Register Mammals, to the List of Endangered and public hearing on Tuesday, March 3, on October 25, 1983 (48 FR 49244). Threatened Wildlife to read as follows: 1998, at the San Bernardino Hilton. Author § 17.11 Endangered and threatened Parties wishing to make statements for wildlife. the record should bring a copy of their The primary author of this proposed statement to the hearing. Oral rule is Arthur Davenport of the Carlsbad * * * * * statements may be limited in length if Field Office (see ADDRESSES section). (h) * * *

Species Vertebrate popu- Historic range lation where endan- Status When listed Critical Special Common name Scientific name gered or threatened habitat rules

MAMMALS

******* Kangaroo rat, San Dipodomys merriami U.S.A. (CA) ...... Entire ...... E 631,ll NA NA Bernardino. parvus.

*******

Dated: January 20, 1998. Jamie Rappaport Clark, Director, Fish and Wildlife Service. [FR Doc. 98–2010 Filed 1–26–98; 8:45 am] BILLING CODE 4310±55±P 3879

Notices Federal Register Vol. 63, No. 17

Tuesday, January 27, 1998

This section of the FEDERAL REGISTER DEPARTMENT OF COMMERCE This meeting is scheduled for 7 p.m., on contains documents other than rules or Monday, February 23, 1998, at the proposed rules that are applicable to the Evaluation of Coastal Zone Department of Environmental Resources public. Notices of hearings and investigations, Management Program and National Auditorium, Tropical Medicine committee meetings, agency decisions and Estuarine Research Reserves Building, San Juan, Puerto Rico. rulings, delegations of authority, filing of The Jobos Bay National Estuarine petitions and applications and agency AGENCY: Office of Ocean and Coastal Research Reserve in Puerto Rico site statements of organization and functions are Resource Management, National Ocean visit will be from March 23–27, 1998. examples of documents appearing in this Service, National Oceanic and One public meeting will be held during section. Atmospheric Administration (NOAA), the week. This meeting is scheduled for DOC. 1:30 p.m., on Wednesday, March 25, DEPARTMENT OF AGRICULTURE ACTION: Notice of intent to evaluate. 1998, at the Reserve’s Visitor’s Center, SUMMARY: The NOAA Office of Ocean Road 705, Kilometer 2.3, Main Street, Forest Service and Coastal Resource Management Aguirre, Puerto Rico. (OCRM) announces its intent to evaluate The Virgin Islands Coastal Zone Intergovernmental Advisory the performance of the Commonwealth Management Program site visit will be Committee Subcommittee Meeting of the Northern Marianas Islands, Puerto from March 30–April 3, 1998. One Rico, Virgin Islands, and New York’s public meeting will be held during the AGENCY: Forest Service, USDA. Coastal Zone Management Programs and week. This meeting is scheduled for 7 ACTION: Notice of meeting. the Jobos Bay National Estuarine p.m., on Monday, March 30, 1998, at the Research Reserve in Puerto Rico. Department of Planning and Natural Resources, Lower Level Conference SUMMARY: The Intergovernmental These evaluations will be conducted Room, St. Thomas, Virgin Islands. Advisory Committee will meet on pursuant to sections 312 and 315 of the The New York Coastal Zone February 5, 1998, at the Double Tree Coastal Zone Management Act of 1972 (CZMA), as amended. The CZMA Management Program site visit will be Hotel, Columbia River, Portland, from March 30–April 3, 1998. A public Oregon. The purpose of the meeting is requires a continuing review of the performance of states with respect to meeting will be held on Tuesday, March to continue discussions on the 31, 1998, from 7–9 p.m. at the implementation of the Northwest Forest coastal program or estuarine research reserve program implementation. Tonawanda City Hall in the City Plan. The meeting will begin at 9:15 Evaluation of Coastal Zone Management Council Chambers, 200 Niagara Street, a.m. and continue until 3:00 p.m. and Estuarine Research Reserve Tonawanda, NY. Agenda items to be discussed include, Programs require findings concerning The States will issue notice of the but are not limited to: review ongoing the extent to which a state has met the public meeting(s) in a local and potential activities for the coming national objectives, adhered to its newspaper(s) at least 45 days prior to year, and progress reports on the coastal program document or final the public meeting(s), and will issue scoping phase of the review of management plan approved by the other timely notices as appropriate. Northwest Forest Plan and the strategic Secretary of Commerce, and adhered to Copies of the State’s most recent research plan. The IAC meeting will be the terms of financial assistance awards performance reports, as well as OCRM’s open to the public and is fully funded under the CZMA. The notifications and supplemental request accessible for people with disabilities. evaluations will include a site visit, letters to the States, are available upon Interpreters are available upon request consideration of public comments, and request from OCRM. Written comments in advance. Written comments may be consultations with interested Federal, from interested parties regarding these submitted for the record at the meeting. State, and local agencies and members Programs are encouraged and will be Time will also be scheduled for oral of the public. Public meetings are held accepted until 15 days after the public public comments. Interested person are as part of the site visits. meeting. Please direct written comments to Vickie A. Allin, Chief, Policy encouraged to attend. Notice is hereby given of the dates of the site visits for the listed evaluations, Coordination Division (PCD), Office of FOR FURTHER INFORMATION CONTACT: and the dates, local times, and locations Ocean and Coastal Resource Questions regarding this meeting may of public meetings during the site visits. Management, NOS/NOAA, 1305 East- be directed to Don Knowles, Executive The Commonwealth of the Northern West Highway, Silver Spring, Maryland Director, Regional Ecosystem Office, 333 Marianas Islands Coastal Zone 20910. When the evaluation is SW 1st Avenue, P.O. Box 3623, Management Program site visit will be completed, OCRM will place a notice in the Federal Register announcing the Portland, OR 97208 (Phone: 503–808– from February 18–27, 1998. One public availability of the Final Evaluation 2180). meeting will be held during the week. This meeting is scheduled for 6:30 p.m., Findings. Dated: January 21, 1998. on Wednesday, February 25, 1998, at FOR FURTHER INFORMATION CONTACT: Donald R. Knowles, the Public Library Conference Room, Vickie A. Allin, Chief, Policy Designated Federal Official. Saipan. Coordination Division, Office of Ocean [FR Doc. 98–1880 Filed 1–26–98; 8:45 am] The Puerto Rico Coastal Zone and Coastal Resource Management, BILLING CODE 3410±11±M Management Program site visit will be NOS/NOAA, 1305 East-West Highway, from February 23–27, 1998. One public Silver Spring, Maryland, 20910, (301) meeting will be held during the week. 713–3090, ext. 126. 3880 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Federal Domestic Assistance Catalog the Magnuson-Stevens Act. All input groundfish research and data needs; (6) 11.419 Coastal Zone Management Program will be provided to the NRC for use in evaluate data and analysis requirements Administration. preparation of its study of a national related to lingcod and rockfish Dated: January 21, 1998. policy with respect to IFQs. The date allocation and management, and begin Nancy Foster, and location of the public hearing in the preparation of the analysis; (7) discuss Assistant Administrator for Ocean Services Western Pacific Council region will be issues related to a groundfish vessel/ and Coastal Zone. announced. permit buy-back program; (8) evaluate [FR Doc. 98–1937 Filed 1–26–98; 8:45 am] Dated: January 22, 1998. Pacific grenadier and rockfish landings BILLING CODE 3510±08±M William W. Fox, Jr. trends; and (9) prepare a groundfish economic data plan. The GMT plans to Director, Office of Science and Technology, National Marine Fisheries Service. address topics in the order listed but DEPARTMENT OF COMMERCE will consider developing daily [FR Doc. 98–1933 Filed 1–26–98; 8:45 am] schedules as the meeting progresses. National Oceanic and Atmospheric BILLING CODE 3510±22±F Due to the large number of agenda Administration items, the GMT economic subgroup may [I.D. 012198A] DEPARTMENT OF COMMERCE meet separately and concurrently on Wednesday; it is not practical to Notice of Public Hearings on Individual National Oceanic and Atmospheric establish daily agendas or schedules in Fishing Quotas Administration advance of the meeting. Although other issues not contained AGENCY: National Marine Fisheries [I.D. 011698B] in this agenda may come before the Service (NMFS), National Oceanic and GMT for discussion, in accordance with Atmospheric Administration (NOAA), Pacific Fishery Management Council; the Magnuson-Stevens Fishery Commerce. Public Meeting Conservation and Management Act, ACTION: Notice. AGENCY: National Marine Fisheries those issues will not be the subject of Service (NMFS), National Oceanic and SUMMARY: Notice is hereby given that formal GMT action during this meeting. Atmospheric Administration (NOAA), NMFS will hold three public meetings GMT action will be restricted to those Commerce. on Individual Fishing Quotas (IFQs) in issues specifically identified in this compliance with the Magnuson-Stevens ACTION: Notice of public meeting. notice. Fishery Conservation and Management SUMMARY: The Pacific Fishery Special Accommodations Act (Magnuson-Stevens Act) as Management Council’s (Council) amended by the Sustainable Fisheries The meeting is physically accessible Groundfish Management Team (GMT) to people with disabilities. Requests for Act of 1996. The meetings will be held will hold a meeting which is open to the in the Caribbean, South Atlantic and sign language interpretation or other public. auxiliary aids should be directed to Mr. Western Pacific Council regions. These DATES: The meeting will begin on meetings supplement those held by the Eric Greene at (503) 326–6352 at least 5 Monday, February 9, 1998, at 1 p.m. and days prior to the meeting date. National Research Council (NRC) in the will continue through 4 p.m. Thursday, other five Council regions. Hearings February 12, 1998. The Tuesday and Dated: January 20, 1998. have been scheduled for the Caribbean Wednesday sessions will begin at 8 a.m. Bruce C. Morehead, and South Atlantic Council regions; the and may go into the evening until Acting Director, Office of Sustainable schedule for the Western Pacific business for the day is completed. An Fisheries, National Marine Fisheries Service. Council region will be announced at a opportunity for public comment will be [FR Doc. 98–1831 Filed 1–26–98; 8:45 am] later date. provided at 4 p.m. each day of the BILLING CODE 3510±22±F DATES: The public hearing on IFQs for meeting and 3 p.m. on Thursday. the Caribbean Council region will be on ADDRESSES: The meeting will be held in DEPARTMENT OF COMMERCE February 12, 1998, beginning at 1 p.m.; the conference room at the Council for the South Atlantic Council region, office, 2130 SW Fifth Avenue, Suite National Oceanic and Atmospheric the hearing will be held on March 3, 224, Portland, OR 97201. 1998, beginning at 7 p.m. Administration FOR FURTHER INFORMATION CONTACT: Jim ADDRESSES: Public hearings on IFQs for Glock, Groundfish Fishery Management [I.D. 011698A] the Caribbean and South Atlantic Coordinator; telephone: (503) 326–6352. Council regions will be held at the SUPPLEMENTARY INFORMATION: The Marine Mammals; Scientific Research following locations, respectively: the purpose of the meeting is to develop a Permit (PHF# 881±1443) Marriott’s Frenchman’s Reef Beach work plan for 1998 and to prepare Resort, St. Thomas, U.S. Virgin Islands, technical advice and reports to support AGENCY: National Marine Fisheries telephone: 809–776–8500; Jekyll Island Council decisions throughout the year. Service (NMFS), National Oceanic and Club, 371 Riverview Drive, Jekyll Island, Specific issues the GMT will address Atmospheric Administration (NOAA), Georgia, telephone: 912–635–2600. include: (1) discuss proposed revisions Commerce. FOR FURTHER INFORMATION CONTACT: to the stock assessment process and ACTION: Receipt of application. Amy Gautam, NMFS, Office of Science appoint representatives to track the and Technology; telephone: (301)713– various assessments; (2) prepare a work SUMMARY: Notice is hereby given that 2328. plan for 1998 GMT activities; (3) the Alaska SeaLife Center, P.O. Box SUPPLEMENTARY INFORMATION: prepare and review sections of the draft 1239, Seward, AK 99664, has applied in Participants will be given five minutes groundfish fishery management plan due form for a permit to take Steller sea each to provide a statement regarding amendment; (4) review methodology for lions (Eumetopias jubatus) and harbor any aspect of IFQ implementation developing inseason catch projections; seals (Phoca vitulina) for purposes of identified in the study requirements of (5) prepare recommendations related to scientific research. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3881

DATES: Written or telefaxed comments In compliance with the National should be mailed to the Chief, Permits must be received on or before February Environmental Policy Act of 1969 (42 and Documentation Division, F/PR1, 26, 1998. U.S.C. 4321 et seq.), an initial Office of Protected Resources, NMFS, ADDRESSES: The application and related determination has been made that the 1315 East-West Highway, Room 13130, documents are available for review activity proposed is categorically Silver Spring, MD 20910. Those upon written request or by appointment excluded from the requirement to individuals requesting a hearing should in the following office(s): prepare an environmental assessment or set forth the specific reasons why a Permits and Documentation Division, environmental impact statement. Office of Protected Resources, NMFS, hearing on a particular request would be 1315 East-West Highway, Room 13705, Dated: January 21, 1998. appropriate. Silver Spring, MD 20910 (301/713– Ann D. Terbush, Comments may also be submitted by 2289); and Chief, Permits and Documentation Division, facsimile at (301) 713–0376, provided Regional Administrator, Alaska Office of Protected Resources, National the facsimile is confirmed by hard copy Region, NMFS, P.O. Box 21668, Juneau, Marine Fisheries Service. submitted by mail and postmarked no AK 99802–1668 (907/586–7221). [FR Doc. 98–1932 Filed 1–26–98; 8:45 am] later than the closing date of the Written comments or requests for a BILLING CODE 3510±22±F comment period. Please note that public hearing on this application comments will not be accepted by email should be mailed to the Chief, Permits or other electronic media. and Documentation Division, F/PR1, DEPARTMENT OF COMMERCE Office of Protected Resources, NMFS, Concurrent with the publication of 1315 East-West Highway, Room 13705, National Oceanic and Atmospheric this notice in the Federal Register, Silver Spring, MD 20910. Those Administration NMFS is forwarding copies of this individuals requesting a hearing should [I.D. 012098A] application to the Marine Mammal set forth the specific reasons why a Commission and its Committee of hearing on this particular request would Marine Mammals; Scientific Research Scientific Advisors. be appropriate. Permits (559±1442 and P524B) SUPPLEMENTARY INFORMATION: The Comments may also be submitted by AGENCY: subject permit is requested under the facsimile at (301) 713–0376, provided National Marine Fisheries authority of the Marine Mammal the facsimile is confirmed by hard copy Service (NMFS), National Oceanic and Protection Act of 1972, as amended submitted by mail and postmarked no Atmospheric Administration (NOAA), (MMPA; 16 U.S.C. 1361 et seq.), the later than the closing date of the Commerce. Regulations Governing the Taking and comment period. Please note that ACTION: Receipt of applications. comments will not be accepted by email Importing of Marine Mammals (50 CFR SUMMARY: Notice is hereby given that part 216), the Endangered Species Act of or other electronic media. applications have been received from Concurrent with the publication of 1973, as amended (16 U.S.C. 1531 et the following individuals to take marine seq.), and the regulations governing the this notice in the Federal Register, mammals for purposes of scientific NMFS is forwarding copies of this taking, importing, and exporting of research: endangered fish and wildlife (50 CFR application to the Marine Mammal (559–1442) Mr. Salvatore Cerchio, 222.23). Commission and its Committee of Museum of Zoology, University of Scientific Advisors. Michigan, 1109 Geddes Ave., Ann Mr. Salvatore Cerchio requests a SUPPLEMENTARY INFORMATION: The Arbor, MI 48109–1079, has applied in permit to import 1000 humpback whale subject permit is requested under the due form for a permit to import (Megaptera novaeangliae) biopsy tissue authority of the Marine Mammal humpback whale samples from Mexico; samples from Mexico. Samples have Protection Act of 1972, as amended and already been collected or will be (MMPA; 16 U.S.C. 1361 et seq.), the (P524B) Dr. Shannon Atkinson, collected under permits issued by the Regulations Governing the Taking and Hawaii Institute of Marine Biology, Mexican Government. The goals of the Importing of Marine Mammals (50 CFR Univ. of HI, 1000 Pope Road MSB #213, project are to assess paternity and test part 216), the Endangered Species Act of Honolulu, HI 96822, has applied in due whether there is a large variance in 1973, as amended (ESA; 16 U.S.C. 1531 form for an amendment to Permit No. repreductive success among males, et seq.), and the regulations governing 969. typical of polygynous systems, or if the taking, importing, and exporting of DATES: Written or telefaxed comments paternities are distributed randomly. endangered fish and wildlife (50 CFR must be received on or before February Dr. Shannon Atkinson requests an 222.23). 26, 1998. For the purposes of scientific amendment to Permit No. 969 to import ADDRESSES: The applications and the reproductive tract tissues, blood, research, the applicant seeks related documents are available for authorization to import from Canada, plasma and serum of Mediterranean review upon written request or by monk seals (Monachus monachus) three juvenile Steller sea lions appointment in the following office(s): (Eumetopias jubatus) currently housed taken from the subpopulation that Permits and Documentation Division, inhabits the coast of Mauritania in at the Vancouver Aquarium, and two Office of Protected Resources, NMFS, North Africa and was involved in the juvenile harbor seals (Phoca vitulina) 1315 East-West Highway, Room 13130, 1997 die-off. Samples will be imported presently residing at University of Silver Spring, MD 20910 (301/713– from Spain, where they are currently in British Columbia. Over a five-year 2289); period the applicant requests to conduct Northeast Region, NMFS, One storage. The applicant also requests studies on the nutritional physiology, Blackburn Drive, Gloucester, MA authority to collect and/or import the metabolic development, and clinical 01930–2298 (508/281–9250); and same samples from all species of health of Steller sea lions and harbor Southwest Region, NMFS, 501 West pinnipeds (except walrus) involved in seals under captive conditions. Ocean Blvd., Long Beach, CA 90802– beachings, strandings, die-offs, and Incidental to this scientific research, the 4213 (310/980–4001). taken during normal veterinary public will be able to view the animals Written comments or requests for a procedures on rehabilitated animals. as part of an education program. public hearing on these applications The objective is to evaluate repreductive 3882 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices hormone concentrations, obtained from Dated: January 20, 1998. violations of the FHSA and its blood samples, with respect to Sadye E. Dunn, regulations, Requirements for Full-Size reproductive status of male and female Secretary. Baby Cribs, 16 CFR Part 1508 (crib monk seals, and other pinnipeds. regulations). Any one of the FHSA In the Matter of COA, INC., a Corporation In compliance with the National d/b/a Coaster Co. of America violations is sufficient to render each Environmental Policy Act of 1969 (42 crib to be a ‘‘banned hazardous U.S.C. 4321 et seq.), an initial Settlement Agreement and Order substance’’ under the FHSA and the determination has been made that the 1. This Settlement Agreement and applicable crib regulation. activity proposed is categorically Order, entered into between COA, Inc., 9. Specifically, model 2368 violated excluded from the requirement to d/b/a Coaster Co. of America, a the FHSA and its crib regulations at 16 prepare an environmental assessment or corporation (hereinafter, ‘‘COA’’), and CFR §§ 1508.4 (a) and (b) (spacing of environmental impact statement. the staff of the Consumer Product Safety crib components); 16 CFR § 1508.6(b) (requirements for hardware), and; 16 Dated: January 21, 1998. Commission (hereinafter, ‘‘staff’’), CFR §§ 1508.9(b)(2) and (d) (identifying Ann D. Terbush, pursuant to the procedures set forth in 16 CFR § 1118.20, is a compromised marks, warning statement, and Chief, Permits and Documentation Division, resolution of the matter described compliance declaration). Office of Protected Resources, National 10. Specifically, model 2364 violated Marine Fisheries Service. herein, without a hearing or determination of issues of law and fact. the FHSA and its crib regulations at 16 [FR Doc. 98–1934 Filed 1–26–98; 8:45 am] CFR § 1508.4(a); 16 CFR § 1508.7(c) BILLING CODE 3510±22±F The Parties (requirements for construction and 2. The staff is the staff of the finishing), and; 16 CFR §§ 1508.9(b) (1) Consumer Product Safety Commission and (2) and (c). CONSUMER PRODUCT SAFETY (hereinafter, ‘‘Commission’’), an 11. In addition, on or about August COMMISSION independent federal regulatory agency 21, 1996, COA received a test report on a sample of model #2364 crib performed [CPSC Docket No. 98±C0004] of the United States government, established by Congress pursuant to by the Detroit Testing Laboratory, Inc. In the Matter of COA, Inc., a section 4 of the Consumer Product (DTL) on August 20, 1996. DTL had Corporation; Provisional Acceptance Safety Act (hereinafter, ‘‘CPSA’’), as identified and listed substantially all of of a Settlement Agreement and Order amended, 15 USC § 2053. the violations which the Commission’s 3. Respondent COA is a corporation evaluations subsequently identified. AGENCY: Consumer Product Safety organized and existing under the laws of DTL also noted that the decorative ‘‘S’’ Commission. the State of California with its principal on the side rails may present a potential ACTION: Provisional Acceptance of a corporate offices located at 1298 for entrapment and strangulation. COA Settlement Agreement under the Sandoval St., Santa Fe Springs, CA knew or should have known of these Consumer Product Safety Act. 90670. COA is an importer and violations of the FHSA on or about wholesaler of all types of home August 21, 1996, yet it failed to report SUMMARY: It is the policy of the furnishings and furniture, including this to the Commission, as required by Commission to publish settlements baby cribs. section 15(b) of the CPSA. Further, it which it provisionally accepts under the continued to sell these cribs until at Consumer Product Safety Act in the Staff Allegations least March 18, 1997. Federal Register in accordance with the 4. Section 4(a) of the Federal 12. Because these two cribs failed to terms of 16 CFR § 1118.20(e). Published Hazardous Substances Act (hereinafter, meet the Requirements for Full-Size below is a provisionally-accepted ‘‘FHSA’’), 15 U.S.C. § 1263(a), prohibits Baby Cribs, each of them is a ‘‘banned Settlement Agreement with COA, Inc., a the introduction into interstate hazardous substance’’ within the corporation, d/b/a Coaster Co. of commerce of any banned hazardous meaning of section 2(q)(1)(A) of the America ‘‘containing a civil penalty of substance. FHSA, 15 U.S.C. 1261 (q)(1)(A). The $300,000.’’. 5. Section 15(b) of the CPSA, 15 introduction into interstate commerce of DATES: Any interested person may ask U.S.C. § 2064(b), requires a these banned hazardous substances by the Commission not to accept this manufacturer of a consumer product COA was a prohibited act pursuant to agreement or otherwise comment on its who, inter alia, obtains information that section 4(a) of the FHSA and was contents by filing a written request with reasonably supports the conclusion that committed ‘‘knowingly’’, as that term is the Office of the Secretary by February the product contains a defect which defined in section 5(c)(5) of the FHSA, 11, 1998. could create a substantial product 15 U.S.C. 1264(c)(5). 13. Although COA had obtained ADDRESSES: Persons wishing to hazard or creates an unreasonable risk sufficient information to reasonably comment on this Settlement Agreement of serious injury or death, to support the conclusion that these cribs should send written comments to the immediately inform the Commission of contained a defect which could create a Comment 98–C0004, Office of the the defect or risk. substantial product hazard, or created Secretary, Consumer Product Safety 6. From approximately January 1993 an unreasonable risk of serious injury or Commission, Washington, D.C. 20207. through December 1996, COA imported and introducted into interstate death, it failed to report such FOR FURTHER INFORMATION CONTACT: commerce approximately 940 full-size information to the Commission in a Howard N. Tarnoff, Trial Attorney, baby cribs, identified as model 2368. timely manner, as required by section Office of Compliance and Enforcement, 7. From approximately June 1996 15(b) of the CPSA. This is a violation of Consumer Product Safety Commission, through April 1997, COA imported and section 19(a)(4) of the CPSA, 15 U.S.C. Washington, D.C. 20207; telephone introduced into interstate commerce § 2068(a)(4). (301) 504–0626. approximately 900 full-size baby cribs, 14. Respondent’s failure to report to SUPPLEMENTARY INFORMATION: The text of identified as model 2364. the Commission, as required by section the Agreement and Order appears 8. The staff inspected and evaluated 15(b) of the CPSA, was committed below. these 2 cribs and identified multiple ‘‘knowingly’’, as that term is defined in Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3883

Section 20(d) of the CPSA, 15 U.S.C. corrective action or other relief not Inc., a corporation, d/b/a Coaster § 2069(d) and COA is subject to civil described above. Company of America and the staff of the penalties under Section 20 of the CPSA. 21. This Settlement Agreement and Consumer Product Safety Commission, Order becomes effective only upon its Response of COA and the Commission having jurisdiction final acceptance by the Commission and over the subject matter and over COA, 15. COA denies each and all of the service of the incorporated Order upon Inc., and it appearing the Settlement staff allegations with respect to these Respondent. cribs. 22. Upon provisional acceptance of Agreement is in the public interest, it is this Settlement Agreement and Order by Ordered, that the Settlement Agreement of the Parties the Commission, the Commission shall Agreement be and hereby is accepted, 16. The Commission had jurisdiction place this Agreement and Order on the and it is in this matter. public record and shall publish it in the Further ordered, that upon final 17. Upon final acceptance of the Federal Register in accordance with the Settlement Agreement, COA, Inc. shall acceptance of the Settlement procedure set forth in 16 CFR Agreement, COA, Inc. shall pay to the pay to the Order of the U.S. Treasury a § 1118.20(e). If the Commission does not civil penalty in the amount of three Order of the U.S. Treasury a civil receive any written request not to accept penalty in the amount of three hundred hundred thousand and 00/100 dollars the Settlement Agreement and Order thousand and 00/100 dollars ($300,000.00) to be paid in three within 15 days, the Agreement and ($300,000.00) to be paid in three installments of $100,000. The first Order shall be deemed finally accepted $100,000 payment will be due within on the 16th day after the date it is installments of $100,000. The first twenty (20) days after service upon published in the Federal Register, in $100,000 payment will be due within Respondent of the Final Order of the accordance with 16 CFR § 1118.20(f). twenty (20) days after service upon Commission accepting this Settlement 23. Upon final acceptance of this Respondent of the Final Order of the Agreement. Thereafter, COA, Inc. agrees Settlement Agreement and Order, the Commission accepting this Settlement to pay $100,000 within one hundred Commission shall issue the attached Agreement. Thereafter, COA, Inc. shall and ten (110) days of the date of service Order, incorporated herein by reference. pay $100,000 within one hundred and of the Final Order, and $100,000 within 24. The provisions of this Settlement ten (110) days of the date of service of two hundred (200) days of the first Agreement and Order shall apply to the Final Order, and $100,000 within payment. Payment of the total $300,000 COA and its successors and assigns. two hundred (200) days of the first 25. For purposes of section 6(b) of the civil penalty shall settle fully the staff’s payment. Payment of the total $300,000 allegations set forth in paragraphs 4 CPSA, 15 U.S.C. § 2055(b), this matter civil penalty shall settle fully the staff’s through 14 of the Settlement Agreement shall be treated as if a complaint had allegations set forth in paragraphs 4 and Order. Upon the failure by COA, issued, and the Commission may Inc. to make a payment or upon the publicize the terms of the Settlement through 14 of the Settlement Agreement making of a late payment (as determined Agreement and Order. and Order. Upon the failure by COA, by the postmark on the envelope) by 26. COA agrees to immediately inform Inc. to make a payment or upon the CSA (a) the entire amount of the civil the Commission if it learns of any making of a late payment (as determined penalty shall be due and payable, and incidents involving the products and by the postmark on the envelope) by (b) interest on the outstanding balance alleged defects identified above. CSA: (a) The entire amount of the civil shall accrue and be paid at the federal 27. This Agreement may be used in penalty shall be due and payable, and legal rate of interest under the interpreting the Order. Agreements, (b) interest on the outstanding balance provisions of 28 U.S.C. §§ 1961 (a) and understandings, representations, or shall accrue and be paid at the federal (b). interpretations made outside of this legal rate of interest under the 18. COA knowingly, voluntarily and Settlement Agreement and Order may provisions of 28 U.S.C. §§ 1961 (a) and completely waives any rights it may not be used to vary or to contradict its (b). have (1) to an administrative or judicial terms. hearing with respect to the Further ordered, COA, Inc. shall COA, Inc. immediately inform the Commission if Commission’s claim for a civil penalty, Dated: December 11, 1997. (2) to judicial review or other challenge it learns of any incidents involving the Michael Yeh, products and alleged defects identified or contest of the validity of the President of COA, Inc. Commission’s action with regard to its herein. The Consumer Product Safety Commission. claim for a civil penalty, (3) to a Provisionally accepted and Provisional Alan H. Scheom, determination by the Commission as to Order issued on the 20th day of January, whether a violation of the FHSA or Assistant Executive Director, Office of 1998. Compliance. section 15(b) of the CPSA, has occurred, By Order of the Commission. Eric L. Stone, (4) to a statement of findings of fact and Sadye E. Dunn, conclusions of law with regard to the Director, Division of Administrative Commission’s claim for a civil penalty, Litigation, Office of Compliance. Secretary, Consumer Product Safety Commission. and (5) to any claims under the Equal Dated: December 17, 1997. Access to Justice Act. Melvin I. Kramer, [FR Doc. 98–1821 Filed 1–26–98; 8:45 am] 19. This Settlement Agreement and Trial Attorney, Division of Administrative BILLING CODE 6355±01±M Order settles any allegations of Litigation, Office of Compliance. violations of the FHSA or of section In the Matter of COA, Inc., a Corporation 15(b) of the CPSA regarding the d/b/a Coaster Company of America products described above. 20. Nothing in this Settlement Order Agreement and Order shall be construed Upon consideration of the Settlement to preclude the CPSC from pursuing a Agreement between Respondent COA, 3884 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

DEPARTMENT OF DEFENSE B. Annual Reporting Burden All proceedings are open. Public reporting burden for this Gregory D. Showalter, GENERAL SERVICES collection of information is estimated to Army Federal Register Liaison Officer. ADMINISTRATION average 30 minutes per response, [FR Doc. 98–2003 Filed 1–26–98; 8:45 am] including the time for reviewing NATIONAL AERONAUTICS AND BILLING CODE 3710±08±M instructions, searching existing data SPACE ADMINISTRATION sources, gathering and maintaining the data needed, and completing and DEPARTMENT OF DEFENSE [OMB Control No. 9000±0066] reviewing the collection of information. The annual reporting burden is Department of the Army, Corps of Submission for OMB Review; estimated as follows: Respondents, Engineers Comment Request Entitled 5,340; responses per respondent, 1; total Professional Employee Compensation annual responses, 5,340; preparation Notice of Availability for the Record of Plan hours per response, .5; and total Decision for the San Gabriel Canyon Sediment Management Plan, Los AGENCIES: Department of Defense (DOD), response burden hours, 2,670. Angeles County, California General Services Administration (GSA), Obtaining Copies of Proposals: and National Aeronautics and Space Requester may obtain a copy of the AGENCY: U.S. Army Corps of Engineers, Administration (NASA). justification from the General Services Los Angeles District, DoD. ACTION: Notice of request for an Administration, FAR Secretariat (VRS), extension to an existing OMB clearance Room 4037, 1800 F Street, Washington, ACTION: Notice of availability. (9000–0066). DC 20405, telephone (202) 501–4755. Please cite OMB Control No. 9000–0066, SUMMARY: The U.S. Army Corps of SUMMARY: Under the provisions of the Professional Compensation Plan, in all Engineers, Regulatory Branch, in Paperwork Reduction Act of 1995 (44 correspondence. coordination with the County of Los U.S.C. Chapter 35), the Federal Dated: January 21, 1998. Angeles—Department of Public Works, Acquisition Regulation (FAR) Sharon A. Kiser, has completed the Record of Decision Secretariat has submitted to the Office FAR Secretariat. associated with the Joint Environmental of Management and Budget (OMB) a [FR Doc. 98–1782 Filed 1–26–98; 8:45 am] Impact Statement/Environmental request to review and approve an Impact Report for the San Gabriel BILLING CODE 6820±34±P extension of a currently approved Canyon Sediment Management Plan. information collection requirement concerning Professional Employee FOR FURTHER INFORMATION CONTACT: Compensation Plan. A request for public DEPARTMENT OF DEFENSE Questions regarding the Record of comments was published at 62 FR Decision or requests for the document 62001, November 20, 1997. No Department of the Army may be directed to Mr. Aaron Allen, comments were received. Project Manager, Regulatory Branch, DATES: Comments may be submitted on Board of Visitors, United States U.S. Army Corps of Engineers, P.O. Box or before February 26, 1998. Military Academy 532711, Los Angeles, California, 90053– 2325, (213) 452–3413. FOR FURTHER INFORMATION CONTACT: Jack AGENCY: United States Military O’Neill, Federal Acquisition Policy Academy. SUPPLEMENTARY INFORMATION: None. Division, GSA (202) 501–3856. ACTION: Notice of open meeting. Robert L. Davis, ADDRESSES: Comments regarding this Colonel, Corps of Engineers, District Engineer. SUMMARY: In accordance with Section burden estimate or any other aspect of [FR Doc. 98–1830 Filed 1–26–98; 8:45 am] this collection of information, including 10(a)(2) of the Federal Advisory BILLING CODE 3710±KF±M suggestions for reducing this burden, Committee Act (P.L. 92–463), should be submitted to: FAR Desk announcement is made of the following Officer, OMB, Room 10102, NEOB, meeting: Washington, DC 20503, and a copy to Name of Committee: Board of Visitors, DEPARTMENT OF ENERGY the General Services Administration, United States Military Academy. FAR Secretariat, 1800 F Street, NW, Date of Meeting: 10 February 1998. Office of Arms Control and Room 4037, Washington, DC 20405. Place of Meeting: Room 418, Russell Senate Nonproliferation Policy; Proposed Please cite OMB Control No. 9000–0066, Office Building, The Capitol, Washington, Subsequent Arrangement Professional Employee Compensation DC. Plan, in all correspondence. Start time of Meeting: Approximately 10:00 a.m. AGENCY: Department of Energy. SUPPLEMENTARY INFORMATION: FOR FURTHER INFORMATION CONTACT: ACTION: Correction. A. Purpose For further information, contact OFPP Policy Letter No. 78–2, March Lieutenant Colonel Joseph A. Dubyel, SUMMARY: In notice document 98–676 29, 1978, requires that all professional United States Military Academy, West beginning on page 1837 in the issue of employees shall be compensated fairly Point, NY 10996–5000, phone: (914) Monday, January 12, 1998, make the and properly. Implementation of this 938–5078. following correction: requires a total compensation plan SUPPLEMENTARY INFORMATION: On page 1837 in the second column, setting forth proposed salaries and Proposed Agenda: Election of officers; SUMMARY section, second paragraph, fringe benefits for professional selection of Executive Committee; fifth line beginning with the words employees with supporting data be scheduling of meetings for remainder of ‘‘transfer of’’ the sentence should read submitted to the contracting officer for year; and identification of areas of ‘‘32,288 kilograms of natural uranium in evaluation. interest for 1998. hexaflouride form’’. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3885

Dated: January 16, 1998. to intervene or protest with the Federal CNG also notes that its December 31, Cherie P. Fitzgerald, Energy Regulatory Commission, 888 1997 Motion Tariff Filing incorporated Director, International Policy and Analysis First Street, NE., Washington, DC 20426, the small-customer transportation rates Division, Office of Arms Control and in accordance with Rules 211 and 214 proposed in Docket No. RP98–65; CNG Nonproliferation. of the Commission’s Rules of Practice has thereby compiled with the filing [FR Doc. 98–1829 Filed 1–26–98; 8:45 am] and Procedure (18 CFR 385.211 and requirement established by the BILLING CODE 6450±01±P 385.214). Commission’s December 31, 1997 Letter Absent a request for hearing within Order in the above-referenced this period, Aurora is authorized to proceedings. DEPARTMENT OF ENERGY issue securities and assume obligations CNG states that copies of its letter of or liabilities as a guarantor, indorser, transmittal and enclosures are being Office of Arms Control and surety, or otherwise in respect of any mailed to its customers and interested Nonproliferation Policy; Proposed security of another person; provided state commissions. Subsequent Arrangement that such issuance or assumption is for Any person desiring to protest said filing should file a motion with the AGENCY: Department of Energy. some lawful object within the corporate purposes of the applicant, and Federal Energy Regulatory Commission, ACTION: Correction. compatible with the public interest, and 888 First Street, N.E., Washington, D.C. 20426, in accordance with Section SUMMARY: In notice document 98–677 is reasonably necessary or appropriate 385.211 of the Commission’s Rules and beginning on page 1837 in the issue of for such purposes. Regulations. All such protests must be Monday, January 12, 1998, make the The Commission reserves the right to require a further showing that neither filed as provided in Section 154.210 of following corrections: the Commission’s Regulations. Protests On page 1837, in the third column, public nor private interests will be adversely affected by continued will be considered by the Commission SUMMARY section, second paragraph, in determining the appropriate action to fifth line, beginning with the words approval of Aurora’s issuances of securities or assumptions of liability. be taken, but will not serve to make ‘‘transfer of’’, the number should read protestants parties to the proceeding. ‘‘76,929.3 kilograms. Notice is hereby given that the deadline for filing motions to intervene Copies of this filing are on file with the Dated: January 16, 1998. or protests, as set forth above, is Commission and are available for public Cherie P. Fitzgerald, February 19, 1998. Copies of the full inspection in the Public Reference Director, International Policy and Analysis text of the order are available from the Room. Division, Office of Arms Control and Commission’s Public Reference Branch, David P. Boergers, Nonproliferation. 888 First Street, NE., Washington, DC Acting Secretary. [FR Doc. 98–1827 Filed 1–26–98; 8:45 am] 20426. [FR Doc. 98–1876 Filed 1–26–98; 8:45 am] BILLING CODE 6450±01±P David P. Boergers, BILLING CODE 6717±01±M Acting Secretary. DEPARTMENT OF ENERGY [FR Doc. 98–1867 Filed 1–26–98; 8:45 am] DEPARTMENT OF ENERGY BILLING CODE 6717±01±M Federal Energy Regulatory Federal Energy Regulatory Commission Commission DEPARTMENT OF ENERGY [Docket No. ER98±573±000] [Docket No. ES97±7±001] Federal Energy Regulatory Aurora Power Resources, Inc.; Notice Commission Consumers Energy Company; Notice of Issuance of Order of Amendment of Application January 21, 1998. [Docket Nos. RP97±406±007 and RP98±65± 001] January 21, 1998. Aurora Power Resources, Inc. Take notice that on January 15, 1998, (Aurora) submitted for filing a rate CNG Transmission Corporation; Notice Consumers Energy Company filed an schedule under which Aurora will of Tariff Motion Filing amendment to its original application in engage in wholesale electric power and this proceeding. The amendment seeks energy transactions as a marketer. January 21, 1998. authorization to issue up to $475 Aurora also requested waiver of various Take notice that on January 14, 1998, million of first mortgage bonds for the Commission regulations. In particular, CNG Transmission Corporation (CNG) sole purpose of serving as security for Aurora requested that the Commission tendered for filing as part of its FERC long-term refunding notes authorized in grant blanket approval under 18 CFR Gas Tariff, Second Revised Volume No. this docket. The first mortgage bonds Part 34 of all future issuances of 1, Second Sub. Sixteenth Revised Sheet would not themselves be a source of securities and assumptions of liability No. 35, with an effective date of January funds for Consumers, nor would they by Aurora. 1, 1998. increase Consumers’ total indebtedness. On January 20, 1998, pursuant to CNG states that the purpose of this Consumers also requested waivers of the delegated authority, the Director, filing is to remove references to an Commission’s competitive bid and Division of Rate Applications, Office of ‘‘Excess Injection Charge’’ in negotiated placement requirements for Electric Power Regulation, granted compliance with the Suspension Order, certain securities to be issued pursuant requests for blanket approval under Part which CNG had not removed from Sub. to authorization granted in this docket. 34, subject to the following: Sixteenth Revised Sheet No. 35 filed on Any person desiring to be heard or to Within thirty days of the date of the December 31, 1997. CNG requests protest said filing should file a motion order, any person desiring to be heard waiver of Section 154.206(b) of the to intervene or protest with the Federal or to protest the blanket approval of Commission’s regulations, so that its Energy Regulatory Commission, 888 issuances of securities or assumptions of tariff sheet may become effective as First Street, N.E., Washington, D.C. liability by Aurora should file a motion proposed. 20426, in accordance with Rules 211 3886 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices and 214 of the Commission’s Rules of Any person wishing to become a party DEPARTMENT OF ENERGY Practice and Procedure (18 CFR 385.211 must file a motion to intervene. Copies and 385.214). All such motions or of this filing are on file with the Federal Energy Regulatory protests should be filed on or before Commission and available for public Commission January 29, 1998. Protests will be inspection in the Public Reference [Docket No. RP97±153±009] considered by the Commission in Room. determining the appropriate action to be David P. Boergers, Granite State Gas Transmission, Inc.; taken, but will not serve to make the Notice of FERC Tariff Filing Protestants parties to the proceeding. Acting Secretary. Any person wishing to become a party [FR Doc. 98–1878 Filed 1–26–98; 8:45 am] January 21, 1998. must file a motion to intervene. Copies BILLING CODE 6717±01±M Take notice that on January 15, 1998, of this filing are on file with the Granite State Gas Transmission, Inc. Commission and are available for public (Granite State) tendered for filing as part inspection. DEPARTMENT OF ENERGY of its FERC Gas Tariff, Third Revised David P. Boergers, Volume No. 1, Fifth Revised Sheet No. Federal Energy Regulatory Acting Secretary. 289, with an effective date of January Commission 15, 1998. [FR Doc. 98–1868 Filed 1–26–98; 8:45 am] According to Granite State, the BILLING CODE 6717±01±M [Docket No. RB98±110±000] purpose of the foregoing tariff sheet is to incorporate GISB Standard 4.3.6 by DEPARTMENT OF ENERGY Garden Banks Gas Pipeline, L.L.C.; reference in the tariff, thus Notice of Proposed Changes in FERC implementing Granite State Internet Federal Energy Regulatory Gas Tariff accessible web page. Commission Granite State further states that copies January 21, 1998. of its filing are being served by first- [Docket No. RP98±111±000] Take notice that on January 15, 1998, class mail on its firm and interruptible shippers and on the regulatory East Tennessee Natural Gas Company; Garden Banks Gas Pipeline, L.L.C. commissions of the states of Maine, Notice of Proposed Changes in FERC (GBGP) tendered for filing as part of its Gas Tariff Massachusetts and New Hampshire. FERC Gas Tariff, Original Volume No. 1, Any person desiring to protest said First Revised Sheet Nos. 100 and 101 January 21, 1998. filing should file a protest with the Take notice that on January 16, 1997, proposed to become effective January 1, Federal Energy Regulatory Commission, East Tennessee Natural Gas Company 1998. 888 First Street, NE., Washington, DC (East Tennessee), tendered for filing as GBGP states that the purpose of this 20426, in accordance with Section part of its FERC Gas Tariff, Second filing is to comply with Order 636–C 385.211 of the Commission’s Rules and Revised Volume No. 1, Fourth Revised issued on February 27, 1997, whereby Regulations. All such protests must be Sheet No. 111. East Tennessee requests the matching term on the right-of-first- filed as provided in Section 154.210 of that this revised tariff sheet be deemed refusal to retain existing capacity was the Commission’s Regulations. Protests effective February 15, 1998. shortened from twenty years to five will be considered by the Commission East Tennessee states that Fourth years. in determining the appropriate action to Revised Sheet No. 111 corrects an be taken, but will not serve to make inadvertent error, namely the mistaken Any person desiring to be heard or to protestants parties to the proceeding. insertion of language previously protest this filing should file a motion Copies of this filing are on file with the approved for deletion by the to intervene or protest with the Federal Commission and are available for public Commission. See November 13, 1996 Energy Regulatory Commission, 888 inspection in the Public Reference Letter Order in Docket No. RP97–31. First Street, N.E., Washington, D.C. Room. The language approved for deletion 20426, in accordance with Sections David P. Boergers, involved the restriction in the General 385.214 and 385.211 of the Acting Secretary. Terms and Conditions of East Commission’s Rules and Regulations. [FR Doc. 98–1875 Filed 1–26–98; 8:45 am] Tennessee’s FERC Gas Tariff, that a All such motions and protests must be BILLING CODE 6717±01±M request for service from East Tennessee filed in accordance with Section could be made no earlier than 90 days 154.210 of the Commission’s prior to the proposed commencement Regulations. Protests will be considered DEPARTMENT OF ENERGY date of service. by the Commission in determining the Any person desiring to be heard or to appropriate action to be taken, but will Federal Energy Regulatory protest this filing should file a motion not serve to make Protestants parties to Commission to intervene or protest with the Federal the proceeding. Any person wishing to Energy Regulatory Commission, 888 [Docket No. CP98±180±000] become a party must file a motion to First Street N.E., Washington, D.C. Great Lakes Gas Transmission 20426, in accordance with Sections intervene. Copies of this filing are on file with the Commission and are Company; Notice of Request Under 385.211 and 385.214 of the Blanket Authorization Commission’s Rules and Regulations. available for public inspection in the All such motions or protests must be Public Reference Room. January 21, 1998. filed as provided in Section 154.210 of David P. Boergers, Take notice that on January 13, 1998, the Commission’s Regulations. Protests Acting Secretary. Great Lakes Gas Transmission Company will be considered by the Commission [FR Doc. 98–1877 Filed 1–26–98; 8:45 am] (Great Lakes), One Woodward Avenue, in determining the appropriate action to BILLING CODE 6717±01±M Suite 1600, Detroit, Michigan 48226, be taken, but will not serve to make filed in Docket No. CP98–180–000 a protestants parties to this proceeding. request pursuant to Section 157.205 of Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3887 the Commission’s Regulations under the Sharing Report with the Commission in DEPARTMENT OF ENERGY Natural Gas Act (18 CFR 157.205) to accordance with the Stipulation and construct and operate a new delivery Agreement (Settlement) filed on Federal Energy Regulatory point (the Duck Creek delivery point) September 24, 1992, and approved by Commission located in Gogebic County, Michigan to the Commission’s February 3, 1993 provide natural gas transportation order issued in Docket No. RP91–143– [Docket No. ER98±174±000] service for Wisconsin Electric Power 000, et al. Company (WEPCO) and Wisconsin Millennium Energy Corporation; Notice Great Lakes states that this report Public Service Corporation (WPS), of Issuance of Order under Great Lake’s blanket certificates reflects application of the revenue issued in Docket No. CP90–2053–000 sharing mechanism and remittances January 21, 1998. made to firm shippers for I/O revenue pursuant to Section 7 of the Natural Gas Millennium Energy Corporation collected for the November 1, 1996 Act, all as more fully set forth in the (Millennium) submitted for filing a rate through October 31, 1997 period, in request which is on file with the schedule under which Millennium will Commission and open to public accordance with Article IV of the engage in wholesale electric power and inspection. Settlement. Great Lakes states that such energy transactions as a marketer. Great Lakes states that it has executed remittances, totaling $21,147, were Millennium also requested waiver of 10–year firm service agreements with made to Great Lakes’ firm shippers on various Commission regulations. In WEPCO and WPS, two new shippers on December 16, 1997. Great Lakes’ system. Great Lakes states particular, Millennium requested that further that the shippers would utilize Great Lakes further states the amounts the Commission grant blanket approval Great Lakes’ transportation to expand remitted are based on implementation of under 18 CFR Part 34 of all future their retail natural gas distribution the Commission’s orders in Docket Nos. issuances of securities and assumptions services within Wisconsin. RP91–143, RS92–63 and RP95–422, et of liability by Millennium. al. The amounts remitted may be Great Lakes indicates that the On January 20, 1998, pursuant to adjusted at a future date in accordance estimated cost of constructing the delegated authority, the Director, facilities is approximately $250,000. with the provisions of Articles III and V Division of Rate Applications, Office of Any person or the Commission’s staff of the Settlement, as certain of the Electric Power Regulation, granted may, within 45 days after issuance of Commission’s orders referenced above requests for blanket approval under Part the instant notice by the Commission, are under Petitions for Review in the 34, subject to the following: file pursuant to Rule 214 of the United States Court of Appeals for the Commission’s Procedural Rules (18 CFR D.C. Circuit in Southeastern Michigan Within thirty days of the date of the 385.214) a motion to intervene or notice Gas Company and Michigan Gas order, any person desiring to be heard of intervention and pursuant to Section Company, et al. v. FERC, Nos. 96–1200, or to protest the blanket approval of 157.205 of the Regulations under the et al. Great Lakes states it will adjust the issuances of securities or assumptions of Natural Gas Act (18 CFR 157.205) a amounts remitted to comply with any liability by Millennium should file a protest to the request. If no protest is further Commission action or judicial motion to intervene or protest with the filed within the time allowed therefor, review resulting from disposition of the Federal Energy Regulatory Commission, the proposed activity shall be deemed to aforementioned court proceeding. 888 First Street, N.E., Washington, D.C. be authorized effective the day after the 20426, in accordance with Rules 211 time allowed for filing a protest. If a Great Lakes states that copies of the and 214 of the Commission’s Rules of protest is filed and not withdrawn report were sent to its firms customers, Practice and Procedure (18 CFR 385.211 within 30 days after the time allowed parties to this proceeding and the Public and 385.214). for filing a protest, the instant request Service Commissions of Minnesota, Absent a request for hearing within shall be treated as an application for Wisconsin and Michigan. authorization pursuant to Section 7 of this period, Millennium is authorized to Any person desiring to protest said issue securities and assume obligations the Natural Gas Act. filing should file a protest with the David P. Boergers, or liabilities as a guarantor, indorser, Federal Energy Regulatory Commission, surety, or otherwise in respect of any Acting Secretary. 888 First Street, N.E., Washington, D.C. security of another person; provided [FR Doc. 98–1871 Filed 1–26–98; 8:45 am] 20426, in accordance with Section that such issuance or assumption is for BILLING CODE 6717±01±M 385.211 of the Commission’s Rules and some lawful object within the corporate Regulations. All such protests must be purposes of the applicant, and filed on or before January 28, 1998. DEPARTMENT OF ENERGY compatible with the public interest, and Protests will be considered by the is reasonably necessary or appropriate Federal Energy Regulatory Commission in determining the for such purposes. appropriate action to be taken, but will Commission The Commission reserves the right to not serve to make protestants parties to [Docket No. RP91±143±044] require a further showing that neither the proceeding. Copies of this filing are public nor private interests will be Great Lakes Gas Transmission Limited on file with the Commission and are adversely affected by continued Partnership; Notice of Revenue available for public inspection in the approval of Millennium’s issuances of Sharing Report; November 1996Ð Commission’s Public Reference Room. securities or assumptions of liability. Octover 1997 David P. Boergers, Notice is hereby given that the Acting Secretary. January 21, 1998. deadline for filing motions to intervene Take notice that on January 15, 1998, [FR Doc. 98–1874 Filed 1–26–98; 8:45 am] or protest, as set forth above, is February Great Lakes Gas Transmission Limited BILLING CODE 6717±01±M 19, 1998. Copies of the full text of the Partnership (Great Lakes) filed its order are available from the Interruptible/Overrun (I/O) Revenue Commission’s Public Reference Branch, 3888 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

888 First Street, N.E., Washington, D.C. authorization pursuant to Section 7 of the instant notice by the Commission, 20426. the Natural Gas Act. file pursuant to Rule 214 of the David P. Boergers, David P. Boergers, Commission’s Procedural Rules (18 CFR Acting Secretary. Acting Secretary. 385.214) a motion to intervene or notice [FR Doc. 98–1866 Filed 1–26–98; 8:45 am] [FR Doc. 98–1872 Filed 1–26–98; 8:45 am] of intervention and pursuant to Section 157.205 of the Regulations under the BILLING CODE 6717±01±M BILLING CODE 6717±01±M Natural Gas Act (18 CFR 157.205) a protest to the request. If no protest is DEPARTMENT OF ENERGY DEPARTMENT OF ENERGY filed within the time allowed therefore, the proposed activity shall be deemed to Federal Energy Regulatory Federal Energy Regulatory be authorized effective the day after the Commission Commission time allowed for filing a protest. If a protest is filed and not withdrawn [Docket No. CP98±172±000] [Docket No. CP98±185±000] within 30 days after the time allowed South Georgia Natural Gas Company; for filing a protest, the instant request NorAm Gas Transmission Company; shall be treated as an application for Notice of Request Under Blanket Notice of Request Under Blanket Authorization authorization pursuant to Section 7 of Authorization the Natural Gas Act. January 21, 1998. January 21, 1998. David P. Boergers, Take notice that on January 7, 1998, Take notice that on January 14, 1998, Acting Secretary. as supplemented on January 15, 1998, NorAm Gas Transmission Company [FR Doc. 98–1869 Filed 1–26–98; 8:45 am] South Georgia Natural Gas Company, (NorAm), 1600 Smith Street, Houston, BILLING CODE 6717±01±M Post Office Box 2563, Birmingham, Texas 77002, filed in Docket No. CP98– Alabama 35202–2563, filed in Docket 185–000 a request pursuant to Sections No. CP98–172–000, a request, pursuant 157.205 and 157.211 of the DEPARTMENT OF ENERGY to Sections 157.205, 157.212, and Commission’s regulations under the 157.216 of the Commission’s Federal Energy Regulatory Natural Gas Act (18 CFR 157.205 and Regulations under the Natural Gas Act Commission 157.211) under NorAm’s blanket (18 CFR 157.205, 157.212, and 157.216), certificate issued in Docket Nos. CP82– for authorization to construct and [Docket No. CP98±173±000] 384–000 and CP82–384–001 for operate modifications to an existing Texas Gas Transmission Corporation authorization to operate certain facilities delivery point in Suwannee County, in Arkansas, Louisiana, Oklahoma and Southern Natural Gas Company; Florida for transportation service to its Notice of Application Texas, all as more fully set forth in the existing customer, Florida Power request which is on file with the Corporation (Florida Power), under January 21, 1998. Commission and open to public South Georgia’s blanket certificate Take notice that on January 8, 1998, inspection. authorization issued in Docket No. Texas Gas Transmission Corporation NorAm specifically requests authority CP82–548–000, pursuant to Section 7 of (Texas Gas) P.O. Box 20008, Owensboro, at the request of ARKLA, a distribution the Natural Gas Act, all as more fully set Kentucky 42304 and Southern Natural division of NorAm Energy Corporation forth in the request which is on file with Gas Company (Southern) P.O. Box 2563, (ARKLA), to operate existing taps for the Commission and open to public Birmingham, Alabama 35202 (jointly delivery of natural gas to ARKLA for inspection. referred to as Applicants) filed in resale to consumers other than the right- South Georgia is proposing to add one Docket No. CP98–173–000 an of-way grantors from whom the taps 6-inch turbine meter and to replace the application pursuant to Section 7(b) of were originally installed. NorAm states existing 3-inch regulators and monitors the Natural Gas Act for permission and that the volumes through these taps with 4-inch regulators and monitors at approval to abandon a natural gas range from 1 MMBtu to 200 MMBtu per the existing meter station, known as exchange service between Texas Gas day. The location and size of each tap Florida Power #2, located at or near Mile and Southern which was authorized in for certification is shown in Exhibit Z of Post 100.324 on South Georgia’s 10-inch Docket No. G–11138, all as more fully the application. NorAm further states Main Line in Suwannee County, set forth in the application on file with that there will be no new construction. Florida. the Commission and open to public Any person or the Commission’s staff South Georgia estimates the total cost inspection. may, within 45 days after issuance of of the modifications to be $196,550, to Applicants propose to abandon the the instant notice by the Commission, be reimbursed to it by Florida Power. exchange service between Texas Gas file pursuant to Rule 214 of the South Georgia estimates the annual and Southern provided under Texas Commission’s Procedural Rules (18 CFR volumes for deliveries will increase Gas’ Rate Schedule X–7 and Southern’s 385.214) a motion to intervene or notice from 350,000 Mcf to 1,050,000 Mcf, and Rate Schedule 11. The Applicants state of intervention and pursuant to Section the maximum daily delivery volumes that this exchange service is no longer 157.205 of the Regulations under the will increase from 9720 Mcf to 29,160 required and has been terminated by Natural Gas Act (18 CFR 157.205) a Mcf per day. Texas Gas giving notice to Southern by protest to the request. If no protest is South Georgia states that it will letter dated April 19, 1996, of its intent filed within the time allowed therefor, transport gas on behalf of Florida Power to terminate the Exchange Agreement the proposed activity shall be deemed to under its Rate Schedule IT. South effective July 19, 1996. be authorized effective the day after the Georgia states that the installation of the Any person desiring to be heard or to time allowed for filing a protest. If a proposed facilities will have no adverse make any protest with reference to said protest is filed and not withdrawn effect on its ability to provide its firm application should on or before within 30 days after the time allowed deliveries. February 11, 1998, file with the Federal for filing a protest, the instant request Any person or the Commission’s staff Energy Regulatory Commission, shall be treated as an application for may, within 45 days after issuance of Washington, DC 20426, a motion to Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3889 intervene or a protest in accordance g. Filed Pursuant to: Federal Power comment date for the particular with the requirements of the Act, 16 U.S.C., 791(a)–825(r). application. A competing license Commission’s Rules of Practice and h. Applicant Contact: Mr. Don R. application must conform with 18 CFR Procedure (18 CFR 385.214 or 385.211) Pope, 9709 W. Fairview Avenue, 4.30(b) and 4.36. and the Regulations under the Natural Littleton, CO 80127–3955, (303) 973– A9. Notice of intent—A notice of Gas Act (18 CFR 157.10). All protests 9610. intent must specify the exact name, filed with the Commission will be i. FERC Contact: Mr. Robert Bell, business address, and telephone number considered by it in determining the (202) 219–2806. of the prospective applicant, and must appropriate action to be taken but will j. Comment Date: April 7, 1998. include an unequivocal statement of not serve to make the protestants parties k. Description of Project: The intent to submit, if such an application to the proceeding. Any person wishing proposed pumped storage project would may be filed, either a preliminary to become a party to a proceeding or to consist of: (1) the existing 16-foot-high, permit application or a development participate as a party in any hearing 1,100-foot-long earthen Moon Lake application (specify which type of therein must file a motion to intervene Dam; (2) the Moon Lake Reservoir, application). A notice of intent must be in accordance with the Commission’s having a surface area of 3,000 acres, a served on the applicant(s) named in this Rules. storage capacity of 35,000 acre-feet, and public notice. Take further notice that, pursuant to normal water surface elevation of 5,500 A10. Proposed Scope of Studies under the authority contained in and subject to feet msl (this will serve as the upper Permit—A preliminary permit, if issued, jurisdiction conferred upon the Federal reservoir); (3) a new 90-foot-high, 650- does not authorize construction. The Energy Regulation Commission by foot-long concrete dam; (4) a new term of the proposed preliminary permit Sections 7 and 15 of the Natural Gas Act reservoir having a surface area of 184 would be 36 months. The work and the Commission’s Rules of Practice acres, a storage capacity of 8,280 acre- proposed under the preliminary permit and Procedure, a hearing will be held feet, and normal water surface elevation would include economic analysis, without further notice before the of 4,950 feet msl (this would serve as preparation of preliminary engineering Commission or its designee on this the lower reservoir); (5) a new 18,000- plans, and a study of environmental application if no motion to intervene is foot long tunnel connecting the impacts. Based on the results of these filed within the time required herein, if reservoirs; (6) a new powerhouse within studies, the Applicant would decide the Commission on its own review of the tunnel, containing four generating whether to proceed with the preparation the matter finds that the abandonment units with a total installed capacity of of a development application to is required by the public convenience 264 MW; (7) a new 5-mile-long, 230–KV construct and operate the project. and necessity. If a motion for leave to transmission line; and (8) appurtenant B. Comments, Protests, or Motions to intervene is timely filed, or if the facilities. Intervene—Anyone may submit Commission on its own motion believes This project would have an annual comments, a protest, or a motion to that a formal hearing is required, further generation of 542,880 MWh and would intervene in accordance with the notice of such hearing will be duly be sold to a local utility. requirements of Rules of Practice and given. l. This notice also consists of the Procedure, 18 CFR 385.210, .211, .214. Under the procedure herein provided following standard paragraphs: A5, A7, In determining the appropriate action to for, unless otherwise advised, it will be A9, A10, B, C, and D2. take, the Commission will consider all unnecessary for Applicants to appear or A5. Preliminary Permit—Anyone protests or other comments filed, but be represented at the hearing. desiring to file a competing application only those who file a motion to David P. Boergers, for preliminary permit for a proposed intervene in accordance with the Acting Secretary. project must submit the competing Commission’s Rules may become a application itself, or a notice of intent to [FR Doc. 98–1870 Filed 1–26–98; 8:45 am] party to the proceeding. Any comments, file such an application, to the protests, or motions to intervene must BILLING CODE 6717±01±M Commission on or before the specified be received on or before the specified comment date for the particular comment date for the particular DEPARTMENT OF ENERGY application (see 18 CFR 4.36). application. Submission of a timely notice of intent C. Filing and Service of Responsive Federal Energy Regulatory allows an interested person to file the Documents—Any filings must bear in Commission competing preliminary permit all capital letters the title application no later than 30 days after ‘‘COMMENTS’’, ‘‘NOTICE OF INTENT Notice of Application for Preliminary the specified comment date for the TO FILE COMPETING APPLICATION’’, Permit particular application. A competing ‘‘COMPETING APPLICATION’’, preliminary permit application must ‘‘PROTEST’’, ‘‘MOTION TO January 21, 1998. conform with 18 CFR 4.30(b) and 4.36. INTERVENE’’, as applicable, and the Take notice that the following A7. Preliminary Permit—Any project number of the particular hydroelectric application has been filed qualified development applicant application to which the filing refers. with the Commission and is available desiring to file a competing Any of the above-named documents for public inspection: development application must submit to must be filed by providing the original a. Type of Application: Preliminary Permit. the Commission, on or before a and the number of copies provided by b. Project No.: 11609–000. specified comment date for the the Commission’s regulations to: The c. Date filed: November 3, 1997. particular application, either a Secretary, Federal Energy Regulatory d. Applicant: South Fork Irrigation competing development application or a Commission, 888 First Street, N.E., District and Hot Springs Valley notice of intent to file such an Washington, D.C. 20426. An additional Irrigation District. application. Submission of a timely copy must be sent to Director, Division e. Name of Project: West Valley notice of intent to file a development of Project Review, Federal Energy Project. application allows an interested person Regulatory Commission, at the above- f. Location: On the Cedar Creek, in to file the competing application no mentioned address. A copy of any Lassen and Modoc Counties, California. later than 120 days after the specified notice of intent, competing application 3890 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices or motion to intervene must also be be sent to the Applicant’s appeals, applications, petitions or other served upon each representative of the representatives. requests listed in this Notice were filed Applicant specified in the particular David P. Boergers, with the Office of Hearings and Appeals application. Acting Secretary. of the Department of Energy. D2. Agency Comments—Federal, [FR Doc. 98–1873 Filed 1–26–98; 8:45 am] Any person who will be aggrieved by the DOE action sought in any of these state, and local agencies are invited to BILLING CODE 6717±01±M cases may file written comments on the file comments on the described application within ten days of application. A copy of the application DEPARTMENT OF ENERGY publication of this Notice or the date of may be obtained by agencies directly receipt of actual notice, whichever from the Applicant. If an agency does Office of Hearings and Appeals occurs first. All such comments shall be not file comments within the time filed with the Office of Hearings and specified for filing comments, it will be Notice of Cases Filed During the Week Appeals, Department of Energy, presumed to have no comments. One of November 10 Through November 14, Washington, D.C. 20585–0107. copy of an agency’s comments must also 1997 Dated: January 15, 1998. During the Week of November 10 George B. Breznay, through November 14, 1997, the Director, Office of Hearings and Appeals.

LIST OF CASES RECEIVED BY THE OFFICE OF HEARINGS AND APPEALS [Week of Nov. 10 through Nov. 14, 1997]

Name and location of ap- Date plicant Case No. Type of submission

11/12/97 Dykema Gossett, Wash- VFA±0349 ...... Appeal of an Information Request Denial. If Granted: The October 20, 1997 Free- ington, DC. dom of Information Request Denial issued by the Oak Ridge Operations Office would be rescinded, and Dykema Gossett would receive access to certain DOE information. 11/13/97 Personnel Security Re- VSA±0146 ...... Request for Review of Opinion under 10 CFR Part 710. If Granted: The July 31, view. 1997 Opinion of the Office of Hearings and Appeals, Case No. VSO±0146, would be reviewed at the request of an individual employed by the Department of Energy. 11/14/97 Convergence Research, VFA±0350 ...... Appeal of an Information Request Denial. If Granted: The October 16, 1997 Free- Portland, Oregon. dom of Information Request Denial issued by the Bonneville Power Administra- tion would be rescinded, and Convergence Research would receive access to certain DOE information. 11/14/97 Personnel Security Re- VSA±0161 ...... Request for Review of Opinion under 10 CFR. If Granted: The October 14, 1997 view. Opinion of the Office of Hearings and Appeals, Case No. VSO-0161, would be reviewed at the request of an individual employed by the Department of Energy.

[FR Doc. 98–1828 Filed 1–26–98; 8:45 am] periodically reviewing the adequacy of e-mail at BILLING CODE 6450±01±P the State’s CPP. [email protected]. Pennsylvania developed and Robert J. Mitkus, submitted a CPP in 1977. EPA Deputy Director, Water Protection Division, ENVIRONMENTAL PROTECTION subsequently approved that CPP. This EPA Region III. AGENCY notice is being published in accordance [FR Doc. 98–1914 Filed 1–26–98; 8:45 am] with Paragraph 18 of the consent decree BILLING CODE 6560±50±P [FRL±5954±2] in the matter of American Littoral Society and Public Interest Research Continuing Planning Process for the ENVIRONMENTAL PROTECTION Group of Pennsylvania v. EPA, Civil Commonwealth of Pennsylvania AGENCY Docket No. 96–489. Consistent with the AGENCY: Environmental Protection consent decree, EPA is publishing this [FRL±5954±8] Agency (EPA). notice of availability of the CPP to ACTION: Notice of availability for public interested parties. By June 1, 1998, EPA Announcement of Stakeholders review and comment of the continuing will prepare and make available to Meeting on Arsenic in Drinking Water planning process (CPP) for the interested parties for their review and Commonwealth of Pennsylvania. comment its preliminary written AGENCY: Environmental Protection summary of its review of the CPP. Agency. SUMMARY: The Clean Water Act (the Act) Copies of the CPP are available by ACTION: Notice of stakeholders meeting. at section 303(e), and EPA’s contacting the person listed in the SUMMARY: implementing regulation at 40 CFR following FOR FURTHER INFORMATION The Environmental Protection 130.5, requires that each State shall CONTACT section. Once available, copies Agency (EPA) will be holding a one-day establish and maintain a continuing of EPA’s preliminary written summary public meeting on February 25, 1998 in planning process (CPP) consistent with may also be requested. San Antonio, Texas. The purpose of this the Act. Each State is responsible for meeting is to present information on managing its water quality program to FOR FURTHER INFORMATION CONTACT: EPA’s plans for activities to develop a implement the processes specified in Sarah B. Blackman, Office of proposed National Primary Drinking the CPP, and EPA is responsible for Watersheds, at (215) 566–5720, or by Water Regulation (NPDWR) for arsenic Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3891 under the Safe Drinking Water Act calling 1–800–422–2419 and mention revised after consideration of the final (SDWA) as amended, and solicit public ‘‘EPA Arsenic Meeting’’ to guarantee the report of the scientific peer review input on major technical and room rate of $94. group, which was subsequently implementation issues, and on preferred SUPPLEMENTARY INFORMATION: published May 8, 1997. In conducting approaches for continued public the studies in the arsenic research plan, involvement. This meeting will be very A. Background EPA will consult with the National similar in content to the arsenic Arsenic (As) is a naturally occurring Academy of Sciences, other Federal stakeholders meeting EPA held in element found in the human body and agencies, and other interested public Washington, DC on September 11–12, is present in food, water, and air. and private parties. 1997. At the upcoming meeting, EPA is Arsenic in drinking water occurs in B. Request for Stakeholder Involvement again seeking input from State and ground water and surface water and is Tribal drinking water programs, the associated with certain natural geologic EPA intends for the proposed NPDWR regulated community (water systems), conditions, as well as with for arsenic to incorporate the best public health organizations, academia, contamination from human activities. available science, risk assessment, environmental and public interest Arsenic ingestion is linked to skin treatment technologies, occurrence data, groups, engineering firms, and other cancer and arsenic inhalation to lung cost/benefit analyses, and stakeholder stakeholders on a number of issues cancer. In addition, arsenic ingestion input on technical and implementation related to developing the NPDWR for seems to be associated with vascular issues. arsenic. EPA encourages the full effects, gastrointestinal irritation, and The stakeholders meeting will cover a participation of stakeholders throughout cancers of the kidney, bladder, liver, broad range of issues including: (1) this process. lung, and other organs. Water primarily regulatory process, including risk DATES: The stakeholder meeting on contains inorganic arsenic species management decisions; (2) arsenic risk arsenic in drinking water will be held (AsV∂ and AsIII∂), which tend to be assessment (exposure, health on Wednesday, February 25, 1998 from more toxic than organic forms. assessment, national occurrence); (3) 8:30 a.m. to 12 noon and 1 p.m. to 5 In 1976 EPA issued a National Interim key technical assessments (treatment p.m. Central Standard Time. Primary Drinking Water Regulation for technologies, treatment residuals, cost, arsenic at 50 parts per billion (ppb; µg/ analytical methods); (4) small system ADDRESSES: The meeting will be held in L). Under the 1986 amendments to the Holiday Inn Riverwalk ((210) 224– concerns; and (5) future stakeholder SDWA, Congress directed EPA to 2500), which is located at 217 North St. involvement. Background materials on publish Maximum Contaminant Level Mary’s Street, San Antonio, TX 78205. arsenic in drinking water issues will be Goals (MCLGs) and promulgate National To register for the meeting, please sent in advance of the meeting to those Primary Drinking Water Regulations contact the Safe Drinking Water Hotline who register with the Safe Drinking (NPDWRs) for 83 contaminants, at 1–800–426–4791 between 9 a.m. and Water Hotline by Wednesday, February including arsenic. When EPA failed to 5:30 p.m. Eastern Standard Time. Those 18, 1998. meet the statutory deadline for EPA has announced this public registered for the meeting by promulgating an arsenic regulation, a meeting to hear the views of Wednesday, February 18, 1998, will citizens’ group filed suit to compel EPA stakeholders on EPA’s plans for receive an agenda, logistics sheet, and to do so. EPA entered into a consent activities to develop a NPDWR for discussion papers prior to the meeting. decree to issue the regulation. EPA held arsenic. The public is invited to provide Members of the public who cannot internal workgroup meetings throughout comments on the issues listed above attend the meeting in person may 1994, addressing risk assessment, and other issues related to the arsenic in participate via conference call and treatment, analytical methods, arsenic drinking water regulation during the should register with the Safe Drinking occurrence, exposure, costs, February 25, 1998 meeting and during Water Hotline by February 18 in order implementation issues, and regulatory future opportunities for stakeholder to receive copies of the overheads in options before deciding in early 1995 to participation. advance. Please provide your name, defer the regulation in order to better Dated: January 21, 1998. organization, title, mailing address, characterize health effects. telephone number, facsimile number, e- On August 6, 1996, Congress Cynthia C. Dougherty, mail address and telephone number for amended the SDWA, adding section Director, Office of Ground Water and Drinking EPA to connect the caller via conference 1412(b)(12)(A) which requires, in part, Water. call [if applicable] for the ‘‘Arsenic that EPA propose a NPDWR for arsenic [FR Doc. 98–1931 Filed 1–26–98; 8:45 am] meeting.’’ by January 1, 2000 and issue a final BILLING CODE 6560±50±P FOR FURTHER INFORMATION CONTACT: For regulation by January 1, 2001. The general information on meeting current maximum contaminant level logistics, please contact the Safe (MCL) of 50 µg/L remains in effect until FEDERAL COMMUNICATIONS Drinking Water Hotline at 1–800–426– the effective date of the revised rule. COMMISSION 4791. For information on the activities The 1996 amendments to the SDWA related to developing the NPDWR for also directed EPA to develop by ITU Proposal for Cost Recovery arsenic, contact the Safe Drinking Water February, 1997, a comprehensive AGENCY: Federal Communications Hotline at 1–800–426–4791, or visit the arsenic research plan to assess health Commission. EPA Office of Ground Water and risks associated with exposure to low ACTION: Notice. Drinking Water arsenic webpage at levels of arsenic. In December 1996, http://www.epa.gov/OGWDW/ars/ EPA announced the availability of the SUMMARY: The Federal Communications arsenic.html, which contains electronic arsenic research plan, and the public Commission seeks comment on the copies of the discussion papers from the had an opportunity to comment on the appropriateness and feasibility of a September 11–12, 1997 stakeholders paper at a scientific peer review meeting proposal by the International meeting. Registrants must make their in January, 1997. EPA reported to Telecommunications Commission (ITU) own room reservations for the Holiday Congress in late January that the plan for cost recovery for registering and Inn Riverwalk by January 30, 1998 by was publicly available and would be processing satellite notifications. 3892 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

In particular, the Commission seeks established new federal universal that it would publish these figures and comment on how the Commission could service support mechanisms consistent the proposed quarterly contribution continue to make the ITU notifications with the Communications Act of 1934, factors in a Public Notice.9 while ensuring that the applicant makes as amended.1 The Commission required On November 13, 1997, using the cost recovery payments directly to the all telecommunications carriers that information submitted on October 31, ITU. provide interstate telecommunications 1997 by the Universal Service DATES: Submit comments on or before services, providers of interstate Administrative Company (USAC), February 27, 1998, and reply comments telecommunications, and payphone Schools and Libraries Corporation, and on or before March 27, 1998. service providers to contribute to the Rural Health Care Corporation federal universal service support (collectively, the administrative ADDRESSES: Send comments to Richard mechanisms.2 The Commission found corporations), the Accounting and B. Engelman, Chief Planning and that contributions for the schools, Audits Division (Division) announced Negotiations Division, International libraries, and rural health care support the proposed universal service Bureau, Federal Communications mechanisms would be based on contribution factors for the first quarter Commission, 2000 M Street, N.W., interstate, intrastate, and international of 1998.10 Pursuant to the Commission’s Washington, D.C. 20554. end-user telecommunications revenues.3 rules, those contribution factors would SUPPLEMENTARY INFORMATION: During the The Commission also found that have been deemed approved on June 23–27, 1997 meeting of the contributions for the high cost, rural, November 28, 1997 if the Commission International Telecommunications and insular and low-income support had taken no action regarding the Union Council, the subject of ITU cost mechanisms would be based on proposed contribution factors.11 On recovery for registering and processing interstate and international end-user November 26, 1997, however, the satellite notifications, as well as other telecommunications revenues.4 Division extended the review period for products and services including On July 18, 1997, the Commission the proposed first quarter 1998 terrestrial notifications, was addressed. released an Order directing the National universal service contribution factors The Council agreed to Resolution 1113 Exchange Carrier Association (NECA) to until December 5, 1997.12 On December that adopted the principle of cost create an independently functioning 5, 1997, the Division further extended recovery for satellite registrations and not-for-profit subsidiary, the Universal the period of time during which the notifications. The Federal Service Administrative Company Commission could modify the proposed Communications Commission (FCC) (USAC), through which it will universal service contribution factors for seeks comment on the appropriateness administer temporarily certain aspects the first quarter of 1998 until December and feasibility of the recovery by the of the federal universal service support 12, 1997.13 On December 12, 1997, the ITU of such fees and how, if adopted, mechanisms.5 The Commission also Division extended the review period for the ITU cost recovery fees should be directed NECA to create two the proposed contribution factors until administered within the FCC independent, not-for-profit entities, December 16, 1997.14 notification process. Schools and Libraries Corporation and On December 16, 1997, the Federal Communications Commission. Rural Health Care Corporation, to Commission released the Third Order administer certain aspects of the Magalie Roman Salas, on Reconsideration in CC Docket 96–45. schools, libraries, and rural health care In that Order, the Commission Secretary. support mechanisms.6 The Commission concluded that it could reduce the [FR Doc. 98–1835 Filed 1–26–98; 8:45 am] instructed USAC, Schools and Libraries maximum amounts collected during the BILLING CODE 6712±01±P Corporation, and Rural Health Care first six months of 1998 for the schools Corporation to submit projections of and libraries and rural health care demand and administrative expenses for support mechanisms without FEDERAL COMMUNICATIONS their respective support mechanisms for COMMISSION jeopardizing the sufficiency of the the first quarter of 1998 to the support mechanisms.15 Consistent with [CC Docket No. 96±45 and 97±160; DA 97± Commission at least sixty days before the Commission’s action on 2623] the start of the first quarter of 1998.7 reconsideration, in this Public Notice, USAC also was required to compile total the Bureau revises the projections of Universal Service interstate, intrastate, and international demand for the low income and rural end-user telecommunications revenues AGENCY: Federal Communications health care support mechanisms and and submit that information to the Commission. 8 Commission. The Commission stated 9 NECA Report and Order at para. 48. ACTION: Notice. 10 Proposed First Quarter Universal Service 1 Federal-State Joint Board on Universal Service, Contribution Factors, Public Notice, DA 97–2392 SUMMARY : In this Public Notice, released Report and Order, 12 FCC Rcd 8776 (1997) (rel. Nov. 13, 1997). On November 19, 1997, AT&T December 16, 1997, the Common Carrier (Universal Service Order). filed comments on the November 13th Public Bureau revises and approves universal 2 Universal Service Order, 12 FCC Rcd at 9173– Notice. See Letter from Rick D. Bailey, AT&T, to service contribution factors for the first 9178, 9183–9185. Magalie Roman Salas, FCC, dated November 19, 3 1997. quarter of 1998. These factors will be Universal Service Order, 12 FCC Rcd at 9203, 9205. 11 47 CFR 54.709(a)(3). used to calculate first quarter 4 Universal Service Order, 12 FCC Rcd at 9200, 12 Extended Review Period for First Quarter contributions to universal service. 9202–9203. Universal Service Contribution Factors, Public FOR FURTHER INFORMATION CONTACT: 5 Changes to the Board of Directors of the National Notice, DA 97–2510 (rel. Nov. 26, 1997). Exchange Carrier Association, Inc., Federal-State 13 Further Extension of Review Period for First Diane Law, Common Carrier Bureau, Joint Board on Universal Service, Report and Order Quarter Universal Service Contribution Factors, Accounting and Audits Division, (202) and Second Order on Reconsideration, CC Dockets Public Notice, DA 97–2560 (rel. Dec. 5, 1997). 418–7400, or via E-mail to No. 97–21, 96–45, FCC 97–253 (rel. July 18, 1997) 14 Additional Extension of Review Period for First ‘‘[email protected].’’ (NECA Report and Order). Quarter Universal Service Contribution Factors, 6 NECA Report and Order at para. 57. Public Notice, DA 97–2600 (rel. Dec. 12, 1997). SUPPLEMENTARY INFORMATION: In the 7 NECA Report and Order at para. 47. 15 Federal-State Joint Board on Universal Service, Universal Service Order released on 8 NECA Report and Order at paras. 43–48. See Third Order on Reconsideration, CC Docket 96–45, May 8, 1997, the Commission also 47 CFR 54.709(a)(2), (3), and 54.711(b). FCC 97–411 (rel. Dec. 16, 1997). Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3893

approves revised universal service million, instead of the $136.3 million cost and low income support contribution factors for the first quarter projected by USAC. Therefore, we find mechanisms decreased because of 1998. that the first quarter projection of contributions will be collected on a The Commission concluded in the demand for the low income support monthly, as opposed to quarterly, basis, Third Order on Reconsideration in CC mechanism should be $125 million. while support will continue to be Docket 96–45 that it should not impose The Bureau also adjusts the first distributed on a monthly basis. As a unnecessary financial burdens on quarter total program costs for the rural result of the 75-day window filing service provider contributors to health care support mechanism, period, initial support for the schools universal service by collecting funds consistent with the Third Order on and libraries and rural health care that exceed demand. Accordingly, the Reconsideration in CC Docket 96–45, support mechanisms will be distributed 16 Bureau has reviewed all of the from $100 million to $25 million. in the second quarter.19 The amount of administrative corporations’ projections On November 26, 1997, the interest earned for the schools and and has determined that the estimated Commission released the Second Order libraries and rural health care support demand for the low income support on Reconsideration in CC Docket No. mechanisms decreased slightly. mechanism appears to be too high. 96–45, which authorized the Accordingly, we have adjusted the Based on our analysis, we project that Administrator to bill contributors and annual demand for the low income collect contributions on a monthly, projected amount of interest income. support mechanism should be rather than a quarterly basis.17 That Therefore, first quarter projections of approximately $500 million.15a This Order will reduce the interest income demand and administrative expenses annual figure of $500 million yields a for the first quarter of 1998.18 The are as follows (revised figures are in quarterly demand projection of $125 amount of interest earned for the high bold):20

[In millions of dollars]

Administra- Program Program tive ex- Interest Total pro- demand penses income gram costs

Schools and Libraries ...... 299.3 2.7 (2.0) 300.0 Rural Health Care ...... 23.0 202.2 (0.2) 25.0

Subtotal ...... 322.3 4.9 (2.2) 325.0 High Cost ...... 434.0 1.1 (1.0) 434.1 Low Income ...... 125.0 0.6 (0.3) 125.3

Subtotal ...... 559.0 1.7 (1.3) 559.4

Total ...... 881.3 6.6 (3.5) 884.4

15a This $500 million projection of annual Tel. Co., Formal Case No. 850, Order No. 9927, page mechanisms would be distributed 40 days after demand is based on the following: According to the 166 (rel. Jan. 29, 1992). In the Universal Service January 1, 1998. 1997 Monitoring Report, 5.2 million customers Order, the Commission estimated that annual 19 Schools and Libraries Corporation and Health participated in Lifeline in 1996. Monitoring Report, funding for LinkUp will increase to $23.6 million. Care Corporation Adopt Length of Filing Windows, CC Docket No. 87–339, May 1997, pgs. 86–87, table Universal Service Order, 12 FCC Rcd at 8966, n. Public Notice, DA 97–2349 (rel. Nov. 6, 1997). See 2.3. Assuming participation rates among existing 903. Thus, the projection of annual low income also 47 CFR 69.616, 69.618(a)(7), 69.619(a)(7) customers remain constant, low income support for demand is approximately $500 million. ($436 (instructing the Schools and Libraries and Rural existing Lifeline participants will be $436 million million plus $40 million plus $23.6 million). Health Care Corporations to authorize USAC to for the year. (5.2 million people times $7, which is 16 submit payments within 20 days of the receipt of the maximum amount of federal support for Lifeline The Rural Health Care Corporation may collect up to $25 million in the first quarter of 1998. Third requisite forms and instructing USAC to distribute subscribers in states that provide matching funds, payments within 20 days of receiving multiplied by 12 months). In the Universal Service Order on Reconsideration at para. 4. authorization). We anticipate that the window Order, the Commission estimated that, by extending 17 Changes to the Board of Directors of the period for Schools and Libraries Corporation and the low income support mechanism to non- National Exchange Carrier Association, Inc., Rural Health Care Corporation will not begin before participating states, approximately 1.9 million new Federal-State Joint Board on Universal Service, the second week in January 1998, funds will not be low-income consumers would become eligible for Second Order on Reconsideration in CC Docket 97– distributed until after the 75-day window period the support mechanism. Universal Service Order, 21, CC Docket Nos. 97–21, 96–45, FCC 97–400 (rel. has closed, and approximately 40 days have passed 12 FCC Rcd at 8966, n. 903. Assuming one-third of Nov. 26, 1997). (20 days for submission of payments, 20 days to eligible consumers participate in the support 18 In calculating interest income, USAC, Schools mechanism and that non-participating states do not distribute payments, pursuant to 47 CFR 69.616, and Libraries Corporation, and Rural Health Care provide matching funds, low income support for 69.618(a)(7), 69.619(a)(7)). Thus, payments for the Corporation assumed payments for the entire new Lifeline participants will be $40 million for the schools and libraries and rural health care support year. (627,000 people (.33 x 1.9 million people) x quarter would arrive on January 1, 1998. USAC mechanisms will not be distributed until May 1998. $5.25 (the maximum amount of federal support for assumed the first payments for the high cost and 20 Administrative expenses appear to be high Lifeline subscribers in states that do not provide low income support mechanisms would be relative to projected quarterly demand, because matching funds) x 12 months). We have assumed distributed at the end of February. Schools and start-up costs have been allocated to the first a one-third participation rate because the Libraries Corporation and Rural Health Care quarter. We anticipate that administrative expenses participation rate for Washington D.C.’s low income Corporation assumed that the first payments for the will total less than two percent of annual program program is 32.3 percent. Chesapeake and Potomac schools, libraries, and rural health care support costs. 3894 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Based on information contained in the quarter revenues, the revised The purpose of the meeting is to begin Universal Service Worksheets, FCC contribution factors set forth below are preparations for the 1999 World Form 457, USAC submitted the based on contribution bases that are Radiocommunication Conference. following information regarding end- divided by two. This results in a more DATES: February 10, 1998; 9:30 a.m.– user telecommunications revenues on accurate portrayal of the contribution 12:00 p.m. November 13, 1997: factors but does not change the amounts ADDRESSES: Federal Communications Total Interstate, Intrastate, and collected. Commission, 1919 M Street, N.W., International End-User Based on the figures submitted by Room 856, Washington D.C. 20554. Telecommunications Revenues from USAC, Schools and Libraries FOR FURTHER INFORMATION CONTACT: January 1, 1997–June 30, 1997: $89.827 Corporation, and Rural Health Care Damon C. Ladson, FCC International billion. Corporation, and revised as set forth Bureau, Planning and Negotiations Total Interstate and International End- above, the approved contribution factors Division, at (202) 418–0420. User Telecommunications Revenues for the first quarter of 1998 are as from January 1, 1997–June 30, 1997: follows: SUPPLEMENTARY INFORMATION: The $35.001 billion.21 Contribution factor for the schools Federal Communications Commission USAC recommended that, in and libraries and rural health care (FCC) established the WRC–99 Advisory calculating the contribution bases, the support mechanisms: Committee to provide advice, technical Commission adjust end-user Total Program Costs / Contribution support and recommendations relating telecommunications revenues Base (Interstate, International, and to the preparation of United States downward to account for possible Intrastate) = $0.325 billion / ($89.827 proposals and positions for the 1999 uncollectible contributions and possible billion / 2) = 0.0072. World Radiocommunication Conference errors in the projections of demand and Contribution factor for the high cost (WRC–99). In accordance with the administrative expense. The proposed and low income support mechanisms: Federal Advisory Committee Act, Public contribution factors set forth in the Total Program Costs / Contribution Law 92–463, as amended, this notice November 13, 1997 Public Notice thus Base (Interstate and International) = advises interested persons of the initial were based on USAC’s recommended $0.559 billion / ($35.001 billion / 2) = meeting of the WRC–99 Advisory contribution bases.22 The revised 0.0319. Committee. The WRC–99 Advisory contribution factors set forth below, These factors are the approved first Committee has an open membership. however, are based on contribution quarter 1998 universal service All interested parties are invited to bases that include no adjustments for contribution factors. To calculate participate in the Advisory Committee uncollectibles or errors in projection. contributions, USAC shall multiply and to attend its meetings. The Based on the low level of carrier-to- these factors by one half of contributors’ proposed agenda for the first meeting is carrier uncollectibles for access end-user telecommunications revenues as follows: charges,23 we have concluded that for January 1, 1997 through June 30, Agenda projected levels of uncollectible 1997, as reported on Universal Service contributions should be minimal. Worksheets. USAC will bill and collect First Meeting of the WRC–99 Advisory Furthermore, given the quarterly those contributions on a monthly basis. Committee, Federal Communications evaluation of demand, we find that we For further information, contact Diane Commission, 1919 M Street, N.W., do not need to take into account Law, Universal Service Branch, Room 856, Washington, D.C. 20554 possible errors in projections when Accounting and Audits Division, February 10, 1998; 9:30 a.m.–12:00 p.m. setting the contribution factors. Any Common Carrier Bureau, at (202) 418– projection-related errors can be 7382. 1. Opening Remarks 24 2. Approval of Agenda corrected in subsequent quarters. Federal Communications Commission. Finally, we note that the contribution 3. Report on FCC Reorganization of Timothy A. Peterson, factors proposed by USAC and set forth WRC Preparatory Process in the Public Notice were derived by Deputy Division Chief, Common Carrier 4. Suggestions for Improving the Bureau. dividing quarterly total program costs Preparatory Process by revenues for a six-month period. [FR Doc. 98–1834 Filed 1–26–98; 8:45 am] 5. Report on Recent ITU-R meetings Although these factors, if approved, BILLING CODE 6712±01±P 6. Advisory Committee Structure and would have been used to collect funds Meeting Schedule 7. Other Business for the first quarter, they would have FEDERAL COMMUNICATIONS Federal Communications Commission. been applied to the six-month revenues COMMISSION reported on individual contributor’s Magalie Roman Salas, Universal Service Worksheets. To obtain Meeting of the Advisory Committee for Secretary. contribution factors that will be applied the 1999/2000 World [FR Doc. 98–1836 Filed 1–26–98; 8:45 am] to revenues that approximate first Radiocommunication Conference BILLING CODE 6712±01±P (WRC±99 Advisory Committee) 21 Letter from William Stern, NECA to Secretary, FCC, dated November 13, 1997. AGENCY: Federal Communications FEDERAL COMMUNICATIONS 22 Letter from John A. Ricker, NECA to Universal Commission. Service Branch, dated November 10, 1997. COMMISSION ACTION: Notice. 23 The Commission estimates that carrier-to- [CC Docket No. 92±237; DA 98±110] carrier uncollectible rates are 0.2 percent. This estimate was calculated using 1996 ARMIS data. SUMMARY: In accordance with the (1996 ARMIS 4301, Traffic Sensitive Total Federal Advisory Committee Act, this Conference Call Meeting of the North Uncollectibles (Column R, Row 1060) divided by notice advises interested persons that American Numbering Council Traffic Sensitive Total Revenues (Column R, Row the next meeting of the WRC–99 1090)). AGENCY: Federal Communications 24 See also Letter from Rick D. Bailey, AT&T, to Advisory Committee will be held on Commission. Tuesday, February 10, 1998, at the Magalie Roman Salas, FCC, dated November 19, ACTION: Notice. 1997 at page 4. Federal Communications Commission. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3895

SUMMARY: On January 22, 1998, the Expedited Waiver of 47 CFR payphones, hotels, hospitals, and Commission released a public notice § 52.19(c)(3)(ii), filed January 12, 1998. educational institutions. announcing the February 9, 1998, 2. NANC’s responsibilities under FCC After consideration of these items, the conference call meeting of the North 97–51, in the Matter of the Use of N11 Commission will hold an en banc American Numbering Council (NANC). Codes and Other Abbreviated Dialing presentation on the status of local The intended effect of this action is to Arrangements. telephone competition. make the public aware of the NANC’s 3. Proposal for Activity of the NANC Additional information concerning next meeting and its agenda. Steering Committee, Paul Hart, USTA, this meeting may be obtained from FOR FURTHER INFORMATION CONTACT: Memorandum to NANC members of Maureen Peratino or David Fiske, Office Jeannie Grimes at (202) 418–2313. The December 18, 1997. of Public Affairs, telephone number address is: Network Services Division, 4. Other business. (202) 418–0500. Common Carrier Bureau, Federal Federal Communications Commission. Copies of materials adopted at this Communications Commission, 2000 M Geraldine A. Matise, meeting can be purchased from the Street, NW, Suite 235, Washington, DC FCC’s duplicating contractor, 20554. The fax number is: (202) 418– Chief, Network Services Division, Common Carrier Bureau. International Transcription Services, 7314. The TTY number is: (202) 418– Inc. (ITS, Inc.) at (202) 857–3800 or fax [FR Doc. 98–1960 Filed 1–26–98; 8:45 am] 0484. (202) 857–3805 and 857–3184. These BILLING CODE 6712±01±P SUPPLEMENTARY INFORMATION: Released copies are available in paper format and January 22, 1998. alternative media, including large print/ The North American Numbering FEDERAL COMMUNICATIONS type; digital disk; and audio tape. ITS Council (NANC), has scheduled a COMMISSION may be reached by e-mail: its— meeting to be held by conference call on [email protected]. Their Internet February 9, 1998, from 11 a.m. until Sunshine Act Meetings; Open address is http://www.itsi.com. 1:30 p.m. EST. The conference bridge Commission Meeting Thursday, This meeting can be viewed over number is 1–888–582–4100, PIN January 29, 1998 George Mason University’s Capitol 6621102. Due to limited port space, Connection. For information on this NANC members and Commission staff The Federal Communications service call (703) 993–3100. The audio will have first priority on the call. Commission will hold an Open Meeting portion of the meeting will be broadcast Members of the public may join the call on the subjects listed below on live on the Internet via the FCC’s as remaining port space permits. Thursday, January 29, 1998, which is Internet audio broadcast page at . The meeting NANC conference call meeting is being Room 856, at 1919 M Street, NW., can also be heard via telephone, for a published in the Federal Register less Washington, DC. fee, from National Narrowcast Network, than 15 calendar days prior to the Item No., Bureau, Subject telephone (202) 966–2211 or fax (202) meeting due to NANC’s need to discuss 966–1770; and from Conference Call a new, time sensitive issue before the 1—Mass Media—Title: Advanced USA (available only outside the next scheduled meeting. This statement Television Systems and Their Impact Washington, DC. metropolitan area), complies with the General Services Upon the Existing Television telephone 1–800–962–0044. Audio and Administration Management Broadcast Service (MM Docket No. video tapes of this meeting can be Regulations implementing the Federal 87–268). Summary: The Commission purchased from Infocus, 341 Victory Advisory Committee Act. See 41 CFR will consider petitions for Drive, Herndon, VA 20170, telephone § 101–6.1015(b)(2). reconsideration filed in response to (703) 834–0100; fax number (703) 834– This meeting is open to the members the Commission’s Fifth Report and 0111. of the general public. The FCC will Order in the digital television Dated January 22, 1998. attempt to accommodate as many proceeding. Federal Communications Commission. participants as possible. Participation 2—Common Carrier—Title: Computer Magalie Roman Salas, III Further Remand Proceedings: Bell on the conference call is limited. The Secretary. Operating Company Provision of public may submit written statements to [FR Doc. 98–2030 Filed 1–23–98; 11:49 am] the NANC, which must be received two Enhanced Services (CC Docket No. BILLING CODE 6712±01±F business days before the meeting. In 95–20); 1998 Biennial Regulatory addition, oral statements at the meeting Review -- Review of Computer III and by parties or entities not represented on ONA Safeguards and Requirements. the NANC will be permitted to the Summary: The Commission will FEDERAL ELECTION COMMISSION extent time permits. Such statements consider action concerning the [Notice 1998±2] will be limited to five minutes in length provision by Bell Operating Companies of intraLATA enhanced by any one party or entity, and requests Privacy Act of 1974; Republication and services. This item is also part of the to make an oral statement must be Notice of New Routine Uses for Commission’s 1998 biennial review of received two business days before the Disclosure meeting. Requests to make an oral regulations. statement or provide written comments 3—Common Carrier—Title: Billed Party AGENCY: Federal Election Commission. to the NANC should be sent to Jeannie Preference for InterLATA 0+ Calls (CC ACTION: Notice of effective date. Grimes at the address under FOR Docket No. 92–77). Summary: The FURTHER INFORMATION CONTACT, stated Commission will consider proposed SUMMARY: On December 15, 1997, the above. rules concerning charges and Federal Election Commission published practices of operator services a proposed notice of amended and/or Proposed Agenda providers (OSPs) in connection with revised systems of records. There having 1. Discussion of New York Public calls from public phones and other been no comments or changes made in Service Commission Petition for aggregator locations such as the amended/revised systems, these 3896 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices proposed systems of records become Board of Governors of the Federal Reserve 1. First Savings Bank of Washington effective January 27, 1998. System, January 21, 1998. Bancorp, Inc., Walla Walla, Washington; Dated: January 21, 1998. Jennifer J. Johnson, to merge with Towne Bancorp, Inc., Joan Aikens, Deputy Secretary of the Board. Woodinville, Washington, and thereby indirectly acquire Towne Bank, Chairman, Federal Election Commission. [FR Doc. 98–1824 Filed 1–26–98; 8:45 am] BILLING CODE 6210-01-F Woodinville, Washington. [FR Doc. 98–1842 Filed 1–26–98; 8:45 am] 2. J, J, & B Capital, L.P., Los Angeles, BILLING CODE 6715±01±M California; to become a bank holding FEDERAL RESERVE SYSTEM company by acquiring 59.5 percent of the voting shares of Founders National Formations of, Acquisitions by, and Bank of Los Angeles, Los Angeles, FEDERAL RESERVE SYSTEM Mergers of Bank Holding Companies California. Change in Bank Control Notices; The companies listed in this notice Board of Governors of the Federal Reserve System, January 21, 1998. Acquisitions of Shares of Banks or have applied to the Board for approval, Bank Holding Companies pursuant to the Bank Holding Company Jennifer J. Johnson, Act of 1956 (12 U.S.C. 1841 et seq.) Deputy Secretary of the Board. The notificants listed below have (BHC Act), Regulation Y (12 CFR Part [FR Doc. 98–1823 Filed 1–26–98; 8:45 am] applied under the Change in Bank 225), and all other applicable statutes BILLING CODE 6210-01-F Control Act (12 U.S.C. 1817(j)) and § and regulations to become a bank 225.41 of the Board’s Regulation Y (12 holding company and/or to acquire the CFR 225.41) to acquire a bank or bank assets or the ownership of, control of, or FEDERAL RESERVE SYSTEM holding company. The factors that are the power to vote shares of a bank or considered in acting on the notices are Formations of, Acquisitions by, and bank holding company and all of the set forth in paragraph 7 of the Act (12 Mergers of Bank Holding Companies banks and nonbanking companies U.S.C. 1817(j)(7)). owned by the bank holding company, The companies listed in this notice The notices are available for including the companies listed below. have applied to the Board for approval, immediate inspection at the Federal pursuant to the Bank Holding Company Reserve Bank indicated. The notices The applications listed below, as well Act of 1956 (12 U.S.C. 1841 et seq.) also will be available for inspection at as other related filings required by the (BHC Act), Regulation Y (12 CFR Part the offices of the Board of Governors. Board, are available for immediate 225), and all other applicable statutes Interested persons may express their inspection at the Federal Reserve Bank and regulations to become a bank views in writing to the Reserve Bank indicated. The application also will be holding company and/or to acquire the indicated for that notice or to the offices available for inspection at the offices of assets or the ownership of, control of, or of the Board of Governors. Comments the Board of Governors. Interested the power to vote shares of a bank or must be received not later than February persons may express their views in bank holding company and all of the 10, 1998. writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the banks and nonbanking companies A. Federal Reserve Bank of Atlanta owned by the bank holding company, (Lois Berthaume, Vice President) 104 proposal also involves the acquisition of a nonbanking company, the review also including the companies listed below. Marietta Street, N.W., Atlanta, Georgia The applications listed below, as well 30303-2713: includes whether the acquisition of the nonbanking company complies with the as other related filings required by the 1. James D. Evans, Miami, Florida; to Board, are available for immediate acquire additional voting shares of standards in section 4 of the BHC Act. Unless otherwise noted, nonbanking inspection at the Federal Reserve Bank Equitable Bank, Fort Lauderdale, indicated. The application also will be Florida. activities will be conducted throughout the United States. available for inspection at the offices of B. Federal Reserve Bank of St. Louis the Board of Governors. Interested (Randall C. Sumner, Vice President) 411 Unless otherwise noted, comments regarding each of these applications persons may express their views in Locust Street, St. Louis, Missouri 63102- writing on the standards enumerated in 2034: must be received at the Reserve Bank indicated or the offices of the Board of the BHC Act (12 U.S.C. 1842(c)). If the 1. Michael W. Welge, Chester, Illinois; proposal also involves the acquisition of to acquire additional voting shares of Governors not later than February 20, 1998. a nonbanking company, the review also Chester Bancorp, Inc., Chester, Illinois, includes whether the acquisition of the A. Federal Reserve Bank of St. Louis and thereby indirectly acquire Chester nonbanking company complies with the (Randall C. Sumner, Vice President) 411 National Bank, Chester, Illinois, and standards in section 4 of the BHC Act. Locust Street, St. Louis, Missouri 63102- Chester National Bank, Perryville, Unless otherwise noted, nonbanking 2034: Missouri. activities will be conducted throughout C. Federal Reserve Bank of Kansas 1. National City Bancshares, Inc., the United States. City (D. Michael Manies, Assistant Vice Evansville, Indiana; to merge with Unless otherwise noted, comments President) 925 Grand Avenue, Kansas Vernois Bancshares, Inc., Mount regarding each of these applications City, Missouri 64198-0001: Vernon, Illinois, and thereby indirectly must be received at the Reserve Bank 1. James Michael Adcock, and David acquire Bank of Illinois, Mount Vernon, indicated or the offices of the Board of Wesley Schubert, both of Shawnee, Illinois. Comments regarding this Governors not later than February 23, Oklahoma, as Trustees of the Don application must be received by 1998. Bodard 1995 Revocable Trust; to acquire February 11, 1998. A. Federal Reserve Bank of Cleveland voting shares of First Medicine Lodge B. Federal Reserve Bank of San (Jeffery Hirsch, Banking Supervisor) Bancshares, Inc., Medicine Lodge, Francisco (Maria Villanueva, Manager 1455 East Sixth Street, Cleveland, Ohio Kansas, and thereby indirectly acquire of Analytical Support, Consumer 44101-2566: First National Bank of Medicine Lodge, Regulation Group) 101 Market Street, 1. Banc One Corporation, Columbus, Medicine Lodge, Kansas. San Francisco, California 94105-1579: Ohio; to acquire and thereby merge with Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3897

First Commerce Corporation, New FEDERAL RESERVE SYSTEM MATTERS TO BE CONSIDERED: Orleans, Louisiana, and thereby 1. Federal Reserve Bank and Branch indirectly acquire First National Bank of Notice of Proposals to Engage in director appointments. (This item was Commerce, New Orleans, Louisiana; Permissible Nonbanking Activities or originally announced for a closed City National Bank of Baton Rouge, to Acquire Companies that are meeting on January 14, 1998.) Baton Rouge, Louisiana; Rapides Bank & Engaged in Permissible Nonbanking 2. Personnel actions (appointments, Trust Company in Alexandria, Activities promotions, assignments, reassignments, and salary actions) Alexandria, Louisiana; The First The companies listed in this notice involving individual Federal Reserve National Bank of Lafayette, Lafayette, have given notice under section 4 of the System employees. Louisiana; The First National Bank of Bank Holding Company Act (12 U.S.C. Lake Charles, Lake Charles, Louisiana; 3. Any matters carried forward from a 1843) (BHC Act) and Regulation Y, (12 previously announced meeting. Central Bank, Monroe, Louisiana; and CFR Part 225) to engage de novo, or to CONTACT PERSON FOR MORE INFORMATION: First United Bank of Farmerville, acquire or control voting securities or Joseph R. Coyne, Assistant to the Board; Farmerville, Louisiana. assets of a company that engages either 202–452–3204. In connection with this application, directly or through a subsidiary or other SUPPLEMENTARY INFORMATION: You may Applicant also has applied to acquire company, in a nonbanking activity that is listed in § 225.28 of Regulation Y (12 call 202–452–3206 beginning at First Commerce Service Corporation, approximately 5 p.m. to business days New Orleans, Louisiana, and thereby CFR 225.28) or that the Board has determined by Order to be closely before the meeting for a recorded engage in providing data processing and announcement of bank and bank data transmission services, facilities, related to banking and permissible for bank holding companies. Unless holding company applications data bases, advice and access to such scheduled for the meeting; or you may services, facilities, pursuant to § otherwise noted, these activities will be conducted throughout the United States. contact the Board’s Web site at http:// 225.28(b)(14) of the Board’s Regulation www.bog.frb.fed.us for an electronic Y. Each notice is available for inspection announcement that not only lists at the Federal Reserve Bank indicated. applications, but also indicates B. Federal Reserve Bank of St. Louis The notice also will be available for (Randall C. Sumner, Vice President) 411 procedural and other information about inspection at the offices of the Board of the meeting. Locust Street, St. Louis, Missouri 63102- Governors. Interested persons may 2034: express their views in writing on the Dated: January 23, 1998. 1. First United Bancshares, Inc., El question whether the proposal complies Jennifer J. Johnson, Dorado, Arkansas; to merge with First with the standards of section 4 of the Deputy Secretary of the Board. Republic Bancshares, Inc., Rayville, BHC Act. [FR Doc. 98–2112 Filed 1–23–98; 3:32 pm] Louisiana, and thereby indirectly Unless otherwise noted, comments BILLING CODE 6210±01±P acquire First Republic Bank, Rayville, regarding the applications must be Louisiana. received at the Reserve Bank indicated FEDERAL RESERVE SYSTEM 2. Unity Bancshares, L.L.C., St. John, or the offices of the Board of Governors not later than February 20, 1998. Missouri; to become a bank holding Differences in Capital and Accounting A. Federal Reserve Bank of company by acquiring 60.1 percent of Standards Among the Federal Banking Richmond (A. Linwood Gill III, the voting shares of St. Johns and Thrift Agencies; Report to Assistant Vice President) 701 East Byrd Bancshares, Inc., St. John, Missouri, and Congressional Committees thereby indirectly acquire St. Johns Street, Richmond, Virginia 23261-4528: Bank and Trust Company, St. John, 1. City Holding Company, Charleston, AGENCY: Board of Governors of the Missouri. West Virginia; to acquire Del Amo Federal Reserve System (FRB). Savings Bank, F.S.B., Torrance, ACTION: Notice of report to the C. Federal Reserve Bank of Kansas California, and thereby engage in Committee on Banking, Housing, and City (D. Michael Manies, Assistant Vice operating a savings and loan Urban Affairs of the United States President) 925 Grand Avenue, Kansas association, pursuant to § Senate and to the Committee on City, Missouri 64198-0001: 225.28(b)(4)(ii) of the Board’s Regulation Banking and Financial Services of the 1. AmCorp Financial Inc., Ardmore, Y. United States House of Representatives. Oklahoma; to acquire 100 percent of the Board of Governors of the Federal Reserve SUMMARY: voting shares of First State Bank, This report was prepared by System, January 21, 1998. the FRB pursuant to section 121 of the Morton, Texas. In addition, the bank’s Jennifer J. Johnson, Federal Deposit Insurance Corporation main office will be relocated to Keller, Deputy Secretary of the Board. Improvement Act of 1991 (12 U.S.C. Texas, and the bank will be renamed [FR Doc. 98–1825 Filed 1–26–98; 8:45 am] 1831n(c)). Section 121 requires each American Bank, Keller, Texas. BILLING CODE 6210-01-F Federal banking and thrift agency to Board of Governors of the Federal Reserve report annually to the above specified System, January 22, 1998. Congressional Committees regarding Jennifer J. Johnson, FEDERAL RESERVE SYSTEM any differences between the accounting or capital standards used by such Deputy Secretary of the Board. Sunshine Act Meeting [FR Doc. 98–1938 Filed 1–26–98; 8:45 am] agency and the accounting or capital standards used by other banking and BILLING CODE 6210-01-F TIME AND DATE: 12:00 noon, Monday, February 2, 1998. thrift agencies. The report must be published in the Federal Register. PLACE: Marriner S. Eccles Federal FOR FURTHER INFORMATION CONTACT: Reserve Board Building, 20th and C Gerald A. Edwards, Deputy Associate Streets, N.W., Washington, D.C. 20551. Director (202/452–2741), Norah Barger, STATUS: Closed. Assistant Director (202/452–2402), 3898 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Barbara Bouchard, Manager (202/452– weighted assets. Tier 1 capital includes capital rules in this regard since savings 3072), or Arthur Lindo, Supervisory common stock and surplus, retained institutions do not have such significant Financial Analyst (202/452–2695), earnings, qualifying perpetual preferred levels of trading activity. Division of Banking Supervision and stock and surplus, and minority interest In addition to the risk-based capital Regulation. For the hearing impaired in consolidated subsidiaries, less requirements, the agencies also have only, Telecommunication Device for the disallowed intangibles such as goodwill. established leverage standards setting Deaf (TDD), Diane Jenkins (202/452– Tier 2 capital includes certain forth minimum ratios of capital to total 3544), Board of Governors of the Federal supplementary capital items such as assets. The three banking agencies Reserve System, 20th & C Street, NW, general loan loss reserves, subordinated employ uniform leverage standards, Washington, DC 20551. debt, and certain other preferred stock while the OTS has established, pursuant SUPPLEMENTARY INFORMATION: The text of and convertible debt capital to FIRREA, a somewhat different the report follows: instruments, subject to appropriate standard. On October 27, 1997, the limitations and conditions. The amount agencies issued for public comment a Report to the Congressional Committees of Tier 2 includable in regulatory capital proposal that would eliminate these Regarding Differences in Capital and is limited to 100 percent of Tier 1. In differences. Accounting Standards Among the addition, institutions that incorporate All of the agencies view the risk-based Federal Banking and Thrift Agencies market risk exposure into their risk- capital standards as a minimum Introduction and Overview based capital requirements may use supervisory benchmark. In part, this is This is the eighth annual report 1 on ‘‘Tier 3’’ capital (i.e., short-term because the risk-based capital the differences in capital standards and subordinated debt with certain framework focuses primarily on credit accounting practices that currently exist restrictions on repayment provisions) to risk; it does not take full or explicit among the three banking agencies (the support their exposure to market risk. account of certain other banking risks, Board of Governors of the Federal Tier 3 capital is limited to such as exposure to changes in interest Reserve System (FRB), the Office of the approximately 70 percent of an rates. The full range of risks to which Comptroller of the Currency (OCC), and institution’s measure for market risk. depository institutions are exposed are the Federal Deposit Insurance Risk-weighted assets are calculated by reviewed and evaluated carefully during Corporation (FDIC) and the Office of assigning risk weights of zero, 20, 50, on-site examinations. In view of these Thrift Supervision (OTS).2 and 100 percent to broad categories of risks, most banking organizations are assets and off-balance sheet items based expected to, and generally do, maintain Overview upon their relative credit risk. The OTS capital levels well above the minimum As stated in the previous reports to has adopted a risk-based capital risk-based and leverage capital Congress, the three bank regulatory standard that in most respects is similar requirements. agencies have, for a number of years, to the framework adopted by the The staffs of the agencies meet employed a common regulatory banking agencies. Differences between regularly to identify and address framework that establishes minimum the OTS capital rules and those of the differences and inconsistencies in their capital adequacy ratios for commercial banking agencies are noted elsewhere in capital standards. The agencies are banking organizations. In 1989, all three this report. committed to continuing this process in banking agencies and the OTS adopted The measurement of capital adequacy an effort to achieve full uniformity in a risk-based capital framework that was in the present framework is mainly their capital standards. In addition, the based upon the international capital directed toward assessing capital in agencies have considered the remaining accord (Basle Accord) developed by the relation to credit risk. In December differences as part of a regulatory review Basle Committee on Banking 1995, the G–10 Governors endorsed an undertaken to comply with Section 303 Regulations and Supervisory Practices amendment to the Basle Accord that of the Riegle Community Development (Basle Supervisors Committee) and will, beginning in January 1998, require and Regulatory Improvement Act of endorsed by the central bank governors internationally-active banks to measure 1994 (Riegle Act), which specifies that of the G–10 countries. and hold capital to support their market the agencies ‘‘make uniform all The risk-based capital framework risk exposure. Specifically, banks will regulations and guidelines establishes minimum ratios of capital to be required to hold capital against their implementing common statutory or risk-weighted assets. The Basle Accord exposure to general market risk supervisory policies.’’ requires banking organizations to have associated with changes in interest total capital (Tier 1 plus Tier 2) equal Efforts To Achieve Uniformity rates, equity prices, exchange rates, and to at least 8 percent and Tier 1 capital commodity prices, as well as for Leverage Capital Ratios equal to at least 4 percent of risk- exposure to specific risk associated with The three banking agencies employ a equity positions and certain debt leverage standard based upon the 1 The first two reports prepared by the Federal Reserve Board were made pursuant to section 1215 positions in the trading portfolio. The common definition of Tier 1 capital of the Financial Institutions Reform, Recovery, and FRB, FDIC, and OCC issued in August contained in their risk-based capital Enforcement Act of 1989 (FIRREA). The subsequent 1996 amendments to their respective guidelines. These standards, established reports were made pursuant to section 121 of the Federal Deposit Insurance Corporation risk-based capital standards that in the second half of 1990 and in early Improvement Act of 1991 (FDICIA), which implemented the market risk 1991, require the most highly-rated superseded section 1215 of FIRREA. amendment to the Accord. The banking institutions to meet a minimum Tier 1 2 At the federal level, the Federal Reserve System agencies’ amendments contain a capital ratio of 3 percent. For all other has primary supervisory responsibility for state- threshold amount of trading activity: institutions, these standards generally chartered banks that are members of the Federal Reserve System, as well as for all bank holding institutions with trading assets and require an additional cushion of at least companies and certain operations of foreign liabilities greater than or equal to 10 100 to 200 basis points, i.e., a minimum banking organizations. The FDIC has primary percent of assets or trading assets and leverage ratio of at least 4 to 5 percent, responsibility for state nonmember banks and FDIC- supervised savings banks. National banks are liabilities greater than or equal to $1 depending upon an organization’s supervised by the OCC. The OTS has primary billion are required to apply the market financial condition. As required by responsibility for savings and loan associations. risk rules. The OTS did not amend its FIRREA, the OTS has established a 3 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3899 percent core capital ratio and a 1.5 principles for the management of propose uniform regulatory capital percent tangible capital leverage interest rate risk. responses to such accounting changes. requirement for thrift institutions. In 1995 the Basle Supervisors Over this past year, the agencies have Certain adjustments discussed in this Committee issued an amendment to the dealt with certain capital effects of report apply to the core capital Basle Accord that requires Statement of Financial Accounting definition used by savings associations. internationally-active banks to hold Standard (FAS) No. 125, ‘‘Accounting On October 27, 1997, the four capital against market risk exposure. for Transfers and Servicing of Financial agencies issued a proposal for public The FRB, FDIC and OCC amended their Assets and Extinguishments of comment addressing the leverage respective risk-based capital guidelines Liabilities’’ which supersedes FAS No. standards (62 FR 55686). Under the in 1996 to implement the amendment to 122, ‘‘Accounting for Mortgages proposal, institutions rated a composite the Accord. Under the agencies’ Servicing Rights.’’ FAS 125, 1 under the Uniform Financial guidelines, affected institutions must ‘‘Accounting for Transfers and Servicing Institutions Rating System (UFIRS) 3 use an internal value-at-risk model to of Financial Assets and would be subject to a minimum 3.0 measure market risk and calculate Extinguishments of Liabilities.’’ percent leverage ratio and all other corresponding capital requirements. The The agencies issued a proposal on institutions would be subject to a market risk rules become mandatory for August 4, 1997, to amend their capital minimum 4.0 percent leverage ratio. certain institutions in January 1998. The standards to address the treatment of This change would simplify and OTS does not intend, at this time, to servicing assets on both mortgage assets streamline the Board’s, FDIC’s, and issue a rule on market risk since the and financial assets other than OCC’s leverage rules. In addition, savings institutions they supervise do mortgages (62 FR 42006). The public changes proposed by the OTS, if not have significant levels of trading comment period ended on October 3, adopted, would make all the agencies’ activity. 1997. The proposed rule reflects rules uniform. The comment period for As mentioned in the introduction, the changes in accounting standards for the proposal ended on December 26, agencies have been meeting to fulfill the servicing assets made in FAS 125. FAS 1997. Agency staffs intend to issue a requirements of Section 303 of the 125 extended the accounting treatment final amendment in early 1998. Riegle Act that calls for uniform rules for mortgage servicing to servicing on all and guidelines. In this regard, in Efforts to Incorporate Non-Credit Risks financial assets. The proposed October 1997, the agencies issued for amendment would raise the capital The Federal Reserve has been working public comment a proposal that would limitation on the sum of all mortgage with the other U.S. banking agencies eliminate existing minor differences servicing assets and purchased credit and with regulatory authorities abroad among the agencies’ risk-based capital card relationships from 50 percent of to develop methods of measuring treatment for the following assets: Tier 1 capital to 100 percent of Tier 1 certain market and price risks and presold residential properties, junior capital. Furthermore, servicing assets on determining appropriate capital liens on 1- to 4-family residential financial assets other than mortgages standards for these risks. These efforts properties, and banks’ holdings of would be deducted from Tier 1 capital. have related to interest rate risk arising mutual funds. In addition, the agencies A final rule should be in place in the from all activities of a bank and to worked together on the following capital first part of 1998. market risk associated principally with issues. Capital Differences an institution’s trading activities. Recourse Regarding domestic efforts, the Differences among the risk-based The agencies published in the Federal banking agencies have, for several years, capital standards of the OTS and the Register on November 5, 1997, (62 FR been working to develop capital three banking agencies are discussed 5994), uniform, proposed rules that standards pertaining to interest rate risk. below. In June 1996, the U.S. banking agencies would use credit ratings to match the issued a joint policy statement risk-based capital assessment more Certain Collateral Transactions closely to an institution’s relative risk of describing a common framework for the The four agencies, on August 16, loss in certain asset securitizations. supervision of interest rate risk in 1996, published a joint proposed banking organizations. It calls for a Unrealized Gains on Certain Equity rulemaking that would, if implemented, review of the qualitative characteristics Securities eliminate capital differences among the and adequacy of an institution’s interest In October 1997 the agencies issued agencies’ risk-based capital treatment rate risk management, as well as an for public comment an interagency for collateralized transactions (61 FR assessment of risk relative to its proposal that would permit institutions 42565). earnings and the economic value of its to include in Tier 2 capital up to 45 The Federal Reserve permits certain capital. The framework is consistent percent of unrealized gains on certain collateralized transactions to be risk- with 1995 revisions to the U.S. risk- available-for-sale equity securities (62 weighted at zero percent. This based capital rules that incorporated the FR 55682). preferential treatment is available only exposure of that economic value to for claims fully collateralized by cash on changes in interest rates as an important Capital Impact of Recent Changes to deposit in the bank or by securities element in the evaluation of capital Accounting Standards issued or guaranteed by OECD central adequacy. In September 1997, the Basle From time to time, the Financial governments or U.S. government Supervisors Committee, with the Accounting Standards Board (FASB) agencies. A positive margin of collateral agreement of the G–10 governors, issues new and modified financial must be maintained on a daily basis released a paper, based on the U.S. joint accounting standards. The adoption of fully taking into account any change in policy statement, that contains a set of some of these standards for regulatory the banking organization’s exposure to reporting purposes has the potential of the obligor or counterparty under a 3 The UFIRS is used by supervisors to summarize their evaluations of the strength and soundness of affecting the definition and calculation claim in relation to the market value of financial institutions in a comprehensive and of regulatory capital. Accordingly, the the collateral held in support of that uniform manner. staffs of the agencies work together to claim. Other collateralized claims, or 3900 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices portions thereof, are risk-weighted at 20 is exposed. As with most other bank in, and advances to, certain subsidiaries percent. subsidiaries, banking and finance from the parent’s capital, the Federal The OCC permits portions of claims subsidiaries generally are consolidated Reserve expects the parent banking collateralized by cash or OECD for regulatory capital purposes. organization to meet or exceed government securities to receive a zero However, in cases where banking and minimum regulatory capital standards percent risk weight, provided that the finance subsidiaries are not without reliance on the capital invested collateral is marked to market daily and consolidated, the Federal Reserve, in the particular subsidiary. In assessing a positive margin is maintained. The consistent with the Basle Accord, the overall capital adequacy of banking FDIC’s and OTS’s rules permit portions generally deducts investments in such organizations, the Federal Reserve may of claims collateralized by cash or OECD subsidiaries in determining the also consider the organization’s fully government securities to receive a 20 adequacy of the parent bank’s capital. consolidated capital position. percent risk weight. The Federal Reserve’s risk-based Under the OTS capital guidelines, a Under the agencies’ proposed rule, capital guidelines provide a degree of distinction, mandated by FIRREA, is portions of claims collateralized by cash flexibility in the capital treatment of drawn between subsidiaries that are or OECD government securities could be unconsolidated subsidiaries (other than engaged in activities permissible for assigned a zero percent risk weight, banking and finance subsidiaries) and national banks and subsidiaries that are provided the transactions meet certain investments in joint ventures and engaged in ‘‘impermissible’’ activities criteria, which would be uniform among associated companies. For example, the for national banks. Subsidiaries of thrift the agencies. Agency staffs intend to Federal Reserve may deduct institutions that engage only finalize the outstanding proposal in investments in such subsidiaries from inpermissible activities are consolidated early 1998. an organization’s capital, may apply an on a line-by-line basis if majority-owned appropriate risk-weighted capital charge and on a pro rata basis if ownership is FSLIC/FDIC—Covered Assets (Assets against the proportionate share of the between 5 and 50 percent. As a general Subject to Guarantee Arrangements by assets of the entity, may require a line- rule, investments, including loans, in the FSLIC or FDIC) by-line consolidation of the entity, or subsidiaries that engage in The three banking agencies generally otherwise may require that the parent impermissible activities are deducted in place these assets in the 20 percent risk organization maintain a level of capital determining the capital adequacy of the category, the same category to which above the minimum standard that is parent. claims on depository institutions and sufficient to compensate for any risk government-sponsored agencies are associated with the investment. Mortgage-Backed Securities (MBS) assigned. The OTS places these assets in The guidelines also permit the The three banking agencies, in the zero percent risk category. deduction of investments in subsidiaries general, place privately-issued MBS in a that, while consolidated for accounting risk category appropriate to the Limitation of Subordinated Debt and purposes, are not consolidated for underlying assets but in no case to the Limited-life Preferred Stock certain specified supervisory or zero percent risk category. In the case of The three banking agencies limit the regulatory purposes. For example, the privately-issued MBS where the direct amount of subordinated debt and Federal Reserve deducts investments in, underlying assets are mortgages, this limited-life preferred stock that may be and unsecured advances to, Section 20 treatment generally results in a risk included in Tier 2 capital to 50 percent securities subsidiaries from the parent weight of 50 percent or 100 percent. of Tier 1 capital. In addition, maturing bank holding company’s capital. The Privately-issued MBS that have capital instruments must be discounted FDIC accords similar treatment to government agency or government- by 20 percent in search of the last five securities subsidiaries of state sponsored agency securities as their years prior to maturity. The OTS has no nonmember banks established pursuant direct underlying assets are generally limitation on the total amount of to Section 337.4 of the FDIC regulations. assigned to the 20 percent risk category. limited-life preferred stock or maturing Similarly, in accordance with Section The OTS assigns privately-issued high capital instruments that may be 325.5(f) of the FDIC regulations, a state quality mortgage-related securities to included within Tier 2 capital. In nonmember bank must deduct the 20 percent risk category. These are, addition, the OTS allows savings investments in, and extensions of credit generally, privately-issued MBS with institutions the option of: (1) to, certain mortgage banking AA or better investment ratings. discounting maturing capital subsidiaries in computing the parent Both the banking and thrift agencies instruments issued on or after bank’s capital. The Federal Reserve does automatically assign to the 100 percent November 7, 1989, by 20 percent a year not have a similar requirement with risk weight category certain MBS, over the last 5 years of their term; or (2) regard to mortgage banking subsidiaries. including interest-only strips, residuals, including the full amount of such The OCC does not have requirements and similar instruments that can absorb instruments provided that the amount dealing specifically with the capital more than their pro rata share of loss. maturing in any of the next seven years treatment of either mortgage banking or Agricultural Loan Loss Amortization does not exceed 20 percent of the thrift’s securities subsidiaries. The OCC, total capital. however, does reserve the right to In the computation of regulatory require a national bank, on a case-by- capital, those banks accepted into the Subsidiaries case basis, to deduct from capital agricultural loan loss amortization Consistent with the Basle Accord and investments in, and extensions of credit program pursuant to Title VIII of the long-standing supervisory practices, the to, any nonbanking subsidiary. Competitive Equality Banking Act of three banking agencies generally The deduction of investments in 1987 are permitted to defer and consolidate all significant majority- subsidiaries from the parent’s capital is amortize losses incurred on agricultural owned subsidiaries of the parent designed to ensure that the capital loans between January 1, 1984 and organization for capital purposes. This supporting the subsidiary is not also December 31, 1991. The program also consolidation assures that the capital used as the basis of further leveraging applies to losses incurred between requirements are related to all of the and risk-taking by the parent banking January 1, 1983 and December 31, 1991, risks to which the banking organization organization. In deducting investments as a result of reappraisals and sales of Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3901 agricultural Other Real Estate Owned nonwithdrawable accounts that meet developed Uniform Reports of (OREO) and agricultural personal the criteria of the OTS. Income Capital Condition and Income (Call Reports) for property. These loans must be fully Certificates and Mutual Capital all commercial banks and FDIC- amortized over a period not to exceed Certificates held by the OTS may also be supervised savings banks. The reporting seven years and, in any case, must be included in capital by thrift institutions. standards followed by the three banking fully amortized by year-end 1998. These instruments are not relevant to agencies for recognition and measuring Savings institutions are not eligible to commercial banks, and, therefore, they purposes are consistent with generally participate in the agricultural loan loss are not addressed in the banking accepted accounting principles (GAAP). amortization program established by agencies’ capital rules. The agencies adopted GAAP as the this statute. reporting basis for the Call Report, Construction Loans on Presold effective for March 1997 reports. The Treatment of Junior Liens on 1- to 4- Residential Property adoption of GAAP for Call Report Family Residential Properties The agencies all assign a qualifying purposes eliminated the differences in In some cases, a banking organization loan to a builder to finance the accounting standards among the may make two loans on a single construction of a presold 1- to 4-family agencies that were set forth in previous residential property, one secured by a residential property to the 50 percent reports to Congress. Thus, there are no first lien, the other by a second lien. In risk category provided certain material differences in regulatory such a situation, the Federal Reserve conditions are satisfied. The Federal accounting standards for regulatory views these two transactions as a single Reserve and the FDIC permit a 50 reports filed with the federal banking lien, provided there are no intervening percent risk weight once the residential agencies by commercial banks, savings liens. The total amount of these property is sold, whether the sale occurs banks, and savings associations. transactions would be assigned to either before or after the construction loan has By order of the Board of Governors of the the 50 percent or the 100 percent risk been made. The OCC and the OTS Federal Reserve System, January 21, 1998. category depending upon whether permit the 50 percent risk weight William W. Wiles, certain other criteria are met. treatment only if the property is sold to Secretary of the Board. One criterion is that the loan must be an individual who will occupy the [FR Doc. 98–1812 Filed 1–26–98; 8:45 am] made in accordance with prudent residence upon completion of underwriting standards, including an construction before the extension of BILLING CODE 6210±01±P appropriate ratio of the current loan credit to the builder. balance to the value of the property (the The agencies’ October proposal set loan-to-value ratio or LTV). When forth the treatment followed by the DEPARTMENT OF HEALTH AND considering whether a loan is consistent Federal Reserve and the FDIC. HUMAN SERVICES with prudent underwriting standards, the Federal Reserve evaluates the LTV Mutual Funds Office of the Secretary ratio based on the combined loan The three banking agencies generally Agency Information Collection amount. If the combined loan amount assign all of a bank’s holding in a Activities: Submission for OMB satisfies prudent underwriting mutual fund to the risk category Review; Comment Request standards, both the first and second lien appropriate to the highest risk asset that are assigned to the 50 percent risk a particular mutual fund is permitted to The Department of Health and Human category. The FDIC also combines the hold under its operating rules. The OCC Services, Office of the Secretary first and second liens to determine the also permits, on a case-by-case basis, an publishes a list of information appropriateness of the LTV ratio, but it institution’s investment to be allocated collections it has submitted to the Office applies the risk weights differently than on a pro rata basis among the risk of Management and Budget (OMB) for the Federal Reserve. If the LTV ratio categories based on the percentages of a clearance in compliance with the based on the combined loan amount portfolio authorized to be invested in a Paperwork Reduction Act of 1995 (44 satisfies prudent underwriting particular risk weight category. The OTS U.S.C. Chapter 35) and 5 CFR 1320.5. standards, the FDIC risk weights the applies a capital charge appropriate to The following are those information first lien at 50 percent and the second the riskiest asset that a mutual fund is collections recently submitted to OMB. lien at 100 percent, otherwise both liens actually holding at a particular time. 1. Self-Evaluation and Recordkeeping are risk weighted at 100 percent. The The OTS also permits, on a case-by-case Required by the Regulation OCC treats all first and second liens basis pro rata allocation among risk Implementing Section 504 of the separately, with qualifying first liens categories based on the fund’s actual Rehabilitation Act of 1973 (45 CFR risk weighted at 50 percent and non- holdings. All of the agencies’ rules 84.6(c))—Extension—0990–0124— qualifying first liens and all second provide that the minimum risk weight Recipients of DHHS funds must conduct liens risk weighted at 100 percent. The for investment in mutual funds is 20 a single-time evaluation of their policies OTS has interpreted its rule to treat first percent. and practices for compliance with and second liens to a single borrower as The agencies have proposed following Section 504 of the Rehabilitation Act of a single extension of credit, similar to the banking agencies’ general treatment 1973. Respondents: State or local the Federal Reserve. and permitting institutions, at their governments, businesses or other for- Under the proposal issued by the option, to assign such investment on a profit, non-profit institutions; Annual agencies in October 1997, the agencies pro rata basis according to the Number of Respondents: 2,120; would follow the OCC capital treatment investment limits in the mutual fund Frequency of Response: once; Burden for first and second liens. prospectus. per Response: 16 hours; Total Annual Burden: 33,920 hours. Pledged Deposits and Nonwithdrawable Accounting Standards OMB Desk Officer: Allison Eydt. Accounts Over the years, the three banking Copies of the information collection The capital guidelines of the OTS agencies, under the auspices of the packages listed above can be obtained permit thrift institutions to include in Federal Financial Institutions by calling the OS Reports Clearance capital certain pledged deposits and Examination Council (FFIEC), have Officer on (202) 690–6207. Written 3902 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices comments and recommendations for the DEPARTMENT OF HEALTH AND SUMMARY: The Food and Drug proposed information collection should HUMAN SERVICES Administration (FDA) is announcing an be sent directly to the OMB desk officer opportunity for public comment on the designated above at the following National Committee on Vital and Health proposed collection of certain address: Human Resources and Housing Statistics: Meeting information by the agency. Under the Branch, Office of Management and Pursuant to the Federal Advisory Paperwork Reduction Act of 1995 (the Budget, New Executive Office Building, Committee Act, the Department of PRA), Federal agencies are required to Room 10235, 725 17th Street, N.W., Health and Human Services announces publish notice in the Federal Register Washington, D.C. 20503. the following advisory committee concerning each proposed collection of meeting. information, including each proposed Comments may also be sent to extension of an existing collection of Cynthia Agens Bauer, OS Reports Name: National Committee on Vital and information, and to allow 60 days for Health Statistics (NCVHS), Subcommittee on Clearance Officer, Room 503H, public comment in response to the Humphrey Building, 200 Independence Population-Specific Issues. Times and Dates: 9:00 a.m.–5:00 p.m., notice. This notice solicits comments on Avenue S.W., Washington, DC, 20201. February 9, 1998; 9:00 a.m.–4:00 p.m., FDA’s protection of human subjects Written comments should be received February 10, 1998. recordkeeping and reporting within 30 days of this notice. Place: Wyndam Metro Center Hotel, 10220 requirements for institutional review North Metro Parkway East, Phoenix, Arizona. Dated: January 16, 1998. boards (IRB’s). IRB’s are groups Status: Open. composed of members of varying Dennis P. Williams, Purpose: The Subcommittee is in the backgrounds which are charged with Deputy Assistant Secretary, Budget. process of examining a number of data needs and issues associated with Medicaid reviewing the ethics and risk/benefit [FR Doc. 98–1845 Filed 1–26–98; 8:45 am] managed care. The purpose of this site visit aspects of clinical studies involving BILLING CODE 4150±04±M to Arizona is to obtain information on one human subjects to assure that the rights State’s Medicaid managed care program, with and welfare of human subjects are special attention to data needs, data systems, adequately protected. DEPARTMENT OF HEALTH AND data uses and data issues. Presentations are DATES: Submit written comments on the HUMAN SERVICES planned involving representatives of State agencies, providers, plans, and patient collection of information by March 30, Office of the Secretary advocacy groups who will describe their data 1998. needs and issues relating to Medicaid ADDRESSES: Submit written comments managed care. A subsequent site visit to Notice of Interest Rate on Overdue Massachusetts also is planned. on the collection of information to the Debts Contact Person for more Information: Dockets Management Branch (HFA– Substantive program information as well as 305), Food and Drug Administration, Section 30.13 of the Department of a roster of committee members may be 12420 Parklawn Dr., rm. 1–23, Health and Human Services’ claims obtained from Carolyn Rimes, lead Rockville, MD 20857. All comments collection regulations (45 CFR Part 30) Subcommittee staff, Health Care Financing should be identified with the docket provides that the Secretary shall charge Administration, DHHS, 7500 Security number found in brackets in the Boulevard, C–3–21–06, Baltimore, Maryland an annual rate of interest as fixed by the 21244–1850, telephone (410) 786–6620, or heading of this document. Secretary of the Treasury after taking Marjorie S. Greenberg, Executive Secretary, FOR FURTHER INFORMATION CONTACT: into consideration private consumer NCVHS, NCHS, CDC, Room 1100, JonnaLynn P. Capezzuto, Office of rates of interest prevailing on the date Presidential Building, 6525 Belcrest Road, Information Resources Management that HHS becomes entitled to recovery. Hyattsville, Maryland 20782, telephone 301/ (HFA–250), Food and Drug 436–7050. Additional information about the The rate generally cannot be lower than full Committee is available on the NCVHS Administration, 5600 Fishers Lane, the Department of Treasury’s current website, where the tentative agenda for the Rockville, MD 20857, 301–827–4659. value of funds rate or the applicable rate Subcommittee meeting will also be posted SUPPLEMENTARY INFORMATION: Under the determined from the ‘‘Schedule of when available: http://aspe.os.dhhs.gov/ PRA (44 U.S.C. 3501–3520), Federal Certified Interest Rates with Range of ncvhs agencies must obtain approval from the Maturities.’’ This rate may be revised Dated: January 20, 1998. Office of Management and Budget quarterly by the Secretary of the James Scanlon, (OMB) for each collection of Treasury and shall be published Director, Division of Data Policy. information they conduct or sponsor. quarterly by the Department of Health [FR Doc. 98–1843 Filed 1–26–98; 8:45 am] ‘‘Collection of information’’ is defined and Human Services in the Federal BILLING CODE 4151±04±M in 44 U.S.C. 3502(3) and 5 CFR Register. 1320.3(c) and includes agency requests or requirements that members of the The Secretary of the Treasury has DEPARTMENT OF HEALTH AND public submit reports, keep records, or certified a rate of 141⁄2% for the quarter HUMAN SERVICES provide information to a third party. ended December 31, 1997. This interest Section 3506(c)(2)(A) of the PRA (44 rate will remain in effect until such time Food and Drug Administration U.S.C. 3506(c)(2)(A)) requires Federal as the Secretary of the Treasury notifies [Docket No. 97N±0535] agencies to provide a 60-day notice in HHS of any change. the Federal Register concerning each Dated: January 20, 1998. Agency Information Collection proposed collection of information, George Strader, Activities: Institutional Review Boards: including each proposed extension of an Proposed Collection; Comment Deputy Assistant Secretary, Finance. existing collection of information, Request before submitting the collection to OMB [FR Doc. 98–1844 Filed 1–26–98; 8:45 am] for approval. To comply with this BILLING CODE 4150±04±M AGENCY: Food and Drug Administration, HHS. requirement, FDA is publishing notice of the proposed collection of ACTION: Notice. information listed below. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3903

With respect to the following Institutional Review Boards—(21 CFR requiring changes in or disapproving collection of information, FDA invites Part 56.115)—(OMB Control Number research; (4) records of continuing comments on: (1) Whether the proposed 0910–0130)—Extension review activities; (5) copies of all collection of information is necessary correspondence between investigators for the proper performance of FDA’s When reviewing clinical research and the IRB; (6) statements of significant functions, including whether the studies regulated by FDA, IRB’s are new findings provided to subjects of the information will have practical utility; required to create and maintain records research; (7) and a list of IRB members describing their operations, and make (2) the accuracy of FDA’s estimate of the by name, showing each member’s the records available for FDA inspection burden of the proposed collection of earned degrees, representative capacity, when requested. These records include: information, including the validity of and experience in sufficient detail to (1) Written procedures describing the the methodology and assumptions used; describe each member’s contributions to structure and membership of the IRB (3) ways to enhance the quality, utility, the IRB’s deliberations, and any and the methods which the IRB will use employment relationship between each and clarity of the information to be in performing its functions; (2) the member and the IRB’s institution. This collected; and (4) ways to minimize the research protocols, informed consent information is used by the FDA in burden of the collection of information documents, progress reports, and conducting audit inspections of IRB’s to on respondents, including through the reports of injuries to subjects submitted determine whether IRB’s and clinical use of automated collection techniques, by investigators to the IRB; (3) minutes investigators are providing adequate when appropriate, and other forms of of meetings showing attendance, votes protections to human subjects information technology. and decisions made by the IRB, the participating in clinical research. number of votes on each decision for, FDA estimates the burden of this against, and abstaining, the basis for collection of information as follows:

TABLE 1.ÐESTIMATED ANNUAL RECORDKEEPING BURDEN1

Annual 21 CFR Section No. of Frequency per Total Annual Hours per Total Hours Recordkeepers Recordkeeping Records Recordkeeper

56.115 2,000 14.6 10,000 65 131,400 1There are no capital costs or operating and maintenance costs associated with this collection of information.

The recordkeeping requirement DEPARTMENT OF HEALTH AND versions of drug products approved burden is based on the following HUMAN SERVICES under an ANDA procedure. ANDA formula: Approximately 2,000 IRB’s sponsors must, with certain exceptions, review FDA-regulated research Food and Drug Administration show that the drug for which they are involving human subjects annually. The [Docket No. 96P±0316] seeking approval contains the same burden for each of the paragraphs under active ingredient in the same strength 21 CFR 56.115 has been considered as Determination That Minocycline and dosage form as the ‘‘listed drug,’’ one for purposes of estimating the Hydrochloride Tablets Were Not which is a version of the drug that was burden. Each paragraph cannot Withdrawn From Sale for Reasons of previously approved under a new drug reasonably be segregated from one Safety or Effectiveness application (NDA). Sponsors of ANDA’s another because all are interrelated. do not have to repeat the extensive AGENCY: Food and Drug Administration, FDA has about 2,000 IRB’s in its clinical testing otherwise necessary to HHS. gain approval of an NDA. The only inventory. The 2,000 IRB’s meet on an ACTION: Notice. clinical data required in an ANDA are average of 14.6 times annually. The data to show that the drug that is the mean number of IRB meetings per year SUMMARY: The Food and Drug subject of the ANDA is bioequivalent to was derived from a study conducted by Administration (FDA) has determined the listed drug. the agency and published by the Office that minocycline hydrochloride tablets The 1984 amendments included what of Planning and Evaluation. The agency were not withdrawn from sale for is now section 505(j)(6) of the Federal estimates that approximately 4.5 hours reasons of safety or effectiveness. This Food, Drug, and Cosmetic Act (21 U.S.C. of person time per meeting are required determination will allow FDA to 355(j)(6)), which requires FDA to to transcribe and type the minutes of the approve abbreviated new drug publish a list of all approved drugs. meeting, to maintain records of applications (ANDA’s) for minocycline FDA publishes this list as part of the continuing review activities, copies of hydrochloride tablets. ‘‘Approved Drug Products with all correspondence between the IRB and FOR FURTHER INFORMATION CONTACT: Therapeutic Equivalence Evaluations,’’ investigators, member records, and Mary E. Catchings, Center for Drug which is generally known as the written IRB procedures which are Evaluation and Research (HFD–7), Food ‘‘Orange Book.’’ Under FDA regulations, approximately five pages per IRB. and Drug Administration, 5600 Fishers drugs are withdrawn from the list if the Lane, Rockville, MD 20857, 301–594– agency withdraws or suspends approval Dated: January 20, 1998. 2041. of the drug’s NDA or ANDA for reasons William K. Hubbard, SUPPLEMENTARY INFORMATION: In 1984, of safety or effectiveness, or if FDA Associate Commissioner for Policy Congress enacted the Drug Price determines that the listed drug was Coordination. Competition and Patent Term withdrawn from sale for reasons of [FR Doc. 98–1944 Filed 1–26–98; 8:45 am] Restoration Act of 1984 (Pub. L. 98–417) safety or effectiveness (21 CFR 314.162). BILLING CODE 4160±01±F (the 1984 amendments), which Regulations also provide that the agency authorized the approval of duplicate must make a determination as to 3904 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices whether a listed drug was withdrawn Periogard Periodontal Tissue Monitor upon written request. Requests should from sale for reasons of safety or (PTM). After reviewing the be identified with the name of the effectiveness before an ANDA that refers recommendation of the Devices Panel, device and the docket number found in to that listed drug may be approved FDA’s Center for Devices and brackets in the heading of this (§ 314.161(a)(1) (21 CFR 314.161(a)(1)). Radiological Health (CDRH) notified the document. FDA may not approve an ANDA that applicant, by letter of June 23, 1997, of Opportunity for Administrative Review does not refer to a listed drug. the approval of the application. In a citizen petition dated August 26, DATES: Petitions for administrative Section 515(d)(3) of the act authorizes 1996 (Docket No. 96P–0316/CP), review by February 26, 1998. any interested person to petition, under submitted in accordance with 21 CFR ADDRESSES: Written requests for copies section 515(g) of the act, for 314.122, Clausen & Associates, Inc., of the summary of safety and administrative review of CDRH’s requested that the agency determine effectiveness data and petitions for decision to approve this application. A whether minocycline hydrochloride administrative review to the Dockets petitioner may request either a formal tablets were withdrawn from sale for Management Branch (HFA–305), Food hearing under 21 CFR part 12 of FDA’s reasons of safety or effectiveness. and Drug Administration, 12420 administrative practices and procedures Minocycline hydrochloride (Minocin) Parklawn Dr., rm. 1–23, Rockville, MD regulations or a review of the tablets are the subject of approved NDA 20857. application and CDRH’s action by an 50–451 held by Lederle Laboratories. In FOR FURTHER INFORMATION CONTACT: independent advisory committee of 1996, Lederle withdrew minocycline Alfred W. Montgomery, Center for experts. A petition is to be in the form hydrochloride tablets from sale. Devices and Radiological Health (HFZ– of a petition for reconsideration under FDA has reviewed its records and, 440), Food and Drug Administration, 21 CFR 10.33(b). A petitioner shall under § 314.161, has determined that 9200 Corporate Blvd., Rockville, MD identify the form of review requested minocycline hydrochloride tablets were 20850, 301–594–1243. (hearing or independent advisory not withdrawn from sale for reasons of SUPPLEMENTARY INFORMATION: On committee) and shall submit with the safety or effectiveness. Accordingly, the September 19, 1996, Xytronyx, Inc., San petition supporting data and agency will maintain minocycline Diego, CA 92121, submitted to CDRH an information showing that there is a hydrochloride tablets in the application for premarket approval of genuine and substantial issue of ‘‘Discontinued Drug Product List’’ the PTM. The device is a visual, material fact for resolution through section of the Orange Book. The periodontal test kit and is indicated for administrative review. After reviewing ‘‘Discontinued Drug Product List’’ use as a rapid, chair-side, visual test for the petition, FDA will decide whether to delineates, among other items, drug the qualitative determination of grant or deny the petition and will products that have been discontinued aspartate aminotransferase (AST) in publish a notice of its decision in the from marketing for reasons other than gingival crevicular fluid. The PTM kit Federal Register. If FDA grants the safety or effectiveness. ANDA’s that detects elevated levels of AST petition, the notice will state the issue refer to minocycline hydrochloride associated with tissue necrosis. It is to be reviewed, the form of review to be tablets may be approved by the agency. intended to be used as an objective, used, the persons who may participate Dated: January 20, 1998. biochemical adjunct to traditional in the review, the time and place where William K. Hubbard, methods of monitoring patients to assist the review will occur, and other details. Associate Commissioner for Policy in the decision to apply treatment and Petitioners may, at any time on or Coordination. in the evaluation of treatment before February 26, 1998, file with the [FR Doc. 98–1849 Filed 1–26–98; 8:45 am] effectiveness. Dockets Management Branch (address BILLING CODE 4160±01±F In accordance with the provisions of above) two copies of each petition and section 515(c)(2) of the act (21 U.S.C. supporting data and information, 360e(c)(2)) as amended by the Safe identified with the name of the device DEPARTMENT OF HEALTH AND Medical Devices Act of 1990, this and the docket number found in HUMAN SERVICES premarket approval application (PMA) brackets in the heading of this was not referred to the Dental Products document. Received petitions may be Food and Drug Administration Panel and/or the Clinical Chemistry and seen in the office above between 9 a.m. Toxicology Devices Panel of the Medical [Docket No. 98M±0036] and 4 p.m., Monday through Friday. Devices Advisory Committee, FDA This notice is issued under the Xytronyx, Inc.; Premarket Approval of advisory committees, for review and Federal Food, Drug, and Cosmetic Act the Periogard Periodontal Tissue recommendation because the (secs. 515(d), 520(h) (21 U.S.C. 360e(d), Monitor information in the PMA substantially 360j(h))) and under authority delegated duplicates information previously to the Commissioner of Food and Drugs AGENCY: Food and Drug Administration, reviewed by the panel. On June 23, (21 CFR 5.10) and redelegated to the HHS. 1997, CDRH approved the application Director, Center for Devices and ACTION: Notice. by a letter to the applicant from the Radiological Health (21 CFR 5.53). Director of the Office of Device SUMMARY: The Food and Drug Evaluation, CDRH. Dated: October 31, 1997. Administration (FDA) is announcing its A summary of the safety and Joseph A. Levitt, approval of the application by Xytronyx, effectiveness data on which CDRH Deputy Director for Regulations Policy, Center Inc., San Diego, CA, for premarket based its approval is on file in the for Devices and Radiological Health. approval, under the Federal Food, Drug, Dockets Management Branch (address [FR Doc. 98–1942 Filed 1–26–98; 8:45 am] and Cosmetic Act (the act), of the above) and is available from that office BILLING CODE 4160±01±F Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3905

DEPARTMENT OF HEALTH AND ventricular tachyarrhythmia; (2) the petition, FDA will decide whether to HUMAN SERVICES recurrent, poorly tolerated sustained grant or deny the petition and will ventricular tachycardia (VT); (3) prior publish a notice of its decision in the Food and Drug Administration myocardial infarction, left ventricular Federal Register. If FDA grants the ≤ [Docket No. 98M±0038] ejection fraction of 35 percent, and a petition, the notice will state the issue documented episode of nonsustained to be reviewed, the form of the review Guidant Corp.; Premarket Approval of VT, with an inducible ventricular to be used, the persons who may VENTAK AVTM AICDTM Model 1810/ tachyarrhythmia. Patients suppressible participate in the review, the time and Model 1815 Automatic Implantable with IV procainamide or an equivalent place where the review will occur, and Cardioverter Defibrillator (AICDTM ) antiarrhythmic have not been studied. other details. Petitioners may, at any with the Model 2833 Software NOTE: The clinical outcome of time on or before February 26, 1998, file Application hemodynamically stable, sustained-VT with the Dockets Management Branch patients is not fully known. Safety and (address above) two copies of each AGENCY: Food and Drug Administration, effectiveness studies have not been petition and supporting data and HHS. conducted. The VENTAK AVTM information, identified with the name of ACTION: Notice. AICDTM pulse generator is not intended the device and the docket number found for use solely as a primary bradycardia in brackets in the heading of this SUMMARY: The Food and Drug support device. document. Received petitions may be Administration (FDA) is announcing its In accordance with the provisions of seen in the office above between 9 a.m. approval of the application by Guidant section 515(c)(2) of the act (21 U.S.C. and 4 p.m., Monday through Friday. Corp., St. Paul, MN, for premarket 360e(c)(2)) as amended by the Safe This notice is issued under the approval, under the Federal Food, Drug, Medical Devices Act of 1990, this Federal Food, Drug, and Cosmetic Act and Cosmetic Act (the act), of the premarket approval application (PMA) (secs. 515(d), 520(h) (21 U.S.C. 360e(d), VENTAK AVTM AICDTM System. was not referred to the Circulatory 360j(h))) and under authority delegated FDA’s Center for Devices and System Devices Panel of the Medical to the Commissioner of Food and Drugs Radiological Health (CDRH) notified the Devices Advisory Committee, an FDA (21 CFR 5.10) and redelegated to the applicant, by letter of July 18, 1997, of advisory committee, for review and Director, Center for Devices and the approval of the application. recommendation because the Radiological Health (21 CFR 5.53). DATES: information in the PMA substantially Petitions for administrative Dated: January 5, 1998. review by February 26, 1998. duplicates information previously Joseph A. Levitt, ADDRESSES: Written requests for copies reviewed by this panel. On July 18, 1997, CDRH approved the Deputy Director for Regulations Policy, Center of the summary of safety and for Devices and Radiological Health. effectiveness data and petitions for application by a letter to the applicant [FR Doc. 98–1943 Filed 1–26–98; 8:45 am] administrative review to the Dockets from the Director of the Office of Device Management Branch (HFA–305), Food Evaluation, CDRH. BILLING CODE 4160±01±F A summary of the safety and and Drug Administration, 12420 effectiveness data on which CDRH Parklawn Dr., rm. 1–23, Rockville, MD based its approval is on file in the DEPARTMENT OF HEALTH AND 20857. Dockets Management Branch (address HUMAN SERVICES FOR FURTHER INFORMATION CONTACT: above) and is available from that office Carole C. Carey, Center for Devices and upon written request. Requests should Food and Drug Administration Radiological Health (HFZ–450), Food be identified with the name of the Anesthetic and Life Support Drugs and Drug Administration, 9200 device and the docket number found in Advisory Committee; Notice of Meeting Corporate Blvd., Rockville, MD 20850, brackets in the heading of this 301–443–8609. document. AGENCY: Food and Drug Administration, SUPPLEMENTARY INFORMATION: On August HHS. 20, 1996, Guidant Corp., St. Paul, MN Opportunity for Administrative Review 55112–5798, submitted to CDRH an Section 515(d)(3) of the act authorizes ACTION: Notice. application for premarket approval of any interested person to petition, under This notice announces a forthcoming  TM TM VENTAK AV AICD Model 1810/ section 515(g) of the act, for meeting of a public advisory committee Model 1815 Automatic Implantable administrative review of CDRH’s of the Food and Drug Administration TM Cardioverter Defibrillator (AICD ) with decision to approve this application. A (FDA). At least one portion of the the Model 2833 Software Application petitioner may request either a formal meeting will be closed to the public. which consists of the following: Model hearing under 21 CFR part 12 of FDA’s Name of Committee: Anesthetic and 1810/Model 1815 pulse generator and administrative practices and procedures Life Support Drugs Advisory Model 2833 Software Application to be regulations or a review of the Committee. used with commercially available application and CDRH’s action by an General Function of the Committee: Cardiac Pacemakers, Inc., Programmer/ independent advisory committee of To provide advice and Recorder/Monitor (PRM). The device is experts. A petition is to be in the form recommendations to the agency on FDA a multiprogrammable automatic, of a petition for reconsideration under regulatory issues. implantable dual-chamber pacemaker 21 CFR 10.33(b). A petitioner shall Date and Time: The meeting will be and cardioverter defibrillator, and is identify the form of review requested held on February 5, 1998, 8 a.m. to 5:30 indicated for use in patients who are at (hearing or independent advisory p.m. high risk of sudden cardiac death due to committee) and shall submit with the Location: Holiday Inn, Versailles ventricular arrhythmias and who have petition supporting data and Ballrooms I and II, 8120 Wisconsin experienced one of the following information showing that there is a Ave., Bethesda, MD. situations: (1) Survival of at least one genuine and substantial issue of Contact Person: Karen M. Templeton- episode of cardiac arrest (manifested by material fact for resolution through Somers, Center for Drug Evaluation and the loss of consciousness) due to a administrative review. After reviewing Research (HFD–21), Food and Drug 3906 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Administration, 5600 Fishers Lane, were available at this time, the identity for different types of dietary Rockville, MD 20857, 301–443–4090, or Commissioner concluded that it was in ingredients and on recordkeeping FDA Advisory Committee Information the public interest to hold this meeting requirements. On February 13, 1998, Line, 1–800–741–8138 (301–443–0572 even if there was not sufficient time for two committee working groups will in the Washington, DC area), code the customary 15-day public notice. continue discussing assignments 12529. Please call the Information Line Notice of this meeting is given under stemming from the Keystone report on for up-to-date information on this the Federal Advisory Committee Act (5 health claims. meeting. U.S.C. app. 2). Procedure: Interested persons may Agenda: The committee will hear Dated: January 22, 1998. present data, information, or views, presentations and discuss the Michael A. Friedman, orally or in writing, on issues pending occurrence of spinal/epidural before the committee. Written Deputy Commissioner for Operations. hematomas with the concurrent use of submissions may be made to the contact approved low molecular weight [FR Doc. 98–2024 Filed 1–23–98; 11:47 am] person by February 9, 1998. Oral heparins or heparinoids and spinal/ BILLING CODE 4160±01±F presentations from the public will be epidural anesthesia or spinal puncture. scheduled between approximately 4 The committee will also consider p.m. and 5 p.m. on February 11 and 12, labeling for low molecular weight DEPARTMENT OF HEALTH AND HUMAN SERVICES 1998. Time allotted for each heparins and heparinoids concerning presentation may be limited. Those these adverse events. The approved Food and Drug Administration desiring to make formal oral drug products under discussion and presentations should notify the contact  their sponsors are: (1) Lovenox Food Advisory Committee; Notice of person before February 9, 1998, and (enoxeparin sodium) Injection, Rhone- Meeting submit a brief statement of the general Poulenc Rorer Pharmaceuticals, Inc.; (2) nature of the evidence or arguments  Fragmin (dalteparin sodium) Injection, AGENCY: Food and Drug Administration, they wish to present, the names and  Pharmacia & Upjohn; (3) Orgaran HHS. addresses of proposed participants, and (danaparioid sodium) Injection, ACTION: Notice. an indication of the approximate time TM Organon, Inc.; and (4) Normiflo requested to make their presentation. This notice announces a forthcoming (ardeparin sodium) Injection, Wyeth Notice of this meeting is given under meeting of a public advisory committee Laboratories, Inc. the Federal Advisory Committee Act (5 of the Food and Drug Administration Procedure: On February 5, 1998, from U.S.C., app. 2). 8 a.m. to 3:45 p.m., the meeting is open (FDA). The meeting will be open to the to the public. Interested persons may public. Dated: January 22, 1998. present data, information, or views, Name of Committee: Food Advisory Michael A. Friedman, orally or in writing, on issues pending Committee. Deputy Commissioner for Operations. before the committee. Written General Function of the Committee: [FR Doc. 98–2023 Filed 1–23–98; 11:47 am] submissions may be made to the contact To provide advice and BILLING CODE 4160±01±F person by January 29, 1998. Oral recommendations to the agency on FDA presentations from the public will be regulatory issues. scheduled between approximately 1 Date and Time: The meeting will be DEPARTMENT OF HEALTH AND p.m. and 2 p.m. Time allotted for each held on February 11, 12, and 13, 1998, HUMAN SERVICES presentation may be limited. Those 8:30 a.m. to 5 p.m. desiring to make formal oral Location: DoubleTree Hotel, Pentagon Food and Drug Administration presentations should notify the contact City, 300 Army Navy Dr., Arlington, VA. person before January 29, 1998, and Contact Person: Catherine M. Open Meeting For Representatives of submit a brief statement of the general DeRoever, Center for Food Safety and Health Professional Organizations Applied Nutrition (HFS–22), Food and nature of the evidence or arguments AGENCY: Food and Drug Administration they wish to present, the names and Drug Administration, 200 C St. SW., ACTION: Notice of public meeting. addresses of proposed participants, and Washington, DC 20204, 202–205–4251, an indication of the approximate time FAX 202–205–4970, E-mail SUMMARY: [email protected], or The Food and Drug requested to make their presentation. Administration (FDA) is announcing a Closed Committee Deliberations: On FDA Advisory Committee Information public meeting with representatives of February 5, 1998, from 3:45 p.m. to 5:30 Line, 1–800–741–8138 (301–443–0572 health professional organizations. The p.m., the meeting will be closed to in the Washington, DC area), code meeting will be chaired by Sharon permit discussion and review of trade 10564. Please call the Information Line Smith Holston, Deputy Commissioner secret and/or confidential information for up-to-date information on this for External Affairs. The agenda will (5 U.S.C. 552b(c)(4)). The investigational meeting. include presentations and discussions new drug and Phase I and II drug Agenda: On February 11, 12, and 13, on the topics of the FDA Modernization products in process will be presented 1998, the committee will undertake Act of 1997, and the role of FDA in the and recent action on selected new drug discussions on dietary supplements. regulation of products used in applications will be discussed. Issues raised in the report of the White FDA regrets that it was unable to House Commission on Dietary complementary and alternative publish this notice 15 days prior to the Supplement Labeling relating to medicine. There will also be a brief February 5, 1998, Anesthetic and Life postmarket surveillance and consumer update on tobacco. Support Drugs Advisory Committee research will be discussed. Also, two DATES: The meeting will be held on meeting. Because the agency believes aspects relating to good manufacturing Monday, February 9, 1998, from 1:30 there is some urgency to bring these practices (GMP’s) for dietary p.m. to 3 p.m. issues to public discussion and supplements will be addressed. The ADDRESSES: The meeting will be held at qualified members of the Anesthetic and agency is interested in the Bethesda Hyatt, One Metro Center, Life Support Drugs Advisory Committee recommendations for ensuring the Bethesda, MD. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3907

REGISTRATION: There is no registration Location: Holiday Inn, Versailles Dated: January 22, 1998. fee, however, space is limited. Persons Ballrooms I and II, 8120 Wisconsin Michael A. Friedman, will be registered in the order in which Ave., Bethesda, MD. Deputy Commissioner for Operations. calls are received. Please call Betty B. Contact Person: Leander B. Madoo, [FR Doc. 98–2022 Filed 1–23–98; 11:47 am] Palsgrove at 301–827–6618 to register. Center for Evaluation and Research BILLING CODE 4160±01±F Registrations also may be transmitted by (HFD–21), Food and Drug fax to 1–800–344–3332 or 301–443– Administration, 5600 Fishers Lane, 2446. Please include the name and title Rockville, MD 20857, 301–443–5455, or DEPARTMENT OF HEALTH AND of the person attending and the name of FDA Advisory Committee Information HUMAN SERVICES the organization. Line, 1–80–741–8138 (301–443–0572 in Food and Drug Administration FOR FURTHER INFORMATION CONTACT: the Washington, DC area), code 12540. Peter H. Rheinstein, M.D., J.D., Office of Please call the Information Line for up- [Docket No. 98D±0017] Health Affairs (HFY–40), Food and Drug to-date information on this meeting. Administration, 5600 Fishers Lane, International Cooperation on Rockville, MD 20857, 301–827–6630. Agenda: The committee will discuss Harmonisation of Technical the safety and efficacy of new drug SUPPLEMENTARY INFORMATION: Requirements for Registration of application (NDA) 20–887 AcuTectTM, Veterinary Medicinal Products (VICH); The purpose of the meeting is to Diatide, Inc., a radiopharmaceutical Draft Guidance on Validation of provide an opportunity for agent for the detection and localization Analytical Procedures: Definition and representatives of health professional of acute venous thrombosis. Terminology (#63), and Validation of organizations and other interested Analytical Procedures: Methodolgy persons to be briefed by senior FDA Procedure: On February 9, 1998, from (#64); Availability; Request for staff. It will also provide an opportunity 8 a.m. to 1 p.m. and from 2 p.m. to 5 Comments for informal discussion on these topics p.m. the meeting is open to the public. Interested persons may present data, of particular interest to health AGENCY: information, or views, orally or in Food and Drug Administration, professional organizations. HHS. This public meeting is free of charge; writing, on issues pending before the ACTION: Notice; request for comments. however, space is limited. Registration committee. Written submissions may be made to the contact person by February for the meeting will be accepted in the SUMMARY: The Food and Drug order received and should be sent to the 2, 1998. Oral presentations from the Administration (FDA) is announcing the contact person. Registration should public will be scheduled between availability for comment of two draft include the name and title of the person approximately 8:30 a.m. and 9:30 a.m. guidance for industry (GFI) documents attending and the name of the Time allotted for each presentation may entitled ‘‘Validation of Analytical organization being represented, if any. be limited. Those desiring to make Procedures: Definition and formal oral presentations should notify Dated: January 20, 1998. Terminology’’ (number 63) and the contact person before February 2, William K. Hubbard, ‘‘Validation of Analytical Procedures: 1998, and submit a brief statement of Methodology’’ (number 64). These Associate Commissioner for Policy the general nature of the evidence or Coordination. related draft GFI documents have been arguments they wish to present, the [FR Doc. 98–1850 Filed 1–26–98; 8:45 am] adapted for veterinary use by the names and addresses of proposed International Cooperation on BILLING CODE 4160±01±F participants, and an indication of the Harmonisation of Technical approximate time requested to make Requirements for Registration of DEPARTMENT OF HEALTH AND their presentation. Veterinary Medicinal Products (VICH) HUMAN SERVICES Closed Committee Deliberations: On from two guidelines, Q2A and Q2B, that February 9, 1998, from 1 p.m. to 2 p.m., were adopted by the International Food and Drug Administration the meeting will be closed to permit Conference on Harmonisation (ICH) of discussion and review of trade secret Technical Requirements for Registration Medical Imaging Drugs Advisory and/or confidential information relating of Pharmaceuticals for Human Use. The Committee; Notice of Meeting to NDA 20–887 AcuTectTM (5 U.S.C. draft guidance is intended to provide guidance on characteristics that should AGENCY: 552b(c)(4)). Food and Drug Administration, be considered during the validation of HHS. FDA regrets that it was unable to analytical procedures included as part ACTION: Notice. publish this notice 15 days prior to the of registration applications for approval February 9, 1998, Medical Imaging of veterinary medicinal products This notice announces a forthcoming Drugs Advisory Committee meeting. submitted to the European Union, meeting of a public advisory committee Because the agency believes there is Japan, and the United States. of the Food and Drug Administration some urgency to bring this issue to DATES: Submit written comments on (FDA). At least one portion of the public discussion and qualified these draft GFI documents by March 30, meeting will be closed to the public. members of the Medical Imaging Drugs 1998. Advisory Committee were available at Name of Committee: Medical Imaging ADDRESSES: Submit written comments Drugs Advisory Committee. this time, the Commissioner concluded on the two draft GFI documents to the General Function of the Committee: that it was in the public interest to hold Dockets Management Branch (HFA– To provide advice and this meeting even if there was not 305), Food and Drug Administration, recommendations to the agency on FDA sufficient time for the customary 15-day 12420 Parklawn Dr., rm 1–23, Rockville, regulatory issues. public notice. MD 20857. Comments should be Date and Time: The meeting will be Notice of this meeting is given under identified with the full title of the draft held on February 9, 1998, 8 a.m. to 5 the Federal Advisory Committee Act (5 GFI document and the docket number p.m. U.S.C. app. 2). found in the heading of this document. 3908 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Submit written requests for single Commission; the European Medicines procedures and provides guidance and copies of these draft GFI documents to Evaluation Agency; the European recommendations on how to consider the Communications and Education Federation of Animal Health; the U.S. various validation characteristics for Team (HFV–12), Center for Veterinary Food and Drug Administration; the U.S. each analytical procedure. It also Medicine (CVM), Food and Drug Department of Agriculture; the Animal indicates the data that should be Administration, 7500 Standish Place, Health Institute; the Japanese Veterinary included in an application for Rockville, MD 20855. Send two self- Pharmaceutical Association; and the registration. Comments about these draft addressed adhesive labels to assist that Japanese Ministry of Agriculture, GFI documents will be considered by office in processing your requests. Forestry and Fisheries. the FDA and the VICH Quality Working Copies of these draft guidance Four observers are eligible to Group. Ultimately, FDA intends to documents may be obtained on the participate in the VICH Steering adopt the VICH Steering Committee’s Internet from the CVM Home Page Committee: One representative from the final guidelines and publish them as (http://www.cvm.fda.gov). Government of Australia/ New Zealand, future GFI documents. FOR FURTHER INFORMATION CONTACT: one representative from the industry in If finalized, these documents will Regarding the GFI’s: William G. Australia/ New Zealand, one represent current FDA thinking on Marnane, Center for Veterinary representative from MERCOSUR characteristics for consideration during Medicine (HFV–140), Food and (Argentina, Brazil, Uruguay and the validation of the analytical Drug Administration, 7500 Standish Paraguay), and one representative from procedures included as part of Pl., Rockville, MD 20855, 301–594– Federacion Latino-Americana de la applications. The draft GFI documents 0678. E-mail: Industria para la Salud Animal. The will not create or confer any rights for [email protected]. VICH Secretariat, which coordinates the or on any person and will not operate Regarding VICH: Sharon R. preparation of documentation, is to bind FDA or the public. Alternate Thompson, Center for Veterinary provided by the Confe´de´ration approaches may be used if they satisfy Medicine (HFV–3), Food and Drug Mondiale de L’Industrie de la Sante´ the requirements of applicable statutes, Administration, 7500 Standish Pl., Animale (COMISA). A COMISA regulations, or both. Rockville, MD 20855, 301–594– representative also participates in the Interested persons may, on or before 1798. E-mail: VICH Steering Committee meetings. March 30, 1998, submit to the Dockets At a meeting held on August 20 and [email protected]. Management Branch (address above) 21, 1997, the VICH Steering Committee written comments on the draft guidance SUPPLEMENTARY INFORMATION: In recent agreed that the draft GFI documents years, many important initiatives have document. Two copies of any comments entitled ‘‘Validation of Analytical are to be submitted, except that been undertaken by regulatory Procedures: Definition and authorities, industry associations, and individuals may submit one copy. Terminology’’ and ‘‘Validation of Comments are to be identified with the individual sponsors to promote the Analytical Procedures: Methodology’’ international harmonization of docket number found in brackets in the should be made available for public heading of this document and with the regulatory requirements. FDA has comment. These draft GFI documents participated in efforts to enhance full title of the guidance document. The were prepared by the VICH Quality comments are available for public harmonization and has expressed its Working Group and are based on the commitment to seeking scientifically examination in the Dockets ICH Guidelines (Q2A and Q2B) that Management Branch between 9 a.m. and based harmonized technical procedures have already been adopted by FDA for for the development of pharmaceutical 4 p.m., Monday through Friday. After human pharmaceuticals. With one review of these comments, FDA will products. One of the goals of exception, the deletion of the text ‘‘(e.g. harmonization is to identify and reduce implement the guidance document with metered dose inhalers)’’ included in the any appropriate changes. Thereafter, the differences in technical ICH guideline Q2B, Section 3, the requirements for drug development interested persons may submit written documents are identical. comment on the guidance document among regulatory agencies. The draft GFI document entitled, directly to the CVM Communications FDA has actively participated in the ‘‘Validation of Analytical Procedures: and Education Team (address above). ICH for several years to develop Definition and Terminology,’’ discusses harmonized technical requirements for the characteristics that should be Dated: January 20, 1998. the registration of human considered during the validation of the William K. Hubbard, pharmaceutical products among the analytical procedures included in an Associate Commissioner for Policy European Union, Japan, and the United application for registration of veterinary Coordination. States. The VICH is a parallel initiative medicinal products in the European [FR Doc. 98–1848 Filed 1–26–98; 8:45 am] for veterinary pharmaceutical products. Union, Japan, and the United States. BILLING CODE 4160±01±F The VICH is concerned with developing This document pertaining to ‘‘Definition harmonized technical requirements for and Terminology’’ is not intended to the registration of veterinary cover testing requirements or DEPARTMENT OF THE INTERIOR pharmaceutical products in the procedures, rather it is intended to serve European Union, Japan, and the United as a collection of terms and definitions. Fish and Wildlife Service States, and includes input from both These common definitions such as regulatory and industry representatives. ‘‘analytical procedures,’’ ‘‘specificity,’’ Information Collection To Be The VICH meetings are held under the ‘‘precision,’’ ‘‘accuracy,’’ etc., are meant Submitted to the Office of Management auspices of the Office International des to bridge the differences that often exist and Budget (OMB) for Approval Under E´ pizooties (OIE). During the initial among various compendia and the Paperwork Reduction Act phase of the VICH, an OIE requirements of the European Union, ACTION: Notice. representative chairs the VICH Steering Japan, and the United States. The draft Committee. The VICH Steering GFI document entitled, ‘‘Validation of SUMMARY: The collection of information Committee is composed of member Analytical Procedures: Methodology,’’ described below will be submitted to representatives from the European discusses common analytical OMB for approval under the provisions Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3909 of the Paperwork Reduction Act of 1995. is needed by the Service to make this U.S. Fish and Wildlife Service, Fort Copies of specific information collection determination before a permit can be Snelling, Minnesota. requirements, related forms and issued. The applicant requests to renew and explanatory material may be obtained The permit is required for any person amend his current permit to take the by contacting the Service Information entering a national wildlife refuge, following species for scientific purposes Collection Clearance officer at the unless otherwise provided under the and the enhancement of propagation or address and/or phone numbers listed provisions of 50 CFR, subchapter C. The survival of the species in the wild in below. permittee must abide by all the terms accordance with listing, recovery DATES: Comments must be submitted on and conditions set forth in the permit. outlines, recovery plans, and/or other or before March 30, 1998. Information collected in submitting Service work for those species: an application for a permit, prior to ADDRESSES: Comments and suggestions Mammals on specific requirements should be sent issuing a permit, may be used to to the Service Information Collection evaluate and conclude the eligibility of, bat, gray (Myotis grisescens) Clearance Officer, U.S. Fish and or merely document, permit applicants. bat, Indiana (Myotis sodalis) Wildlife Service, MS 222 ARLSQ, 1849 The Service will require the use of bat, Ozark big-eared (Plecotus C Street, NW, Washington, DC 20240. permits as a condition in new and townsendii ingens) wolf (Canis lupus) FOR FURTHER INFORMATION CONTACT: revised regulations pursuant to the Stephen R. Vehrs, Refuge Program Refuge Improvement Act. Birds The Service will provide Special Use Specialist, Division of Refuges, 703/ Permit forms as requested by interested eagle, bald (Haliaeetus leucocephalus) 358–2397. citizens. The required written forms falcon, peregrine (Falco peregrinus) SUPPLEMENTARY INFORMATION: The and/or verbal application information plover, piping (Charadrius melodus) Service proposes to submit the will be sued by the Service to ensure tern, least tern (Sterna antillarum) warbler, Kirtland’s (wood) (Dendroica following information collection that the applicant is eligible to receive kirtlandii) clearance requirements to OMB for a Permit. review and approval under the Title: United States Department of the Reptiles Paperwork Reduction Act of 1995, Pub. Interior, Fish and Wildlife Service, snake, copperbelly water (northern L. 104–13. Comments are invited on: (1) Special Use Permit. Whether the collection of information is Bureau form number: 3–1383. population) (Nerodia erythrogaster necessary for the proper performance of Frequency of collection: On occasion. neglecta) the functions of the agency, including Description of respondents: Fish whether the information will have Individuals or households; State, local, practical utility; (2) the accuracy of the or Tribal governments; businesses or cavefish, Ozark (Amblyopsis rosae) darter, Niangua (Etheostoma nianguae) agency’s estimate of burden, including other for profit and not-for-profit madtom, Scioto (Noturus trautmani) the validity of the methodology and institutions. madtom, Neosho (Noturus placidus) assumptions used; (3) ways to enhance Number of respondents: 10,000. sturgeon, pallid (Scaphirhynchus albus) the quality, utility, and clarity of the Estimated completion time: The information to be collected; and (4) reporting burden for FWS Form 3–1383 Clams ways to minimize the burden of the (Special Use Permit) is estimated to be clubshell (Pleurobema clava) collection of information on those who 30 minutes. fanshell [Cyprogenia stegaria Burden estimate: 5,000 hours. are to respond, including through the (=irrorata)] use of appropriate automated, Dated: January 15, 1998. mussel, ring pink (=golf stick pearly) electronic, mechanical, or other Carolyn A. Bohan, (Obovaria retusa) technological collection techniques or Acting Assistant Director for Refuges and mussel, winged mapleleaf (Quadrula other forms of information technology. Wildlife. fragosa) The issuance of a Permit by the Fish [FR Doc. 98–1862 Filed 1–26–98; 8:45 am] pearlymussel, cracking [Hemistena and Wildlife Service for access to units BILLING CODE 4310±55±M (=Lastena) lata] of the National Wildlife Refuge System pearlymussel, Curtis’ [Epioblasma Administration Act (16 U.S.C. 668dd– (=Dysnomia) florentina curtisi] 668ee et seq.) as amended; the Refuge DEPARTMENT OF THE INTERIOR pearlymussel, Higgins’ eye (Lampsilis Recreation Act (16 U.S.C. 460K–3); the higginsi) National Wildlife Refuge System Fish and Wildlife Service pearlymussel, orange-foot pimple back Improvement Act of 1997 (Pub. L. 105– (Plethobasus cooperianus) 57); and as implemented by regulations Endangered and Threatened Species pearlymussel, pink mucket [Lampsilis in 50 CFR 25–38. Permit Applications (=abrupta) orbiculata] The information requested prior to AGENCY: Fish and Wildlife Service, pearlymussel, purple cat’s paw pearly issuing the Permit is required to obtain Interior. mussel [Epioblasma (=Dysnomia) a benefit, and will assist the Service in ACTION: Notice of receipt of application. obliquata obliquata (=sulcata administering System programs in sulcata)] accordance with the above statutory The following applicant has applied pearlymussel, tubercled-blossom authorities. The Improvement Act for a permit to conduct certain activities [Epioblasma (=Dysnomia) torulosa requires that a wildlife dependent with endangered species. This notice is torulosa] recreational use or any other uses of a provided pursuant to section 10(c) of pearlymussel, turgid-blossom refuge that, in the sound professional the Endangered Species Act of 1973, as [Epioblasma (=Dysnomia) turgidula] judgment of the Director, will not amended (16 U.S.C. 1531, et seq.). pearlymussel, white cat’s paw materially interfere with or detract from [Epioblasma (=Dysnomia) obliquata the fulfillment of the mission of the PRT–697830 perobliqua] System or the purposes for which the Applicant: Assistant Regional pearlymussel, white wartyback refuge was established. The information Director, Ecological Services, Region 3, (Plethobasus cicatricosus) 3910 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices pigtoe, rough (Pleurobema plenum) and must be received within 30 days of Levine, Laguna Beach, California; Lisa pocketbook, fat [Potamilus (=Proptera) the date of this publication. M. Kegarice, San Bernardino, California; capax] Documents and other information Harmsworth Associates, Dove Canyon, riffleshell, northern (Epioblasma submitted with these applications are California; Jeffrey L. Lincer, Poway, torulosa rangiana) available for review by any party who California; Chambers Group, Inc., Irvine, submits a written request for a copy of Snails California; Merkel and Associates, San such documents to the following office Diego, California. snail, Iowa Pleistocene (Discus within 30 days of the date of publication These applicants request a permit or macclintocki) of this notice: U.S. Fish and Wildlife a permit amendment to take (harass by Insects Service, Ecological Services Operations, survey) the Quino checkerspot butterfly 1 Federal Drive, Fort Snelling, (Euphydryas editha quino) in beetle, American burying (=giant Minnesota 55111–4056. Telephone: conjunction with presence or absence carrion) (Nicrophorus americanus) (612/725–3536 x224); FAX: (612/725– surveys throughout the species range in beetle, Hungerford’s crawling water 3526). California, for the purpose of enhancing (Brychius hungerfordi) its survival. butterfly, Karner blue (Lycaeides Dated: January 20, 1998. melissa samuelis) Matthias A. Kerschbaum, Permit No. 781384 butterfly, Mitchell’s satyr (Neonympha Acting Assistant Regional Director, IL, IN, Applicant: Thomas A. Leslie, mitchellii mitchellii) MO (Ecological Services), Region 3, Fort Snelling, Minnesota. Wildomar, California. dragonfly, Hine’s (=Ohio) emerald The applicant requests an amendment [FR Doc. 98–1859 Filed 1–26–98; 8:45 am] (Somatochlora hineana) to his permit to take (harass by survey) BILLING CODE 4310±55±P Plants the Quino checkerspot butterfly (Euphydryas editha quino) in Aconitum noveboracense (northern wild DEPARTMENT OF THE INTERIOR conjunction with presence or absence monkshood) surveys and ecological research Apios priceana (Price’s potato-bean) Fish and Wildlife Service throughout the species range in Asclepias meadii (Mead’s milkweed) California, for the purpose of enhancing Asplenium (=Phyllitis) scolopendrium Endangered and Threatened Species its survival. (=japonica) var. americanum Permit Applications (American hart’s-tongue fern) Permit No. 814215 Boltonia decurrens (decurrent false AGENCY: Fish and Wildlife Service. Applicant: Claude Edwards, San aster) ACTION: Notice of receipt of permit Diego, California. Cirsium pitcheri (Pitcher’s thistle) applications. The applicant requests an amendment Dalea foliosa (=Petalostemum f.) (leafy SUMMARY: The following applicants have to his permit to take (harass by survey) prairie-clover) the Quino checkerspot butterfly Erythronium propullans (Minnesota applied for a scientific research permit to conduct certain activities with (Euphydryas editha quino) in dwarf trout lily) conjunction with presence or absence Geocarpon minimum (no common endangered species pursuant to section 10 (a)(1)(A) of the Endangered Species surveys and observational studies name) throughout the species range in Hymenoxys herbacea (=acaulis var. Act of 1973, as amended (16 USC 1531 et seq.). California, for the purpose of enhancing glabra) (lakeside daisy) its survival. Iris lacustris (dwarf lake iris) Permit No. 837580 Isotria medeoloides (small whorled Permit No. 821229 Applicant: Robert Weppler, Riverside, pogonia) California. Applicant: David G. Crawford, Agoura Lespedeza leptostachya (prairie bush- The applicant requests a permit to Hills, California. clover) take (harass by survey) the Delhi Sands The applicant requests an amendment Lesquerella filiformis (Missouri bladder- flower-loving fly (Rhaphiomidas to his permit to take (harass by survey) pod) terminatus abdominalis) in southern the Delhi-Sands flower loving fly Lindera melissifolia (pondberry) California in conjunction with presence (Rhaphiomidas terminatus abdominalis) Mimulus glabratus var. michiganensis or absence surveys for the purpose of in Riverside and San Bernardino (Michigan monkey-flower) enhancing its survival. Counties, California, and take (harass by Oxytropis campestris var. chartacea survey) the tidewater goby (Eucyclobius (Fassett’s locoweed) Permit No. 799486 newberryi) throughout its range in Platanthera leucophaea (eastern prairie Applicant: Jan Randall, San California in conjunction with presence fringed orchid) Francisco, California. or absence surveys, for the purpose of Platanthera praeclara (western prairie The applicant requests an amendment enhancing their survival. fringed orchid) of her permit to take (capture and Permit No. 838015 Sedum integrifolium ssp. leedyi (Leedy’s remove eight individuals from the wild) roseroot) the giant kangaroo rat (Dipodomys Applicant: Stephan Henry Sprague, Solidago houghtonii (Houghton’s ingens) in conjunction with scientific Anaheim, California. goldenrod) research in Merced, Fresno, Monterey, The applicant requests a permit to Spiraea virginiana (Virginia spiraea) San Luis Obispo, Kings, Kern, and Santa take (harass by survey) the Delhi-Sands Trifolium stoloniferum (running buffalo Barbara Counties, California, for the flower loving fly (Rhaphiomidas clover) purpose of enhancing its survival. terminatus abdominalis), Quino Written data or comments should be checkerspot butterfly (Euphydryas submitted to the Regional Director, U.S. Permit No.’s: 838028, 785138, 832945, editha quino), and the coastal California Fish and Wildlife Service, Ecological 810768, 837301, 781217, 797999 gnatcatcher (Polioptila californica Services Operations, 1 Federal Drive, Applicants: Michael G. Van Hattem, californica) in conjunction with Fort Snelling, Minnesota 55111—4056, San Juan Capistrano, California; David presence or absence surveys throughout Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3911 each species range, for the purpose of invitation for public involvement, and Sec. 18, lots 13 to 20, inclusive. enhancing their survival. call for information on oil and gas The issues anticipated to be addressed minerals and other resources. Permit No. 787645 by this EIS include the conflicting mandates of protecting wilderness SUMMARY: The Bureau of Land Thomas Olsen Associates, Inc., resources and values while honoring Management (BLM), Farmington District Hemet, California. valid existing oil and gas rights. Office is initiating preparation of an The applicant requests an amendment The proposed planning criteria Environmental Impact Statement (EIS) to his permit to take (harass by survey) include: the cactus ferruginous pygmy-owl on proposed oil and gas development of 1. All proposed actions and (Glaucidium brasilianum cactorum) in three existing leases within the Bisti/De- alternatives considered must comply conjunction with presence or absence Na-Zin Wilderness Area. The public is with current laws and federal surveys in Pima County, Arizona, for invited to participate in this planning regulations. the purpose of enhancing its survival. effort with the identification of 2. The EIS will weigh long-term DATES: Written comments on these additional issues and planning criteria. benefits and detriments against short- permit applications must be received on This notice is also to solicit oil and term benefits and detriments. or before February 26, 1998. gas mineral and other resource 3. This planning process will provide ADDRESSES: Written data or comments information and indications of interest for public involvement including early should be submitted to the Chief, and need. Mineral extraction notice and frequent opportunity for Division of Consultation and companies, environmental interested citizens and groups to Conservation Planning, Ecological organizations, state, Tribal, and local participate in and comment on the Services, Fish and Wildlife Service, 911 governments, and the general public are preparation of plans and related N.E. 11th Avenue, Portland, Oregon encouraged to submit information to the guidance. BLM to assist in the determinations of 97232–4181; fax: (503) 231–6243. Please Dated: January 21, 1998. refer to the respective permit number for oil and gas development potential and M.J. Cha´vez, each application when submitting possible conflicts with other resources. comments. All comments received, The planning document will be State Director. including names and addresses, will prepared by an interdisciplinary team of [FR Doc. 98–1882 Filed 1–26–98; 8:45 am] become part of the official specialists within the Farmington BILLING CODE 4310±FB±M administrative record and may be made District Office. Two public scoping available to the public. meetings will be held: in Farmington, DEPARTMENT OF THE INTERIOR FOR FURTHER INFORMATION CONTACT: New Mexico on February 24, 1998 in the San Juan College Henderson Fine Documents and other information Bureau of Land Management submitted with these applications are Arts Building, room 9012 at 7:00 p.m.; available for review, subject to the and in Santa Fe, New Mexico on [UT±020±1020±00] requirements of the Privacy Act and February 25, 1998 in the BLM New Mexico State Office, 1474 Rodeo Road, Environmental Analysis; Cedar City Freedom of Information Act, by any District, Utah party who submits a written request for at 7:00 p.m. Public hearings will be announced after the completion of a a copy of such documents within 20 AGENCY: Bureau of Land Management, days of the date of publication of this Draft EIS. Interior. DATES: notice to the address above; telephone: Comments relating to the ACTION: Notice of availability. (503) 231–2063. Please refer to the identification issues and planning respective permit number for each criteria, and responses to this call for oil SUMMARY: The Bureau of Land application when requesting copies of and gas mineral and other resource Management, Cedar City District, has documents. information will be accepted through completed an Environmental Analysis the close of business March 20, 1998. (EA)/Finding of No Significant Impact Dated: January 21, 1998. ADDRESSES: Comments and requests to (FONSI) of the Proposed Plan Thomas Dwyer, be included on the mailing list should Amendments to the Cedar/Beaver/ Acting Regional Director, Region 1, Portland, be sent to: Lee Otteni, District Manager; Garfield/Antimony and the Paria, Oregon. Bureau of Land Management, Vermilion and Zion Management [FR Doc. 98–1884 Filed 1–26–98; 8:45 am] Farmington District Office; 1235 La Framework Plans. The Proposed BILLING CODE 4310±55±P Plata Highway, Suite A, Farmington, Amendments involve the addition of New Mexico 87401. Proprietary data five new land tenure adjustment criteria (LTAs). These LTAs could be used to DEPARTMENT OF THE INTERIOR should be identified as such to ensure confidentiality. facilitate changes in land ownership Bureau of Land Management FOR FURTHER INFORMATION CONTACT: enhancing the ability to provide for Christopher V. Barns at the address economic growth as well as provide [NM±070±08±1210±04] above, or call 505–599–6338. additional protection for sensitive resources. Notice of Intent To Prepare and SUPPLEMENTARY INFORMATION: The DATES: The protest period for these Environmental Impact Statement on Oil existing leases are found in the Hunter Proposed Plan Amendments will and Gas Development Within the Bisti/ Wash portion of the Bisti/De-Na-Zin commence with the date of publication De-Na-Zin Wilderness Area; Invitation Wilderness Area on 2,630.93 acres of of this notice and last for 30 days. for Public Participation and Call for the following public lands: Protests must be received on or before Information T. 24 N., R. 12 W., NMPM, January 27, 1998. Sec. 3, lots 8, 9, 16, 17; AGENCY: Bureau of Land Management, Sec. 4, lots 5 to 20, inclusive; ADDRESSES: Protests must be addressed Interior. Sec. 8, lots 1, 2, 7 to 16, inclusive; to the Director (WO–210), Bureau of ACTION: Notice of intent to prepare an Sec. 9, lots 3, 4, 5, 6, 12, 13; Land Management, Attn: Brenda Environmental Impact Statement, Sec. 17, lots 1 to 16, inclusive; and Williams, 1849 C Street, N.W., 3912 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Washington, D.C. 20240 within 30 days adjourn at approximately 4:00 p.m. or contact Alexis London to obtain a copy after the date of publication of this upon completion of business. Public of this collection of information. Notice of Availability. comments will be heard from 11:00 a.m. SUPPLEMENTARY INFORMATION: FOR FURTHER INFORMATION CONTACT: until 11:30 a.m. If necessary to Title: 30 CFR 250, Subpart F, Oil and Verlin Smith, Area Manager, Kanab accommodate all wishing to make Gas Well-Workover Operations. Resource Area, at 318 North First East, public comments, a time limit may be OMB Control Number: 1010–0043. Kanab, Utah 84741, (801) 644–2672. placed upon each speaker. At an Abstract: The Outer Continental Shelf Copies of the proposed Plan appropriate time, the meeting will (OCS) Lands Act (43 U.S.C. 1331 et Amendments are available for review at adjourn for approximately one hour for seq.), as amended, requires the Secretary the Kanab Field Office. lunch. The purposes of the meeting are of the Interior to preserve, protect, and SUPPLEMENTARY INFORMATION: This to interact with the Director of the develop oil and gas resources in the action is announced pursuant to Section Bureau of Land Management in a video OCS; make such resources available to 202(a) of the Federal Land Management teleconference with other Resource meet the Nation’s energy needs as Act (1976) and 43 CFR Part 1610. These Advisory Councils, to identify issues for rapidly as possible; balance orderly Proposed Amendments are subject to the Council to address in 1998, and to energy resource development with protests by any party who has schedule future 1998 meetings. protection of the human, marine, and participated in the planning process. FOR FURTHER INFORMATION CONTACT: coastal environment; ensure the public Protest must be specific and contain the Richard Hubbard, Bureau of Land a fair and equitable return on the following information: Management, Spokane District Office, resources offshore; and preserve and —The name, mailing address, phone 1103 North Fancher Road, Spokane, maintain free enterprise competition. To number, and interest of the person Washington, 99212; or call 509–536– carry out these responsibilities, MMS filing the protest. 1200. has issued regulations at 30 CFR Part —A statement of the issue(s) being Dated January 21, 1998. 250. Subpart F, Oil and Gas Well- protested. Joseph K. Buesing, Workover Operations, of that part —A statement of the part(s) of the contains requirements and procedures District Manager. proposed amendment being protested for well-workover operations in the and citing pages, paragraphs, maps [FR Doc. 98–1881 Filed 1–26–98; 8:45 am] OCS. etc., of the Proposed Plan BILLING CODE 4310±33±P The MMS uses the information Amendment. collected under subpart F to analyze —A copy of all documents addressing and evaluate planned well-workover DEPARTMENT OF THE INTERIOR the issue(s) submitted by the protestor operations in the OCS to ensure that during the planning process or a Minerals Management Service operations result in personnel safety reference to the date when the and protection of the environment. The protester discussed the issue(s) for the Agency Information Collection evaluation is used in decisions on record. Activities: Proposed Collection; whether to approve, disapprove, or to —A concise statement as to why the Comment Request require modification to the proposed protester believes the BLM State well-workover operations. If Director is incorrect. AGENCY: Minerals Management Service respondents submit proprietary Dated: January 15, 1998. (MMS), Interior. information, it will be protected under G. William Lamb, ACTION: Notice of extension of a 30 CFR 250.18, Data and information to be made available to the public. No State Director, Utah. currently approved information collection. items of a sensitive nature are collected. [FR Doc. 98–1635 Filed 1–26–98; 8:45 am] The requirement to respond is BILLING CODE 4310±DQ±M SUMMARY: As part of its continuing effort mandatory. to reduce paperwork and respondent Estimated Number and Description of DEPARTMENT OF THE INTERIOR burden, MMS invites the public and Respondents: There are approximately other Federal agencies to comment on a 130 Federal OCS oil and gas or sulphur Bureau of Land Management proposal to extend the currently lessees. approved collection of information Frequency: On occasion, varies by [OR±130±1020±00;GP8±0087] discussed below. The Paperwork section. Estimated Annual Reporting and Notice of Meeting of the Eastern Reduction Act of 1995 (PRA) provides Recordkeeping Hour Burden: There are Washington Resource Advisory that an agency may not conduct or 445 burden hours currently approved Council sponsor, and a person is not required to respond to, a collection of information for this collection. AGENCY: Interior, Bureau of Land unless it displays a currently valid Comments: The MMS will summarize Management, Spokane District. Office of Management and Budget written responses to this notice and ACTION: Meeting of the Eastern (OMB) control number. address them in its submission for OMB Washington Resource Advisory Council; DATES: Submit written comments by approval. All comments will become a February 20, 1998, in Spokane, March 30, 1998. matter of public record. We will also Washington. consult with a representative number of ADDRESSES: Direct all written comments respondents on the accuracy of the SUMMARY: A meeting of the Eastern to the Rules Processing Team, Minerals burden estimate. As a result of the Washington Resource Advisory Council Management Service, Mail Stop 4020, comments we receive and consultations, will be held on February 20, 1998. The 381 Elden Street, Herndon, Virginia we will make any necessary adjustments meeting will convene at 8:00 a.m., at the 20170–4817. for our submission to OMB. In Spokane District Office of the Bureau of FOR FURTHER INFORMATION CONTACT: calculating the burden, MMS may have Land Management, 1103 N. Fancher, Alexis London, Rules Processing Team, assumed that respondents perform some Spokane, WA 99212. The meeting will telephone (703) 787–1600. You may also of the requirements and maintain Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3913 records in the normal course of their Dated: January 12, 1998. about proposed contractual actions for activities. The MMS considers these to E.P. Danenberger, capital recovery and management of be usual and customary. Commenters Chief, Engineering and Operations Division. project resources and facilities. are invited to provide information if [FR Doc. 98–1861 Filed 1–26–98; 8:45 am] Additional Bureau of Reclamation they disagree with this assumption, and BILLING CODE 4310±MR±P (Reclamation) announcements of they should tell us what the burden individual contract actions may be hours and costs imposed by this published in the Federal Register and in collection of information are. DEPARTMENT OF THE INTERIOR newspapers of general circulation in the areas determined by Reclamation to be (1) The MMS specifically solicits National Park Service affected by the proposed action. comments on the following questions: Announcements may be in the form of (a) Is the proposed collection of Meeting: Committee for the news releases, legal notices, official information necessary for the proper Preservation of the White House letters, memorandums, or other forms of performance of MMS’s functions, and In compliance with the Federal written material. Meetings, workshops, will it be useful? Advisory Committee Act, notice is and/or hearings may also be used, as appropriate, to provide local publicity. (b) Are the estimates of the burden hereby given of a meeting of the Committee for the Preservation of the The public participation procedures do hours of the proposed collection not apply to proposed contracts for sale reasonable? White House. The meeting will be held at the Old Executive Office Building, of surplus or interim irrigation water for (c) Do you have any suggestions that Washington, DC at 10 a.m., Friday, a term of 1 year or less. Either of the would enhance the quality, clarity, or February 6, 1998. It is expected that the contracting parties may invite the public usefulness of the information to be agenda will include policies, goals and to observe contract proceedings. All collected? long range plans. The meeting will be public participation procedures will be (d) Is there a way to minimize the open, but subject to appointment and coordinated with those involved in information collection burden on those security clearance requirements. complying with the National Environmental Policy Act. who are to respond, including through Clearance information must be received the use of appropriate automated by February 2, 1998. ADDRESSES: The identity of the electronic, mechanical, or other forms of Inquiries may be made by calling the approving officer and other information pertaining to a specific contract information technology? Committee for the Preservation of the White House between 9 a.m. and 4 p.m., proposal may be obtained by calling or (2) In addition, the PRA requires weekdays at (202) 619–6344. Written writing the appropriate regional office at agencies to estimate the total annual comments may be sent to the Executive the address and telephone number given reporting and recordkeeping cost Secretary, Committee for the for each region in the supplementary burden for the collection of this Preservation of the White House, 1100 information. information. The MMS needs your Ohio Drive, SW, Washington, DC 20242. FOR FURTHER INFORMATION CONTACT: comments on this item. Your response James I. McDaniel, Alonzo Knapp, Manager, Reclamation should split the cost estimate into two Executive Secretary, Committee for the Law, Contracts, and Repayment Office, components: (a) Total capital and Preservation of the White House. Bureau of Reclamation, PO Box 25007, startup cost component; and (b) annual [FR Doc. 98–1889 Filed 1–26–98; 8:45 am] Denver, Colorado 80225–0007; operation, maintenance, and purchase BILLING CODE 4310±70±M telephone 303–236–1061 extension 224. of services component. Your estimates SUPPLEMENTARY INFORMATION: Pursuant should consider the costs to generate, to section 226 of the Reclamation maintain, and disclose or provide the DEPARTMENT OF THE INTERIOR Reform Act of 1982 (96 Stat. 1273) and information. You should describe the 43 CFR 426.20 of the rules and methods you use to estimate major cost Bureau of Reclamation regulations published in 52 FR 11954, factors, including system and Apr. 13, 1987, Reclamation will publish Quarterly Status Report of Water technology acquisition, expected useful notice of the proposed or amendatory Service and Repayment Contract life of capital equipment, discount contract actions for any contract for the Negotiations rate(s), and the period over which you delivery of project water for authorized incur costs. Capital and startup costs AGENCY: Bureau of Reclamation, uses in newspapers of general include, among other items, computers Interior. circulation in the affected area at least and software you purchase to prepare ACTION: Notice. 60 days prior to contract execution. for collecting information; monitoring, Pursuant to the ‘‘Final Revised Public sampling, drilling, and testing SUMMARY: Notice is hereby given of Participation Procedures’’ for water equipment; and record storage facilities. proposed contractual actions pending resource-related contract negotiations, Generally, your estimates should not through December 31, 1997, and published in 47 FR 7763, Feb. 22, 1982, include equipment or services contract actions that have been a tabulation is provided of all proposed purchased: Before October 1, 1995; to completed or discontinued since the last contractual actions in each of the five publication of this notice on October 27, Reclamation regions. Each proposed comply with requirements not 1997. From the date of this publication, action is, or is expected to be, in some associated with the information future quarterly notices during this stage of the contract negotiation process collection; for reasons other than to calendar year will be limited to in 1998. When contract negotiations are provide information or keep records for modified, new, completed, or completed, and prior to execution, each the Government; or as part of customary discontinued contract actions. This proposed contract form must be and usual business or private practices. annual notice should be used as a point approved by the Secretary of the MMS Information Collection of reference to identify changes in future Interior, or pursuant to delegated or Clearance Officer: Jo Ann Lauterbach, notices. This notice is one of a variety redelegated authority, the Commissioner (202) 208–7744. of means used to inform the public of Reclamation or one of the regional 3914 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices directors. In some instances, (FR) Federal Register and grant obligation of approximately congressional review and approval of a (IDD) Irrigation and Drainage District $31 million. report, water rate, or other terms and (ID) Irrigation District 7. Palmer Creek Water District conditions of the contract may be (M&I) Municipal and Industrial Improvement Company, Willamette involved. (O&M) Operation and Maintenance Basin Project, Oregon: Irrigation water Public participation in and receipt of (P-SMBP) Pick-Sloan Missouri Basin service contract for approximately comments on contract proposals will be Program 13,000 acre-feet. facilitated by adherence to the following (R&B) Rehabilitation and Betterment 8. U. S. Fish and Wildlife Service and procedures: (PPR) Present Perfected Right Boise-Kuna ID, Boise Project, Idaho: 1. Only persons authorized to act on (RRA) Reclamation Reform Act Memorandum of Agreement for the use behalf of the contracting entities may (NEPA) National Environmental Policy of approximately 400 acre-feet of storage negotiate the terms and conditions of a Act space annually in Anderson Ranch specific contract proposal. (SOD) Safety of Dams Reservoir. Water to be used for wildlife (SRPA) Small Reclamation Projects Act 2. Advance notice of meetings or mitigation purposes (ponds and (WCUA) Water Conservation and hearings will be furnished to those wetlands). Utilization Act parties that have made a timely written 9. North Unit ID, Deschutes Project, (WD) Water District request for such notice to the Oregon: Long-term municipal water appropriate regional or project office of Pacific Northwest Region service contract for provision of Reclamation. approximately 125 acre-feet annually 3. Written correspondence regarding Bureau of Reclamation, 1150 North Curtis Road, Boise, Idaho 83706–1234, from the project water supply to the City proposed contracts may be made of Madras. available to the general public pursuant telephone 208–378–5346. 1. Irrigation, M&I, and miscellaneous 10. Lewiston Orchards ID, Lewiston to the terms and procedures of the Orchards Project, Idaho: Repayment Freedom of Information Act (80 Stat. water users; Idaho, Oregon, Washington, Montana, and Wyoming: Temporary or contract for reimbursable cost of dam 383), as amended. safety repairs to Reservoir ‘‘A.’’ 4. Written comments on a proposed interim water service contracts for irrigation, M&I, or miscellaneous use to 11. North Unit ID, Deschutes Project, contract or contract action must be Oregon: Repayment contract for submitted to the appropriate regional provide up to 10,000 acre-feet of water annually for terms up to 5 years; long- reimbursable cost of dam safety repairs officials at the locations and within the to Wickiup Dam. time limits set forth in the advance term contracts for similar service for up to 1,000 acre-feet of water annually. 12. Twenty-one individual public notices. contractors, Umatilla Project, Oregon: 5. All written comments received and 2. Rogue River Basin Water Users, Rogue River Basin Project, Oregon: Repayment agreements for reimbursable testimony presented at any public cost of dam safety repairs to McKay hearings will be reviewed and Water service contracts; $8 per acre-foot per annum. Dam. summarized by the appropriate regional 13. North Unit ID, Deschutes Project, office for use by the contract approving 3. Willamette Basin Water Users, Willamette Basin Project, Oregon: Water Oregon: Warren Act contract with cost authority. of service charge to allow for use of 6. Copies of specific proposed service contracts; $8 per acre-foot per project facilities to convey nonproject contracts may be obtained from the annum. water. appropriate regional director or his 4. Lake Chelan Reclamation District, 14. South Boise Mutual Irrigation designated public contact as they Chief Joseph Dam Project, Washington; Company, Ltd. and United Water Idaho, become available for review and Consolidated ID, Spokane Valley Boise Project, Idaho: Agreement comment. Project, Washington; Individual 7. In the event modifications are made Contractors, Crooked River Project, amending contracts to approve the in the form of a proposed contract, the Oregon; Lower Payette Ditch Company acquisition and municipal use of appropriate regional director shall Ltd., Pioneer Ditch Company, Boise Anderson Ranch Reservoir water by determine whether republication of the Project, Idaho; Tumalo ID, Crescent United Water Idaho, and the transfer of notice and/or extension of the comment Lake Dam Project, Oregon; Monroe Lucky Peak Reservoir water to the period is necessary. Creek ID, Mann Creek Project, Idaho; United States. Factors considered in making such a Clark and Edwards Canal and Irrigation 15. Baker Valley ID, Baker Project, determination shall include, but are not Company, Enterprise Canal Company, Oregon: Warren Act contract with cost limited to: (i) The significance of the Ltd., Lenroot Canal Company, Liberty of service charge to allow for use of modification, and (ii) the degree of Park Canal Company, Parsons Ditch project facilities to store nonproject public interest which has been Company, Poplar ID, Wearyrick Ditch water. expressed over the course of the Company, all in the Minidoka Project, 16. Okanogan ID, Okanogan Project, negotiations. As a minimum, the Idaho; Juniper Flat District Washington: SOD contract to repay regional director shall furnish revised Improvement Company, Wapinitia district’s share of cost to install an Early contracts to all parties who requested Project, Oregon; Roza ID, Yakima Warning System. the contract in response to the initial Project, Washington: Amendatory 17. Rogue River Valley and Medford public notice. repayment and water service contracts; IDs, Rogue River Basin Project, Oregon: purpose is to conform to the RRA (Pub. SOD contract to repay each district’s Acronym Definitions Used Herein L. 97–293). share of cost to repair Fish Lake Dam. (BCP) Boulder Canyon Project 5. Bridgeport ID, Chief Joseph Dam 18. Trendwest Resorts, Yakima (CAP) Central Arizona Project Project, Washington: Warren Act Project, Washington: Long-term water (CUP) Central Utah Project contract for the use of an irrigation exchange contract for assignment of (CVP) Central Valley Project outlet in Chief Joseph Dam. Teanaway River and Big Creek water (CRSP) Colorado River Storage Project 6. Douglas County, Milltown Hill rights to Reclamation for instream flow (D&MC) Drainage and Minor Project, Oregon: SRPA loan repayment use in exchange for annual use of up to Construction contract; proposed combination loan 3,500 acre-feet of water from Cle Elum Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3915

Reservoir for a proposed resort for terms up to 1 year; long-term California Department of Water development. contracts for similar service for up to Resources, CVP, California: Pursuant to 19. Milner ID, Minidoka-Palisades 1,000 acre-feet annually. Public Law 102–575, conveyance Projects, Idaho: Amendment of storage Note: Copies of the standard forms of agreements for the purpose of wheeling contracts to reduce the district’s temporary water service contracts for the refuge water supplies and funding of spaceholding in Palisades Reservoir by various types of service are available upon district facility improvements, and up to 5,162 acre-feet, thereby allowing written request from the Regional Director at exchange agreements to provide water use of this space by Reclamation for the address shown above. for refuge and private wetlands. flow augmentation. 2. Contractors from the American 9. Mountain Gate Community 20. Burley and Southwest IDs, River Division, Buchanan Division, Services District, CVP, California: Minidoka Project, Idaho: Warren Act Cross Valley Canal, Delta Division, Amendment of existing long-term water contract with charge to allow for use of Friant Division, Hidden Division, service contract to include right to project facilities to convey nondistrict Sacramento River Division, Shasta renew. This amendment will also water to Southwest ID. Division, and Trinity River Division, conform the contract to current 21. City of Cle Elum, Yakima Project, CVP, California: Renewal of existing Reclamation law, including Public Law Washington: Contract for up to 2,170 long-term and interim renewal water 102–575. acre-feet of water for municipal use. 10. Santa Barbara County Water The following contract actions have service contracts with contractors whose contracts expire between 1998 and Agency, Cachuma Project, California: been completed in the Pacific Northwest Repayment contract for SOD work on Region since this notice was last 2000; water quantities for these contracts total in excess of 1.7M acre- Bradbury Dam. published on October 27, 1997. 11. CVP Service Area, California: 1. (15) Stanfield and Westland IDs feet. These contract actions will be accomplished through interim renewal Temporary water purchase agreements and 69 individual contractors, Umatilla for acquisition of 20,000 to 200,000 Project, Oregon: Repayment contracts contracts pursuant to Public Law 102– 575. acre-feet of water for fish and wildlife for reimbursable cost of dam safety purposes as authorized by the Central repairs to McKay Dam. Agreements have 3. Redwood Valley County WD, SRPA, California: District is considering Valley Project Improvement Act for been executed with 50 individual terms of up to 3 years. contractors; a contract executed October restructuring the repayment schedule 12. City of Roseville, CVP, California: 17, 1997, with Stanfield ID; and a pursuant to Public Law 100–516 or Execution of long-term Warren Act contract executed January 1998 with initiating new legislation to prepay the contract for conveyance of nonproject Westland ID. loan at a discounted rate. Prepayment water provided from the Placer County 2. (24) J. R. Simplot Company and option under Public Law 102–575 has Water Agency. This contract will allow Partners, Boise Project, Idaho: Long- expired. CVP facilities to be used to deliver term contract for 3,000 acre-feet of 4. Sacramento River water rights nonproject water to the City of Roseville Anderson Ranch Reservoir storage for contractors, CVP, California: Contract for use within their service area. M&I use. Contract executed November amendment for assignment under 10, 1997. voluntary land ownership transfers to 13. Sacramento Municipal Utility 3. (25) Eagle Island Water Users provide for the current CVP water rates District, CVP, California: Amendment of Association, Inc., Boise Project, Idaho: and update standard contract articles. existing water service contract to allow Amendment of water service contract to 5. Naval Air Station and Truckee for additional points of diversion and reduce the Association’s spaceholding Carson ID, Newlands Project, Nevada: assignment of up to 15,000 acre-feet of in Lucky Peak Reservoir by Amend water service Agreement No. project water to the Sacramento County approximately 5,300 acre-feet, thereby 14–06–400–1024 for the use of project Water Agency. The amended contract allowing use of this space by water on Naval Air Station land. will conform to current Reclamation Reclamation for flow augmentation. 6. El Dorado County Water Agency, law. Amendment executed November 10, San Juan WD, and Sacramento County 14. Mercy Springs WD, CVP, 1997. Water Agency, CVP, California: M&I California: Assignment of Mercy Springs 4. (27) The Dalles ID, The Dalles water service contracts to supplement WD’s water service contract to Pajaro Project, Oregon: Amendatory SRPA loan existing water supply: 15,000 acre-feet Valley Water Management Agency. The repayment contract to modify the for El Dorado County Water Agency, assignment will provide for delivery of repayment schedule, including 13,000 acre-feet for San Juan WD, and up to 13,300 acre-feet annually of water extension of repayment period from 30 22,000 acre-feet for Sacramento County to the Agency from the CVP for to 34 years. Contract executed December Water Agency, authorized by Public agricultural purposes. 12, 1997. Law 101–514. 15. Santa Barbara County Water 7. U.S. Fish and Wildlife Service, Agency, Cachuma Project, California: Mid-Pacific Region California Department of Fish and Contract to transfer responsibility for Bureau of Reclamation, 2800 Cottage Game, Grassland WD, CVP, California: O&M and O&M funding of certain Way, Sacramento, California 95825– Water service contracts to provide water Cachuma Project facilities to the 1898, telephone 916–979–2401. supplies for refuges and private member units. 1. Irrigation water districts, individual wetlands within the CVP pursuant to 16. Stony Creek WD, Black Butte Dam irrigators, M&I, and miscellaneous water Public Law 102–575 and Federal and Lake, Sacramento River Division, users, Mid-Pacific Region projects other Reclamation Laws; quantity to be CVP, California: A proposed than CVP: Temporary (interim) water contracted for is approximately 450,000 amendment of Stony Creek WD’s water service contracts for available project acre-feet. service contract, No. 2–07–20-W0261, to water for irrigation, M&I, or fish and 8. Glenn-Colusa ID, Sutter Extension allow the contractor to change from wildlife purposes providing up to WD, Biggs-West Gridley WD, Central paying for all project water, whether 10,000 acre-feet of water annually for California ID, San Luis Canal Company, used or not, to paying only for project terms up to 5 years; temporary Warren Grasslands WD, Buena Vista Water water scheduled or delivered and to add Act contracts for use of project facilities Storage District, and the State of another month to the irrigation period. 3916 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

17. M&T, Inc., Sacramento River will conform to current Reclamation Supplemental Decree in Arizona v. Water Rights Contractors, CVP, law. California et al. California: A proposed exchange 8. Miscellaneous PPR No. 11, BCP, Lower Colorado Region agreement with M&T, Inc., to take its Arizona: Assign a portion of the PPR Butte Creek water rights water from the Bureau of Reclamation, PO Box 61470 from Holpal to McNulty et al. Sacramento River in exchange for CVP (Nevada Highway and Park Street), 9. Federal Establishment PPR water. Boulder City, Nevada 89006–1470, entitlement holders, BCP, Arizona: 18. East Bay Municipal Utility telephone 702–293–8536. Individual contracts for administration District, CVP, California: Amendment to 1. Milton and Jean Phillips, Kenneth of Colorado River water entitlement of the long-term water service contract No. or Ann Easterday, Robert E. Harp, the Colorado River, Fort Mojave, 14–06–200–5183A, to change the points Cameron Brothers Construction Co., Quechan, Chemehuevi, and Cocopah of diversion. Ogram Farms, Bruce Church, Inc., Indian Tribes. 19. Madera and Lindsay-Strathmore Sunkist Growers, Inc., Clayton Farms, 10. United States facilities; BCP; IDs, and Delta Lands Reclamation BCP, Arizona: Water service contracts, Arizona, California, and Nevada: District No. 770, CVP, California: as recommended by Arizona Reservation of Colorado River water for Execution of 2- to 3-year Warren Act Department of Water Resources, with use at Federal facilities and lands contracts for conveyance of nonproject agricultural entities located near the administered by Reclamation. water in the Friant-Kern and/or Madera Colorado River for up to an additional 11. Windsor Beach State Park, Lake Canals when excess capacity exists. 15,557 acre-feet per year total. Havasu City, BCP, Arizona: Contract for 20. Napa County Flood Control and 2. Arizona State Land Department, 90 acre-feet entitlement to Colorado Water Conservation District, Solano State of Arizona, BCP, Arizona: Contract River domestic water. Project, California: Renewal of water for 6,607 acre-feet per year of Colorado 12. Bureau of Land Management, BCP, service contract No. 14–06–200–1290A, River water for agricultural use and Arizona: Contract for 1,176 acre-feet per which expires February 28, 1999. related purposes on State-owned land. year, for irrigation use, of Arizona’s 21. Solano County Water Agency, 3. Armon Curtis, Arlin Dulin, Jack Colorado River water that is not used by Solano Project, California: Renewal of Rayner, Glen Curtis, Jamar Produce higher priority Arizona entitlement water service contract No. 14–06–200– Corporation, and Ansel T. Hall, BCP, holders. 4090, which expires February 28, 1999. Arizona: Water service contracts: 13. Curtis Family Trust et al., BCP, 22. Reno, Sparks, and Washoe purpose is to amend their contracts to Arizona: Contract for 2,100 acre-feet per County; Washoe and Truckee Storage exempt them from the RRA. year of Colorado River water for Projects; Nevada and California: irrigation. 4. Brooke Water Co., Havasu Water Contract for the storage of non-Federal 14. Beattie Farms SW, BCP, Arizona: Co., City of Quartzsite, McAllister water in Truckee River reservoirs as Contract for 1,890 acre-feet per year of Subdivision, and Arizona State Land authorized by Public Law 101–618 and unused Arizona entitlement for Department, BCP, Arizona: Contracts for consistent with the terms and irrigation use. additional M&I allocations of Colorado conditions of the Truckee River Water 15. Section 10 Backwater, BCP, River water to entities located along the Quality Settlement Agreement. Arizona: Contract for 250 acre-feet per 23. Sierra Pacific Power Company, Colorado River in Arizona for up to year of unused Arizona entitlement for Washoe and Truckee Storage Projects, 2,657 acre-feet per year as environmental use until a permanent Nevada and California: Contract for the recommended by the Arizona water supply can be obtained. storage of non-Federal water in Truckee Department of Water Resources. 16. U.S. Fish and Wildlife Service, River reservoirs as authorized by Public 5. National Park Service for Lake Lower Colorado River Refuge Complex, Law 101–618 and consistent with the Mead National Recreation Area, BCP, Arizona: Proposed agreement for terms and conditions of the proposed Supreme Court Decree in Arizona v. the administration of existing Colorado Truckee River Operating Agreement. California, and BCP in Arizona and River water entitlement of refuge lands 24. Casitas Municipal Water District, Nevada: Memorandum of located in Arizona, resolving water Ventura Project, California: Repayment Understanding for delivery of Colorado rights coordination issues, and to contract for SOD work on Casitas Dam. River water for the National Park provide for additional entitlement for 25. Centerville Community Services Service’s Federal Establishment PPR of nonconsumptive use of flow through District, CVP, California: A long-term 500 acre-feet of diversions annually and water. supplemental repayment contract for the National Park Service’s Federal 17. Hilander C ID, Colorado River reimbursement to the United States for Establishment PPR pursuant to Basin Salinity Control Project, Arizona: conveyance costs associated with CVP Executive Order No. 5125 (April 25, Water delivery contract for 4,500 acre- water conveyed to Centerville. 1930). feet. 26. El Dorado ID, CVP, California: 6. Mohave Valley ID, BCP, Arizona: 18. Maricopa-Stanfield IDD, CAP, Execution of long-term Warren Act Amendment of current contract for Arizona: District has requested the contract for conveyance of nonproject additional Colorado River water, change United States to defer payments and water. This contract will allow CVP in service area, diversion points, RRA restructure its $78 million distribution facilities to be used to deliver exemption, and PPR. system repayment obligation. nonproject water to the district for use 7. Miscellaneous PPR entitlement 19. Indian and non-Indian agricultural within their service area. holders, BCP, Arizona and California: and M&I water users, CAP, Arizona: 27. Placer County Water Agency, CVP, New contracts for entitlement to New and amendatory contracts for California: Amendment of existing Colorado River water as decreed by the repayment of Federal expenditures for water service contract to allow for U.S. Supreme Court in Arizona v. construction of distribution systems. additional points of diversion and California, as supplemented or 20. Gila River Indian Community, reduction in the amount of project water amended, and as required by section 5 CAP, Arizona: Master repayment/O&M to be delivered from a maximum of of the Boulder Canyon Project Act. contract for the CAP-funded distribution 117,000 acre-feet to a maximum of Miscellaneous PPR holders are listed in system to serve up to approximately 35,000 acre-feet. The amended contract the January 9, 1979, Supreme Court 77,000 acres of land. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3917

21. Tohono O’odham Nation, SRPA, CAP, Arizona: Execute an assignment 44. Bureau of Land Management, BCP, Arizona: Repayment contract for a $7.3 assigning 237 acre-feet of New Pueblo’s Arizona: Agreement for 4,010 acre-feet million loan for the Schuk Toak District. CAP water entitlement to Community. of Colorado River water in accordance 22. San Tan ID, CAP, Arizona: Amend Amend Community’s CAP subcontract with Secretarial Reservations. distribution system repayment contract to increase its entitlement by 237 acre- 45. Arizona State Lands, CAP, No. 6–07–30-W0120 to increase the feet. Upon execution of the assignment Arizona: Assignment of 3,900 acre-feet repayment obligation approximately from New Pueblo to Community, New of CAP water to the City of Scottsdale. $168,000. Pueblo’s CAP water service subcontract 46. Town of Youngtown, CAP, 23. Central Arizona Drainage and would terminate. Arizona: Assignment of 380 acre-feet of Irrigation District, CAP, Arizona: 32. Bullhead City, BCP, Arizona: CAP water to Sun City Water Company. Amend distribution system repayment Assignment of 1,800 acre-feet of water The following contract actions have contract No. 4–07–30-W0048 to and associated service area from been completed or discontinued in the reschedule repayment terms pursuant to Mohave County Water Conservation Lower Colorado Region since this notice U.S. Bankruptcy Court, District of District to Bullhead City, Arizona. was last published on October 27, 1997. Arizona. 33. Mr. Robert H. Chesney, BCP, 1. (5) City of Parker, BCP, Arizona: 24. City of Needles, Lower Colorado Arizona: Amend contract No. 5–07–30– Contract for additional M&I allocation of Water Supply Project, California: W0321 to increase the cubic-foot-per- Colorado River water as recommended Amend contract No. 2–07–30-W0280 to second diversion and install a low-lift by the Arizona Department of Water extend Needles subcontracting authority pump. Resources. to the Counties of Imperial and 34. U.S. Army Proving Ground, BCP, 2. (15) Crystal Beach Water Riverside. Arizona: Agreement for 1,883 acre-feet Conservation District, BCP, Arizona: 25. Imperial ID/Coachella Valley WD of Colorado River water. Contract for delivery of 132 acre-feet per and/or the Metropolitan WD of 35. Arizona State Lands, BCP, year of Colorado River water for Southern California, BCP, California: Arizona: Water delivery contract for domestic use, as recommended by the Contract to fund the Department of the 1,400 acre-feet of Colorado River water Arizona Department of Water Resources. Interior’s expenses to conserve All- for domestic use. 3. (27) McMicken Irrigation District/ American Canal seepage water in 36. Miscellaneous PPR No. 38, BCP, Avondale, CAP, Arizona: Amend accordance with Title II of the San Luis California: Assign Schroeder’s portion McMicken’s CAP subcontract to reduce Rey Indian Water Rights Settlement Act of the PPR to Murphy Broadcasting and its entitlement by 647 acre-feet, and dated November 17, 1988. change the place of use and type of the amend Avondale’s CAP water service 26. Coachella Valley WD and/or the water use. subcontract to increase its entitlement Metropolitan WD of Southern 37. Berneil Water Co., CAP Arizona: by 647 acre-feet of CAP water. California, BCP, California: Contract to Subcontracts associated with partial 4. (28) City of Scottsdale and other fund the Department of the Interior’s assignment of water service to the City M&I water subcontractors, CAP, expenses to conserve seepage water of Scottsdale, Cave Creek Water Arizona: Subcontract amendments from the Coachella Branch of the All- Company, and the City of Phoenix. associated with assignment of M&I American Canal in accordance with 38. Tohono O’odham Nation, CAP water service subcontracts from Camp Title II of the San Luis Rey Indian Water Arizona: Repayment contract for Verde Water System, Inc., to provide the Rights Settlement Act, dated November construction costs associated with City of Scottsdale with an additional 17, 1988. distribution system on Central Arizona 17,823 acre-feet of CAP water. 27. United States Navy, BCP, Niland, IDD. 5. (34) San Diego County Water California: Contract for 23 acre-feet of 39. Tohono O’odham Nation, Arizona: Authority, San Diego, California, San surplus Colorado River water for Contracts for Schuk Toak and San Diego Project: Title transfer of the first domestic use delivered through the Xavier Districts for repayment of and second barrels of the San Diego Coachella Canal. Federal expenditures for construction of Aqueduct. 28. Southern Nevada Water Authority, distribution systems. 6. (42) Salt River Project, Inc., Salt Robert B. Griffith Water Project, BCP, 40. Arizona State Land Department, River Project, Arizona: Repayment Nevada: Amend the repayment contract BCP, Arizona: Water delivery contract contract for SOD construction activities to provide for the incorporation of the for delivery of up to 9,000 acre-feet per at Horse Mesa Dam and Mormon Flat Griffith Project into the expanded year of unused apportionment and Dam. southern Nevada Water System, funded surplus Colorado River water for 7. (4) Discontinued—Cibola Valley and built by Southern Nevada Water irrigation. IDD, BCP, Arizona: Cibola Valley IDD Authority, to facilitate the diversion, 41. Don Schuler, BCP, California: was looking at the possibility of treatment, and conveyance of additional Temporary delivery contract for surplus transferring, leasing, selling, or banking water out of Lake Mead for which the and/or unused apportionment of its entitlement of 22,560 acre-feet for Authority has an existing entitlement to Colorado River water for domestic and use in Arizona, California, or Nevada use. industrial use on 18 lots of recreational 8. (9) Discontinued—Julia Soto 29. Salt River-Pima Maricopa Indian homes in California. Zozaya and Steve M. Zozaya, Mohave Community, CAP, Arizona: O&M 42. Bureau of Land Management, BCP, County, BCP, Arizona: Miscellaneous contract for its CAP water distribution California: Agreement for 1,000 acre-feet PPR contract for 720 acre-feet of system. of Colorado River water in accordance irrigation water. This item has been 30. McMicken ID/Town of Goodyear, with Secretarial Reservation. included in No. 7. CAP, Arizona: Amend McMicken’s CAP 43. Bureau of Land Management, 9. (11) Discontinued—Atchison, subcontract to reduce its entitlement by Lower Colorado Water Supply Project, Topeka and Santa Fe Railway Company, 507 acre-feet and Goodyear’s water/ California: Agreement for a consumptive BCP, California: The company intends service subcontract to increase its use of 1,150 acre-feet of water for use on to transfer its miscellaneous PPR for the entitlement by 507 acre-feet. Bureau of Land Management- diversion of 1,260 acre-feet and 31. Community Water Company of administered lands in California consumptive use of 273 acre-feet of Green Valley/New Pueblo Water Co., adjacent to the Colorado River. Colorado River water to the City of 3918 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Needles. This item has been included in augmentation plan, Case No. 97CW201, Uncompahgre Project, Colorado: Water No. 7. Water Division Court No. 4, State of management agreement for water stored 10. (21) Yuma Mesa IDD, Gila Project, Colorado, to provide Horizon Ranch at Taylor Park Reservoir and the Wayne Arizona: Amendment to provide for with domestic, lawn irrigation, pond N. Aspinall Storage Units to improve increase in domestic water deliveries evaporation, and livestock water. water management. (from 10,000 to 20,000 acre-feet) within 2. Southern Ute Indian Tribe, Animas- 11. Southern Ute Indian Tribe, Florida its overall use in the district. La Plata Project, Colorado: Repayment Project, Colorado: Supplement to 11. (24) Agricultural and M&I water contract for 26,500 acre-feet per year for contract No. 14–06–400–3038, dated users, CAP, Arizona: Water service M&I use and 2,600 acre-feet per year for May 7, 1963, for an additional 181 acre- subcontracts for percentages of available irrigation use in Phase One and 700 feet of project water, plus 563 acre-feet supply reallocated in 1992 for irrigation acre-feet in Phase Two; contract terms to of water pursuant to the 1986 Colorado entities and up to 640,000 acre-feet per be consistent with binding cost-sharing Ute Indian Water Rights Final year allocated in 1983 for M&I use. agreement and water rights settlement Settlement Agreement. 12. (39) Discontinued—Southern agreement. 12. Country Aire Estates, Forrest Nevada Water Authority, BCP, Nevada: 3. Ute Mountain Ute Tribe, Animas-La Groves Estates, and Los Ranchitos, Contract to use Federal facilities and Plata Project, Colorado and New Florida Project, Colorado: Water service land to divert water from Lake Mead at Mexico: Repayment contract; 6,000 acre- contracts for a total of 86 acre-feet non-Federal expense. feet per year for M&I use in Colorado; annually of domestic water as 13. (53) Discontinued—Arizona 26,400 acre-feet per year for irrigation replacement water in State of Colorado Public Service, BCP, Arizona: Colorado use in Colorado; 900 acre-feet per year approved augmentation plans. The River water diversion contract for 1,500 for irrigation use in New Mexico; water supply for these contracts are flow acre-feet for domestic use at Yucca contract terms to be consistent with rights purchased and owned by the Power Plant near Yuma, Arizona. binding cost-sharing agreement and United States for project development water rights settlement agreement. Upper Colorado Region and are not specifically a part of the 4. Pine River ID, Pine River Project, project water supply. Bureau of Reclamation, 125 South Colorado: Contract to allow the district 13. Grand Valley Water Users State Street, Room 6107, Salt Lake City, to convert up to 3,000 acre-feet of Association, Orchard Mesa ID, and Utah 84138–1102, telephone 801–524– project irrigation water to municipal, Public Service Company of Colorado, 4419. domestic, and industrial uses. Grand Valley Project, Colorado: Water 1. Individual irrigators, M&I, and 5. San Juan-Chama Project, New service contract for the utilization of miscellaneous water users, Initial Units, Mexico: San Juan Pueblo repayment project water for cooling purposes for a Colorado River Storage Project; Utah, contract for up to 2,000 acre-feet of steam electric generation plant. Wyoming, Colorado, and New Mexico: project water for irrigation purposes. 14. Public Service Company of New Temporary (interim) water service Taos Area—The Taos Area Aceqias, the Mexico, CRSP, Navajo Unit, New contracts for surplus project water for Town and County of Taos are forming Mexico: Amendatory water service irrigation or M&I use to provide up to a joint powers agreement to form an contract for diversion of 20,200 acre- 10,000 acre-feet of water annually for organization to enter into a repayment feet, not to exceed a depletion of 16,200 terms up to 10 years; long-term contract for up to 2,990 acre-feet of acre-feet of project water for cooling contracts for similar service for up to project water to be used for irrigation purposes for a steam electric generation 1,000 acre-feet of water annually. and M&I in the Taos, New Mexico area. (a) Harrison F. Russell and Patricia E. 6. City of El Paso, Rio Grande Project, plant. Russell, Aspinall Unit, CRSP, Colorado: Texas and New Mexico: Amendment to 15. Provo Reservoir Water Users Contract for 1 acre-foot to support an the 1941 and 1962 contracts to expand Company, Wasatch Irrigation Company, augmentation plan, Case No. 97CW39, acreage owned by the city to 3,000 Timpanogas Irrigation Company, Water Division Court No. 4, State of acres; extend terms of water rights Exchange Irrigation Company, Colorado, to provide for a single family assignments; and allow assignments Washington Irrigation Company, and residential well, including home lawn outside city limits under authority of the City of Provo; CUP, Utah: Water and livestock watering (non- the Public Service Board. exchange contracts, water rights in commercial). 7. The National Park Service, several mountain lakes and reservoirs (b) Lazear Domestic Water Colorado Water Conservation Board, are being exchanged for equivalent Corporation, Aspinall Unit, CRSP, Wayne N. Aspinall Unit, CRSP, contract water rights in Jordanelle Colorado: Contract for 44 acre-feet to Colorado: Contract to provide specific Reservoir. support an augmentation plan, Case No. river flow patterns in the Gunnison 16. Sanpete County Water 95CW209, Water Division Court No. 4, River through the Black Canyon of the Conservancy District, Narrows Project, State of Colorado, to provide domestic Gunnison National Monument. Utah: Application for a SRPA loan and water service to up to 100 residences, 8. Upper Gunnison River Water grant to construct a dam, reservoir, and lawns, gardens, and livestock watering. Conservancy District, Wayne N. pipeline to annually supply (c) East Alum Creek Ranch Aspinall Unit, CRSP, Colorado: Long- approximately 5,000 acre-feet of water Corporation, Aspinall Unit, CRSP, term water service contract for through a transmountain diversion from Colorado: Contract for 23 acre-feet to municipal, domestic, and irrigation use. upper Gooseberry Creek in the Price support an augmentation plan, Case No. 9. Upper Gunnison River Water River drainage (Colorado River Basin) to 97CW198, Water Division Court No. 4, Conservancy District, Wayne N. the San Pitch—Sevier River (Great State of Colorado, to provide East Alum Aspinall Unit, CRSP, Colorado: Basin). Creek Ranch Subdivision with Substitute supply plan for the 17. Emery County Water Conservancy domestic, lawn irrigation, pond administration of the Gunnison River. District, Emery County Project, Utah: evaporation, and livestock water. 10. Uncompahgre Valley Water Users Warren Act contract to allow temporary (d) Horizon Ranch Corporation, Association, Upper Gunnison River storage of nonproject water in Joes Aspinall Unit, CRSP, Colorado: Contract Water Conservancy District, Colorado Valley Reservoir and/or Huntington for 4 acre-feet to support an River Water Conservation District, North Reservoir. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3919

18. Town of Taos, San Juan-Chama negotiation of repayment contracts with 13. P-SMBP, Kansas and Nebraska: Project, New Mexico: Contract to irrigators and M&I users. Initiate negotiations for renewal of long- purchase water from Town of Taos to 5. Tom Green County Water Control term water supply contracts with increase native flows in Rio Grande for and Improvement District No. 1, San Kansas-Bostwick, Nebraska-Bostwick, benefit of the Silvery Minnow. Angelo Project, Texas: Pursuant to Frenchman Valley, and Frenchman- 19. City of Albuquerque, San Juan- section 501 of Public Law 101–434, Cambridge IDs. Chama Project, New Mexico: Amend negotiate amendatory contract to 14. Northwest Area Water Supply, water storage contract No. 3–CS–53– increase irrigable acreage within the North Dakota: Long-term contract for 01510 to exempt the City of project. water supply from Garrison Diversion Albuquerque from acreage limitation 6. Lakeview ID, Shoshone Project, Unit facilities. Draft basis of negotiation and reporting provisions. Wyoming: New long-term water service has been submitted to the Regional 20. El Paso County Water contract for up to 3,200 acre-feet of firm Office for review. Improvement District No. 1, Rio Grande water supply annually and up to 11,800 15. Fort Shaw and Greenfields IDs, Project, Texas and New Mexico: acre-feet of interim water from Buffalo Sun River Project, Montana: Contract for Supplemental contract between El Paso Bill Reservoir. Pursuant to section 9(e) SOD costs for repairs to Willow Creek County Water Improvement District No. of the Reclamation Project Act of 1939 Dam. Greenfields ID has signed a 1-year 1 and the United States to allow the and Public Law 100–516. repayment contract for its share of the 7. City of Rapid City and Rapid Valley conversion of project water from SOD costs. Basis of negotiation for Fort Water Conservancy District, Rapid irrigation to M&I within the El Paso Shaw ID has been submitted to the Valley Unit, P-SMBP, South Dakota: area. Denver Office for review. Contract renewal for up to 55,000 acre- 21. Individual Irrigators, Dolores 16. P-SMBP, Kansas: Water service feet of storage capacity in Pactola Project, Colorado: The United States contracts with Kirwin and Webster IDs Reservoir. proposes to lease up to 1,500 acre-feet 8. North Platte Project, Pathfinder ID: in the Solomon River Basin in Kansas of project water declared surplus under Negotiation of contract regarding SOD will be extended for a period of 4 years the authority of the Warren Act of 1911. program modification of Lake Alice in accordance with Pub. L. 104–326 enacted October 19, 1996. Water service Great Plains Region Dam No. 1 Filter/Drain. 9. Northern Cheyenne Indian contracts will be renewed prior to Bureau of Reclamation, PO Box Reservation, Montana: In accordance expiration. 36900, Federal Building, 316 North 26th with section 9 of the Northern Cheyenne 17. P-SMBP, Nebraska: Water service Street, Billings, Montana 59107–6900, Reserved Water Rights Settlement Act of contracts with the Loup Basin telephone 406–247–7730. 1992, the United States and the Reclamation District for Sargent and 1. Individual irrigators, M&I, and Northern Cheyenne Indian Tribe are Farwell IDs in the Middle Loup River miscellaneous water users; Colorado, proposing to contract for 30,000 acre- Basin in Nebraska will be extended for Kansas, Montana, Nebraska, North feet per year of stored water from a period of 4 years in accordance with Dakota, Oklahoma, South Dakota, Texas, Bighorn Reservoir, Yellowtail Unit, Public Law 104–326 enacted October and Wyoming: Temporary (interim) Lower Bighorn Division, P-SMBP, 19, 1996. water service contracts for the sale, Montana. The Tribe will pay the United 18. City of Cheyenne, Kendrick conveyance, storage, and exchange of States both capital and O&M costs Project, Wyoming: Negotiation of surplus project water and nonproject associated with each acre-foot of water contract to renew for an additional term water for irrigation or M&I use to the Tribe sells from this storage for M&I of 5 years. Contract for up to 10,000 provide up to 10,000 acre-feet of water purposes. acre-feet of storage space for annually for a term up to 1 year. 10. Mid-Dakota Rural Water System, replacement water on a yearly basis in 2. Green Mountain Reservoir, Inc., South Dakota: Pursuant to the Seminoe Reservoir. A temporary Colorado-Big Thompson Project, Reclamation Projects Authorization and contract has been issued pending Colorado: Water service contracts for Adjustment Act of 1992, the Secretary of negotiation of the long-term contract. irrigation and M&I; contract negotiations the Interior is authorized to make grants 19. Highland-Hanover ID, P-SMBP, for sale of water from the marketable and loans to Mid-Dakota Rural Water Hanover-Bluff Unit, Wyoming: yield to water users within the Colorado System, Inc., a nonprofit corporation for Renegotiation of long-term water service River Basin of Western Colorado. the planning and construction of a rural contract; includes provisions for 3. Ruedi Reservoir, Fryingpan- water supply system. repayment of construction costs. Arkansas Project, Colorado: Second 11. Angostura ID, Angostura Unit, P- 20. Upper Bluff ID, P-SMBP, Hanover- round water sales from the regulatory SMBP, South Dakota: The district had a Bluff Unit, Wyoming: Renegotiation of capacity of Ruedi Reservoir. Negotiation contract for water service which expired long-term water service contract; of water service and repayment on December 31, 1995. An interim 3- includes provisions for repayment of contracts for approximately 17,000 acre- year contract provides for a continuing construction cost. feet annually for M&I use; contract with water supply and the district to operate 21. Fort Clark ID, P-SMBP, North Colorado Water Conservation Board for and maintain the dam and reservoir. Dakota: Negotiate an interim water remaining 21,650 acre-feet of marketable The proposed long-term contract would service contract to continue delivery of yield for interim use by U.S. Fish and provide a continued water supply for project water pending renewal of a long- Wildlife Service for benefit of the district and the district’s continued term water service-repayment contract. endangered fishes in the Upper O&M of the facility. 22. Canadian River Project, Texas: Colorado River Basin. 12. Cities of Loveland and Berthold, Recalculate existing contract repayment 4. Garrison Diversion Unit, P-SMBP, Colorado, Colorado-Big Thompson schedule to conform with the provisions North Dakota: Renegotiation of the Project, Colorado: Long-term contracts of the Emergency Drought Relief Act of master repayment contract with for conveyance of nonproject M&I water 1996. The revised schedule is to reflect Garrison Diversion Conservancy District through Colorado-Big Thompson Project a consideration for project land to conform with the Garrison Diversion facilities pursuant to the Town Sites and transferred to the National Park Service, Unit Reformulation Act of 1986; Power Development Act of 1906. and a 3-year deferment of payments. 3920 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

23. Nueces River Project, Texas: power at the Grand Valley Power Plant, the U.S. and the ENI region. It will Recalculate existing contract repayment Palisade, Colorado. complement, and be supported by, schedule to conform with the provisions Dated: January 20, 1998. existing and future USAID programs to of the Emergency Drought Relief Act of Wayne O. Deason, meet the continued need for 1996. The revised schedule is to reflect strengthening environmental policies Deputy Director, Program Analysis Office. a 5-year deferment of payments. and regulatory frameworks within CEE/ 24. Western Heart River ID, P-SMBP, [FR Doc. 98–1883 Filed 1–26–98; 8:45 am] NIS nations. In some cases, it is Heart Butte Unit, North Dakota: BILLING CODE 4310±94±P expected, within the context of the Negotiation of water service contract to overall EPP, limited technical assistance continue delivery of project water to the will be provided to ensure that policies district. INTERNATIONAL DEVELOPMENT exist and are implemented to support 25. Lower Marias Unit, P-SMBP, COOPERATION AGENCY the investments stimulated by the Montana: Water service contract expired Agency for International Development program’s primary work. USAID June 1997. Initiating renewal of existing anticipates that the Program will serve contract for 25 years for up to 480 acre- Environmental Partnership Program in as a catalyst across the region to feet of storage from Tiber Reservoir to Central and Eastern Europe (CEE) and increase public/private participation in irrigate 160 acres. Basis of negotiation is the New Independent States (NIS) of environmentally sound economic in the process of being completed; the Former Soviet Union development by: (1) Stimulating existing contract was extended for 1 dialogue between these sectors and year pending negotiation of long-term ACTION: Availability of applications. action on policies that encourage private contract. SUMMARY: participation in environmental projects; 26. Lower Marias Unit, P-SMBP, The U.S. Agency for International Development (USAID) and (2) assisting ENI-based Montana: Initiating 25-year water environmental decision-makers in service contract for up to 750 acre-feet seeks applications from qualified U.S. organizations or consortia of accessing information on environmental of storage from Tiber Reservoir to technologies, approaches and services irrigate 250 acres. organizations for award of a three to five-year Cooperative Agreement in or locating partners who can help them 27. Glendo Unit, P-SMBP, Wyoming: solve priority environmental problems Initiate negotiations for renewal of long- support of a program to promote market- oriented solutions to environmental that are predominantly transboundary term water service contracts with or regional in nature (air and water Burbank Ditch, New Grattan Ditch problems facing local governments and industries in Central and Eastern Europe pollution, climate-change mitigation, Company, Torrington ID, Lucerne Canal solid and toxic waste cleanup, etc.). The and Power Company, and Wright and (CEE) and the New Independent States (NIS) of the former Soviet Union. The RFA will fully describe the competitive Murphy Ditch Company. The current application process, as well as the contracts expire in 1998. successful applicant will coordinate a partnership grants program that will overall EPP and the Program 28. Glendo Unit, P-SMBP, Nebraska: Description for the proposed Initiate negotiations for renewal of long- facilitate linkages among organizations within the CEE and the NIS and cooperative agreement. The RFA will term water service contracts with outline what information is to be Bridgeport, Enterprise, and Mitchell IDs, between U.S. entities and partners within the region, and promote CEE/NIS submitted for review by USAID. As and Central Nebraska Public Power and stated above, the successful applicant Irrigation District. The current contracts business opportunities for U.S. firms in the environmental sector. USAID seeks will be expected to contribute to the expire in 1998. proposed Program’s cost in cash and/or 29. Belle Fourche Unit, P-SMBP, an organization with demonstrated in kind, in order to demonstrate South Dakota: Basis of negotiation has capability to identify opportunities for commitment to the principles of the EPP been approved for the negotiation of a partnering, as well as the capacity to and maximize its potential impact. The long-term repayment contract deferring nurture and facilitate such partnerships. Agreement will be incrementally funded the Belle Fourche ID’s 1997 Applicants must be prepared to by USAID, subject to availability of construction payment and also contribute non-USAID resources toward funds. reduction of the district’s annual meeting the overall cost of the program; payment. all partnership grants within the DATES: The RFA will be available o/a 30. Fryingpan-Arkansas Project, program will also be made on a cost- January 12, 1998. Colorado: Repayment contract with sharing basis. This competitive RFA SUPPLEMENTARY INFORMATION: Southeastern Colorado Water will be awarded as a component of a Electronic Access: The preferred Conservancy District for repayment of new initiative, entitled ‘‘Environmental method of distribution of USAID cost of SOD modifications to Pueblo Partnership Program (EPP),’’ which is a procurement information is via the Dam. result of a year-long series of Internet or by request of a solicitation of 31. Dickinson Heart River Mutual Aid discussions on appropriate transition a 3.5′′ floppy disk (WordPerfect 5.1/5.2 Corporation, P-SMBP, Dickinson Unit, strategies for environmentally sound format). The RFA, once issued, may be North Dakota: Negotiate renewal of economic improvements by the U.S. in downloaded from the Agency Website water service contract for irrigation of CEE/NIS. The goal of the overall EPP is at: http//www.info.usaid.gov. From this lands below Dickinson Dam in western to forge relationships with new partners, homepage, select ‘‘Business and North Dakota. particularly private partners, to expand Procurement Opportunities,’’ then 32. Greenfields ID, Sun River Project, and accelerate environmental trade, ‘‘USAID Procurements,’’ then Montana: Contract for SOD costs for investment and policy reform in this ‘‘Download Available USAID repairs to Pishkun Dike No. 4. region. In addition to market-oriented Solicitations.’’ Receipt of this RFA 33. Public Service Company of solutions to environmental problems through the Internet must be confirmed Colorado: Agreement to furnish surplus facing localities and industry in these by written notification to the contact water from the historic users pool at countries, the purpose of the EPP is to person listed above. It is the Green Mountain Reservoir for the stimulate sustainable environmental responsibility of the recipient of this purpose of generating hydroelectric trade and investment linkages between RFA to ensure that it has been received Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3921 from the Internet in its entirety as relating to the proposed consent decree. injunctive relief to prevent future USAID bears no responsibility for data Any comments should be addressed to violations at the plant, and perform a errors resulting from the transmission the Assistant Attorney General of the Supplemental Environmental Project to on conversion processes. Environment and Natural Resources reduce exposure to lead among newborn FOR FURTHER INFORMATION CONTACT: Division, Department of Justice, infants in Chester, Pennsylvania. Elaine Smialek, fax (202) 216–3396; Washington, D.C. 20530, and should The Department of Justice will receive [email protected]. refer to United States v. Abbott for a period of thirty (30) days from the Laboratories, et al., Civil Action No. 98– date of this publication comments Dated: January 15, 1998. 1013–JAF, D.J. Ref. 90–11–3–1574. relating to the proposed Consent Decree. Judith D. Johnson, The proposed consent decree may be Comments should be addressed to the Division Chief, M/OP/ENI examined at the Office of the United Assistant Attorney General of the [FR Doc. 98–1921 Filed 1–26–98; 8:45 am] States Attorney, District of Puerto Rico, Environment and Natural Resources BILLING CODE 6116±01±M Federal Building, Chardon Avenue, Division, Department of Justice, Hato Rey, Puerto Rico, 00918 and at Washington, D.C. 20530, and should Region II, Office of the Environmental refer to Chester Residents Concerned for DEPARTMENT OF JUSTICE Protection Agency, 290 Broadway, New Quality Living, et al., and York, NY 10007–1866 and at the Commonwealth of Pennsylvania and Notice of Lodging of Consent Decree Consent Decree Library, 1120 G Street, United States of America v. Delaware Pursuant to the Comprehensive N.W., 4th Floor, Washington, D.C. County Regional Water Control Environmental Response, 20005, (202) 624–0892. A copy of the Authority (‘‘DELCORA’’), D.J. Ref. 90–5– Compensation, and Liability Act of proposed consent decree may be 2–1–2071. 1980, as Amended obtained in person or by mail from the The Consent Decree may be examined at the Office of the United States Consistent with Departmental policy, Consent Decree Library, 1120 G Street, Attorney, 5615 Chestnut Street, Suite 28 CFR 50.7, 38 FR 19029, and 42 U.S.C. N.W., 4th Floor, Washington, D.C. 1250, Philadelphia, PA 19106, at U.S. 9622(d), notice is hereby given that on 20005. In requesting a copy, please EPA Region 3, 841 Chestnut Building, January 8, 1998, a proposed Consent enclose a check (there is a 25 cent per Philadelphia, PA 19107, and at the Decree in United States v. Abbott page reproduction cost) in the amount Consent Decree Library, 1120 G Street, Laboratories, et al., Civil Action No. 98– of $69.25 payable to the Consent Decree N.W., 4th Floor, Washington, D.C. 1013–JAF, was lodged with the United Library. If a copy of the Consent Decree 20005, (202) 624–0892. A copy of the States District Court for the District of without the attachments is sufficient, Consent Decree may be obtained in Puerto Rico. The proposed Consent please specify that fact and enclose a person or by mail from the Consent Decree will resolve the United States’ check in the amount of $26.00. Decree Library, 1120 G Street, N.W., 4th claims under the Comprehensive Bruce S. Gelber, Floor, Washington, D.C. 20005. In Environmental Response, Deputy Chief, Environmental Enforcement requesting a copy exclusive of exhibits, Compensation, and Liability Act Section, Environment and Natural Resources please enclose a check in the amount of (‘‘CERCLA’’), 42 U.S.C. 9601 et seq., on Division. $9.75 (25 cents per page reproduction behalf of the U.S. Environmental [FR Doc. 98–1920 Filed 1–26–98; 8:45 am] cost) payable to the Consent Decree Protection Agency (‘‘EPA’’) against BILLING CODE 4410±15±M Library. defendants Abbott Laboratories, American Cyanamid Company, Joel M. Gross, Browning-Ferris Industries of Puerto DEPARTMENT OF JUSTICE Chief, Environmental Enforcement Section, Rico, Inc., E.I. DuPont de Nemours & Environment and Natural Resources Division. Notice of Lodging of Consent Decree [FR Doc. 98–1918 Filed 1–26–98; 8:45 am] Company, Merck & Company, Inc., the Under the Clean Air Act Municipality of Barceloneta, Pharmacia BILLING CODE 4410±15±M & Upjohn Caribe Inc., Roche Products, Pursuant to Department policy, 18 Inc., Schering-Plough Products, Inc., CFR 50.7, notice is hereby given that on and Union Carbide Corporation relating December 18, 1997, a proposed Consent DEPARTMENT OF JUSTICE to the Barceloneta Landfill Superfund Decree in Chester Residents Concerned Notice of Lodging of Consent Decree Site (‘‘Site’’) located near the for Quality Living, et al., and Pursuant to the Comprehensive Municipality of Barceloneta, Puerto Commonwealth of Pennsylvania and Environmental Response, Rico. The Complaint alleges that each of United States of America v. Delaware Compensation and Liability Act the defendants is liable under Sections County Regional Water Control 106 and 107(a) of CERCLA, 42 U.S.C. Authority (‘‘DELCORA’’), Civil Action In accordance with Departmental 9606 and 9607. No. 94–CV–5639 was lodged with the policy, 28 CFR 50.7, notice is hereby Pursuant to the Consent Decree, the United States District Court for the given that a proposed consent decree in settling defendants will implement the Eastern District of Pennsylvania. United States v. Young Refining remedy selected in the July 5, 1996 In this action the United States, as a Company, Civil Action No. 1–96–CV– Record of Decision (the ‘‘ROD’’) for the plaintiff-intervenor, sought civil 1002–JEC, was lodged on December 31, Site, now estimated to cost penalties and injunctive relief pursuant 1997, with the United States District approximately $10.5 million, reimburse to Section 113 of the Clean Air Act, 42 Court for the Northern District of the United States for $425,000 of past U.S.C. 7413, against DELCORA for Georgia. The consent decree settles a costs, and make payment of EPA’s violations of the Clean Air Act in claim brought under Section 107(a) of future response costs, as defined in the connection with the operation of sludge the Comprehensive Environmental Consent Decree, and up to $400,000 of incinerators at DELCORA’s sewage Response, Compensation, and Liability EPA’s oversight costs. treatment plant located in Chester, Act (‘‘CERCLA’’), 42 U.S.C. 9607(a), for The Department of Justice will receive Pennsylvania. Under the proposed response costs incurred by the United for a period of thirty (30) days from the Consent Decree DELCORA agrees to pay States at the Basket Creek Drum date of this publication comments a civil penalty of $120,000, implement Disposal site (the ‘‘Basket Creek site’’) in 3922 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Douglasville, Georgia. Under the Petroleum Environmental Research SUBJECT MATTER: (1) Issuance of proposed consent decree, Continental Forum (‘‘PERF’’) Project 95–11, titled Proposed and Final Decisions on Claims Trading Company and Dr. Fred W.J. Liu ‘‘Advanced NDE for Acoustic Emission Against Albania; (2) Hearings on the will pay $67,500 to the United States in Interpretation’’, has filed written Record on Objections to Proposed reimbursement of response costs notifications simultaneously with the Decisions on Claims Against Albania. incurred by the Environmental Attorney General and the Federal Trade STATUS: Open. Protection Agency (‘‘EPA’’) in Commission disclosing (1) the identities All meetings are held at the Foreign connection with the Basket Creek site. of the parties and (2) the nature and Claims Settlement Commission, 600 E Most of the removal of hazardous objectives of the venture. The Street, N.W., Washington, DC. Requests substances from the Basket Creek Site notifications were filed for the purpose for information, or advance notices of was conducted by Chem-Nuclear of invoking the Act’s provisions limiting intention to observe an open meeting, Systems, Inc. EPA has incurred costs of the recovery of antitrust plaintiffs to may be directed to: Administrative approximately $678,000 in connection actual damages under specified Officer, Foreign Claims Settlement with the Basket Creek Site. circumstances. Pursuant to Section 6(b) Commission, 600 E Street, NW., Room The Department of Justice will of the Act, the identities of the parties 6002, Washington, DC 20579. receive, for a period of thirty (30) days are: Exxon Research and Engineering Telephone: (202) 616–6988. from the date of this publication, Company, Florham Park, NJ; Shell Oil Dated at Washington, DC, January 21, 1998. Company, Houston, TX; Aramco comments relating to the proposed Judith H. Lock, consent decree. Comments should be Services Company, Houston, TX; Administrative Officer. addressed to the Assistant Attorney Chevron Research and Technology General for the Environmental and Company, Richmond, CA; Mobil [FR Doc. 98–2045 Filed 1–23–98; 12:18 pm] Natural Resources Division, Department Technology Company, Paulsboro, TX; BILLING CODE 4410±01±U of Justice, Washington, DC 20530, and and BP International Place, Sunbury-on- Thames, Middlesex TW167LN United should refer to United States v. Young DEPARTMENT OF JUSTICE Refining Company, DOJ Ref. #90–11–2– Kingdom. The nature and objective of the research program is to deliver 755. Office of Justice Programs The proposed consent decree may be software and/or protocols to permit examined at the office of the United reliable use of AEI for onstream Bureau of Justice Statistics; Agency States Attorney, Richard Russell Federal applications. Information Collection Activities: Building, Suite 1800, 75 Spring Street, Participation in this venture will Proposed Collection; Comment SW., Atlanta, Georgia 30335; the Region remain open to all interested persons Request 4 Office of the Environmental Protection and organizations until the final Project Agency, 61 Forsythe St., SE., Atlanta, Completion Date which is presently ACTION: Notice of information collection Georgia 30303; and at the Consent anticipated to occur approximately under review: Prison population reports Decree Library, 1120 G Street, NW., 4th twenty-one months after the project midyear counts and advance yearend Floor, Washington, DC 20005, (202) commences. Also the parties intend to counts-National prisoner statistics; 624–0892. A copy of the proposed file additional written notification Revision of a currently approved consent decree may be obtained in disclosing all changes in membership. collection. person or by mail from the Consent Information about participating in Project 95–11 may be obtained by This information collection is Decree Library, 1120 G Street, NW., 4th published to obtain comments from the Floor, Washington, DC 20005. In contacting Emery B. Lendvai-Lintner, Exxon Research and Engineering public and affected agencies. Comments requesting a copy please refer to the Company, P.O. Box 101, Florham Park, are encouraged and will be accepted referenced case and enclose a check in NJ 07932–0101. until March 30, 1998. This process is the amount of $4.50 (25 cents per page conducted in accordance with the reproduction costs), payable to the Constance K. Robinson, Director of Operations, Antitrust Division. Paperwork Reduction Act of 1955. Consent Decree Library. Written comments and suggestions [FR Doc. 98–1917 Filed 1–26–98; 8:45 am] Walker B. Smith, from the public and affected agencies Deputy Chief, Environmental Enforcement BILLING CODE 4410±11±M concerning the proposed collection of Section, Environment and Natural Resources information should address one or more Division. DEPARTMENT OF JUSTICE of the following four points: [FR Doc. 98–1919 Filed 1–26–98; 8:45 am] (1) Evaluate whether the collection of BILLING CODE 4410±15±M Foreign Claims Settlement information is necessary for the proper Commission performance of the functions of the agency, including whether the DEPARTMENT OF JUSTICE [F.C.S.C. Meeting Notice No. 3±98] information will have practical utility; (2) Evaluate the accuracy of the Antitrust Division Sunshine Act Meeting agency’s estimate of the burden of the Notice Pursuant to the National The Foreign Claims Settlement collection of information, including the Cooperative Research and Production Commission, pursuant to its regulations validity of the methodology and Act of 1993ÐPetroleum Environmental (45 CFR Part 504) and the Government assumptions used; Research Forum (``PERF'') Project 95± in the Sunshine Act (5 U.S.C. 552b), (3) Enhance the quality, utility and 11 hereby gives notice in regard to the clarity of the information to be scheduling of meetings and oral collected; and Notice is hereby given that, on hearings for the transaction of (4) Minimize the burden of the October 2, 1997, pursuant to Section Commission business and other matters collection of information on those who 6(a) of the National Cooperative specified, as follows: are to respond, including through the Research and Production Act of 1993, DATE AND TIME: Friday, February 20, use of appropriate automated, 15 U.S.C. 4301 et seq. (‘‘the Act’’), 1998, 10:00 a.m. electronic, mechanical, or other Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3923 technological collection techniques or (b) The number of inmates housed in criminal justice agencies are collected, other forms of information technology, county or other local authority maintained, analyzed, and archived. e.g. permitting electronic submission of correctional facilities, or in other state Data are also linked across agencies to responses. or Federal facilities on December 31 of permit more complex analyses of If you have additional comments, the current year solely to ease prison Federal criminal justice issues. Regular suggestions, or need a copy of the crowding; annual reports and special topical proposed information collection (c) As of the direct result of state reports are prepared that describe the instrument with instructions, or need prison crowding during the current Federal criminal justice system, Federal additional information, please contact year, the number of inmates released via defendants and offenses, and other James Stephan, Statistician, Bureau of court order, administrative procedure or special issues of interest. In addition, Justice Statistics, 810 7th Street NW, statute, accelerated release, sentence special tabulations are prepared, Washington, DC 20531, or via facsimile reduction, emergency release, or other pursuant to BJS direction, in response to (202) to 202–307–1463. expedited release; and requests from government officials. The (d) The aggregate rated, operational, project to be funded under the proposed Overview of This Information and design capacities, by sex, of each Collection cooperative agreement will continue the State’s correctional facilities at yearend. program’s current activities. (1) Type of information collection. The Bureau of Justice Statistics uses DATES: Proposals must be postmarked Revision of currently approved this information in published reports on or before March 31, 1998. collection. and for the U.S. Congress, Executive ADDRESSES: Proposals should be mailed (2) The title of the Form/Collection: Office of the President, practitioner, to: Applications Coordinator, Bureau of Prison Population Reports Midyear researchers, students, the media, and Justice Statistics, 810 7th Street, NW, Counts; and Prison Population Report others interested in criminal justice Washington, DC 20531. Advance Yearend Counts—National statistics. Prisoner Statistics. (5) An estimate of the total number of FOR FURTHER INFORMATION CONTACT: John (3) The agency form number and the respondents and the amount of time Scalia, Program Manager, Federal applicable component of the needed for an average respondent to Justice Statistics Program, Bureau of Department sponsoring the collection. respond: 52 respondents each taking an Justice Statistics, (202) 616–3276. Form: NPS–1A; and NPS–1B. average 2.5 hours to respond. SUPPLEMENTARY INFORMATION: Corrections Unit, Bureau of Justice (6) An estimate of the total public Background Statistics, Office of Justice Programs, burden (in hours) associated with the United States Department of Justice. collection: 130 annual burden hours. The Bureau of Justice Statistics (4) Affected public who will be asked If additional information is required, Federal Justice Statistics Program (FJSP) to respond, as well as a brief abstract: contact: Mr. Robert B. Briggs, Clearance was initiated in 1982 to serve as a Primary: State Departments of Officer, United States Department of central resource for information Corrections. Others: The Federal Bureau Justice, Information Management and describing the processing of Federal of Prisons. For the NPS–1A form, 52 Security Staff, Justice Management criminal defendants and characteristics central reporters (one from each State, Division, Suite 850, Washington Center, of those defendants. The program the District of Columbia, and the 1001 G Street, NW Washington, DC collects data from different components Federal Bureau of Prisons) responsible 20530. of the Federal criminal justice system for keeping records on inmates will be and tracks the progress of suspects from Dated: January 21, 1998. investigation through prosecution, asked to provide information for the Robert B. Briggs, following categories: adjudication, sentencing, and (a) As of June 30 of the current year Department Clearance Officer, United States corrections. The program represents the Department of Justice. and June 30 of the previous year, the primary BJS effort describing the number of male and female inmates [FR Doc. 98–1847 Filed 1–26–98; 8:45 am] Federal criminal justice system and under their jurisdiction with maximum BILLING CODE 4410±18±M responds directly to the legislative sentences of more than one year, one authorization that BJS ‘‘collect, analyze, and disseminate comprehensive Federal year or less; and unsentenced inmates; DEPARTMENT OF JUSTICE and justice transaction statistics (including (b) As of June 30 of the current year, Bureau of Justice Statistics statistics on issues of Federal justice and June 30 of the previous year, the interest such as public fraud and high number of male and female inmates in [OJP(BJS)±1151] technology crime)’’ as set forth in 42 their custody with maximum sentences U.S.C. § 3732(c)(15). Continuation of Federal Justice of more than one year, one year or less; In keeping with the original program Statistics Program and unsentenced inmates. plan which was designed to minimize For the NPS–1B form, 52 central AGENCY: Office of Justice Programs, data collection costs, no original data reporters (one from each State, the Bureau of Justice Statistics (BJS), Justice. collection is supported under this District of Columbia, and the Federal ACTION: Solicitation for award of program. Data are obtained from Bureau of Prisons) responsible for cooperative agreement. operational Federal agencies including keeping records on inmates will be the Executive Office for the United asked to provide information for the SUMMARY: The purpose of this notice is States Attorneys, the Administrative following categories: to announce a public solicitation for the Office of the United States Courts, the (a) As of December 31 of the current continuation of the Bureau of Justice Bureau of Prisons, and the United States year, and December 31 of the previous Statistics’ (BJS) Federal Justice Statistics Sentencing Commission. In order to year, the number of male and female Program (FJSP). The FJSP serves as the trace the flow of cases from one stage to inmates under their jurisdiction with national resource for data describing the another and to supplement any maximum sentences of more than one processing of criminal cases in the individual agency’s data, computer year, one year or less; and unsentenced Federal criminal justice system. Under matching techniques have been inmates; this program, data generated by Federal developed that permit the linking of 3924 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices data obtained from different sources. maintain, and archive data from Federal criminal docket, the Administrative The linking of these data permit more justice agencies, produce annual reports Office also provides data describing the complex and detailed analysis of (the Compendium of Federal Justice activities of the Federal pretrial services particular issues. Statistics and Federal Criminal Case agencies and the Federal Probation and Throughout the history of the FJSP, a Processing), and topical special reports. Supervision Service. The Federal regular series of reports has been Any Special Reports prepared by the Judicial Center has provided data produced. These reports include the recipient will be prepared under the describing the Federal courts’ appellate annual Compendium of Federal Justice direction of BJS staff. In addition, BJS docket.) The recipient should attempt to Statistics (available on the Internet at staff may also initiate Special Reports. expand the program to include other www.ojp.usdoj.gov/bjs/abstract/ The recipient will be expected to assist Federal law enforcement agencies. The cfjs93.htm) which describes transactions BJS staff with Special Reports by recipient will also be responsible for in the Federal criminal justice system providing the necessary data for processing data to meet uniform for a particular year; and a series of analysis and, when requested, assisting classification categories and for linking Special Reports addressing specific in the preparation of data tabulations data to permit analysis of data obtained aspects of the Federal criminal justice and reviewing the methodology used to from different sources. system, specific offenses, or other analyze the data. 2. Prepare tapes and related special issues of interest. Recent Special documentation for archiving in the Report include: Prisoner Petitions in the Type of Assistance national archive maintained by BJS. The Federal Courts (available on the Internet Assistance will be made available public use data tapes of the source data at www.ojp.usdoj.gov/bjs/abstract/ under a cooperative agreement. Awards shall conform to BJS standards for ppfc96.htm), Juvenile Delinquents in the will be made for a period of 12 months submission to the National Archive of Federal Criminal Justice System with an option for two additional Criminal Justice Data at the University (www.usdoj.gov/bjs/abstract/jdfcjs.htm), continuation years conditional upon the of Michigan. In addition, the recipient and Noncitizens in the Federal Criminal availability of funds and the quality of will prepare a set of standard analysis Justice System (www.usdoj.gov/bjs/ the initial performance and products. data files from each agency’s source data abstract/nifcjs.htm). In addition, the Costs are estimated at not to exceed for each fiscal year. These standard program serves as the primary source of $650,000 for the initial 12-month analysis data files will describe a information for other BJS statistical period. Funding for subsequent years particular cohort of defendants and will series that describe individuals in the may include reasonable increases for include all variables included in the Federal criminal justice system; cost-of-living and changes in scope of source data and all variables created for program staff have also responded to ad work, where applicable. the Compendium of Federal Justice hoc BJS requests for specific data Statistics. These standard analysis files tabulations and analyses. Statutory Authority will be included on a CD-ROM to be In addition, the FJSP supports the The cooperative agreement to be produced by BJS. The recipient will efforts of the Coordinating Committee awarded pursuant to this solicitation document each of the standard analysis on Federal Criminal Case Processing will be funded by the Bureau of Justice data files and all programs used to Statistics. This interagency committee— Statistics consistent with its mandate as create BJS reports. Such documentation, represented by the Administrative set forth in 42 U.S.C. 3732. to the extent possible, will be Office of the U.S. Courts, the Bureau of maintained in an electronic database Justice Statistics, the Executive Office Eligibility Requirements from which users can query variables of for the U.S. Attorneys, the Federal Both for-profit and nonprofit interest. This electronic data dictionary Bureau of Prisons, and the United States organizations may apply for funds. will also be included on the CD-ROM Sentencing Commission—was Consistent with Office of Justice prepared by BJS. In addition, the established as a forum for discussing Programs fiscal requirements, no fees recipient will document the issues related to the collection of data may be charged against this project by methodology used to produce the describing the Federal criminal justice profit-making organizations. Compendium of Federal Justice system and the reporting of Federal Statistics—including the production of Scope of Work criminal case processing statistics. With the standard analysis data files. the support of the Coordinating The objective of the proposed 3. Prepare the Compendium of Committee, beginning in 1998 BJS will program is to continue basic activities Federal Justice Statistics and the annually publish Federal Criminal Case initiated under the ongoing BJS Federal Federal Criminal Case Processing Processing Statistics. This report— Justice Statistics Program. Specifically, Statistics report and submit both text which will supplement each agency’s the recipient of funds will serve as the and tables in camera-ready format for annual statistical report—will highlight Federal Justice Statistics Resource each Federal fiscal year. specific aspects of the Federal criminal Center. The Resource Center will— 4. Prepare BJS Special Reports, data justice system as well as describe 1. Maintain and expand the Federal tabulations, analyses, data sets, and significant trends in Federal criminal Justice Statistics Program Database. other data manipulations in response to case processing. The statistics presented This will involve the collection, BJS requests. Any Special Reports will be tabulated according to processing, and maintenance of data proposed by the recipient will be procedures agreed upon by each provided by Federal agencies designed in coordination with BJS. BJS participating agency. participating in the program. The will approve all Special Report topics agencies currently participating in the proposed by the recipient. The recipient Objectives program are: the Executive Office for the will provide tabulations, as requested, The purpose of this award is to United States Attorneys, the describing Federal offenders to support support the continuation of the Federal Administrative Office of the United BJS’s National Correctional Reporting Justice Statistics Program. The recipient States Courts, the Bureau of Prisons, and Program and the National Judicial of funds will serve as the Federal Justice the United States Sentencing Reporting Program. Statistics Resource Center whereby the Commission. (In addition to providing 5. Provide BJS with electronic access recipient will continue to collect, data describing the Federal courts’ to the Federal Justice Statistics Resource Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3925

Center (including all source data, Applications will be evaluated on the Proposals must include both narrative standard analysis data files, and overall extent to which they respond to descriptions and a detailed budget. The software used to produce BJS reports) criminal justice priorities, conform to program narrative shall describe and computing resources, as necessary. the goals of the Federal Justice Statistics activities as described in the previous In addition, the recipient must provide Program, and appear to be fiscally section. The detailed budget and the BJS staff with daily access to the feasible and efficient. Applicants will be budget narrative must provide estimated standard analysis data files (for the most evaluated on the basis of— costs including salaries of staff involved recent reporting period available) in a 1. Knowledge of, and experience in, in the project and the percentage of time form in which variables name and working with different components of devoted to the project, fringe benefit rate values correspond to those included in the criminal justice system with itemization and costs, travel costs, the FJSP electronic data dictionary. particular emphasis on knowledge of proposed equipment, supplied, and 6. Provide support to the interagency operational, management, and statistical other expenses. Contractual services or Coordinating Committee on Federal data collected and maintained by equipment must be procured following Criminal Case Processing Statistics. The various Federal criminal justice Office of Justice Programs grant recipient will work with BJS to support components; procurement procedures. 2. Statistical expertise in the area of the efforts of the Coordinating Dated: January 21, 1998. Committee on Federal Criminal Case data analysis, data linkage, and research; Jan M. Chaiken, Processing Statistics including the Director, Bureau of Justice Statistics. production of reconciled case 3. Experience in the application of [FR Doc. 98–1864 Filed 1–26–98; 8:45 am] processing statistics, matching records statistical data to the analysis of across agencies’ databases, identifying criminal justice issues; BILLING CODE 4410±18±P differences in data collection and 4. Demonstrated ability to prepare reporting methods, and other technical high quality statistical reports; 5. Availability of qualified DEPARTMENT OF JUSTICE assistance, as requested. professional and support staff and of 7. Provide Internet access to the suitable equipment for data processing National Institute of Justice Federal Justice Statistics Resource and data manipulation; [OJP(NIJ)±1153] Center. The recipient will provide direct 6. Demonstrated fiscal, management, access via the Internet to all FJSP data and organizational capability suitable National Institute of Justice files (including those files prepared by for providing sound program direction Solicitation for Drug Court Evaluation prior recipients of this award) and the for this multifaced effort; II electronic data dictionary. In addition, 7. Demonstrated ability to design and the recipient will work with BJS to maintain interactive sites on the World AGENCY: National Institute of Justice provide a World Wide Web-accessible Wide Web; and (NIJ), Office of Justice Programs. query system for the Federal Justice 8. Reasonableness of estimated costs ACTION: Notice of solicitation. Statistics Resource Center. The recipient for the total project and for individual SUMMARY: must provide Internet users with the cost categories. Announcement of the capability of performing queries of the availability of the National Institute of FJSP data bases in order to extract basic Application and Award Process Justice ‘‘Solicitation for Drug Court information describing individuals An original and two (2) copies of the Evaluation II.’’ processed in the Federal criminal justice full proposal must be submitted on SF DATES: The deadline for applications is system. Users should be able to 424 (Rev. 1988), Application for Federal close of business March 13, 1998. disaggregate these data by Federal Assistance. Proposals must be ADDRESSES: National Institute of Justice, judicial district. accompanied by a Budget Detail 810 Seventh Street, NW, Washington, Worksheet (replaced the SF 424A, DC 20531. Award Procedures Budget Information); OJP Form 4000/3 FOR FURTHER INFORMATION CONTACT: For Proposals should describe, in (Rev.1–93), Program Narrative and general information about application appropriate detail, the procedures to be Assurances’ OJP Form 4061/6, procedures for solicitations, please call undertaken in furtherance of each of the Certification Regarding Lobbying; the U.S. Department of Justice Response activities described under the Scope of Disbarment, Suspension, and Other Center 1–800–421–6771. Work. Information provided should Responsibility Matters; Drug-Free SUPPLEMENTARY INFORMATION: The focus on activities to be conducted Workplace requirements; and OJP Form following supplementary information is during the initial 12-month period but 7120/1 (Rev. 1–93), Accounting System provided: should also include a more general and Financial Capability Questionnaire discussion of three-year objectives for (to be submitted by applicants who have Authority the program. Information on staffing not previously received Federal funds This action is authorized under the levels and qualifications should be from the Office of Justice Programs and Omnibus Crime Control and Safe Streets included for each task and descriptions are not state of local units of Act of 1968, §§ 201–03, as amended, 42 of experience relevant to the project government). If appropriate, applicants U.S.C. 3721–23 (1994). should be included. Resumes of the must also complete the certificate proposed project director and key staff regarding lobbying activities. All Background should be included in the proposal. applicants must sign Certified NIJ is soliciting proposals to evaluate Applications will be competitively Assurances that they are in compliance 16 drug court sites, which are reviewed by BJS. Final authority to with the Federal laws and regulations administered by the Office of Justice enter into a cooperative agreement is which prohibit discrimination in Programs, Drug Court Program Office reserved for the Director, BJS, or his program or activity that receives Federal (DCPO). The evaluation will take place designee, who may, in his discretion, funds. To obtain appropriate forms, in two separate phases. A single initial determine that none of the applications contact Getha Hilario, BJS Management grant of up to $500,000 will be awarded shall be funded. Assistant, at (202) 616–3500. for a 12–24 month period. A second 3926 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices supplemental grant will be awarded for of panel review, discussion, evaluation granted the request of Commonwealth the second phase of the research, and recommendation on applications Edison Company (the licensee) to ranging from 12–24 months, the award for financial assistance under the withdraw its January 31, 1997, amount dependent on the work National Foundation on the Arts and the application for proposed amendments to required. Humanities Act of 1965, as amended, Facility Operating License Nos. NPF–37 The first phase of research will including discussion of information and NPF–66, for Byron Station, Units 1 include: a conceptual description of the given in confidence to the agency by the and 2, located in Ogle County, Illinois. 16 DCPO drug court sites; development grant applicants. Because the proposed of comprehensive descriptive, meetings will consider information that The proposed amendment would historical, and attitudinal data about is likely to disclose: (1) Trade secrets have modified the facility technical drug court programs; and measurement and commercial or financial information specifications (TS) to reduce the Byron, of the data available for program obtained from a person and privileged Unit 1, limiting TS value for the primary evaluation. As part of phase one or confidential; or (2) information of a coolant dose equivalent iodine-131 researchers will develop a viable personal nature the disclosure of which (DEI) concentration from 0.35 to 0.20 strategy for evaluating program impact would constitute a clearly unwarranted microcuries per gram. The intent of this and success that will serve as a proposal invasion of personal privacy, pursuant proposed TS revision was to limit the for the supplemental grant to be to authority granted me by the offsite dose at the exclusion area awarded for phase two of the research. Chairman’s Delegation of Authority to boundary to a small fraction of the Phase two of the research will assess Close Advisory Committee meetings, radiation exposure guidelines in 10 CFR the success of the drug courts at meeting dated July 19, 1993, I have determined Part 100. In the interim, ComEd their goals, including: desistance from that this meeting will be closed to the performed an operability assessment criminal behavior and drug use, public pursuant to subsections (c)(4), and administratively reduced the Byron, retention in treatment, and changes in and (6) of section 552b of Title 5, United Unit 1, DEI to 0.20 microcuries per life circumstances and productivity. States Code. Interested organizations should call gram. On November 7, 1997, ComEd the National Criminal Justice Reference 1. Date: February 20, 1998. started its Byron, Unit 1, fall 1997 Service (NCJRS) at 1–800–851–3420 to Time: 9:00 a.m. to 5:30 p.m. refueling outage during which the steam Room: 415. obtain a copy of ‘‘Solicitation for Drug generators (SG) are being replaced. The Program: This meeting will review Court Evaluation II, 1998’’ (refer to replacement SG begin installed at applications for Humanities document no. SL000241). The Byron, Unit 1, will not have the Projects in Media/Enterprise, solicitation is available electronically relatively large end of cycle SG tube submitted to the Division of Public via the World Wide Web, connect to the leakage attributed to the original SG. Programs, for projects at the January National Institute of Justice homepage at Accordingly, the license amendment 12, 1998 deadline. http://ojp.usdoj.gov/nij/funding.htm. requests submitted on January 31, 1997, 2. Date: February 23, 1998. was no longer needed. Jeremy Travis, Time: 9:00 a.m. to 5:30 p.m. Director, National Institute of Justice. Room: 415. The Commission had previously [FR Doc. 98–1898 Filed 1–26–98; 8:45 am] Program: This meeting will review issued a Notice of Consideration of BILLING CODE 4410±18±P applications for Humanities Issuance of Amendment published in Projects in Libraries and Archives, the Federal Register on March 12, 1997, submitted to the Division of Public (62 FR 11489). However, by letter dated NATIONAL FOUNDATION ON THE Programs, for projects at the January November 11, 1997, the licensee ARTS AND THE HUMANITIES 12, 1998 deadline. withdrew the proposed change. 3. Date: February 27, 1998. For further details with respect to this Meetings of Humanities Panel Time: 9:00 a.m. to 5:30 p.m. Room: 415. action, see the application for AGENCY: National Endowment for the amendment dated January 31, 1997, and Humanities. Program: This meeting will review applications for Humanities the licensee’s letter dated November 11, ACTION: Notice of meetings. Projects in Media, submitted to the 1997, which withdrew the application SUMMARY: Pursuant to the provisions of Division of Public Programs, for for the license amendments. The above the Federal Advisory Committee Act projects at the January 12, 1998 documents are available for public (Pub. L. 92–463, as amended), notice is deadline. inspection at the Commission’s Public hereby given that the following Nancy E. Weiss, Document Room, the Gelman Building, meetings of the Humanities Panel will Advisory Committee, Management Officer. 2120 L Street, NW., Washington, DC, be held at the Old Post Office, 1100 [FR Doc. 98–1865 Filed 1–26–98; 8:45 am] and at the local public document room located at the Byron Public Library Pennsylvania Avenue, N.W., BILLING CODE 7536±01±M Washington, D.C. 20506. District, 109 N. Franklin, P.O. Box 434, FOR FURTHER INFORMATION CONTACT: Byron, Illinois 60481. Nancy E. Weiss, Advisory Committee NUCLEAR REGULATORY Dated at Rockville, Maryland, this 8th day Management Officer, National COMMISSION of January, 1998. Endowment for the Humanities, For the Nuclear Regulatory Commission. Washington, D.C. 20506; telephone [Docket Nos. STN 50±454 AND STN 50±456] (202) 606–8322. Hearing-impaired M. David Lynch, Commonwealth Edison Company; individuals are advised that information Senior Project Manager, Project Directorate Notice of Withdrawal of Application for on this matter may be obtained by III–2, Division of Reactor Projects—III/IV, Amendment to Facility Operating contacting the Endowment’s TDD Office of Nuclear Reactor Regulation Licenses terminal on (202) 606–8282. [FR Doc. 98–1900 Filed 1–26–98; 8:45 am] SUPPLEMENTARY INFORMATION: The The U.S. Nuclear Regulatory BILLING CODE 7590±01±P proposed meetings are for the purpose Commission (the Commission) has Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3927

NUCLEAR REGULATORY CFR Part 50 may be used when an underlying purpose of the rule or is not COMMISSION exemption is granted by the necessary to achieve the underlying Commission under 10 CFR 50.12. purpose of the rule. * * *’’ [Docket Nos. STN 50±454, STN 50±455 and To mitigate low-temperature The underlying purpose of 10 CFR STN 50±456, STN 50±457] overpressure transients that would 50.60 and 10 CFR Part 50 Appendix G Commonwealth Edison Company; produce pressure excursions exceeding is to establish fracture toughness (Byron Station, Units 1 and 2); the required limits while the reactor is requirements for ferritic materials of (Braidwood Station, Units 1 and 2); operating at low temperatures, the pressure-retaining components of the Exemption licensee installed a low-temperature reactor coolant pressure boundary to overpressure protection (LTOP) system. provide adequate margins of safety I The system includes pressure-relieving during any condition of normal devices called power-operated relief operation, including anticipated Commonwealth Edison Company valves (PORVs). The PORVs are set at a operational occurrences, to which the (ComEd, the licensee) is the holder of pressure low enough so that if an LTOP pressure boundary may be subjected Facility Operating License Nos. NPF–37, transient occurred, the mitigation over its service lifetime. Section IV.A.2 NPF–66, NPF–72, and NPF–77, which system would prevent the pressure in of Appendix G to 10 CFR Part 50, authorize operation of Byron Station, the reactor vessel from exceeding the requires that the reactor vessel be Units 1 and 2, and Braidwood Station, required limits. To prevent the PORVs operated with P–T limits at least as Units 1 and 2, respectively. The licenses from lifting as a result of normal conservative as those obtained by provide, among other things, that the operating pressure surges, some margin following the methods of analysis and licensee is subject to all rules, is needed between the PORV setpoint the required margins of safety of regulations, and orders of the and the normal operating pressure. In Appendix G of Section XI of the ASME Commission now or hereafter in effect. addition, when instrument uncertainty Code. 10 CFR 50.55a requires that any The Byron facility consists of two is considered, the operating window reference to ASME Code Section XI in pressurized-water reactors located at the between the PORV setpoint and the 10 CFR Part 50, Appendix G, refers to licensee’s site in Ogle County, Illinois. minimum pressure required for reactor addenda through the 1988 Addenda and The Braidwood facility consists of two coolant pump seals is small and editions through the 1989 Edition of the pressurized-water reactors located at the presents difficulties for plant operation. ASME Code, unless otherwise noted. licensee’s site in Will County, Illinois. The licensee has requested the use of Appendix G of the ASME Code II the 1996 Addenda to the ASME Code, requires that the P-T limits be Section XI, Appendix G, which allows calculated: (a) Using a safety factor of In its letter dated April 3, 1997, as the use of lower stress intensity factors two on the principal membrane supplemented on June 19, 1997, ComEd for determining the applied stress (pressure) stresses, (b) assuming a flaw requested an exemption from the intensity from pressure and thermal at the surface with a depth of one- Commission’s regulations. Title 10 of 1 stresses, and allows use of an LTOP quarter of the vessel wall thickness ( ⁄4 the Code of Federal Regulations, Part 50, system setpoint so that system pressure T) and a length of six (6) times its depth, Section 60 (10 CFR 50.60), ‘‘Acceptance does not exceed 110 percent of the P-T and (c) using a conservative fracture Criteria for Fracture Prevention limits. The 1996 Addenda to the ASME toughness curve that is based on the Measures for Lightwater Nuclear Power Code, Section XI, Appendix G, is lower bound of static, dynamic, and Reactors for Normal Operation,’’ states consistent with guidelines developed by crack arrest fracture toughness tests on that all lightwater nuclear power the ASME Working Group on Operating material similar to the reactor vessel reactors must meet the fracture Plant Criteria to define pressure limits material. toughness and material surveillance during LTOP events that avoid certain For determining the P–T limits, the program requirements for the reactor unnecessary operational restrictions, licensee proposed to use the safety coolant pressure boundary as stated in provide adequate margins against failure margins based on the 1996 Addenda to Appendices G and H to 10 CFR Part 50. of the reactor pressure vessel, and the ASME Code in lieu of the 1989 Appendix G to 10 CFR Part 50 defines reduce the potential for unnecessary Edition. When compared to the 1989 pressure-temperature (P-T) limits during activation of pressure-relieving devices Edition of the ASME Code, the 1996 any condition of normal operation, used for LTOP. ASME Code, Section XI, Addenda permits the use of a lower including anticipated operational Appendix G, 1996 Addenda, has been stress intensity factor for determining occurrences and system hydrostatic approved by the ASME Code the applied stress intensity from tests to which the pressure boundary Committee. pressure and thermal stresses. This may be subjected over its service results in a slight reduction in the lifetime, and specifies that these P-T III applied stress intensity and a limits must be at least as conservative as Pursuant to 10 CFR 50.12, the corresponding shift in the allowable the limits obtained by conforming to the Commission may, upon application by pressure at a given temperature in the methods of analysis and the margins of any interested entity or upon its own non-conservative direction; however, safety of the American Society of initiative, grant exemptions from the this difference is minor when compared Mechanical Engineers (ASME) Boiler requirements of 10 CFR Part 50 when (1) to the explicit conservatisms and Pressure Vessel Code (Code), the exemptions are authorized by law, incorporated into Appendix G, and the Section XI, Appendix G. 10 CFR 50.55a will not present an undue risk to public changes in the stress intensity factor are requires that any reference to ASME health and safety, and are consistent supported by the work performed for Code Section XI in 10 CFR Part 50 refers with the common defense and security; NRC and for others by J.A. Keeney and to addenda through the 1988 Addenda and (2) when special circumstances are T.L. Dickson at Oak Ridge National and editions through the 1989 Edition of present. Special circumstances are Laboratory (ORNL). the Code unless otherwise noted. It is present whenever, according to 10 CFR For determining the LTOP system specified in 10 CFR 50.60(b) that 50.12(a)(2)(ii), ‘‘Application of the setpoint, the licensee proposed to use alternatives to the requirements regulation in the particular safety margins based on the 1996 described in Appendices G and H to 10 circumstances would not serve the Addenda to the ASME Code. The 1996 3928 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Addenda allows determination of the Section XI, Appendix G, and the LTOP criticality accident monitor alarm, (2) setpoint for mitigating LTOP events so system setpoint may be determined so the procedures must include drills to that the maximum pressure in the vessel that system pressure does not exceed familiarize personnel with the would not exceed 110 percent of the 110 percent of the P–T limits. evacuation plan, and (3) the procedures P–T limits that are determined using the Pursuant to 10 CFR 51.32, the designate responsible individuals for 1996 methodology. This results in a Commission has determined that the determining the cause of the alarm and safety factor of 1.8 on the principal granting of this exemption will not have placement of radiation survey membrane stresses. All other factors, a significant effect on the quality of the instruments in accessible locations for including assumed flaw size and human environment (63 FR 2268). use in such an emergency. Subsection fracture toughness, remain the same. This exemption is effective upon (b)(1) of 10 CFR 70.24 requires licensees Although this methodology would issuance. to have a means for identifying quickly reduce the safety factor on the principal Dated at Rockville, Maryland, this 16th day personnel who have received a dose of membrane stresses, the proposed of January, 1998. 10 rads or more. Subsection (b)(2) of 10 criteria will provide adequate margins For the Nuclear Regulatory Commission. CFR 70.24 requires licensees to of safety for the reactor vessel during Frank J. Miraglia, maintain personnel decontamination LTOP transients and, thus, will satisfy Acting Director, Office of Nuclear Reactor facilities, to maintain arrangements for the underlying purpose of 10 CFR 50.60 Regulation. the services of a physician and other for fracture toughness requirements. medical personnel qualified to handle Further, by relieving the operational [FR Doc. 98–1902 Filed 1–26–98; 8:45 am] BILLING CODE 7590±01±P radiation emergencies, and to maintain restrictions, the potential for arrangements for the transportation of undesirable lifting of the PORV would contaminated individuals to treatment be reduced, thereby improving plant NUCLEAR REGULATORY facilities outside the site boundary. safety. COMMISSION Paragraph (c) of 10 CFR 70.24 exempts It should be noted that the provision Part 50 licensees from the requirements to set the PORV setpoint so that system [Docket No. 50±271] of paragraph (b) of 10 CFR 70.24 for pressure remains below 110 percent of Vermont Yankee Nuclear Power SNM used or to be used in the reactor. the P–T limits has already been Paragraph (d) of 10 CFR 70.24 states that incorporated into the Byron and Corporation, Vermont Yankee Nuclear Power Station; Exemption any licensee who believes that there is Braidwood licensing basis. This good cause why he or she should be provision was approved by an I granted an exemption from all or part of exemption to 10 CFR 50.60 granted to The Vermont Yankee Nuclear Power 10 CFR 70.24 may apply to the Byron, Units 1 and 2, on November 29, Commission for such an exemption and 1996, to Braidwood, Unit 1 on July 13, Corporation (the licensee) is the holder shall specify the reasons for the relief 1995, and to Braidwood, Unit 2 on of Facility Operating License No. DPR– requested. December 12, 1997, to allow the use of 28, which authorizes operation of the ASME Code Case N–514. Therefore, Vermont Yankee Nuclear Power Station. III although it represents a change from the The license provides, among other The SNM that could be assembled 1989 Edition of the ASME Code, it is not things, that the licensee is subject to all into a critical mass at Vermont Yankee a change to the current licensing basis rules, regulations, and orders of the is in the form of nuclear fuel; the for the facilities. Nuclear Regulatory Commission (the Commission) now or hereafter in effect. quantity of SNM other than fuel that is IV The facility consists of a single-unit stored on site in any given location is For the foregoing reasons, the NRC boiling-water reactor located at the small enough to preclude achieving a staff has concluded that ComEd’s licensee’s site in Windham County, critical mass. The Commission’s proposed use of the alternate Vermont. technical staff has evaluated the methodology in determining the possibility of an inadvertent criticality acceptable setpoint for LTOP events will II of the nuclear fuel at Vermont Yankee not present an undue risk to public Section 70.24 of Title 10 of the Code and has determined that it is extremely health and safety and is consistent with of Federal Regulations (10 CFR 70.24), unlikely for such an accident to occur the common defense and security. The ‘‘Criticality Accident Requirements,’’ if the licensee meets the following seven NRC staff has determined that there are requires that each licensee authorized to criteria: special circumstances present, as possess special nuclear material (SNM) 1. Only three new fuel assemblies are specified in 10 CFR 50.12(a)(2), in that shall maintain a criticality accident allowed out of a shipping cask or 10 CFR 50.60 need not be applied in monitoring system in each area where storage rack at one time. order to achieve the underlying purpose such material is handled, used, or 2. The k-effective does not exceed of this regulation, which is to provide stored. Subsections (a)(1) and (a)(2) of 0.95, at a 95% probability, 95% adequate fracture toughness of the 10 CFR 70.24 specify detection and confidence level, in the event that the reactor pressure boundary. sensitivity requirements that these fresh fuel storage racks are filled with Accordingly, the Commission has monitors must meet. Subsection (a)(1) fuel of the maximum permissible U–235 determined that, pursuant to 10 CFR also specifies that all areas subject to enrichment and flooded with pure 50.12(a), an exemption is authorized by criticality accident monitoring must be water. law, will not endanger life or property covered by two detectors. Subsection 3. If optimum moderation occurs at or common defense and security, and is, (a)(3) of 10 CFR 70.24 requires licensees low moderator density, then the k- otherwise, in the public interest. to maintain emergency procedures for effective does not exceed 0.98, at a 95% Therefore, the Commission hereby each area in which this licensed SNM probability, 95% confidence level, in grants an exemption from the is handled, used, or stored and also the event that the fresh fuel storage requirements of 10 CFR 50.60 so that the requires that (1) the procedures ensure racks are filled with fuel of the P–T limits may be determined using the that all personnel withdraw to an area maximum permissible U–235 1996 Addenda to the ASME Code, of safety upon the sounding of a enrichment and flooded with a Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3929 moderator at the density corresponding IV Determination, and Opportunity for to optimum moderation. The Commission has determined that Hearing published in the Federal 4. The k-effective does not exceed pursuant to 10 CFR 70.14, this Register on September 26, 1997 (62 FR 0.95, at a 95% probability, 95% exemption is authorized by law, will not 50628). An Environmental Assessment confidence level, in the event that the endanger life or property or the common and Finding of No Significant Impact spent fuel storage racks are filled with defense and security, and is otherwise was published in the Federal Register fuel of the maximum permissible U–235 in the public interest. Therefore, the on October 1, 1997 (62 FR 51493). However, by letter dated December 18, enrichment and flooded with pure Commission hereby grants the Vermont 1997, the licensee withdrew the August water. Yankee Nuclear Power Corporation an exemption from the requirements of 10 18, 1997 application. 5. The quantity of forms of SNM other The licensee withdrew the than nuclear fuel, that is stored on site CFR 70.24. Pursuant to 10 CFR 51.32, the application because its plan to in any given area is less than the Commission has determined that the reorganize and create a new corporation quantity necessary for a critical mass. granting of this exemption will have no changed. For further details with respect to this 6. Radiation monitors, as required by significant impact on the human action, see the application for General Design Criterion (GDC) 63, are environment (63 FR 2425). amendment dated August 18, 1997, and provided in fuel storage and handling This exemption is effective upon the letter from licensee dated December areas to detect excessive radiation levels issuance. 18, 1997, which withdrew the and to initiate appropriate safety Dated at Rockville, Maryland, this 20th day actions. application. The above documents are of January 1998. available for public inspection at the 7. The maximum nominal U–235 For the Nuclear Regulatory Commission. Commission’s Public Document Room, enrichment is limited to 5.0 weight Samuel J. Collins, the Gelman Building, 2120 L Street, percent. Director, Office of Nuclear Reactor NW., Washington, DC. By letter dated December 16, 1997, Regulation. Dated at Rockville, Maryland, this 20th day the licensee requested an exemption [FR Doc. 98–1901 Filed 1–26–98; 8:45 am] of January 1998. from 10 CFR 70.24. The licensee’s letter BILLING CODE 7590±01±P For the Nuclear Regulatory Commission. dated January 13, 1998, provided Seymour H. Weiss, additional information supporting the Director, Non-Power Reactors and exemption. In the submittals, the NUCLEAR REGULATORY Decommissioning Project Directorate, licensee addressed criteria 1, 2, 4, 5, 6, COMMISSION Division of Reactor Program Management, and 7. Criterion 3 is satisfied because [Docket No. 50±22] Office of Nuclear Reactor Regulation. the licensee’s submittal dated January [FR Doc. 98–1899 Filed 1–26–98; 8:45 am] 13, 1998, states that the cycle 20 fuel Westinghouse Electric Corporation BILLING CODE 7590±01±P will be channeled and stored in the (CBS Corporation); Westinghouse Test spent fuel storage pool until it is loaded Reactor; Notice of Withdrawal of in the core and that the licensee has no Application for Consent to Transfer NUCLEAR REGULATORY plans to store new fuel in the new fuel Facility License and Conforming COMMISSION storage vault. The Commission’s Amendment [Docket No. 50±263] technical staff has reviewed the The U.S. Nuclear Regulatory licensee’s submittals and has Draft Environmental Assessment; Commission (the Commission) has determined that Vermont Yankee meets Relating to a Proposed License permitted the withdrawal of the August the criteria for prevention of inadvertent Amendment To Increase the Maximum 18, 1997 application for consent to criticality; therefore, the staff has Rated Thermal Power Level at the transfer Facility License No. TR–2 for determined that it is extremely unlikely Monticello Nuclear Generating Plant the Westinghouse Test Reactor, located for an inadvertent criticality to occur in at the Westinghouse Waltz Mill site in AGENCY: SNM handling or storage areas at Nuclear Regulatory Westmoreland County, Pennsylvania, Vermont Yankee. Commission. and application for a conforming license ACTION: Notice of opportunity for public The purpose of the criticality amendment; submitted by comment. monitors required by 10 CFR 70.24 is to Westinghouse Electric Corporation (CBS ensure that if a criticality were to occur Corporation). SUMMARY: The Nuclear Regulatory during the handling of SNM, personnel The proposed action would have Commission has prepared a draft would be alerted to that fact and would approved the transfer of License No. environmental assessment related to the take appropriate action. The staff has TR–2 from the Westinghouse Electric Northern States Power Company’s determined that it is extremely unlikely Corporation to a new corporation that (NSP’s) request for a license amendment that such an accident could occur; would have taken the name to increase the maximum rated thermal furthermore, the licensee has radiation Westinghouse Electric Corporation, but power level from 1670 megawatts- monitors that meet GDC 63 in fuel would not have included in its lines of thermal (MWt) to 1775 MWt. As stated storage and handling areas. These business certain media operations. The in the NRC staff’s position paper on the monitors will alert personnel to proposed action would have also Boiling-Water Reactor Extended Power excessive radiation levels and allow amended the license to reflect the Uprate Program dated February 8, 1996, them to initiate appropriate safety proposed transfer of the license. the staff has the option of preparing an actions. The low probability of an The Commission had previously environmental impact statement if it inadvertent criticality, together with the issued a Notice of Consideration of believes a significant impact results licensee’s adherence to GDC 63, Approval of Transfer of License and from the power uprate. The staff did not constitutes good cause for granting an Issuance of a Conforming Amendment identify a significant impact related to exemption to the requirements of 10 to Facility License, Proposed No the NSP’s request and, therefore, the CFR 70.24. Significant Hazards Consideration NRC staff documented its 3930 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices environmental review in an of generating capacity in the future. The due to power uprate could increase by environmental assessment (EA). In proposed action would provide approximately 6.3 percent above the accordance with the February 8, 1996, increased reactor power, thus adding an normal summer operating period of 4 staff position paper, the draft EA and additional 26 MW of reliable electrical months. Additionally, the licensee finding of no significant impact is being energy generating capacity without determined that power uprate may published in the Federal Register for a major hardware modifications to the involve an extra week of cooling tower 30-day comment period. plant. Hardware changes are not needed operation. Taking into account the DATES: Comment period expires because of improvements in technology, additional fogging rate and the February 26, 1998. Comments received performance, and design. These additional cooling tower operation, the after this date will be considered if it is improvements have resulted in a conditions at power uprate are still practical to do so, but the Commission significant increase in the difference bounded by the FES. is able to assure consideration only for between the calculated safety analysis The increase in power level would comments received on or before this results and licensing limits established cause a current and magnetic field date. by the original license. increase on the onsite transmission line between the main generator and the ADDRESSES: Submit written comments 2.0 Environmental Impacts plant substation. The line is located to Chief, Rules Review and Directives The issuance of the operating license entirely within the fenced, licensee- Branch, U.S. Nuclear Regulatory for MNGP stated that any activity controlled boundary of the plant, and it Commission, Mail Stop T–6D–69, authorized by the license is is not expected that members of the Washington, DC 20555–0001. Written encompassed by the overall action public or wildlife would be affected. comments may also be delivered to evaluated in the Final Environmental Exposure from magnetic fields from the 11545 Rockville Pike, Rockville, Statement (FES), which was issued in offsite transmission system is not Maryland, from 7:30 am to 4:15 pm, November 1972. The license for MNGP expected to increase significantly. Federal Workdays. Copies of written allowed a maximum reactor power level 2.1.2 Water Use. Power uprate does comments received may be examined at of 1670 MWt. NSP submitted an not involve a significant increase in the NRC Public Document Room, 2120 environmental evaluation supporting water use at MNGP. Both ground and L Street, N.W. (Lower Level), the proposed power uprate action and surface water appropriation limits are Washington, DC. provided a summary of its conclusions established by the Minnesota FOR FURTHER INFORMATION CONTACT: Tae concerning both the radiological and Department of Natural Resources. Kim, Office of Nuclear Reactor nonradiological environmental impacts Operating history shows that over the Regulation, Mail Stop O–13D18, U.S. of the proposed action. The evaluations last 5 years MNGP has used less than 13 Nuclear Regulatory Commission, performed by the licensee concluded million gallons of ground water per Washington, DC 20555–0001, telephone that the environmental impacts of year. The annual limit established in the (301) 415–1392. power uprate are well bounded or permit for groundwater use is 15 million SUPPLEMENTARY INFORMATION: The U.S. encompassed by previously evaluated gallons. Power uprate is not expected to Nuclear Regulatory Commission (the environmental impacts and criteria change the groundwater usage and, Commission) is considering issuance of established by the staff in the FES. A therefore, operation within the an amendment to Facility Operating summary of the nonradiological and allowable limit would continue. Under License No. DPR–22, issued to Northern radiological effects on the environment the surface water appropriation limit, States Power Company, for operation of that may result from the proposed MNGP may withdraw a maximum of the Monticello Nuclear Generating Plant amendment is provided below. 645 cubic feet per second (cfs) from the Mississippi River. There are special located in Wright County, Minnesota. 2.1 Nonradiological Impacts The Commission’s draft environmental restrictions when the river flow is assessment and finding of no significant 2.1.1 Land use. Power uprate does particularly high or low; however, impact related to the subject license not modify land use at the site. No new power uprate is not expected to change amendment is provided below: facilities, access roads, parking the surface water requirements of the facilities, laydown areas, or onsite plant and, therefore, current Environmental Assessment transmission and distribution appropriation limits would be 1.0 Introduction equipment, including power line right maintained. of way, are needed to support the uprate Power uprate would result in an 1.1 Description of Proposed Action or operation after uprate. No change to increase in the evaporation rate of the By letter dated July 26, 1996, as above or below ground storage tanks cooling towers resulting in an increase revised December 4, 1997, Northern would occur as a result of power uprate in evaporative losses from the river. States Power Company (NSP) requested and the uprate does not affect land with Assuming the evaporation rate of the an amendment to License No. DPR–22 historical or archeological sites. cooling towers increases linearly in for the Monticello Nuclear Generating Based on the operating history at the proportion to the power increase, the Plant (MNGP) that would increase the MNGP, the effects of drift, icing, and fog evaporation rate would increase to 4400 maximum power level from 1670 have been negligible. The frequency of acre-ft/yr [acre-foot per year]. The value megawatts-thermal (MWt) to 1775 MWt. fog and drift were provided by the assumed in the FES was 5000 acre-ft/yr This change is approximately 6.3 licensee at the time of original licensing evaporative losses; therefore, the FES is percent above the current maximum and the impacts of that frequency of still bounding. license power level and is considered an drift and fog are bounded by the Discharges to the water are governed extended power uprate. evaluation contained in the FES. The by the National Pollutant Discharge FES assumed cooling tower operation of Elimination System (NPDES) permit, 1.2 Need for the Proposed Action 7 months, with the total fogging time issued by the State of Minnesota. NSP has projected the need for estimated at 45 hours per year. If the Temperature and effluent limits at additional generation resources through cooling tower fogging rate is assumed to certain points are established in the a comparison of needs to available increase proportional to the proposed permits. As a result of power uprate, a resources. NSP has projected a shortfall power increase, the amount of fogging slight increase in circulating water Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3931 discharge temperature is projected to exist within the licensee-controlled area The increase in waste would be occur. This is due to an increase in heat at MNGP. Using information from the insufficient to impact the amount of rejected by the condenser due to the Minnesota Department of Natural waste generated at the site. Further, the increased power levels and increased Resources, the licensee performed a licensee believes ongoing efforts at steam flow. A conservative estimate by biological assessment of the impact of MNGP to reduce radioactive wastes will the licensee predicts a maximum 1.7 °F power uprate on these species. The balance the slight increase in waste that [degrees Fahrenheit] increase in the assessment did not identify any would be generated as a result of power temperature of the water entering the impacts. Power uprate would not result uprate. discharge canal. This increase would in any significant changes to land use or The FES and Technical Specifications not result in exceeding the limits water use, or result in any significant allow MNGP to discharge a limited delineated in the FES or the limits changes to the quantity or quality of amount of liquid radioactive waste. The established by the State in the permit. effluents; therefore, no effects on the FES concluded that, based on the Additionally, temperature monitoring is endangered or threatened species or on allowed amounts, no adverse continuous and this maximum their habitat are expected as a result of environmental impact would result temperature increase would occur only power uprate. from release of the allowable radioactive at certain times of the year with certain The proposed power uprate would waste. However, since 1972, an river flows. In the past, when MNGP has not change the method of generating administrative limit of zero radioactive approached the limit designated in the electricity nor the method of handling liquid release has been imposed by NSP. NPDES permit, NSP has reduced power any influent from the environment or MNGP expects to keep the zero release at the plant to maintain compliance; this nonradiological effluents to the administrative limit and remain well will continue in the future. The slight environment. Therefore, no changes or within the bounds of the FES. increase in temperature does not require different types of nonradiological A slight increase in input to the liquid any changes to permit requirements and environmental impacts are expected. radioactive waste system is expected due to the increase in backwash would not result in any significant 2.2 Radiological Impacts impacts to the environment that are frequency of the RWCU and condensate different from those previously MNGP has a number of radioactive demineralizer system. However, the identified or change the previous Clean waste systems designed to collect, liquid radioactive waste input will be Water Act Section 316(a) demonstration process, and dispose of solid, liquid, recycled instead of discharged and will concerning thermal plume in the and gaseous radioactive waste. No not result in a significant increase in Mississippi River. changes to these systems are required volume of liquid radioactive waste. Power uprate would not introduce for power uprate conditions. The Other sources of liquid radioactive any new contaminants or pollutants and licensee considered the effect of the waste such as valve packings, pump seal would not significantly increase the higher power level on solid radioactive flows, drain waste, etc., are not expected amount of potential contaminants wastes, liquid radioactive wastes, to change or increase as a result of previously allowed by the State. NSP gaseous radioactive wastes, and power uprate. Based on the above, it will continue to adhere to effluent radiation levels. does not appear that power uprate will limitation and monitoring requirements As a result of power uprate, a slight cause an increase in liquid radioactive as part of compliance with the NPDES increase in solid waste from the reactor waste above the presently allowed permit. As a result of the additional water cleanup (RWCU) system limits and will not affect compliance week of cooling tower operation, a slight demineralizers and condensate with the limits of 10 CFR Part 20 or increase in normal bromine and sodium demineralizers would occur. This is due Appendix I of 10 CFR Part 50. hypochlorite injection may be required; to more frequent filter backwashes. Gaseous radioactive waste effluents however, the effluent concentrations Additional RWCU filter backwashes consist of two pathways: reactor would continue to be well below the would result in less than 1 cubic meter building ventilation system and offgas NPDES permit limits. Continuous of additional resin waste per year; system pathway. Operational experience flowrate monitoring at designated points condensate demineralizer filter at MNGP shows a 4-year average release will continue. backwashes are estimated to result in an of 688 Ci/yr [curie per year] noble gas Over the years of operation, a number additional 4 cubic meters of resin waste and 0.22 Ci/yr iodine and particulate of modifications to the intake structure per year. Therefore, the projected release. The FES assumed release rates have been implemented to reduce cold increase in spent resin volume is less of 110,376 Ci/yr for noble gases and 0.75 shock, impingement, and entrainment of than 6 cubic meters per year, which Ci/yr for iodine and particulate releases. organisms and fish. Because the would bring the total generation rate to Assuming power uprate increases the discharge canal inlet temperature is approximately 55 cubic meters per year. offgas release rate linearly in proportion expected to increase 1.7 °F at power In addition to the solid process waste, to the core thermal power increase, the uprate, the overall discharge canal there are solid reactor system wastes increase in offgas stack release would be temperature is not significantly generated from the plant. These include well below that assumed in the FES. increased; therefore, the temperature irradiated fuel assemblies and control Assuming the radioactivity of the decrease during cold shock is not blades. Due to extended burnup and the reactor coolant system increases in a significantly changed. higher enrichments, the number of linear fashion proportional to the power Additionally, impingement and irradiated fuel assemblies is not increase, the reactor building release entrainment mortality of drift organisms expected to significantly increase the rate is well below that assumed in the is not increased above what was volume of waste; however, the activity FES. Based on the above, power uprate previously evaluated by the staff. of the waste generated from spent has an insignificant effect on the present 2.1.3 Other impacts. No significant control blades and incore ion changers production and activity of gaseous increases or changes to the noise may increase slightly. This is due to the effluents released through the reactor generated by MNGP are expected as a higher flux conditions expected under building ventilation system and the result of power uprate; therefore, the power uprate. Improvements in offgas system pathways and the dose FES remains bounding. A small number technology and longer fuel cycles are from effluent releases is well within the of endangered and threatened species expected to offset this slight increase. bounds of Appendix I to 10 CFR Part 50 3932 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices and 10 CFR Part 20. The changes in core proposed action and the alternative STATUS: Public and Closed. flux profile would result in increased action are similar. MATTERS TO BE CONSIDERED: consequences of a fuel defect for a bundle in a non-leak location; however, 4.0 Alternative Use of Resources Week of January 26 this continues to be bounded by the This action does not involve the use Wednesday, January 28 consequences for the peak bundle and of any resources not previously those limits are not changed. 11:30 a.m.—Affirmation Session (Public considered in the Final Environmental Meeting) (if needed). Power uprate does not introduce any Statement for the MNGP. new or different radiological release Week of February 2—Tentative pathways and does not increase the 5.0 Basis and Conclusions for Not probability of an operator error or Preparing an Environmental Impact Wednesday, February 4 equipment malfunction that would Statement 11:30 a.m.—Affirmation Session (Public result in a radiological release. Meeting) (if needed). The staff has reviewed the proposed Tables S–3 and S–4 of 10 CFR 51.51 Week of February 9—Tentative and 10 CFR 51.52, respectively, outline power uprate for the MNGP relative to the environmental effects of uranium the requirements set forth in 10 CFR There are no meetings the week of fuel cycle activities and fuel and Part 51. Based upon the environmental February 9. radioactive waste transportation. The assessment, the staff has concluded that Week of February 16—Tentative environmental evaluation supporting there are no significant radiological or Table S–3 assumed a reference reactor nonradiological impacts associated with Thursday, February 19 with a specific capacity factor that the proposed action and that the 9:30 a.m.—Meeting with Northeast results in an adjusted daily electricity proposed license amendment will not Nuclear on Millstone (Public production during a reference year. An have a significant effect on the quality Meeting) (Contact: Bill Travers, average burnup and enrichment are also of the human environment. Therefore, 301–415–1200). assumed. MNGP will not exceed the the Commission has determined 12:00 m.—Affirmation Session (Public assumption of the reference reactor year, pursuant to 10 CFR 51.31 not to prepare Meeting) (if needed). * The schedule for Commission but will exceed the average burnup and an environmental impact statement for meetings is subject to change on short fuel enrichment criteria as a result of the proposed amendment but to prepare power uprate. The environmental notice. To verify the status of meetings this draft finding of no significant call (recording)—(301) 415–1292. impacts of the higher burnup and impact. enrichment values were documented in Contact person for more information: NUREG/CR–5009, ‘‘Assessment of the For further details with respect to the Bill Hill (301) 415–1661. Use of Extended Burnup Fuels in Light proposed action, see the licensee’s letter The NRC Commission Meeting Water Power Reactors,’’ and discussed dated July 26, 1996, as revised by letter Schedule can be found on the Internet in the Environmental Assessment and dated December 4, 1997, which are at: Finding of No Significant Impact, which available for public inspection at the http://www.nrc.gov/SECY/smj/ was published in the Federal Register Commission’s Public Document Room, schedule.htm on February 29, 1988 (53 FR 6040). The The Gelman Building, 2120 L Street, This notice is distributed by mail to staff concluded that no significant NW., Washington, DC, and at the local several hundred subscribers; if you no adverse effects will be generated by public document room located at the longer wish to receive it, or would like increasing the burnup levels as long as Minneapolis Public Library, Technology to be added to it, please contact the the maximum rod average burnup level and Science Department, 300 Nicollet Office of the Secretary, Attn: Operations Branch, Washington, D.C. 20555 (301– of any fuel rod is no greater than 60 Mall, Minneapolis, Minnesota 55401. Gwd/MtU [gigawatt-days per metric ton 415–1661). Dated at Rockville, Maryland, this 21st day In addition, distribution of this of uranium]. The staff also stated that of January 1998. meeting notice over the Internet system the environmental impacts summarized Cynthia A. Carpenter, is available. If you are interested in in Tables S–3 and S–4 for a burnup receiving this Commission meeting level of 33 Gwd/MtU are conservative Acting Director, Project Directorate III–1, schedule electronically, please send an and bound the corresponding impacts Division of Reactor Projects—III/IV, Office of electronic message to [email protected] or Nuclear Reactor Regulation. for burnup levels up to 60 Gwd/MtU [email protected]. and uranium-235 enrichments up to 5 [FR Doc. 98–1903 Filed 1–26–98; 8:45 am] Dated: January 23, 1998. weight percent. Based on the above, BILLING CODE 7590±01±P William M. Hill, Jr., there are no adverse radiological or non- radiological impacts associated with the Secy, Tracking Officer, Office of the Secretary. use of extended fuel burnup and/or [FR Doc. 98–2090 Filed 1–23–98; 2:25 pm] NUCLEAR REGULATORY BILLING CODE 7590±01±M increased enrichment and, therefore, COMMISSION power uprate will not significantly affect the quality of the human Sunshine Act Meeting OFFICE OF MANAGEMENT AND environment. BUDGET 3.0 Alternatives AGENCY: Nuclear Regulatory Commission. Discount Rates for Cost-Effectiveness As an alternative to the proposed Analysis of Federal Programs action, the staff considered denial of the DATE: Weeks of January 26, February 2, AGENCY: 9, and 16, 1998. Office of Management and proposed action. Denial of the proposed Budget. action would result in no change in PLACE: Commissioners’ Conference ACTION: Revisions to Appendix C of current environmental impacts of plant Room, 11555 Rockville Pike, Rockville, OMB Circular A–94. operation but would restrict operation Maryland. to the currently licensed power level. SUMMARY: The Office of Management The environmental impact of the and Budget revised Circular A–94 in Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3933

1992. The revised Circular specified 5-year ...... 3.5 Exchange Fund, Fidelity Financial certain discount rates to be updated 7-year ...... 3.5 Trust, Fidelity Fixed-Income Trust, annually when the interest rate and 10-year ...... 3.6 Fidelity Government Securities Fund, inflation assumptions used to prepare 30-year ...... 3.8 Fidelity Hastings Street Trust, Fidelity the budget of the United States Analyses of programs with terms Hereford Street Trust, Fidelity Income Government were changed. These different from those presented above Fund, Fidelity Institutional Cash discount rates are found in Appendix C may use a linear interpolation. For Portfolios, Fidelity Institutional Tax- of the revised Circular. The updated example, a four-year project can be Exempt Cash Portfolios, Fidelity discount rates are shown below. The evaluated with a rate equal to the Investment Trust, Fidelity Magellan discount rates in Appendix C are to be average of the three-year and five-year Fund, Fidelity Massachusetts Municipal used for cost-effectiveness analysis, rates. Programs with durations longer Trust, Fidelity Money Market Trust, including lease-purchase analysis, as than 30 years may use the 30-year Fidelity Mt. Vernon Street Trust, specified in the revised Circular. They interest rate. Fidelity Municipal Trust, Fidelity do not apply to regulatory analysis. [FR Doc. 98–1826 Filed 1–26–98; 8:45 am] Municipal Trust II, Fidelity Newbury DATES: The revised discount rates are BILLING CODE 3110±01±P Street Trust, Fidelity New York effective immediately and will be in Municipal Trust, Fidelity New York effect through January 1999. Municipal Trust II, North Carolina FOR FURTHER INFORMATION CONTACT: SECURITIES AND EXCHANGE Capital Management Trust, Fidelity Robert B. Anderson, Office of Economic COMMISSION Phillips Street Trust, Fidelity Puritan Policy, Office of Management and Trust, Fidelity Revere Street Trust, Budget, (202) 395–3381. [Investment Company Act Release No. Fidelity School Street Trust, Fidelity 23004; 812±10134] Joseph J. Minarik, Securities Fund, Fidelity Select Associate Director for Economic Policy, Office Daily Money Fund, et al.; Notice of Portfolios, Fidelity Summer Street of Management and Budget. Application Trust, Fidelity Trend Fund, Fidelity [OMB Circular No. A–94, Revised, October Union Street Trust, Fidelity Union 29, 1992] January 20, 1998. Street Trust II, Fidelity U.S. AGENCY: Securities and Exchange Investments-Bond Fund, L.P., Fidelity Appendix C Commission (‘‘SEC’’). U.S. Investments-Government Securities (Revised January 1998) ACTION: Notice of application for an Fund, L.P., Variable Insurance Products Discount Rates for Cost-Effectiveness, Lease order under the Investment Company Fund, Variable Insurance Products Fund Purchase, and Related Analyses Act of 1940 (the ‘‘Act’’) granting an II, Variable Insurance Products Fund III Effective Dates. This appendix is updated exemption under section 6(c) of the Act (collectively, the ‘‘Trusts’’); Fidelity annually around the time of the President’s from sections 13(a), 18(f), and 21(b) of Canadian Asset Allocation Fund, budget submission to Congress. This version the Act, under sections 6(c) and 17(b) of Fidelity U.S. Money Market Fund, of the appendix is valid through the end of the Act from sections 17(a)(1) and (3) of Fidelity Asset Manager Fund, Fidelity January, 1999. Copies of the updated the Act, and under rule 17d–1 under the Canadian Bond Fund, Fidelity Canadian appendix and the Circular can be obtained Act to permit certain transactions in Growth Company Fund, Fidelity from the OMB Publications Office (202–395– Canadian Income Fund, Fidelity 7332) or in an electronic form through the accordance with section 17(d) of the Act OMB home page on the world-wide WEB, and rule 17d–1. Canadian Short Term Asset Fund, http://www.whitehouse.gov/WH/EOP/omb. Fidelity Capital Builder Fund, Fidelity Updates of this appendix are also available SUMMARY OF APPLICATION: The requested Emerging Markets Bond Fund, Fidelity upon request from OMB’s Office of Economic order would permit certain registered Emerging Markets Portfolio Fund, Policy (202–395–3381), as is a table of past open-end funds and unregistered funds Fidelity European Growth Fund, years’ rates. to enter into insurance agreements with Fidelity Far East Fund, Fidelity Growth Nominal Discount Rates. Nominal interest an affiliated mutual insurance company America Fund, Fidelity International rates based on the economic assumptions (the ‘‘Mutual Company’’). The Mutual Portfolio Fund, Fidelity Japanese from the budget are presented below. These Company would provide limited Growth Fund, Fidelity Latin America nominal rates are to be used for discounting insurance coverage for certain money nominal flows, which are often encountered Growth Fund, Fidelity North American in lease-purchase analysis. market assets held by the funds. Income Fund, Fidelity RSP Global Bond APPLICANTS: Daily Money Fund, Fidelity Fund, Fidelity Small Cap America Nominal Interest Rates on Treasury Notes Aberdeen Street Trust, Fidelity Advisor Fund, Fidelity True North Fund, and Bonds of Specified Maturities (in Percent) Series I, Fidelity Advisor Series II, Fidelity Managed Income Fund, Fidelity Fidelity Advisor Series III, Fidelity Focus Consumer Industries Fund, 3-Year ...... 5.6 Advisor Series IV, Fidelity Advisor Fidelity Focus Financial Services Fund, 5-Year ...... 5.7 7-Year ...... 5.8 Series V, Fidelity Advisor Series VI, Fidelity Focus Health Care Fund, 10-Year ...... 5.9 Fidelity Advisor Series VII, Fidelity Fidelity Focus Natural Resources Fund, 30-Year ...... 6.1 Advisor Series VIII, Fidelity Beacon Fidelity Focus Technology Fund Street Trust, Fidelity Boston Street (collectively, the ‘‘Canadian Funds’’); Real Discount Rates. Real interest rates based on the economic assumptions from the Trust, Fidelity California Municipal Fidelity Advisor U.S. Large-Cap Stock budget are presented below. These real rates Trust, Fidelity California Municipal Fund (Bermuda) Ltd., Fidelity Advisor are to be used for discounting real (constant- Trust II, Fidelity Capital Trust, Fidelity World Europe Fund (Bermuda) Ltd., dollar) flows, as is often required in cost- Charles Street Trust, Fidelity Fidelity Advisor World Southeast Asia effectiveness analysis. Commonwealth Trust, Fidelity Concord Fund (Bermuda) Ltd., Fidelity World Real Interest Rates on Treasury Notes and Street Trust, Fidelity Congress Street Advisor World U.S. Limited Term Bond Bonds of Specified Maturities (in Percent) Fund, Fidelity Contrafund, Fidelity Fund (Bermuda) Ltd., Fidelity Advisor 3-year ...... 3.4 Court Street Trust, Fidelity Court Street World U.S. Government Investment Trust II, Fidelity Destiny Portfolios, Fund (Bermuda) Ltd., Fidelity Advisor Fidelity Devonshire Trust, Fidelity World U.S. Treasury Money Fund 3934 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

(Bermuda) Ltd. (collectively, the SUPPLEMENTARY INFORMATION: The independent need for the insurance ‘‘Fidelity Advisor World Funds’’); following is a summary of the coverage. Fidelity Investments Canada, Ltd. application. The complete application B. Mutual Company Operations (‘‘FICL’’); Fidelity Management and may be obtained for a fee at the SEC’s Research Company (‘‘FMR’’); Fidelity Public Reference Branch, 450 5th Street, 1. The Mutual Company will be Distributors Corporation (‘‘FDC’’); NW., Washington, DC 20549 (telephone organized as a Bermuda mutual National Financial Services Corporation (202) 942–8090). insurance company and will be (‘‘NFSC’’) 1; each Trust and each governed by a board of directors registered investment company and Applicants’ Representations consisting of employees of FMR or FMR series thereof that are currently or in the A. Overview Corp. and other persons associated with future advised by FMR or a person the Mutual Company. As a mutual controlling, controlled by, or under 1. Each of the Registered Funds is an insurance company, the Mutual common control with FMR (collectively open-end investment company Company will not issue stock. with FMR, the ‘‘Adviser’’) or distributed registered under the Act and offers one Proprietary interests in the Mutual by FDC or NFSC (collectively, the or more portfolios. The Fidelity Advisor Company will belong only to the ‘‘Registered Funds’’); the Fidelity World Funds are portfolios of mutual Participating Funds as policyholders. Advisor World Funds, the Canadian funds established under the laws of Each Participating Fund will have equal Funds, and other pooled investment Bermuda. The Canadian Funds are voting rights, i.e., each Participating funds advised or in the future advised portfolios established under the laws of Fund will have one vote. The board of by the Adviser, that are offered Canada. The only 2(b) Entity that trustees (‘‘Trustees’’) of each Registered exclusively outside the United States to currently may rely on the requested Fund will exercise the Fund’s voting non-U.S. residents (the ‘‘Unregistered order is the Massachusetts Municipal rights. The Funds will have voting Funds’’); and state and local entities or Depository Trust (‘‘Municipal Trust’’), rights with respect to (a) the election accounts thereof advised or in the future which is established pursuant to and removal of the Mutual Company’s advised by the Adviser that are exempt Massachusetts law.2 board of directors; (b) the dissolution or from regulation under the Act pursuant 2. The Adviser, an investment adviser liquidation of the Mutual Company; (c) to section 2(b) of the Act (the ‘‘2(b) the amendment of the Mutual Entities’’) (collectively, the Registered registered under the Investment Advisers Act of 1940, acts as investment Company’s articles of incorporation or Funds, the Unregistered Funds, and the other governing instrument; (d) any adviser to each Registered Fund and its 2(b) Entities are the ‘‘Funds’’). merger, consolidation or sale of portfolios and provides the Registered FILING DATES: The application was filed substantially all of the Mutual Funds with administrative services. on May 7, 1996, and amended on Company’s assets; and (e) additional FICL acts as the investment adviser to December 3, 1997. matters relating to the Mutual Company the Canadian Funds. FDC and NFSC act HEARING OR NOTIFICATION OF HEARING. An as may be required or authorized by as the distributors of all the Registered order granting the application will be law. Funds. FMR, FICL, FDC, and NFSC are issued unless the SEC orders a hearing. 2. Employees of the Adviser will be Interested persons may request a all direct or indirect subsidiaries of FMR Corp. involved in the day-to-day operations of hearing by writing to the SEC’s the Mutual Company, including Secretary and serving applicants with a 3. Applicants propose that certain determining and implementing the copy of the request, personally or by Funds (‘‘Participating Funds’’) enter investment policies of the Mutual mail. Hearing requests should be into insurance agreements with the Company and managing its assets. The received by the SEC by 5:30 p.m. on Mutual Company. The Mutual Company Mutual Company will employ an February 16, 1998, and should be would provide insurance coverage for unaffiliated third party in Bermuda to accompanied by proof of service on certain loss events (‘‘Loss Events’’) conduct its administrative and applicants, in the form of an affidavit, described below with regards to certain ministerial activities. or, for lawyers, a certificate of service. money market securities (‘‘Insurable 3. The Mutual Company will operate Hearing requests should state the nature Assets’’). Initially, applicants expect on a break-even basis and any reserves of the writer’s interest, the reason for the that the only Participating Funds will be and surplus will be used (a) to increase request, and the issues consented. U.S. dollar denominated money market the Mutual Company’s aggregate Persons may request notification of a funds.3 Other types of Funds may coverage and/or the risk retained by the hearing by writing to the SEC’s participate in the future if the Fund’s Mutual Company and/or (b) to decrease Secretary. Adviser and board of trustees determine the premiums charged by the Mutual ADDRESSES: Secretary, SEC, 450 Fifth that the insurance would be of value to Company. The Mutual Company will Street, NW., Washington, DC 20549. the Fund and that the Fund had an pay no dividends or distributions, and Applicants, 82 Devonshire Street, neither the Funds’ interest in the Boston, Massachusetts 02109. 2 In order to participate in the Mutual Company, Mutual Company nor the policies will FOR FURTHER INFORMATION CONTACT: a 2(b) Entity (including the Municipal Trust) would be transferable. A Participating Fund have to determine that the proposed investments in Elaine M. Boggs, Senior Counsel, at that terminates its participation prior to (202) 942–0572 (Division of Investment instruments through the proposed transactions are consistent with state laws or administrative rules the liquidation of the Mutual Company Management, Office of Investment regulating the 2(b) Entity. If not, it must seek to will not receive any proceeds, regardless Company Regulation), or Mercer E. have those laws or rules amended. Accordingly, the of whether the Mutual Company has a Municipal Trust is not named as an applicant Bullard, Special Counsel, at (202) 942– surplus at the time. If the Mutual 0659 (Division of Investment because it considers it premature to join formally. 3 Money market funds are funds that have as their Company is liquidated when it has a Management, Office of Chief Counsel). objective the generation of income and the surplus, Participating Funds at that time preservation of capital. Money market funds are will divide the proceeds based on their 1 The terms ‘‘FDC’’ and ‘‘NFSC’’ include any subject to rule 2a–7 under the Act, which contains other company controlled by or under common several conditions limiting the risk and volatility of relative levels of premium payments to control with FMR that acts in the future as securities in which a money market fund may the Mutual Company during its distributor for the Trusts or their series. invest. existence. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3935

C. Insurance Coverage basis for each Fund. There are no limits Mutual Company unless these are one 1. Insurable Assets are securities that, (other than the Policy limit) on the or more covered Loss Events exceeding at the time of purchase, are money amount of loss recoverable by a the Mutual Company’s available market securities eligible pursuant to Participating Fund in a particular year reserves and surplus funds. Fund Notes rule 2a–7 under the Act (including or with respect to any single issuer. will be drawn upon and will be repaid 6. The Mutual Company also would repurchase agreements), other than: (i) to the Funds by the Mutual Company on provide coverage for certain wrongful U.S. Treasury securities backed by the a pro rata basis. acts on the part of past or present 3. In addition, because annual full faith and credit of the U.S. officers, Trustees, or employees of a premiums in the initial years of Government, and (ii) other obligations Participating Fund that result in the operation will be insufficient to permit all of the principal and interest of which Fund sustaining a Loss Event. This the Mutual Company to provide the $30 are backed by the full faith and credit coverage would not apply to FMR in its million of coverage it will retain, the of the U.S. Government. capacity as investment adviser to the Company’s insurance policies will be 2. Loss Events include losses incurred Funds. Wrongful acts would include ‘‘assessable.’’ Thus, if a Loss Event by a Participating Fund in connection any breach of duty, neglect, error, occurs, each Participating Fund will be with a nonpayment of principal or misstatement, misleading statement, subject, in addition to its annual interest by the issuer when due and omission or other act committed or premium payments, to a special payable, or the institution of a wrongfully attempted by an employee premium assessment initially estimated bankruptcy, insolvency, or similar resulting in a Participating Fund to be approximately two and one half proceeding with respect to the issuer sustaining a loss attributable to a Loss times its annual premium payment. A and/or credit enhancement provider (if Event. The coverage is not fidelity bond Fund’s annual and special assessment any) of an Insurable Asset. Loss Events coverage and will not be subject to rule premiums will be paid from the general also include losses in connection with 17g–1 under the Act. The coverage assets of the Fund, except that FMR will a default relating to a credit would generally expand the existing pay the premiums for Funds with ‘‘all- enhancement. In addition, Loss Events errors and omissions coverage inclusive’’ management agreements, include the inability of a Fund to maintained by a Participating Fund by under which FMR is contractually recover fully the amount loaned under covering losses not currently covered by obligated to pay all Fund expenses. The a repurchase agreement because of an the Fund’s existing policy. For example, special premium assessment will be event of default under the contract the Mutual Company would cover made on a pro rata basis by each (‘‘repo-related Loss Event’’), and losses losses that result from wrongful acts in Participating Fund in the same resulting if certain payments to a connection with the purchase of an proportion as the Fund’s then current Participating Fund were subsequently investment that was not rule 2a–7 pro rata shares of its regular premium considered a preference in bankruptcy eligible and that are in an amount that payment, regardless of which Fund (‘‘preference-related Loss Event’’). In the exceeds the amount covered under the actually sustains a Loss Event. If future, the definition of Loss Events Participating Fund’s existing errors and reserves and surplus funds in the could be expanded. omissions policy. Mutual Company build up sufficiently, 3. The Adviser or the Mutual applicants expect the assessment rate to D. Mutual Company Capitalization Company will retain insurance decline over time. professionals to set the aggregate annual 1. As noted above, the Mutual 4. Assuming that all the Fund Notes premium based upon their assessment Company will have an annual aggregate are fully drawn upon and the Funds are of the risk of Loss Events occurring with Policy limit of $100 million. The Mutual subject to the maximum special respect to Insurable Assets in which the Company initially will cover the first premium assessment, applicants Funds invest. The insurable $30 million in claims from payments anticipate that the maximum professionals, using actuarial standards, collected from the Participating Funds commitment by all Participating Funds will allocate the premium among the and Fidelity, with third-party (which as of October 31, 1997, had Participating Funds based on the risk reinsurance covering the remaining $70 approximately $98 billion in net assets) characteristics of the different types of million. The first $30 million will be to the Mutual Company would initially Insurable Assets held by each Fund. capitalized by the following sources: (i) amount to approximately $11 million 4. The insurance policy (‘‘Policy’’) A one-year loan by Fidelity of $250,000 resulting in a projected maximum written by the Mutual Company will be (‘‘Fidelity Note’’), (ii) a one-year commitment by the Funds that would structured as a claims-made policy. The demand note by the participating funds not exceed .04% of the Funds’ net Policy will have a term of one year and of $450,000 in the aggregate (‘‘Fund assets. Thus, any monies required to be will be renewable. Neither the Mutual Notes’’), (iii) first-year premiums of paid by a Participating Fund pursuant to Company nor a Participating Fund will approximately $2.7 million, (iv) the Fund Notes or special assessment in be permitted to terminate or decrease its assessable premiums of approximately a given year would not cause the net coverage during a policy year. The $11 million, and (v) a commitment by asset value of a money market Fund to Policy will have no cash surrender Fidelity of approximately $17 million. If be reduced below $1.00 per share. value, will not be transferable, and will the Mutual Company’s reserves are 5. The Mutual Company also will not provide for the payment of any insufficient to cover claims, it will use receive a $17 million commitment from dividend or other distribution. its other assets in the following order: FMR backed by a letter of credit to cover 5. Loss recoveries by the Participating (a) The Fund Notes, (b) the FMR Note, Loss Events exceeding the Mutual Funds will be limited to $100 million (c) the premium assessment, (d) FMR’s Company’s reserves and surplus funds annually in the aggregate. A commitment, and (e) reinsurance. and the Participating Funds’ assessable Participating Fund will recover for a 2. The amount of each Fund Note will policies. FMR’s commitment to cover Loss Event only to the extent that the be determined on a pro rata basis in the losses would stand behind the amount of its loss exceeds the same proportion as the Fund’s premium premiums and assessable policies of the deductible amount of 0.30% of a payment. Because the Fund Notes are Participating Funds and is expected to Participating Fund’s Insurable Assets, demand notes, a Participating Fund will decline over time as reserves increase. which will be applied on a per loss not be required to pay any monies to the The Mutual Company will pay FMR an 3936 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices annual fee, at market rates, for the Applicants’ Legal Analysis borrowings, (c) the freedom of commitment. The rate of the annual fee investment companies to borrow funds A. Sections 13(a) and 18(f) will be the same amount as the lowest for speculation, and (d) the propensity rate FMR would then pay a bank for a 1. Section 18(f)(1) of the Act generally of senior securities to mislead investors letter of credit in a comparable amount. prohibits a registered open-end by conveying false impression of The reinsurance obtained by the Mutual investment company from issuing any freedom from risk, and to increase the Company will stand behind the senior security. Section 13(a)(2) of the speculative nature of both the common premiums, assessable policies, and Act requires that a registered investment stock and senior securities of FMR’s commitment. company obtain shareholder investment companies. authorization before issuing any senior 4. Applicants state that the assessable E. Insurance Claims security not contemplated by the feature of the policy and the obligations 1. The order of the payment of claims recitals of policy in its registration created by the Fund Notes will not give will be based on the date the loss was statement. Section 13(a)(3) of the Act rise to the abuses at which sections incurred. In the event of multiple losses provides that no registered investment 13(a) and 18(f) are directed. Applicants occurring on the same date in excess of company will, unless authorized by the submit that neither the assessable the Policy limit, claims will be paid pro vote of a majority of its outstanding feature nor the Fund Notes will involve rata based on the amount of a fund’s voting securities, deviate from any speculative trading or leverage in the loss in excess of its deductible. investment policy that is changeable typical sense because a Registered Fund only if authorized by shareholder vote, 2. A Participating Fund that will not be buying portfolio securities or deviate from any policy recited in its experiences a Loss Event typically with borrowed money. Applicants registration statement pursuant to would receive payment within believe that the proposed insurance section 8(b)(3) of the Act. Each approximately 30 days of filing an coverage will not create an unduly Registered Fund has a fundamental acceptable proof of loss with the Mutual complicated capital structure. investment policy prohibiting the Company. Entities providing Applicants contend that, because of the issuance of senior securities except as reinsurance will be obligated to pay the limited coverage and the deductible, the permitted under the Act. Applicants Mutual Company within the same insurance coverage will not induce a request relief from sections 13(a) and period of time. Normal insurance Registered Fund to invest in risky 18(f) to the extent that the assessable subrogation rights will be provided in securities. feature of the policy entered into by 5. Applicants further state that neither connection with the insurance coverage. each Registered Fund and the obligation the special assessment feature nor the 3. Beginning the day of the Loss Event of each Fund pursuant to the Fund Fund Notes will change the risk/reward until the proceeds of a Participating Notes could be deemed the issuance of characteristics of any Registered Fund. Fund’s claim are received from the senior securities by the Registered Applicants submit that payment of Mutual Company, the net asset value of Funds, and thus be prohibited by monies by a Registered Fund pursuant a Participating Fund that sustains a Loss section 18(f) and in contravention of a to the Fund Notes will have no effect on Event will be computed by recording Registered Fund’s fundamental policy the Fund’s net asset value because the the amount of the expected recovery as against issuing senior securities Fund will record a receivable on its a receivable on the books of the Fund, pursuant to section 13(a)(2), and its books and will receive interest at market subject to the Policy limit. Prior to deviation from that policy in rates on those monies. Further, recording a receivable, a Participating contravention of section 13(a)(3). Relief applicants believe that, even assuming Fund will have contacted the Mutual from section 13(a)(3) would extend only that all the Fund Notes are drawn upon Company upon the occurrence of a Loss to existing Registered Funds with a and the Funds are subject to the Event to determine the amount of fundamental investment restriction maximum special assessment, it is available coverage. The recovery will be prohibiting investments in senior projected that the maximum amount determined by calculating the amount of securities and to any other Registered payable by the Participating Fund will the Participating Fund’s loss and Funds that have such policies at the be de minimis in relation to their total comparing this number to the coverage time the Adviser becomes the Fund’s net assets. remaining under the Policy limit for the investment adviser. policy year in question. The relevant 2. Section 6(c) of the Act permits the B. Sections 17(a) (1) and (2) receivable on a Participating Fund’s SEC to exempt any person or transaction 1. Sections 17(a) (1) and (2) of the Act books will be computable and recorded from any provision of the Act, if the generally prohibit sales or purchases of prior to the Fund’s next net asset value exemption is necessary or appropriate securities to or from a registered determination following a Loss Event. in the public interest and consistent investment company by any affiliated person of the company or any affiliated F. Disclosure of the Insurance with the protection of investors and the purposes fairly intended by the policies person of an affiliated person. Section 1. A brief description of the nature of the Act. For the reasons provided 2(a)(3) of the Act defines an affiliated and extent of the insurance coverage below, applicants argue that the person of an investment company to will be contained in each Registered requested order meets the section 6(c) include any investment adviser of the Fund’s registration statement and, if standards. investment company and anyone under required by generally accepted 3. Applicants state that sections 13(a) common control with the investment accounting principles (‘‘GAAP’’), its and 18(f) resulted from Congress’ desire company. Under section 2(a)(3), FMR, financial statements. The insurance to eliminate certain practices including as investment adviser of each of the coverage provided by the Mutual (a) heavy borrowings by investment Funds, is an affiliated person of each Company will not be used in connection companies from the public without Fund. Further, because the Funds either with the marketing of the sale of shares adequate assets and reserves, (b) the share a common investment adviser or of the Registered Funds, and thus will complexity of capital structures which have an investment adviser that is under not be discussed in any marketing or induced investment companies to invest common control with those of the other sales literature distributed with respect in risky securities to produce income Funds, and most Registered Funds also to any Registered Fund. necessary to cover the high cost of share a common board of trustees or Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3937 other governing body, each Fund may C. Sections 17(a)(3) and 21(b) Company of interest on the FMR Note be deemed to be under common control 1. Section 17(a)(3) of the Act generally and an annual fee for its commitment, with all other Funds and, therefore, may prohibits an affiliated person or an and (d) FMR’s contribution of cash to be deemed to be an affiliated person of affiliated person of an affiliated person the Mutual Company in exchange for those Funds. of a registered investment company the FMR Note. 2. Rule 17d–1(b) provides that, in 2. Each Participating Fund will have from borrowing money or other property determining whether to approve a voting rights in the Mutual Company. from the company or from any company transaction, the SEC is to consider To the extent that the Mutual Company controlled by the registered company whether the proposed transaction is could be deemed to be controlled by, or except in certain circumstances not consistent with the provisions, policies, under common control with, the relevant here. Section 21(b) makes it and purposes of the Act, and the extent Participating Funds or the Adviser and unlawful for any registered investment thus an affiliated person of the to which the participation of the company to lend money or property to investment companies is on a basis Registered Funds, applicants believe any person, directly or indirectly, if the that the insurance coverage could be different from or less advantageous than person controls or is under common that of the other participants. For the deemed to be controlled by, or under control with the registered company. common control with, the Participating reasons stated below, applicants believe 2. Applicants seek relief from section that the requested relief meets these Funds or the Adviser and thus an 17(a)(3) and from section 21(b) to the affiliated person of the Registered standards. extent that the Fund Notes, if drawn 3. Applicants state that the Registered Funds, applicants believe that the upon by the Mutual Company, could be insurance coverage could be deemed Funds will not participate in the deemed the borrowing of money or arrangement on a basis that is different ‘‘property’’ subject to the prohibition of property from the Registered Funds by section 17(a)(1) against an affiliate of a from or less advantageous than other an affiliated person. Applicants state Participating Funds because each Registered Fund selling property to the that sections 17(a)(3) and 21(b) were Fund. In addition, applicants state that Fund’s premium will be allocated in intended to prevent a party with strong accordance with the risk characteristics FMR’s commitment to the Mutual potential adverse interests and influence of the different types of Insurable Assets Company could be viewed as a sale of over the investment decisions of a in which the Funds invest based upon property to the Registered Funds (as the registered investment company from actuarial standards. Applicants state indirect beneficiaries of the causing or inducing the investment that each Participating Fund’s commitment and payers of the fee) by company to engage in lending assessable portion will be on a pro rata an affiliated person of the Registered transactions that are detrimental to the basis according to its share of the Funds under section 17(a)(1). Further, best interests of the investment regular premium payments. Applicants applicants state that FMR’s contribution company and its shareholders. also state that, in the case of multiple of cash to the Mutual company in Applicants believe that the Fund Notes loss events in a single year, the Mutual exchange for the FMR Note could be do not raise these concerns because: (a) Company will make payments considered the sale of a security for The amount of each Fund’s Fund Note chronologically based on the date on property by the Mutual Company, a will be determined on a pro rata basis which a Loss Event occurs up to the company controlled by the Registered in the same proportion as the Fund’s annual Policy limit. Applicants note Funds, to FMR under section 17(a)(2). then current pro rata share of its regular that, while a Registered Fund may not Applicants request exemptions from the premium payment, (b) all Fund Notes recover on a loss in a particular year, all provisions of sections 17(a) (1) and (2) will have the same terms, which will be Registered Funds will be treated in the to permit these transactions. fair and reasonable to each Fund, and same manner. 3. Section 17(b) of the Act permits the (c) any interest received by the Funds 4. Applicants state that the Mutual SEC to grant an order permitting a on the Fund Notes will be determined Company is intended to provide transaction otherwise prohibited by according to a market rate. substantial benefits to the Participating section 17(a) if it finds that the terms of D. Section 17(d) and Rule 17d–1 Funds, including protection against the proposed transaction are fair and losses incurred from defaulting reasonable and do not involve 1. Section 17(d) of the Act and rule Insurable Assets and from repo- and overreaching on the part of any person 17d–1 under the Act prohibit an preference-related Loss Events. Further, concerned. For the reasons stated below, affiliated person of a registered applicants note that the interest applicants believe that the terms of the investment company or an affiliated received by FMR on the FMR note and transactions meet the standards of person of an affiliated person, acting as the fee it will receive for its sections 6(c) and 17(b). principal, from participating in any joint commitment to cover losses of the 4. Applicants state that the insurance arrangement in which the investment Mutual Company will be determined coverage will provide the Participating company participates unless the according to a market rate. Applicants Funds and their shareholders with a arrangement has been approved by the state that the fees will compensate FMR means of reducing their risk of loss from SEC. Applicants believe that the for assuming significant economic risks defaulting Insurable Assets and repo- involvement of FMR and the and that FMR will receive no other and preference-related Loss Events and, Participating Funds in the Mutual direct benefits from its involvement in some cases, protection against their Company could be deemed to constitute with the Mutual Company. net asset value per share dropping participation in a joint arrangement below $1.00. Applicants believe that the because of: (a) The payment of Applicants’ Conditions proposed transactions do not involve premiums by the Funds to the Mutual Applicants agree that any order of the overarching because the coverage could Company for insurance coverage and SEC granting the requested relief will be not be obtained from an unaffiliated the rights of the Funds to certain subject to the following conditions: third-party issuer at a comparable price. payments from the Mutual Company in 1. The Trustees, including a majority In addition, applicants state that the connection with a Loss Event, (b) the of the Trustees who are not ‘‘interested proposed arrangement is consistent with assessable feature of the Policies, (c) the persons’’ of any Registered or the policies of each Participating Fund. receipt by FMR from the Mutual Unregistered Fund, as defined in section 3938 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

2(a)(19) of the Act (‘‘Disinterested claim, and the information or materials II. Self-Regulatory Organization’s Trustees’’), will initially and at least upon which the determinations Statement of the Purpose of, and annually thereafter, in each year a described in condition (1) were made. Statutory Basis for, Proposed Rule Registered Fund participates in the The Mutual Company will make its Change insurance arrangement, determine (a) records available to the Trustees and the In its filing with the Commission, that the Policy is in the best interests of staff of the SEC upon request. CBOE included statements concerning the Registered Fund and its 7. The Mutual Company will pay the purpose of and basis for the shareholders, (b) that any amounts paid FMR for its commitment to cover losses proposed rule change and discussed any or potentially payable to the Mutual at a rate not to exceed the lowest rate comments it received on the proposed Company by the Registered Fund FMR would then be paying a bank for rule change. The text of these statements including, without limitation, the a letter of credit in a comparable may be examined at the places specified premiums, the special assessable amount. in Item IV below. The CBOE has premium, and the Fund Notes, are fair prepared summaries, set forth in and reasonable to the Registered Fund, By the Commission. Margaret H. McFarland, sections A, B, and C below, of the most (c) after reviewing all claims paid or significant aspects of such statements. denied by the Mutual Company, that the Deputy Secretary. settlement of all claims has been [FR Doc. 98–1854 Filed 1–26–98; 8:45 am] A. Self-Regulatory Organization’s reasonable and fair to the Registered BILLING CODE 8010±01±M Statement of the Purpose of, and Fund, and (d) that any procedures Statutory Basis for, Proposed Rule adopted pursuant to condition 3 have Change been complied with. SECURITIES AND EXCHANGE The purpose of the proposed rule 2. Any conflicts that may arise COMMISSION change is to amend the policy currently concerning the Participating Funds governing the use of telephones at relating to the operation or policies of [Release No. 34±39556; File No. SR±CBOE± equity option trading posts. The the Mutual Company will be resolved 97±65] proposed amendment would permit on an equitable basis by a committee of floor brokers at these posts to receive the Disinterested Trustees of the Self-Regulatory Organizations; Notice orders, over telephones located at the Registered Funds. of Filing of Proposed Rule Change by equity option posts, when (i) those calls 3. The Trustees of each Registered the Chicago Board Options Exchange, are patched through a booth on the floor Fund, including a majority of the Incorporated Relating to the Placing of as further described below and (ii) the Disinterested Trustees, will adopt Orders Over the Outside Telephone order is from U.S. registered broker- procedures that are reasonably designed Lines at the Equity Trading Posts dealers. The revised policy will be to provide that the conditions in the January 16, 1998. issued in a regulatory circular. In application have been complied with. addition, the Exchange has filed as Pursuant to Section 19(b)(1) of the The procedures will include, without Exhibit B to the filing a proposed form Securities Exchange Act of 1934, 15 limitation, the guidelines set forth in the of application and agreement to be used U.S.C. 78s(b)(1), notice is hereby given Statement of Policy Regarding Coverage, by members seeking approval to use the that on December 11, 1997, the Chicago attached as Exhibit D to the application, telephones at the equity option posts. as it may be amended from time to time. Board Options Exchange, Incorporated 4. Participation by a Registered Fund (‘‘CBOE’’) filed with the Securities and Orders Entered by Broker-Dealers in the Mutual Company will be Exchange Commission (‘‘Commission’’) The proposed change is the latest in consistent with the policy of the Fund, the proposed rule change as described a continual expansion of direct as recited in its registration statement in Items, I, II, and III below, which Items telephone access of orders to the equity and reports filed under the Act. have been prepared by the CBOE. The option trading posts since a telephone 5. The nature and extent of the Commission is publishing this notice to policy was first filed with the insurance coverage will be briefly solicit comments on the proposed rule Commission in 1993, see SR–CBOE–93– described in each Registered Fund’s change from interested persons. 24. The regulatory circular that was the current registration statement and, if I. Self-Regulatory Organization’s subject of that original filing prohibited required by GAAP, in each Registered any orders from being transmitted over Fund’s financial statements. Other than Statement of the Terms of Substance of the Proposed Rule Change the outside telephone lines at the equity this disclosure, the insurance coverage option posts. (At that time and today, provided by the Mutual Company will The Chicago Board Options Exchange, orders could and can be transmitted not be used in connection with the Inc. (‘‘CBOE or the ‘‘Exchange’’) over the intra-floor lines from one point 1 marketing of the sales of shares of the proposes to amend its policy governing on the Exchange floor to another.) In Registered Funds. the use of member-owned or Exchange- 1996, the Exchange liberalized its 6. Each Registered Fund will maintain owned telephones located at the equity telephone policy in the equity crowds to and preserve permanently in an easily trading post on the floor of the allow market-makers to place orders accessible place a written copy of the Exchange. over the outside telephone lines directly procedures (and any modifications The text of the proposed rule change with floor brokers at the equity option thereto) described in condition (3) and is available at the Office of the posts.2 This change allowed market- will maintain and preserve for a period Secretary, CBOE and at the Commission. makers who need to be off the floor to of not less than six years from the end transmit their orders more efficiently. of the fiscal year in which any Fund 1 The two regulatory circulars that govern the use The current proposed change would participated in the Mutual Company, of telephones at the equity trading posts were expand the ability to transmit orders the first two years in an easily accessible approved by the Commission on October 28, 1996 entered by broker-dealers over place, a written record relating to the [(see SR–CBOE–96–15, Securities Exchange Act Release No. 37876 (October 28, 1996), 61 FR 56728 premiums paid and any claims made by (November 4, 1996)] and on March 2, 1994 [See SR– 2 See SR–CBOE–96–15, approved in Securities the Fund and any action taken by the CBOE–93–24, Securities Exchange Act Release No. Exchange Act Release No. 37876 (October 28, 1996), Mutual Company with respect to the 33701 (March 2, 1994)]. 61 FR 56728 (November 4, 1996). Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3939 telephones located at the equity option the order. The Equity Floor Procedure before the Telecommunications posts 3 where an order is transmitted Committee and the Exchange will Department may authorize a line or over the telephones on a three way call monitor the policy and determine telephone to be installed. Before involving the following persons at the whether a future expansion in line with approving a telephone request, the following locations: (1) a representative the OEX model is appropriate. As with Department of Compliance will review of a member broker-dealer or its the use of telephones at the OEX trading the application and contact the correspondent firm from a location from post, the Exchange intends to police applicant if any questions are raised off of the Exchange trading floor, (2) a compliance with the conditions about the intended use of the telephone CBOE broker or an associated person of applicable to the use of telephones at line. such broker including a Designated the equity trading posts by means of Upon approval of the proposed rule Primary Market-Maker (‘‘DPM’’) acting customary floor surveillance changes, the Exchange will issue a in his capacity as a floor broker, at a procedures, including reliance on regulatory circular substantially the booth on the floor of the Exchange, and surveillance by Floor Officials and same as Exhibit A to the submitted (3) CBOE floor broker (including a DPM) Exchange employees. Floor brokers filing. The Exchange will implement or other person authorized to receive an accepting orders in this manner would these changes within sixty days of the order at an equity trading post on the not be required to be qualified pursuant approval of the changes. floor of the Exchange. to Exchange Rule 9.1 as with brokers The proposed rules are consistent In determining to limit the transmittal accepting orders of public customers with and further the objectives of of orders in this proposal to orders from over OEX post telephones because the Section 6(b)(5) of the Securities member broker-dealers and their qualification requirements do not apply Exchange Act of 1934 in that they are correspondent firms, the Exchange has to the acceptance of orders from designed to improve communications to adopted the Equity Floor Procedure registered broker-dealers. However, the and from the Exchange’s trading floor in Committee’s recommendation.4 It is the Department of Compliance will be a manner that promotes just and judgment of this Committee which required to review and approve all equitable principles of trade, prevents oversees trading at the equity option applications to ensure that the applicant fraudulent and manipulative acts and posts that it would be best to continue is not intending to transact business practices, and maintains fair and orderly to expand telephone access to the equity which the applicant is not authorized to markets. option posts on an incremental basis. transact. Because of concerns with the potential B. Self-Regulatory Organization’s for error (and thus liability) in accepting Application and Agreement Statement on Burden on Competition orders from a wide range of customers, In order to implement the change in CBOE does not believe that the the Equity Floor Procedure Committee the policy, the Exchange is also seeking proposed rule change will impose any determined to limit access to this class approval of a proposed form of burden on competition. of broker-dealers only. The requirement application and agreement that that the call must involve a person at a members will be required to submit to C. Self-Regulatory Organization’s booth on the floor of the Exchange will be approved to use the telephones at the Statement on Comments on the help to ensure that there is a further equity option posts pursuant to the Proposed Rule Change Received From record of the order in the event that a revised policy. This application and Members, Participants or Others dispute arises later in connection with agreement is nearly identical to the No written comments were solicited application and agreement used for OEX or received with respect to the proposed 3 Equity option posts includes trading stations of post telephones which was approved by rule change. both market-makers and Designated Primary the Commission, except to the extent Market-Makers where equity options are traded and that the agreement sets forth terms of III. Date of Effectiveness of the any other trading stations over which the Equity Proposed Rule Change and Timing for Floor Procedure Committee has jurisdiction. the equity telephone policy that are Persons transacting business in broad-based index different from the terms of the OEX Commission Action options traded at the same posts as equity options telephone policy. The Exchange has Within 35 days of the date of will not be subjected to the restrictions of this policy as long as the telephone lines are not used determined to file the application and publication of this notice in the Federal in contravention of this policy in conducting agreement for approval because it Register or within such longer period (i) business related to equity options. The EFPC will contains some provisions that have not as the Commission may designate up to determine whether a particular narrow-based index otherwise been approved specifically for 90 days of such date if it finds such option is subject to this policy. use of telephones at the equity option 4 It should be noted that the Exchange filed (see longer period to be appropriate and SR–CBOE–95–49) and the Commission approved posts. Among the provisions in the publishes its reasons for so finding or (Securities Exchange Act Release No. 37487 (July application and agreement are (ii) as to which the self-regulatory 26, 1996)) a more liberal policy concerning the paragraph G and H which deal with organization consents, the Commission transmittal or orders over outside telephone lines at liability issues. Paragraph G states that the trading post for Standard & Poor’s 100 Stock will: Index options (‘‘OEX’’). That policy permits orders the Exchange shall not be liable to (A) by order approve such proposed to be transmitted from any source provided the members of their customers for losses rule change, or broker accepting the order is properly qualified resulting from the installation, (B) institute proceedings to determine under Exchange rules to accept the order and operation, relocation, use of, or inability provided the broker has received approval from the whether the proposed rule change Exchange to accept such orders over the telephone. to use telephones or telephone lines at should be disapproved. The Exchange generally has deferred to the an equity option post. Paragraph H judgment of the various Floor Procedure requires the member to indemnify the IV. Solicitation of Comments Committees in determining to what extent they Interested persons are invited to want to allow telephone access directly into the Exchange against any liabilities arising trading posts over which they have purview. The out of equity post telephones or lines. submit written data, views and Equity Floor Procedure Committee recommended The application and agreement will arguments concerning the foregoing. taking a more limited approach than the OEX Floor require an applicant to receive approval Persons making written submissions Procedure Committee but, after gaining experience of the Department of Compliance as should file six copies thereof with the with this expansion, they may decide to offer access to the same extent as the OEX Floor Procedure well as the Equity Floor Procedure Secretary, Securities and Exchange Committee. Committee, as indicated on the form, Commission, 450 Fifth Street, N.W., 3940 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Washington, D.C. 20549. Copies of the whom the Exchange has jurisdiction in Exchange has entered into agreements submission, all subsequent connection with certain investigations for the sharing of information and other amendments, all written statements and proceedings that are initiated by forms of mutual assistance, including with respect to the proposed rule other exchanges or self-regulatory but not limited to members and affiliate change that are filed with the organizations. members of the Intermarket Commission, and all written Surveillance Group.1 The proposed rule communications relating to the II. Self-Regulatory Organization’s change would explicitly provide that proposed rule change between the Statement of The Purpose of, and the Exchange may enter into agreements Commission and any person, other than Statutory Basis For, The Proposed Rule with domestic and foreign self- those that may be withheld from the Change regulatory organizations providing for public in accordance with the In its filing with the Commission, the the exchange of information and other provisions of 5 U.S.C. 552, will be Exchange included statements forms of mutual assistance for market available for inspection and copying in concerning the purpose of and basis for surveillance, investigative, enforcement the Commission’s Public Reference the proposed rule change and discussed and regulatory purposes. The Section, 450 Fifth Street, N.W., any comments it received on the requirements of the proposed rule Washington, D.C. 20549. Copies of such proposed rule change. The text of these would apply regardless of whether the filing will also be available for statements may be examined at the Exchange had itself initiated a formal inspection and copying at the principal places specified in Item IV below. The investigation or disciplinary proceeding. office of CBOE. All submissions should Exchange has prepared summaries, set The proposed rule change would also refer to the file number in the caption forth in sections A, B, and C below, of provide that any person or entity above and should be submitted by the most significant aspects of such required to furnish information or February 17, 1998. statements. testimony pursuant to the new rule For the Commission, by the Division of must be afforded the same rights and A. Self-Regulatory Organization’s procedural protections as that person or Market Regulation, pursuant to delegated Statement of the Purpose of, and authority.5 entity would have if the Exchange had Statutory Basis for, the Proposed Rule initiated the request for information or Margaret H. McFarland, Change Deputy Secretary. testimony. While the Exchange believes that the [FR Doc. 98–1855 Filed 1–26–98; 8:45 am] 1. Purpose current rule provides adequate authority BILLING CODE 8010±01±M Currently, Article VIII, Rule 11 to require members and specified others requires members (and certain others) to to provide testimony, documentary submit books and papers, furnish materials or other information to the SECURITIES AND EXCHANGE information, and appear and provide COMMISSION Exchange’s Board or to the Exchange (or testimony to the Exchange’s Board and any committee, subcommittee or officer [Release No. 34±39557; File No. SR±CHX± other committees or officers of the thereof) and refrain from impeding or 97±33] Exchange, among other things. While delaying any examination, inquiry, or the Exchange believes that the current investigation (whether formal or Self-Regulatory Organizations; rule provides adequate authority to informal) the Exchange believes that Chicago Stock Exchange; Notice of require members (and others specified changes are desirable to conform this Filing of and Immediate Effectiveness in the rule) to provide information to text to the new provisions added above. of Proposed Rule Change Regarding other regulatory organizations, the Specifically, the proposed rule change Regulatory Cooperation Exchange believes that clarifying this would provide that no member, member January 16, 1998. provision to expressly provide for such organization, or partner, officer, director Pursuant to Section 19(b)(1) of the information is desirable, especially or other person associated with a Securities Exchange Act of 1934 because other self-regulatory member or other person or entity subject (‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is organizations have recently amended to the jurisdiction of the Exchange shall hereby given that on December 11, 1997, their rules to clarify their information- impede or delay an Exchange the Chicago Stock Exchange, sharing authority. examination, inquiry or investigation Incorporated (‘‘CHX’’ or ‘‘Exchange’’) The proposed rule change would (whether formal or informal) with filed with the Securities and Exchange expressly provide that no member, respect to possible violations within the Commission (‘‘Commission’’ or ‘‘SEC’’) member organization, or partner, officer, disciplinary jurisdiction of the the proposed rule change, as described director or other person associated with Exchange or with respect to possible in Items I, II, and III below, which Items a member or other person or entity limitations on access to Exchange have been prepared by the self- subject to the jurisdiction of the services or otherwise with respect to the regulatory organization. The Exchange shall refuse to appear and discharge of its duties nor refuse to Commission is publishing this notice to testify before another exchange or self- furnish testimony, documentary solicit comments on the proposed rule regulatory organization in connection materials or other information requested change from interested persons. with a regulatory investigation, by the Board of Governors or by the examination or disciplinary proceeding, Exchange (or by any committee, I. Self-Regulatory Organization’s or refuse to furnish documentary subcommittee, or officer thereof) during Statement of The Terms of Substance of materials or other information, or the Proposed Rule Change otherwise impede or delay such 1 The Intermarket Surveillance Group (‘‘ISG’’) is The Exchange proposes to amend investigation, examination or an organization of securities industry self-regulatory organizations formed in 1983 to coordinate and Article VIII, Rule 11 of its Rules to disciplinary proceeding if the Exchange develop intermarket surveillance programs clarify the existing Rule and to require requests such information or testimony designed to identify and combat fraudulent and regulatory cooperation by members, in connection with an inquiry resulting manipulative acts and practices. In order to from an agreement entered into by the promote its purposes, members agree to exchange member organizations, and others over such information as is necessary for ISG members Exchange with other exchanges or self- to perform their self-regulatory and market 5 17 CFR 200.30–3(a)(12). regulatory organizations with whom the surveillance functions. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3941 the course of such examination, inquiry IV. Solicitation of Comments I. Self-Regulatory Organization’s or investigation or otherwise in Statement of the Terms of Substance of furtherance of the discharge of its or his Interested persons are invited to the Proposed Rule Change submit written data, views and duties. Failure to furnish such The proposed rule change will testimony, documentary materials or arguments concerning the foregoing. Persons making written submissions expand DTC’s coupon collection service other information requested pursuant to (‘‘CCS’’) to include the collection of the proposed rule on the date or within should file six copies thereof with the Secretary, Securities and Exchange interest relating to coupons from the time period requested would be corporate bearer bonds. considered obstruction of an Exchange Commission, 450 Fifth Street, N.W., inquiry or investigation and would not Washington, D.C. 20549. Copies of the II. Self-Regulatory Organization’s be subject to formal disciplinary action. submission, all subsequent Statement of the Purpose of, and amendments, all written statements Statutory Basis for, the Proposed Rule 2. Basis with respect to the proposed rule Change change that are filed with the In its filing with the Commission, The Exchange believes that the Commission, and all written DTC included statements concerning proposed rule change is consistent with communications relating to the the purpose of and basis for the Section 6(b)(5) of the Act in that it is proposed rule change between the designed to promote just and equitable proposed rule change and discussed any Commission and any person, other than comments it received on the proposed principles of trade, to foster cooperation those that may be withheld from the and coordination with persons rule change. The text of these statements public in accordance with the may be examined at the places specified regulating securities transactions, to provisions of 5 U.S.C. 552, will be remove impediments to and perfect the in Item IV below. DTC has prepared available for inspection and copying at summaries, set forth in sections (A), (B), mechanism of a free and open market the Commission’s Public Reference and a national market system and, in and (C) below, of the most significant Room. Copies of such filing will also be aspects of such statements.2 general, to protect investors and the available for inspection and copying at public interest. the principal office of the CHX. All (A) Self-Regulatory Organization’s B. Self-Regulatory Organization’s submissions should refer to File No. Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Statement on Burden on Competition SR–CHX–97–33 and should be submitted by February 17, 1998. Change The Exchange does not believe that For the Commission, by the Division of CCS currently provides DTC the proposed rule change will impose Market Regulation, pursuant to delegated participants with a method for the any burden on competition. authority. collection of interest relating to coupons 3 C. Self-Regulatory Organization’s Margaret H. McFarland, from municipal bearer bonds. Participants using CCS are required to Statement on Comments on the Deputy Secretary. deposit coupons in a standard sealed Proposed Rule Change Received From [FR Doc. 98–1856 Filed 1–26–98; 8:45 am] Members, Participants or Others envelop or ‘‘shell,’’ each of which may BILLING CODE 8010±01±M contain no more than 200 coupons for The Exchange has neither solicited the same CUSIP number, series, and nor received written comments on the payable date. DTC submits the contents SECURITIES AND EXCHANGE proposed change. of the shells to the appropriate issuer or COMMISSION paying agent and then credits the III. Date of Effectiveness of the interest to the participant’s account. Proposed Rule Change and Timing for [Release No. 34±39561; File No. SR±DTC± Under the proposed rule change, CCS Commission Action 97±17] will be modified to process corporate bearer bonds in addition to municipal Because the proposed rule change: (1) Self-Regulatory Organizations; the bearer bonds. With certain exceptions, does not significantly affect the Depository Trust Company; Notice of a DTC will handle shells containing protection of investors or the public Proposed Rule Change Relating to a corporate bearer bonds in the same interest; (2) does not impose any Modification of the Coupon Collection manner in which it currently handles significant burden on competition; and Service municipal bearer bonds. (3) does not become operative for 30 First, DTC will contact the corporate days from December 11, 1997, the date January 20, 1998. paying agent before submitting the of which it was filed, and the Exchange Pursuant to Section 19(b)(1) of the coupons for payment to determine provided the Commission with written Securities Exchange Act of 1934 whether the coupon proceeds are notice of its intent to file the proposed (‘‘Act’’),1 notice is hereby given that on payable in U.S. dollars. To be eligible rule change at least five days prior to the August 7, 1997. The Depository Trust for CCS, corporate bearer bonds must be filing date, it has become effective Company (‘‘DTC’’) filed with the payable in either U.S. dollars or pursuant to Section 19(b)(3)(A) of the Securities and Exchange Commission Canadian funds. Where the corporate Act and Rule 19b–4(e)(6) thereunder. (‘‘Commission’’) and on December 22, bearer bonds are payable in Canadian At any time within 60 days of the 1997, amended the proposed rule funds, DTC will request the paying filing of the proposed rule change, the change as described in Items I, II, and agent to convert the funds to U.S. Commission may summarily abrogate III below, which items have been dollars in accordance with the such rule change if it appears to the prepared primarily by DTC. The Commission that such action is Commission is publishing this notice to 2 The commission has modified the text of the necessary or appropriate in the public solicit comments from interested summaries prepared by DTC. 3 interest, for the protection of investors, persons on the proposed rule change. For a complete description of CCS, refer to Securities Exchange Act Release No. 35750 (January or otherwise in furtherance of the 22, 1996), 61 FR 2852 [File No. SR–DTC–95–18] purpose of this Act. 1 15 U.S.C. 78s(b)(1). (order approving proposed rule change). 3942 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices prevailing exchange rate. DTC will not (B) Self-Regulatory Organization’s For the Commission by the Division of process corporate bearer bonds through Statement on Burden on Competition Market Regulation, pursuant to delegated CCS unless the paying agent is able to authority.5 convert the funds to U.S. dollars. DTC does not believe that the Margaret H. McFarland, Second, DTC will suppress for proposed rule change will impose any Deputy Secretary. corporate bearer coupons the automatic burden on competition that is not [FR Doc. 98–1857 Filed 1–26–98; 8:45 am] payment function that it applies to necessary or appropriate in furtherance BILLING CODE 8010±01±M municipal bearer coupons. Under the of the purposes of the Act, in the public current operation of CCS, DTC credits interest, and for the protection of participants’ accounts on the payable investors. SECURITIES AND EXCHANGE date of the municipal bearer coupons (C) Self-Regulatory Organization’s COMMISSION regardless of whether it has received the Statement on Comments on the [Release No. 34±39562; File No. SR±NASD± money. With corporate bearer bonds, Proposed Rule Change Received From 97±78] DTC will need to receive the interest Members, Participants or Others payment before paying the participant Self-Regulatory Organizations; Order in order to avoid having to adjust Written comments from DTC Approving a Proposed Rule Change by participants’ accounts due to participants and others have not been National Association of Securities fluctuations in exchange rates. DTC has solicited or received. Dealers, Inc. Relating to the Amended informed the Commission that due to III. Date of Effectiveness of the Interpretation of IM±8310±2 the additional processing and tracking Proposed Rule Change and Timing for Concerning the Release of Additional of corporate bearer coupon deposits, a Commission Action Disciplinary Information surcharge will be added in the future for the handling of these deposits. Within thirty-five days of the date of January 20, 1998. DTC will require that each shell publication of this notice in the Federal I. Introduction contain the following information on its Register or within such longer period (i) face: as the Commission may designate up to On October 17, 1997, the National 1. CUSIP number; ninety days of such date if it finds such Association of Securities Dealers, Inc. 2. description of issue including longer period to be appropriate and (‘‘NASD’’ or ‘‘Association’’) submitted purpose, series, date of issue, and publishes its reasons for so finding or to the Securities and Exchange maturity date; (ii) as to which DTC consents, the Commission (‘‘SEC’’ or ‘‘Commission’’), 3. payable date; Commission will: pursuant to Section 19(b)(1) of the 4. quantity of coupons enclosed; Securities Exchange Act of 1934 (A) by order approve such proposed (‘‘Act’’),1 and Rule 19b–4 thereunder,2 a 5. dollar value of individual coupons; rule change or 6. total shell value unless payable in proposed rule change which amended Canadian dollars; (B) institute proceedings to determine the Interpretation on the Release of 7. participant number; and whether the proposed rule change Disciplinary Information, IM–8310–2 of 8. contact number and telephone should be disapproved. Rule 8310 of the Procedural Rules of the NASD (‘‘Interpretation’’ or ‘‘IM–8310– number of the depositing participant. IV. Solicitation of Comments The shells will need to be 2’’). A notice of the proposed rule accompanied by one completed deposit Interested persons are invited to change was published in the Federal 3 ticket for up to twenty-five shells which submit written data, views, and Register on November 21, 1997. The provides the following information: arguments concerning the foregoing. Commission has received no comment 1. participant number; Persons making written submissions letters on the proposed rule change. For 2. shell quantity; should file six copies thereof with the the reasons discussed below, the 3. total dollar value; Secretary, Securities and Exchange Commission is approving the proposed 4. CUSIP number per shell; Commission, 450 Fifth Street, N.W., rule change. 5. coupon quantity per shell; Washington, D.C. 20549. Copies of the In its notice, filed on October 17, 6. dollar value per shell unless submission, all subsequent 1997, the NASD Regulation, Inc. payable in Canadian dollars; and amendments, all written statements (‘‘NASDR’’) proposed to amend IM– 7. whether the coupons are future-due with respect to the proposed rule 8310–2 to include the phrase or past-due. change that are filed with the ‘‘electronic inquiry’’ in the rule DTC will verify the number of shells Commission, and all written language so that it could respond to listed on the deposit ticket and give the communications relating to the electronic inquiries, as well as written participant a time-stamped copy of the proposed rule change between the or telephonic inquiries. In the notice, ticket. If the number of shells listed on Commission and any person, other than the NASDR also proposed to amend the the deposit ticket does not agree with those that may be withheld from the rule language to include the additional the physical number of shells, the entire public in accordance with the information required to be reported on deposit will be rejected and sent back to provisions of 5 U.S.C. 552, will be the amended Forms U–4, U–5, and BD. the participant. available for inspection and copying in In November 1997, the NASDR DTC believes that the proposed rule the Commission’s Public Reference requested that the Commission approve, change is consistent with the Section, 450 Fifth Street, N.W., on an accelerated basis, that portion of requirements of Section 17A of the Act4 Washington, D.C. 20549. Copies of such the amended rule language that would and the rules and regulations filing also will be available for allow it to respond to electronic thereunder because it promotes inspection and copying at the principal office of DTC. All submissions should 5 17 CFR 200.30–3(a)(12). efficiencies in the clearance and 1 refer to File No. SR–DTC–97–17 and 15 U.S.C. 78s(b)(1). settlement of securities transactions. 2 17 CFR 240.19b–4. should be submitted by February 17, 3 Securities Exchange Act Rel. No. 39322 (Nov. 4 15 U.S.C. 78q–1. 1998. 13, 1997), 62 FR 62391. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3943 inquiries.4 Hence, the Commission information regarding the disciplinary Pages (‘‘DRPs’’) for both forms in a partially approved, on an accelerated history of its members and persons manner that is compatible with its basis, that portion of the NASDR’s associated with a member.8 In January current CRD technology protocol. The request which gives the NASD the 1997, NASDR’s senior management reformatted, interim forms and DRPs option of responding to the electronic determined that the CRD redesign contain no substantive changes to any of inquiries of persons or entities should be reassessed in light of the questions. requesting employment and disciplinary changing business needs and rapidly The NASD proposes to make the history of its members and their advancing computer technology. After interim forms and the disclosure of the associated persons.5 This order negotiations and discussions among the additional information set forth in this approves the amended rule language Commission, the NASD, and the North rule filing effective on February 17, that addresses the release of additional American Securities Administrators 1998.10 This effective date will permit disciplinary history required to be Association, Inc. (‘‘NASAA’’) members and the NASD to complete disclosed pursuant to amended Forms concerning CRD development and annual registration renewals and permit U–4, U–5, and BD. implementation, SR–NASD–96–38 was the NASD to train members on the use II. Description of Proposal withdrawn and replaced by this filing, of the interim forms before they are SR–NASD–97–78. implemented. The information that Under the NASD’s Public Disclosure This filing proposes the same would be released from January 1 11 to Program (‘‘PDP’’),6 the NASD, in substantive disclosure as SR–NASD–96– February 17, 1998, would include only response to a written inquiry, electronic 38. Specifically, the proposed rule that information that currently is inquiry,7 or telephonic inquiry via a change allows the NASD to release all required to be reported on the Forms U– toll-free telephone listing, releases information on any question on page 3 4 and U–5. certain information contained in the (Question 22) of the amended Form U– III. Discussion Central Registration Depository (‘‘CRD’’) 4 and Question 11 of the amended Form regarding the employment and BD, as approved by the Commission in The Commission finds that the disciplinary history of its members and July 1996.9 The additional information proposed rule change is consistent with their associated persons, including that the NASD proposes to disclose the requirements of the Act12 and the information regarding past and present includes: rules and regulations promulgated employment history with Association 1. All pending arbitrations and civil thereunder applicable to the NASD. members; all final disciplinary actions proceedings that relate to securities or Specifically, the Commission believes taken by federal, state, or foreign commodities transactions; that approval of the proposed rule securities agencies or self-regulatory 2. Pending written customer change is consistent with Section organizations that relate to securities or complaints alleging sales practice 15A(b)(6) of the Act. Section 15A(b)(6) commodities transactions; all pending violations and compensatory damages of provides in relevant part that the rules disciplinary actions that have been $5,000 or more; of the Association be designed to foster taken by federal or state securities 3. Settlement’s of $10,000 or more of cooperation and coordination with agencies or self-regulatory organizations arbitrations, civil suits, and customer persons engaged in regulating and that relate to securities and commodities complaints involving securities or processing information with respect to transactions and are required to be commodities transactions: securities and not to permit unfair reported on Form BD or Form U–4; all 4. Current investigations involving discrimination among customers, foreign government or self-regulatory criminal or regulatory matters; issuers, brokers or dealers. organization disciplinary actions that 5. Terminations of employment after Pursuant to Section 15A(b)(6), the relate to securities or commodities allegations involving violation of proposed rule change benefits the transactions and are required to be investment-related statutes or rules, public because, by releasing this reported on Form BD or Form U–4; and fraud, theft, or failure to supervise additional disciplinary information, the all criminal indictments, informations investment-related activities; or convictions that are required to be 6. Bankruptcies less than 10 years old 10 See supra note 3, at p. 62391. See also letter reported on Form BD or Form U–4. The and outstanding liens or judgments; from Joan Conley, Secretary, NASD to Katherine A. 7. Bonding company denials, pay England, Assistant Director, Division of Market Association also releases information Regulation, SEC, dated November 13, 1997, concerning civil judgments and outs, or revocations; and (correcting Amendment No. 2 to reflect this arbitration decisions in securities and 8. Any suspension or revocation to act effective date). commodities disputes involving public as an attorney, accountant, or federal 11 Upon approval of the electronic inquiry portion customers. contractor. of its proposal, the NASD had planned to begin To accomplish the release of this responding to electronic inquiries for PDP On November 25, 1996, as part of its information, via the Internet, on or about January PDP, the NASD filed a proposed rule additional information, however, the 1, 1998. See supra note 3 at p. 62391. However, change, SR–NASD–96–38, designed to NASD has reformatted the questions set hardware problems and system capacity have permit the NASD to release additional forth on page 3 of amended Form U–4; hampered implementation. Telephone conversation questions 13 through 16 on amended between Alden S. Adkins, General Counsel, NASDR. and Katherine A. England, Assistant 4 Telephone conversation with Alden S. Adkins, Form U–5; and the Disclosure Reporting Director, Division of Market Regulation, SEC, General Counsel and Mary M. Dunbar, Assistant December 29, 1997. General Counsel, NASDR, and Belinda Blaine, 8 The NASD proposal to release additional 12 In approving this rule, the Commission notes Associate Director, Katherine A. England, Assistant disciplinary history of its members and associated that it has considered the proposed rule’s impact on Director, and Mignon McLemore, Staff Attorney, persons was initially filed with the Commission on efficiency, competition, and capital formation. The Division of Market Regulation, November 26, 1997. November 26, 1996. See Securities Exchange Act release of additional disciplinary history of the 5 See Securities Exchange Act Rel. No. 39442 Rel. No. 37994 (November 27, 1996), 61 FR 64549 NASD’s members and associated persons should (December 11, 1997), 62 FR 66706 (December 19, (December 5, 1996) (SR–NASD–96–38). result in competition for brokerage business among 1997). 9 See Securities Exchange Act Rel. No. 37407 those broker-dealers with impeccable disciplinary 6 See Securities Exchange Act Rel. No. 30629 (July 5, 1996), 61 FR 36595 (July 11, 1996); and histories. Efficiency should improve in the (April 23, 1992), 57 FR 18535 (April 30, 1992); and Securities Exchange Act Rel. No. 37431 (July 12, marketplace as members and their associated Securities Exchange Act Rel. No. 32568 (July 1, 1996), 61 FR 37357 (July 18, 1996); See also persons become more conscious of compliance and 1993), 58 FR 36723 (July 8, 1993). Securities Exchange Act Rel. No. 37632 (September the potential ramifications of this increased 7 See supra note 5. 4, 1996), 61 FR 47412 (September 9, 1996). disclosure. 15 U.S.C. 78c(f). 3944 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

NASD is providing investors with a The agenda will include: (1) DEPARTMENT OF TRANSPORTATION resource to aid them in choosing a Chairman’s Remarks; (2) Review and broker-dealer for their investment Approval of Summary of the Previous Surface Transportation Board needs. Moreover, increasing disclosure Meeting; (3) Consider and Approve: a. of members’ and their associated Proposed Final Draft, Minimum [STB Finance Docket No. 33539] persons’ relevant disciplinary history Aviation System Performance Standards The Burlington Northern and Santa Fe could help investors determine whether for Automatic Dependent Surveillance Railway CompanyÐTrackage Rights to conduct or continue to conduct Broadcast (ADS–B), RTCA Paper No. business with a particular broker-dealer ExemptionÐSouthern Pacific 007–98/TMC–308, Prepared by Special Transportation Company or associated person. The Commission Committee (SC)–186; b. Proposed Final notes that disclosure of this additional Draft, Guidance for Initial Southern Pacific Transportation information may serve as a deterrent to Implementation of Cockpit Display of Company (SPT) has agreed to grant fraudulent activity as well. overhead trackage rights to The According to the NASD, the Forms Traffic Information, RTCA Paper No. Burlington Northern and Santa Fe U–4 and U–5 had to be redesigned to 384–97/TMC–305, Prepared by SC–186; Railway Company (BNSF) over SPT’s facilitate compliance with this c. Proposed Change 2 to DO–229, line between Caldwell, TX, in the disclosure requirement at this time. Minimum Operational Performance vicinity of SPT’s Ennis Subdivision Thus, the forms were redesigned to be Standards for Global Positioning milepost 30.8, and Placedo, TX, in the compatible with the current CRD System/Wide Area Augmentation vicinity of SPT’s Victoria Subdivision protocol (i.e., the answers on the interim System Airborne Equipment, RTCA milepost 14.2, a distance of forms now match the location of Paper No. 381–97/SC159–773, Prepared approximately 152.7 miles.1 questions in the CRD system). Upon by SC–159; (4) Discuss/Take Position The transaction was scheduled to be completion of the CRD redesign, the on: a. Proposed Revision to the Terms consummated on January 19, 1998. The forms as originally designed will be of Reference for SC–190, RTCA Paper purpose of the trackage rights is implemented. The Commission, No. 279–97/SC190–021; b. Discussion improve the operating efficiencies of therefore, approves the use of these on the Work Plan for SC–191, SPT and BNSF. interim forms, recognizing their Collaborative Decisionmaking; c. As a condition to this exemption, any necessity in disseminating this Committee Chairman’s Progress Report employees affected by the trackage additional disciplinary history to the for SC–182, Avionics Computer rights will be protected by the public. Resource; d. Committee Milestones, For the above reasons, the conditions imposed in Norfolk and RTCA Paper No. 006–98/TMC–307; e. Western Ry. Co.—Trackage Rights—BN, Commission believes that the proposed Status of SC–169, Data Link; f. Proposal rule change is consistent with the 354 I.C.C. 605 (1978), as modified in for Terrain Data Base Special Mendocino Coast Ry., Inc.—Lease and provisions of the Act, and in particular, Committee; g. Proposal for SC–181, with Section 15A(b)(6). Operate, 360 I.C.C. 653 (1980). It is therefore ordered, pursuant to Navigation Standards, to Develop a This notice is filed under 49 CFR Section 19(b)(2) of the Act,13 that the MOPS for Navigation Data Information 1180.2(d)(7). If it contains false or remaining portion of proposed rule on a Moving Map; h. Proposed Revision misleading information, the exemption change, SR–NASD–97–78, concerning to the Terms of Reference for SC–147; is void ab initio. Petitions to revoke the the release of additional disciplinary (5) Other Business; (6) Date and Place of exemption under 49 U.S.C. 10502(d) information be, and hereby is, approved. Next Meeting. may be filed at any time. The filing of Attendance is open to the interested a petition to revoke will not For the Commission, by the Division of automatically stay the transaction. Market Regulation, pursuant to delegated public but limited to space availability. An original and 10 copies of all authority.14 With the approval of the chairman, pleadings, referring to STB Finance Margaret H. McFarland, members of the public may present oral Docket No. 33539, must be filed with Deputy Secretary. statements at the meeting. Persons the Surface Transportation Board, Office [FR Doc. 98–1853 Filed 1–26–98; 8:45 am] wishing to present statements or obtain of the Secretary, Case Control Unit, 1925 BILLING CODE 8010±01±M information should contact the RTCA K Street, N.W., Washington, DC 20423– Secretariat, 1140 Connecticut Avenue, 0001. In addition, a copy of each NW., Suite 1020, Washington, DC pleading must be served on Michael E. DEPARTMENT OF TRANSPORTATION 20036; (202) 833–9339 (phone); (202) Roper, Esq., The Burlington Northern 833–9434 (fax); or http://www/rtca/org and Santa Fe Railway Company, 3017 Federal Aviation Administration (web site). Members of the public may Lou Menk Drive, P.O. Box 961039, Fort present a written statement to the RTCA Technical Management Worth, TX 76161–0039. Committee committee at any time. Decided: January 20, 1998. Issued in Washington, DC, on January 16, By the Board, David M. Konschnik, Pursuant to section 10(a)(2) of the 1998. Director, Office of Proceedings. Federal Advisory Committee Act Pub. L. Vernon A. Williams, 92–463, 5 U.S.C., Appendix 2), notice is Janice L. Peters, hereby given for the RTCA Technical Designated Official. Secretary. Management Committee meeting to be [FR Doc. 98–1924 Filed 1–26–98; 8:45 am] [FR Doc. 98–1910 Filed 1–26–98; 8:45 am] held February 19, 1998, starting at 9:00 BILLING CODE 4910±13±M BILLING CODE 4915±00±P a.m. The meeting will be held at RTCA, 1140 Connecticut Avenue, NW., Suite 1 The trackage rights are limited to southbound 1020, Washington, DC 20036. movements and are provided solely to facilitate directional operations between Houston, TX, and Placedo. In addition, the trackage rights will 13 15 U.S.C. 78s(b)(2). continue only so long as SPT continues to operate 14 17 CFR 200.30–3(a)(12). directionally between Houston and Placedo. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3945

DEPARTMENT OF TRANSPORTATION Decided: January 20, 1998. the exemption under 49 U.S.C. 10502(d) By the Board, David M. Konschnik, may be filed at any time. The filing of Surface Transportation Board Director, Office of Proceedings. a petition to revoke will not Vernon A. Williams, [STB Finance Docket No. 33537] automatically stay the transaction. Secretary. An original and 10 copies of all GRC Holdings CorporationÐ [FR Doc. 98–1911 Filed 1–26–98; 8:45 am] pleadings, referring to STB Finance Acquisition ExemptionÐUnion Pacific BILLING CODE 4915±00±P Docket No. 33508, must be filed with Railroad Company the Surface Transportation Board, Office of the Secretary, Case Control Unit, 1925 GRC Holdings Corporation (GRCH), a DEPARTMENT OF TRANSPORTATION K Street, N.W., Washington, DC 20423– noncarrier, has filed a verified notice of 0001. In addition, a copy of each exemption under 49 CFR 1150.31 to Surface Transportation Board pleading must be served on David C. acquire from Union Pacific Railroad [STB Finance Docket No. 33508] Reeves, 1300 I Street, N.W., Suite 500 Company (UP) a 244.5-mile line of East, Washington, DC 20005–3314.2 railroad between Vigus, MO (milepost Missouri Central Railroad CompanyÐ Decided: January 20, 1998. 19.0), and Pleasant Hill, MO (milepost Acquisition and Operation By the Board, David M. Konschnik, 263.5). GRCH intends immediately to ExemptionÐLines of Union Pacific Director, Office of Proceedings. convey to Missouri Central Railroad Railroad Company Vernon A. Williams, Company (MCRR) the assets necessary Secretary. to conduct railroad operations over the Missouri Central Railroad Company [FR Doc. 98–1912 Filed 1–26–98; 8:45 am] line. (MCRR), a noncarrier, has filed a The earliest date possible for verified notice of exemption under 49 BILLING CODE 4915±00±P consummation of the transaction is CFR 1150.31 to acquire from GRC March 17, 1998, 60 days after GRCH Holdings Corporation (GRCH) and to certified that it posted the required operate a 244.5-mile line of railroad DEPARTMENT OF THE TREASURY notice at the affected employees’ currently owned by Union Pacific [Treasury Directive 13±03] workplace and served notice of the Railroad Company (UP) between Vigus, transaction, as required, on the national MO (milepost 19.0), and Pleasant Hill, Departmental Offices; Delegation of offices of the labor unions with MO (milepost 263.5). MCRR also is Authority Related to the United States employees on the affected line. acquiring directly from UP incidental Community Adjustment and This transaction is related to STB trackage rights over UP’s lines of Investment Program, and Designation Finance Docket No. 33508, Missouri railroad between Vigus (milepost 19.0) of Representative on the Community Central Railroad Company—Acquisition and Rock Island Junction, MO (milepost Adjustment and Investment Program and Operation Exemption—Lines of 10.3), and between Pleasant Hill Finance Committee Union Pacific Railroad Company, (milepost 263.5) and Leeds Junction, MO (milepost 288.3), a total distance of January 21, 1998. wherein MCRR has filed a verified 1. Purpose. This Directive makes notice of exemption to acquire: (1) the 33.5 miles. The earliest date possible for certain delegations and a designation to above-noted railroad assets from GRCH, consummation of the acquisition from the Assistant Secretary (Financial and (2) specified incidental trackage GRCH is March 17, 1998, 60 days after Markets) relating to the United States rights directly from UP. GRC certified, in the related proceeding Community Adjustment and Investment This notice is filed under 49 CFR below, that it posted the required notice Program (the CAI Program) in support of 1150.31. If the notice contains false or at the affected employees’ workplace the North American Free Trade misleading information, the exemption and served notice of the transaction, as Agreement (the NAFTA). is void ab initio.1 A petition to revoke required, on the national offices of the 2. Background. The North American the exemption under 49 U.S.C. 10502(d) labor unions with employees on the Free Trade Agreement Implementation may be filed at any time. The filing of affected line. Act (Public Law 103–182, 107 Stat. a petition to revoke will not This transaction is related to STB 2057) (the Act) authorized the CAI automatically stay the transaction. Finance Docket No. 33537, GRC Program in support of the NAFTA. An original and 10 copies of all Holdings Corporation—Acquisition Executive Order 12916, dated May 13, pleadings, referring to STB Finance Exemption—Union Pacific Railroad 1994 (the Executive Order), delegated to Docket No. 33537, must be filed with Company, wherein GRCH has the Secretary of the Treasury certain the Surface Transportation Board, Office concurrently filed a verified notice of functions given to the President under of the Secretary, Case Control Unit, 1925 exemption to acquire the above-noted the Act relating to the CAI Program. The K Street, N.W., Washington, DC 20423– 244.5-mile line from UP. Executive Order also established an 0001. In addition, a copy of each This notice is filed under 49 CFR interagency Community Adjustment pleading must be served on David C. 1150.31. If the notice contains false or Reeves, 1300 I Street, N.W., Suite 500 misleading information, the exemption 2 There currently is a large service list in this 2 East, Washington, DC 20005–3314. is void ab initio.1 A petition to revoke proceeding because over 300 individuals representing themselves have filed letters opposing 1 A petition to reject the notice has been filed. The the transaction. In response to a request by joint individuals who reside in Lee’s Summit or Raytown Board will address that petition in a subsequent petitioners, The Cities of Lee’s Summit, MO, and into ‘‘advise of all proceedings’’ status rather than decision. Raytown, MO, and to relieve all parties of ‘‘party of record’’ status. It will not be necessary to unnecessary burdens, the Board will place the 2 There currently is a large service list in the serve copies of pleadings on these individuals, but individuals who reside in Lee’s Summit or Raytown related proceeding in STB Finance Docket No. the Board will expect the joint petitioners to keep into ‘‘advise of all proceedings’’ status rather than 33508 because over 300 individuals representing them fully informed so that they can participate in ‘‘party of record’’ status. It will not be necessary to themselves have filed letters opposing the proceedings before the Board should they desire to serve copies of pleadings on these individuals, but transaction. In response to a request by joint do so. the Board will expect the joint petitioners to keep petitioners, The Cities of Lee’s Summit, MO, and 1 A petition to reject the notice has been filed. The them fully informed so that they can participate in Raytown, MO, and to relieve all parties of Board will address that petition in a subsequent proceedings before the Board should they desire to unnecessary burdens, the Board will place the decision. do so. 3946 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices and Investment Program Finance DEPARTMENT OF THE TREASURY Estimated Time Per Respondent: 1 Committee (the Finance Committee) to hour, 2 minutes. implement the CAI Program. Treasury Internal Revenue Service Estimated Total Annual Burden Order (TO) 100–13, ‘‘Delegation of Hours: 10,600. Proposed Collection; Comment Authority Related to the United States The following paragraph applies to all Request for Notice 98±8 Community Adjustment and Investment of the collections of information covered Program in Support of NAFTA and AGENCY: Internal Revenue Service (IRS), by this notice: Designation of Representative on the Treasury. An agency may not conduct or Community Adjustment and Investment ACTION: Notice and request for sponsor, and a person is not required to Program Finance Committee,’’ delegated comments. respond to, a collection of information to the Under Secretary for Domestic unless the collection of information SUMMARY: Finance, all of the Secretary’s The Department of the displays a valid OMB control number. Treasury, as part of its continuing effort Books or records relating to a collection authorities under the Executive Order to reduce paperwork and respondent of information must be retained as long and designated the Under Secretary for burden, invites the general public and as their contents may become material Domestic Finance as the Department of other Federal agencies to take this in the administration of any internal the Treasury’s representative on the opportunity to comment on proposed revenue law. Generally, tax returns and Finance Committee. and/or continuing information tax return information are confidential, 3. Delegation. a. The duties, powers, collections, as required by the as required by 26 U.S.C. 6103. rights, and obligations of the Secretary Paperwork Reduction Act of 1995, Request for Comments: Comments of the Treasury under the Executive Public Law 104–13 (44 U.S.C. submitted in response to this notice will Order, which are vested in the Under 3506(c)(2)(A)). Currently, the IRS is be summarized and/or included in the Secretary for Domestic Finance soliciting comments concerning Notice request for OMB approval. All pursuant to TO 100–13, are hereby 98–8, ligible Deferred Compensation comments will become a matter of redelegated to the Assistant Secretary Plans under Section 457. public record. Comments are invited on: (Financial Markets). DATES: Written comments should be (a) Whether the collection of information is necessary for the proper OPI: U S (Domestic Finance) received on or before March 30, 1998 to be assured of consideration. performance of the functions of the b. The Department of the Treasury’s ADDRESSES: Direct all written comments agency, including whether the representative on the Finance to Garrick R. Shear, Internal Revenue information shall have practical utility; Committee established by the Executive Service, room 5571, 1111 Constitution (b) the accuracy of the agency’s estimate Order, which is designated as the Under Avenue NW., Washington, DC 20224. of the burden of the collection of Secretary for Domestic Finance FOR FURTHER INFORMATION CONTACT: information; (c) ways to enhance the pursuant to TO 100–13, is hereby Requests for additional information or quality, utility, and clarity of the redesignated as the Assistant Secretary copies of the information collection information to be collected; (d) ways to (Financial Markets). should be directed to Carol Savage, minimize the burden of the collection of (202) 622–3945, Internal Revenue information on respondents, including 4. Redelegation. The Assistant through the use of automated collection Secretary (Financial Markets) may Service, room 5569, 1111 Constitution Avenue NW., Washington, DC 20224. techniques or other forms of information redelegate in writing to an appropriate technology; and (e) estimates of capital SUPPLEMENTARY INFORMATION: subordinate official the authorities or start-up costs and costs of operation, granted under this Directive, and may Title: Eligible Deferred Compensation maintenance, and purchase of services redesignate in writing an appropriate Plans under Section 457. to provide information. OMB Number: 1545–1580. subordinate official as the Department Approved: January 15, 1998. of the Treasury’s representative on the Notice Number: Notice 98–8. Abstract: The Small Business Job Garrick R. Shear, Finance Committee. Protection Act of 1996 and the Taxpayer IRS Reports Clearance Officer. 5. Authority. TO 100–13, ‘‘Delegation Relief Act of 1997 made changes to rules [FR Doc. 98–1814 Filed 1–26–98; 8:45 am] of Authority Related to the United under Internal Revenue Code section BILLING CODE 4830±01±U States Community Adjustment and 457 regarding eligible deferred Investment Program in Support of compensation plans offered by state and NAFTA and Designation of local governments. Notice 98–8 requires DEPARTMENT OF THE TREASURY Representative on the Community state and local governments to establish Adjustment and Investment Program a written trust, custodial account, or Internal Revenue Service Finance Committee,’’ dated August 17, annuity contract to hold the assets and [PS±27±91] 1995. income in trust for the exclusive benefit of its participants and beneficiaries. 6. Expiration Date. This Directive Proposed Collection; Comment Also, new non-bank custodians must shall expire three years from the date of Request For Regulation Project submit applications to the IRS to be issuance unless superseded or cancelled approved to serve as custodians of AGENCY: Internal Revenue Service (IRS), prior to that date. section 457 plan assets. Treasury. 7. Office of Primary Interest. Office of Current Actions: There are no changes ACTION: Notice and request for the Under Secretary for Domestic being made to the notice at this time. comments. Finance. Type of Review: Extension of a SUMMARY: John D. Hawke, Jr., currently approved collection. The Department of the Affected Public: State, local or tribal Treasury, as part of its continuing effort Under Secretary for Domestic Finance. governments. to reduce paperwork and respondent [FR Doc. 98–1846 Filed 1–26–98; 8:45 am] Estimated Number of Respondents: burden, invites the general public and BILLING CODE 4810±25±P 10,260. other Federal agencies to take this Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 3947 opportunity to comment on proposed Books or records relating to a collection DEPARTMENT OF THE TREASURY and/or continuing information of information must be retained as long collections, as required by the as their contents may become material Office of Thrift Supervision Paperwork Reduction Act of 1995, in the administration of any internal Public Law 104–13 (44 U.S.C. revenue law. Generally, tax returns and [AC±5: OTS No. 5194] 3506(c)(2)(A)). Currently, the IRS is tax return information are confidential, soliciting comments concerning an as required by 26 U.S.C. 6103. Heritage Federal Savings and Loan existing final regulation, PS–27–91 (TD Request for Comments: Comments Association, Laurens, South Carolina; 8442), Procedural Rules for Excise Taxes submitted in response to this notice will Approval of Conversion Application Currently Reportable on Form 720 be summarized and/or included in the (§§ 40.6302(c)–3(b)(2)(ii), 40.6302(c)– request for OMB approval. All Notice is hereby given that on January 3(b)(2)(iii), and 40.6302(c)–3(e). comments will become a matter of 16, 1998, the Director, Corporate DATES: Written comments should be public record. Comments are invited on: Activities, Office of Thrift Supervision, received on or before March 30, 1998 to (a) Whether the collection of or her designee, acting pursuant to be assured of consideration. information is necessary for the proper delegated authority, approved the performance of the functions of the ADDRESSES: Direct all written comments application of Heritage Federal Savings agency, including whether the to Garrick R. Shear, Internal Revenue and Loan Association, Laurens, South information shall have practical utility; Service, room 5571, 1111 Constitution Carolina, to convert to the stock form of (b) the accuracy of the agency’s estimate Avenue NW., Washington, DC 20224. organization. Copies of the application of the burden of the collection of are available for inspection at the FOR FURTHER INFORMATION CONTACT: information; (c) ways to enhance the Requests for additional information or Dissemination Branch, Office of Thrift quality, utility, and clarity of the Supervision, 1700 G Street, NW, copies of the information collection information to be collected; (d) ways to should be directed to Carol Savage, Washington, DC 20552, and the minimize the burden of the collection of Southeast Regional Office, Office of (202) 622–3945, Internal Revenue information on respondents, including Service, room 5569, 1111 Constitution Thrift Supervision, 1475 Peachtree through the use of automated collection Street, N.E., Atlanta, GA 30309. Avenue NW., Washington, DC 20224. techniques or other forms of information SUPPLEMENTARY INFORMATION: technology; and (e) estimates of capital Dated: January 22, 1998. Title: Procedural Rules for Excise or start-up costs and costs of operation, By the Office of Thrift Supervision. Taxes Currently Reportable on Form maintenance, and purchase of services Nadine Y. Washington, 720. to provide information. Corporate Secretary. OMB Number: 1545–1296. Approved: January 15, 1998. [FR Doc. 98–1896 Filed 1–26–98; 8:45 am] Regulation Project Number: PS–27– Garrick R. Shear, BILLING CODE 6720±01±M 91. IRS Reports Clearance Officer. Abstract: Internal Revenue Code [FR Doc. 98–1815 Filed 1–26–98; 8:45 am] section 6302(c) authorizes the use of DEPARTMENT OF THE TREASURY Government depositaries for the receipt BILLING CODE 4830±01±U of taxes imposed under the internal Office of Thrift Supervision revenue laws. These regulations provide DEPARTMENT OF THE TREASURY reporting and recordkeeping [AC±4: OTS Nos. 02497 and H±2024] requirements related to returns, Office of Thrift Supervision payments, and deposits of tax for excise [AC±3: OTS Nos. 03257 and H±2193] SouthBanc Shares, M.H.C., Anderson, taxes currently reportable on Form 720. South Carolina; Approval of Current Actions: There is no change to Harbor Financial, M.H.C., Fort Pierce, Conversion Application this existing regulation. Florida; Approval of Conversion Type of Review: Extension of a Application Notice is hereby given that on January currently approved collection. 16, 1998, the Director, Corporate Affected Public: Business or other for- Notice is hereby given that on January Activities, Office of Thrift Supervision, profit organizations. 16, 1998, the Director, Corporate or her designee, acting pursuant to Estimated Number of Recordkeepers: Activities, Office of Thrift Supervision, delegated authority, approved the 4,000. or her designee, acting pursuant to application of SouthBanc Shares, Estimated Time Per Recordkeeper: 60 delegated authority, approved the M.H.C., Anderson, South Carolina, to hours. application of Harbor Financial, M.H.C., convert to the stock form of Estimated Total Annual Fort Pierce, Florida, to convert to the organization. Copies of the application Recordkeeping Hours: 240,000. stock form of organization. Copies of the are available for inspection at the Estimated Number of Respondents: application are available for inspection Dissemination Branch, Office of Thrift 5,000. at the Dissemination Branch, Office of Supervision, 1700 G Street, NW, Estimated Time Per Respondents: 22 Thrift Supervision, 1700 G Street, N.W., Washington, DC 20552, and the minutes. Washington, DC 20552, and the Southeast Regional Office, Office of Estimated Total Annual Reporting Southeast Regional Office, Office of Thrift Supervision, 1475 Peachtree Hours: 1,850. Thrift Supervision, 1475 Peachtree Street, NE, Atlanta, GA 30309. The following paragraph applies to all Street, N.E., Atlanta, GA 30309. of the collections of information covered Dated: January 22, 1998. Dated: January 22, 1998. by this notice: By the Office of Thrift Supervision. An agency may not conduct or By the Office of Thrift Supervision. sponsor, and a person is not required to Nadine Y. Washington, Nadine Y. Washington, respond to, a collection of information Corporate Secretary. Corporate Secretary. unless the collection of information [FR Doc. 98–1894 Filed 1–26–98; 8:45 am] [FR Doc. 98–1895 Filed 1–26–98; 8:45 am] displays a valid OMB control number. BILLING CODE 6720±01±M BILLING CODE 6720±01±M federal register January 27,1998 Tuesday Below 19Kilowatts;ProposedRule Nonroad Spark-IgnitionEnginesator Phase 2EmissionStandardsforNew 40 CFRPart90 Protection Agency Environmental Part II 3949 3950 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

ENVIRONMENTAL PROTECTION II. Legal Authority and Background 4. Liquefied Petroleum Gas Fueled Indoor AGENCY III. Overview of Proposed Provisions Power Equipment A. More Stringent Standards and a Shift to 5. Dealer Responsibility Cleaner Technology 40 CFR Part 90 6. Engines Used in Recreational Vehicles 1. Nonhandheld Engine HC+NOX Emission 7. Engines Used in Rescue and Emergency [FRL±5942±9] Standards Equipment 2. Handheld Engine HC+NOX Emission 8. Replacement Engines RIN 2060±AE29 Standards V. Environmental Benefit Assessment 3. Useful Life Categories A. Roles of HC and NOX in Ozone Phase 2 Emission Standards for New B. Assuring Emission Reductions are Formation Nonroad Spark-Ignition Engines At or Achieved In-use B. Health and Welfare Effects of Below 19 Kilowatts 1. Traditional Compliance Programs for Tropospheric Ozone Mobile Sources C. Estimated Emissions Impact of Proposed AGENCY: Environmental Protection 2. Compliance Programs for the Small SI Regulations Agency (EPA). Engine Industry D. Health and Welfare Effects of CO ACTION: Notice of proposed rulemaking 3. The Proposed Phase 2 Compliance Emissions (NPRM). Program E. Health and Welfare Effects of Hazardous 4. Alternative Compliance Program Air Pollutant Emissions SUMMARY: Today’s action proposes a Options F. Particulate Matter IV. Description of Proposed Program VI. Economic Impacts second phase of regulations to control A. Standards and Related Provisions emissions from new nonroad spark- A. Engine Technologies 1. HC+NOX Emission Standards B. Engine Costs ignition engines at or below 19 kilowatts 2. NMHC+NOX Emission Standards for 1. Nonhandheld Engine Costs (25 horsepower). These engines are used Class I and II Natural Gas Fueled 2. Handheld Engine Costs Nonhandheld Engines principally in lawn and garden C. Equipment Costs equipment, both in nonhandheld 3. CO Emission Standards 4. Useful Life Categories 1. Nonhandheld Equipment Manufacturers applications such as lawnmowers, and 2. Handheld Equipment Manufacturers also in handheld applications such as 5. Certification Averaging, Banking and Trading Program D. Operating Costs trimmers and chainsaws. The proposed 6. Certification Fuel Nonhandheld Engines standards are expected to result in a 30 B. Test Procedures Handheld Engines percent reduction of emissions of 1. Test Cycle: Requirement for the Use of E. Cost per Engine and Cost-effectiveness hydrocarbons plus oxides of nitrogen a Speed Governor Operation for Testing 1. Cost per Engine from the current Phase 1 standards. If of Nonhandheld Engines 2. Cost-effectiveness 2. Test Cycle: Adjustments for Weightings VII. Public Participation adopted, the standards would result in A. Comments and the Public Docket important reductions in emissions for 2-mode Cycle for Handheld Engines 3. Measurement of NMHC Emissions From B. Public Hearing which contribute to excessively high Natural Gas Fueled Nonhandheld C. Obtaining Electronic Copies of ozone levels in many areas of the United Engines Documents States. C. Field/Bench Adjustment Program VIII. Administrative Requirements DATES: Written comments on this NPRM 1. Background and Principles A. Administrative Designation and must be submitted on or before March 2. General Methodology Regulatory Analysis 13, 1998. EPA will hold a public hearing 3. Practical Requirements of the Program B. Paperwork Reduction Act C. Unfunded Mandates Reform Act on February 11, 1998 starting at 10:00; 4. Alternative Methodology Considered D. Compliance Program D. Regulatory Flexibility requests to present oral testimony must 1. Certification be received on or before February 6, 2. Production Line Testing I. Regulated Entities 1998. 3. In-use Emission Testing Entities potentially regulated by this ADDRESSES: Written comments should 4. Criteria for Evaluating Alternatives to action are those that manufacture or be submitted (in duplicate if possible) Mandatory Recall introduce into commerce new small to: EPA Air and Radiation Docket, E. Flexibilities spark-ignition nonroad engines or Attention Docket No. A–96–55, Room 1. Overview of Approach to Providing Compliance Flexibilities equipment. Regulated categories and M–1500 (mail code 6102), 401 M Street, 2. Proposed Production Volume Cutoffs entities include: SW, Washington, D.C. 20460. Materials 3. General Flexibilities relevant to this rulemaking are 4. Phase-In Flexibilities Category Examples of regu- contained in this docket and may be 5. Flexibilities for Small Volume Engine lated entities viewed from 8:00 a.m. until 5:30 p.m. Manufacturers and Small Volume Engine Industry ...... Manufacturers or im- weekdays. The docket may also be Families 6. Flexibilities for Small Volume porters of new reached by telephone at (202) 260–7548. nonroad small (at As provided in 40 CFR part 2, a Equipment Manufacturers and Small Volume Equipment Models or below 19 kW) reasonable fee may be charged by EPA 7. Engine Availability spark-ignition en- for photocopying. The public hearing F. Nonregulatory Programs gines and equip- will be held in Ann Arbor, MI at a 1. Voluntary ‘‘Green’’ Labeling Program ment. location to be determined; call (313) 2. Voluntary Fuel Spillage and Evaporative 668–4278 for further information. Emission Reduction Program This table is not intended to be FOR FURTHER INFORMATION CONTACT: 3. Particulate matter and Hazardous Air exhaustive, but rather provides a guide Robert Larson, Office of Mobile Sources, Pollutant Testing Program for Handheld for readers regarding entities likely to be Engines regulated by this action. This table lists Engine Programs and Compliance G. General Provisions Division, (313) 668–4278, the types of entities that EPA is now 1. Model Year Definition and Annual aware could potentially be regulated by [email protected]. Production Period Flexibilities During this action. Other types of entities not SUPPLEMENTARY INFORMATION: the Transition to Phase 2 2. Definition of Handheld Engines listed in the table could also be Table of Contents 3. Small Displacement Nonhandheld regulated. To determine whether your I. Regulated Entities Engine Class company is regulated by this action, you Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3951 should carefully examine the The engines covered by the existing process produced substantial useful applicability criteria in § 90.1 of title 40 Phase 1 rule include nonhandheld information and provided EPA with of the Code of Federal Regulations. If engines (Class I and II) used in input from numerous key stakeholders you have questions regarding the applications such as lawnmowers, which has helped EPA develop the applicability of this action to a generator sets and riding mowers, and Phase 2 small SI engine regulatory particular entity, consult the person handheld engines, (Class III, IV and V), program being proposed today.5 In listed in the preceding FOR FURTHER used in applications such as trimmers, addition, during the meetings there was INFORMATION CONTACT section. edgers, brush cutters, leaf blowers, leaf much useful discussion which has vacuums, chain saws, augers and tillers. II. Legal Authority and Background helped EPA understand the perspectives The proposed Phase 2 rules contained of the interests represented at the table.6 Authority for the actions set forth in in today’s notice would apply to the Following the final meeting of the this rule is granted to EPA by sections same types of engines and applications regulatory negotiation committee in 202, 203, 204, 205, 206, 207, 208, 209, covered by Phase 1. February 1996, EPA proceeded to 213, 215, 216, and 301(a) of the Clean On September 30, 1993, the charter develop the Phase 2 rule. EPA and other Air Act as amended (42 U.S.C. 7521, for the Small Nonroad Engine interested parties continued working to 7522, 7523, 7524, 7525, 7541, 7542, Negotiated Rulemaking Advisory find areas of agreement on how certain 7543, 7547, 7549, 7550, and 7601(a)). Committee was filed with Congress. The aspects of a Phase 2 program would be In the summer of 1992, EPA initiated purpose of the committee was to help addressed in the proposed rule. As these a convening process to determine the EPA develop Phase 2 small SI engine discussions proceeded, the involved feasibility of a negotiated rulemaking for regulations. The committee consisted of parties worked together to develop the development of the regulatory eleven members representing the range written documents, Statements of program for small nonroad spark-ignited of stakeholders.4 The committee Principles (SOPs), which have partly (SI) engines at or below 19 kilowatts adopted protocols and formed four task formed the basis of today’s Phase 2 (hereafter referred to as ‘‘small SI groups to examine key issues and bring NPRM (see 62 FR 14740, March 27, engines’’). An August 1992 report recommendations to the full committee. 1997). A Statement of Principles (SOP) recommended an ‘‘Exploratory The task groups included: Test is a joint written statement by the U.S. Meeting’’ which was held November Procedure; Technology; Certification; EPA and supporting parties outlining a 1992. Following meetings in January and Public Education and Market comprehensive plan for developing a and June 1993, the group decided to Incentives. proposed rulemaking. In this case, the pursue a regulatory negotiation process The committee and the task groups two SOPs lay out the framework for a for the development of Phase 2 met numerous times between September proposal for Phase 2 regulations regulations for these engines, while EPA 1993 and February 1996, with the final covering small handheld and developed a first phase of controls for committee meeting on February 16, nonhandheld spark-ignited nonroad small SI engines through the traditional 1996, in Ann Arbor, Michigan. During engines, respectively. rulemaking process. the course of its work, the committee The ‘‘Handheld SOP’’, addressing On July 3, 1995, EPA published the addressed many issues, including: issues affecting engines used in Phase 1 final rule, Emission Standards applicability of the rule; engine/ handheld equipment, was signed in for New Nonroad Spark-ignition (SI) equipment classification; test May 1996 by EPA, the Auger and Power Engines At or Below 19 Kilowatts, procedures for engines; standards and Equipment Manufacturers Association hereafter referred to as the Phase 1 small standard structure; effective dates and 1 (APEMA), the North American SI engine regulations. The Phase 1 lead time of the program; certification, Equipment Dealers Association small SI engine regulations established enforcement and compliance strategies; an effective date of model year 1997. in-use program; market-based incentive (NAEDA), the Portable Power Although the Phase 1 regulations were programs; public education programs; Equipment Manufacturers Association the first to establish nationwide new technologies; and dealer responsibility. (PPEMA), the State and Territorial Air engine emission standards for this The committee developed data and Pollution Program Administrators/ industry, the federal regulations were draft language to address most of these Association of Local Air Pollution developed to harmonize with the Tier I 2 issues, both through the work of the task Control Officials (STAPPA/ALAPCO), standards established by California’s Air groups and the work of the committee and the Wisconsin Department of Resources Board.3 as a whole. However, the committee did Natural Resources. The ‘‘Nonhandheld not reach consensus on an agreement in SOP’’, addressing issues affecting 1 60 FR 34582, July 3, 1995, codified at 40 CFR principle or draft regulatory language engines used in nonhandheld part 90. The docket for the Phase 1 small SI engine equipment, was signed in December # during the course of the negotiations. rulemaking, EPA Air Docket A–93–25, is While the committee did not achieve 1996 by EPA, Briggs & Stratton incorporated by reference. Corporation, Kawasaki Motors 2 The California utility and lawn and garden consensus, the regulatory negotiation equipment engine (utility engine) emission Corporation, U.S.A., Kohler Company, regulations are contained in Title 13, California 4 The organizations participating in the regulatory Kubota, Mitsubishi Engine North Code of Regulations (CCR), Sections 2400–2407. negotiations as members of the Committee were: the America, Inc., Onan Corporation, 3 Since the July 3, 1995 promulgation of the Phase American Lung Association (ALA); the Auger and Suzuki Motor Corporation, Tecumseh 1 program, four changes have been made to Phase Power Equipment Manufacturers Association 1. First, provisions for allowing a streamlined (APEMA); the Engine Manufacturers Association Products Company, The Toro Company, certification process were promulgated May 8, (EMA); the Manufacturers of Emission Controls 1996, 61 FR 20738. Second, revisions to the Association (MECA); the Natural Resources Defense 5 EPA initially established EPA Air Docket A–93– national security exemption provisions were Counsel (NRDC); the North American Equipment 29 for the Phase 2 rulemaking; this docket contains promulgated October 4, 1996, 61 FR 52088. Third, Dealers Association (NAEDA); the Outdoor Power background materials on this Phase 2 rulemaking, revisions to the carbon monoxide (CO) emission Equipment Institute (OPEI); the Portable Power as well as materials related to the Small Nonroad standards for Class I and II engines, and provisions Equipment Manufacturers Association (PPEMA); Engine Negotiated Rulemaking process. EPA Air related to crankcase emissions, were promulgated, the State and Territorial Air Pollution Program Docket A–93–29 is hereby incorporated by November 13, 1996, 61 FR 58296. Finally, Administrators/Association of Local Air Pollution reference. provisions relating to replacement engines and 2- Control Officials (STAPPA/ALAPCO); the 6 The final report by the facilitators to the stroke engines in nonhandheld applications were Wisconsin Department of Natural Resources; and regulatory negotiation process can be found in EPA published August 7, 1997, 62 FR 42637. U.S. EPA. Air Docket A–93–29, Item #II–A–10. 3952 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules and Wis-Con Total Power Corporation. these emission standards through their year small SI engines beyond Phase 1 While the two SOPs set out a framework useful lives.7 Second, the proposal adds levels, as proposed in today’s notice for for EPA’s development of the proposed an in-use component to the Phase 1 Phase 2 controls, is achievable through Phase 2 program, the Agency wishes to compliance program to assure that the technology that will be available for the stress that they do not represent final emission benefits are achieved in actual engines to which the standards would decisions regarding Phase 2 or bind EPA use. apply, considering cost, lead time noise, as to how provisions in the final rule As is clear from the analysis energy and safety factors. For must be promulgated. supporting this proposed rule (see nonhandheld engines, proposed Phase 2 EPA published an Advanced Notice of Sections V, VI and VII, and draft emission levels are expected to be Proposed Rulemaking (ANPRM) in Regulatory Support Document), further achieved through a combination of March 1997 (see 62 FR 14740, March 27, emission reductions from future model modifications to current engine 1997) which announced the signing of year small SI engines beyond those technologies, and conversions to the two SOPs and requested comments achieved through the Phase 1 program cleaner, more durable technology such on all aspects of the SOPs for purposes can be achieved in a cost-effective as overhead valve engine technology. of developing today’s proposal. EPA manner. Uncontrolled, small SI engines For handheld engines, proposed Phase 2 also specifically requested information contribute approximately 3.4 percent of emission levels are expected to be on small business issues in the ANPRM. the national HC emission inventory, 9.3 achieved through improvements to Significant comments received on the percent of the mobile source HC current 2-stroke engine technologies ANPRM are discussed in the context of emission inventory, and 34.4 percent of (see discussion in Section IV.A of this the description of the program the nonroad mobile source HC emission preamble). contained in today’s proposal. inventory. The Phase 1 small SI regulations are If the Phase 2 program is adopted as III. Overview of Proposed Provisions expected to reduce the HC emissions proposed, many elements of the existing EPA is proposing today a second from these engines by 32 percent. Phase 1 program would remain phase of regulations for small SI engines However, even with Phase 1 controls in essentially the same in the Phase 2 19 kW and below (hereafter referred to place, small SI engines continue to program. First, the types of engines as small SI engines). Two principal contribute significantly to the emission covered by the proposed Phase 2 rule goals of the proposed Phase 2 rule are inventory that leads to ozone would remain essentially the same as to encourage a shift to cleaner engine concentrations in nonattainment areas. those covered in the Phase 1 program technology, and to assure that the air After Phase 1, small SI engines (see discussion, Section IV.G). In quality benefits anticipated by the rule contribute approximately 3.1 percent addition, EPA would retain the five are achieved in actual use. To achieve HC nationally, 8.4 percent of mobile engine class categorization from Phase 1 these goals, the proposed Phase 2 source HC, and 31.6 percent of the for regulatory purposes as in Table 1 program builds on the current Phase 1 nonroad mobile source HC inventory (see discussion, Section IV.G.3). Third, program in two key ways. First, today’s (note that these values do not reflect the Phase 1 criteria for determining proposal includes more stringent changes in inventories from other whether an engine family would be standards for hydrocarbons (HC) plus sectors). allowed to certify to less stringent oxides of nitrogen (NOX) emissions, In addition, further control of handheld standards would be retained with a requirement that engines meet HC+NOX emissions from future model (see Section IV.G.2).

TABLE 1.ÐSMALL SI ENGINE CLASSES

Nonhandheld Handheld Class I Class II Class III Class IV Class V

<225 cc ...... ≥225 cc ...... <20 cc ...... 20 cc≤ and <50 cc ...... ≥50 cc

In addition, other elements of the 40 CFR Part 90, Subparts D and E), maintenance instructions (see 40 CFR existing Phase 1 program that would except for minor changes addressed in Part 90, Subparts G, I, J, K, and L), remain essentially unchanged in this Section IV.B; (4) provisions for selective except for provisions for ordered recall proposed Phase 2 program include: (1) enforcement audits (SEAs), (see 40 CFR (see proposed § 90.808) and compliance Applicability of the rule and definitions Part 90, Subpart F), except that for the flexibilities for small volume equipment (see 40 CFR Part 90, Subpart A), except Phase 2 program SEA would exist manufacturers (see proposed § 90.1003). as discussed in Section IV.G; (2) primarily as a backstop to manufacturer- EPA solicits comment on the certification requirements (see 40 CFR run production line testing program (see appropriateness of retaining these Part 90, Subpart B), except for the Section IV.D.2; and (5) provisions elements of the Phase 1 program in proposed requirements to determine pertaining to importation of Phase 2. deterioration factors and to certify that nonconforming engines, emission- Elements new to the regulatory engines meet the standards through related defect reporting requirements, requirements for small SI engines their useful lives (see Section IV.D.1), voluntary emission recall program, included in today’s proposed Phase 2 and proposed flexibilities for small exclusion and exemption of nonroad program include: (1) proposed emission volume engine manufacturers (see engines from regulations, prohibited standard levels and useful life categories Section IV.E); (3) provisions regarding acts and general enforcement (see proposed amendments to Subpart test equipment and test procedures (see provisions, and emission warranty and B, and Section IV.A); (2) a certification

7 EPA is proposing a set of values for the useful categories, which are discussed in more detail in life of the engines for regulatory purposes. The term Section IV.A.4 of this preamble. ‘‘useful life’’ refers to these regulatory useful life Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3953

averaging, banking and trading program number of ways. The remainder of this 1. Nonhandheld Engine HC+NOX for nonhandheld engines (see proposed section provides an overview of the Emission Standards Subpart C, and Section IV.A.5); (3) Phase 2 program goals of encouraging a procedures for the determination of shift to cleaner technology and assuring The emission standards proposed deterioration factors at the time of that emission reductions are achieved today for nonhandheld engines, certification (see proposed amendments in-use, and a description of the basic indicated in Table 2, represent an to Subpart B, and Section IV.D.1; (4) a proposed programs for nonhandheld approximate 25 percent reduction in manufacturer-run production line and handheld engines for achieving HC+NOX levels from Phase 1 levels. testing program, called CumSum (see these goals. These standards are expected to be proposed Subpart H, and Section A. More Stringent Standards and a Shift achieved in a cost-effective manner by IV.D.2); and (5) in-use testing programs to Cleaner Technology modifications to current engine for nonhandheld and handheld engines, technologies and, especially in the case with an in-use credit program for EPA is proposing today HC+NOX of Class II engines, by conversion of emission standards for nonhandheld handheld engines (see proposed current side valve (SV) technology and handheld engines that are expected Subparts M and N, and Section IV.D.3). engines to cleaner, more durable In addition, this proposal contains a to achieve important reductions of technology, such as overhead valve number of flexibilities to ease the emissions that contribute to ozone (OHV) technology engines. For Class I, transition to this more stringent Phase 2 nonattainment. The standards for program, some which would apply to all Classes II–V would be fully phased-in where engine sales are currently manufacturers, and others which would by the 2005 model year, with Class I dominated by side-valve (SV) be targeted to ease the transition levels effective in the 2001 model year. technology engines, the proposed levels specifically for small production Engines would be required to meet these are expected to result in cleaner and volume manufacturers (see discussion, levels throughout their useful lives. For more emissions durable SV technology Section IV.E). Finally, today’s notice nonhandheld engines, a certification engines, but are not in themselves also describes EPA’s intent to pursue a averaging, banking and trading program expected to result in conversion of SV voluntary ‘‘green labeling’’ program and is proposed as an integral part of engines to OHV or comparably clean a voluntary fuel spillage reduction feasibility of the proposed HC+NOX and durable engine technology. These program for nonhandheld and handheld emission standards (see Section IV.A.5). modifications to SV engines can be engines, and a particulate matter (PM) A more complete discussion of the accommodated by 2001, the proposed and hazardous air pollutant testing justification of the level of the standards effective date for the Phase 2 standard program for handheld engines (see and the technologies expected to meet for Class I engines. For Class II engines, Section IV.F). these levels can be found in Section the proposed levels are expected to The programs proposed today for IV.A. This section contains a brief result in complete conversion to clean nonhandheld and handheld engines are overview of the proposed nonhandheld OHV or comparable technology. To engine emission standards, the similar in many respects. They also allow this more significant design have some important differences. The proposed handheld emission standards, change, the proposed Phase II standards intertwining issues of more stringent and the proposal for useful life are gradually decreased from 2001 standards and assurance of emission categories for nonhandheld and reductions in use can be addressed in a handheld engines. through 2005.

TABLE 2.ÐHC+NOX EMISSION STANDARDS FOR NONHANDHELD ENGINES IN GRAMS/KILOWATT-HOUR [g/kW-hr] 1

Model year Model year Model year Model year Model year Engine class 2001 2002 2003 2004 2005

Class I ...... 25.0 25.0 25.0 25.0 25.0 Class II ...... 18.0 16.6 15.0 13.6 2 12.1

1 Optional non-methane hydrocarbon (NMHC) plus NOX emission standards for natural gas fueled engines only, and carbon monoxide (CO) emission standards, are also proposed in today's notice, and are discussed in Section IV.A. 2 The 12.1 g/kW-hr Class II standard assumes a phase-in from 50 percent in model year 2001 to 100 percent in model year 2005 of OHV or comparably clean and durable technology.

A key aspect of the proposed Phase 2 allow for lower new engine emissions as propagation, better fuel combustion, and program for nonhandheld engines is the well as lower emission deterioration better cooling characteristics. In belief that low emission standards for characteristics. In general, the addition, OHV technology engines are nonhandheld engines can be met combustion chamber and cylinder head designed with lower surface to volume through engine technology that can be design of OHV technology engines give ratios, which enhance fuel combustion. low emitting both when the engine is these engines the potential to produce OHV technology engines also have the new, and also when the engine has lower emissions both when new and potential to exhibit improved in-use experienced hour accumulation to the also in-use. These engines have engine durability characteristics due to engine’s useful life. Therefore, these potential to exhibit lower emissions the location of the valves in the cylinder Phase 2 standards are based on useful when new due to location of the head rather than in the block, which life emission performance. combustion chamber directly over the affords more uniform exposure of the a. OHV and SV Engine Technologies. piston, rather than partly to the side of valves to heat sources and thus lower EPA believes that features inherent to the piston as in SV technology engines. distortion of valves and valve seats. the design of OHV technology engines This location allows a shorter However, the Agency recognizes that are superior to those of SV engines and combustion time, shorter flame the design of the engine is all-important, 3954 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules and that it is possible to improve the equipment and the number of hours designed as experiments to explore the features of both SV and OHV technology the existing, non-Phase II SV engines consumer acceptance and feasibility of engines to enhance new and in-use would be used. If this happens, sales of developing low cost OHV technology emission characteristics (e.g., cylinder cleaner, Phase II engines could be which can be applied to mass heads, advanced carburetion, fuel depressed and the extended use of SV production Class I engines. The two injection). The Agency requests engines toward the end of their useful programs include a series of reports to comment on the fundamental life would add disproportionately to EPA on the level of success, supposition of this rule that OHV emission from small engines as the impediments encountered, market technology engines have the potential to emission performance of these engines response, costs, emission rates, and so be superior to SV technology engines for tends to continue deteriorating with use. forth. The two Class I OHV new and in-use emissions Moreover, promulgation of a more demonstration programs will begin prior characteristics. Further discussion of SV stringent Class I standard, combined to the proposed effective dates for the and OHV technology engines is with the proposed Class II standard, Phase 2 rule. While the MOUs are contained in Section IV.A and Chapter would raise questions about the need for outside the scope of the regulatory 3 of the Draft Regulatory Support providing significantly longer lead time process, if successful, this voluntary Document (RSD). before the standards became effective. program may generate considerable b. Class I Use of OHV Technology. Additionally lead time might be emission benefits in addition to those The nonhandheld small SI engine necessary to allow manufacturers to anticipated to result from the proposed market has traditionally been dominated invest the greater level of engineering standards. by SV technology engines, with SV and production resources necessary to In addition, the proposed voluntary technology engines accounting for as convert both Class I and Class II engines ‘‘green labeling’’ program is designed to much as 90 percent of engine sales in to OHV technology for their entire encourage manufacturers to produce Class I and 65 percent of engine sales in product line as could be necessary for engines that are substantially below the Class II. The majority of Class I SV a nationwide program. This additional standards proposed today. In Class I in engines are used in low cost, consumer lead time could delay the environmental particular, manufacturers may decide products such as walk-behind mowers. benefits of the program. for market reasons to convert current SV Recently, the market has been moving Due to uncertainties as to consumer engines to OHV or comparably clean towards OHV for Class II, in recognition acceptance of OHV engines in typical and durable technology engines, in of OHV advantages in engine Class I equipment applications if order to qualify for the ‘‘green label’’ performance, engine durability, fuel required nationwide and how a more (see discussion of the program in economy, and emissions characteristics. stringent Class I standard might effect Section IV.F.1). These advantages would be expected to lead time for the program as a whole EPA requests comment on the general be more important in commercial and the resulting uncertainty of issue of the impact of moving to OHV equipment which tend to make up emissions benefit, the Agency is not at technology for Class I engines, including significant market for Class II engines. this time proposing Class I standards the potential impact on sales of new For Class I engines, there has not been which would mandate the conversion of equipment, the extended use of existing this same trend to OHV technology. Class I engines to OHV technology. SV engines, the impact of a more One barrier to increased penetration However, EPA is requesting comments stringent Class I standard on the ability of OHV technology engines into the on the likely impacts of such a standard. of manufacturers to meet the proposed Class I market, which is dominated by Even if it is not appropriate to adopt Class II standard under the proposed residential, low cost equipment, may more stringent Class I standards now, in schedule, any options in addition to the have been the cost associated with the the future, as uncertainties regarding voluntary ‘‘green labeling’’ program conversion of product lines from SV consumer acceptance of OHV Class I which would encourage the sale of technology to OHV technology. These engines and other issues are resolved, clean OHV technology engines and the conversion costs to the engine EPA will be able to re-evaluate the implications for emissions impact manufacturer are expected to be in the stringency of the proposed standard and which would likely result from these range of $5 to $14 per engine, pursue any necessary and appropriate actions. depending on volume; cost to the revisions. Additionally, the experience c. Class II Use of OHV Technology. consumer would likely be even higher in California will likely provide useful The 12.1 g/kW-hr HC + NOX emission (see Section VI for further discussion of information. standard proposed to take effect in the these costs). For residential, low cost While today’s proposed emission 2005 model year for Class II engines is equipment, the OHV engine’s standard for Class I engines are not expected to result in complete advantages in performance and expected to require additional conversion to clean OHV or comparably durability may not outweigh the conversion from SV to OHV technology, clean and durable engine technology. As associated higher purchase price when EPA does desire to encourage the is discussed below in Section IV.A, this compared to equipment using less production and sale of OHV engines is an aggressive standard for Class II expensive SV equipment, at least in the into the Class I market on a mass engines. The transition to OHV near term and in light of the lead time volume basis. In order to encourage this, technology should be eased by the EPA is proposing for the proposed Class EPA has entered into Memoranda of phase-in of the standard and the I standard. If consumers of residential Understanding (MOUs) with two certification averaging, banking, and equipment are particularly price individual engine manufacturers.8±10 trading provisions proposed today for sensitive, they may choose not to These two companies currently nonhandheld engines. purchase new equipment if priced represent over 80 percent of all Class I higher due to the use of an OHV engine. 2. Handheld Engine HC+NOX Emission engine sales. The two MOUs detail the Standards Rather, to the extent four stroke SV specifics of Class I OHV engine engines tend to continue providing demonstration programs which are The standards proposed today for operable service, consumers may choose handheld engines represent an to spend money on equipment 8±10 Copies of these MOUs are in EPA Air Docket approximate 35 percent reduction from maintenance, extending both the life of A–96–55, Items II–B–03 and II–B–04. Phase 1 levels, to be phased-in on a Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3955 percentage of production basis between are expected to be achieved in a cost- stroke technology engines (as discussed the 2002 and 2005 model year, as effective manner by use of improved 2- in more detail in Section IV.A). indicated in Table 3. These standards

TABLE 3.ÐHC+NOX EMISSION STANDARDS FOR HANDHELD ENGINES [In g/kW-hr]

HC+NOX emission Model year Model year Model year Model year Engine class standard 2002 2003 2004 2005 (g/kW-hr) (percent) (percent) (percent) (percent)

Class III ...... 210 Class IV ...... 172 20 40 70 100 1 Class V ...... 116 1 The standards would be phased-in on the basis of percentage of total eligible sales. In this proposed rule, ``eligible sales'' or ``U.S. sales'' is defined as Phase 2 engines sold for purposes of being used in the United States, and includes any engine exported and subsequently imported in a new piece of equipment, but excludes any engine introduced into commerce, by itself or in a piece of equipment, for use in a state that has established its own emission requirements applicable to such engines pursuant to a waiver granted by EPA under section 209(e) of the Clean Air Act.

Two-stroke technology engines have such technology, and EPA believes that TABLE 5.ÐUSEFUL LIFE CATEGORIES traditionally been the dominant engine the proposed ‘‘green labeling’’ program, FOR HANDHELD ENGINES design used for handheld equipment (discussed in Section IV.F.1) should [Hours] applications. These engines have been provide important incentives to well suited to meet the weight, manufacturers to introduce cleaner Residential Commercial multipositional use, and power technologies on a national basis. In requirements of these applications. addition, the Agency intends to conduct Class III, IV and However, 2-stroke technology engines a technology review and a possible V ...... 50 300 also have very high engine emissions, Phase 3 rulemaking to address the compared with 4-stroke technologies, possibility that technological advances EPA is proposing that at the time of due in large part to fuel scavenging and/or cost reductions may occur after certification, engine manufacturers losses. promulgation of the Phase 2 rule that would have the responsibility to select With the advent of emission control could make greater, but still cost- the useful life period which most requirements federally and in California, research into other effective reductions feasible in typically represents the in-use operating technologies to further control handheld engine emission levels. periods for the majority of engines in the engine family, based on information emissions from engines used in 3. Useful Life Categories handheld applications has occurred. about that engine family including Promising technologies include light Today’s proposal would require that design and durability information, as weight 4-stroke technology engines, and engines meet the proposed emission well as information about the 2-stroke technology engines with standards throughout their useful lives. equipment in which the engine is aftertreatment. However, little is known EPA is today proposing multiple useful expected to be used. Manufacturers about the in-use performance, in-use life categories, indicated in Tables 4 and would label the engine according to the emissions characteristics and cost of 5, given the numerous applications in useful life selection. See Section IV.A.4 these technologies, or how appropriate which these engines are used, and wide for further discussion of the proposed it is to consider these technologies variation in expected engine useful life useful life provisions for nonhandheld across the full range of handheld in these different applications. In and handheld engines. equipment applications. Because of addition, the use of these engines in these uncertainties, today’s standards B. Assuring Emission Reductions are applications which experience Achieved In-use would not require conversion to 4- primarily commercial rather than stroke engine technology or the use of primarily consumer or residential usage The goal of the in-use component of aftertreatment for handheld engines. can also impact the useful life of the the proposed Phase 2 program is to However, EPA wants to encourage engine. provide assurance that the emission introduction of technologies into today’s reduction benefits anticipated by the market which are cleaner than required TABLE 4.ÐUSEFUL LIFE CATEGORIES program are achieved in actual use. This by the proposed standards. For example, EPA recognizes that some engine FOR NONHANDHELD ENGINES section describes how EPA’s traditional manufacturers have recently developed [Hours] compliance programs for mobile sources and marketed cleaner, lightweight 4- achieve this goal, outlines various stroke engines for use in handheld Category Category Category challenges in designing a compliance equipment. The Agency believes C B A program for the small SI industry, potentially cleaner 4-stroke engines, 2- provides an overview of the compliance Class I ... 66 250 500 program proposed today for stroke engines with aftertreatment and Class II .. 250 500 1000 other advanced two-stroke technologies nonhandheld and handheld engines, may enter the market to a limited extent and discusses alternative compliance on a national level during the time program options. frame of the Phase 2 program. EPA’s goal is to encourage development of 3956 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

1. Traditional Compliance Programs for when new, without the requirement that use testing programs. For example, the Mobile Sources they continue to meet those standards spark-ignition marine engine program EPA has traditionally used three-step in-use throughout their useful lives. As includes a voluntary in-use credit compliance programs to implement and such, while the Phase 1 program program that EPA expects will be an enforce mobile source emission contains programs for certification and effective way to address exceedances standards. For a given engine family, the production line testing (in the form of identified through in-use testing, and first of the three steps is certification, EPA initiated Selective Enforcement the program also includes provisions for where, based on emission data from test Audits), the program does not contain a the use of certification credits to address requirement for manufacturers to project exceedances identified through engines, which are often prototype the emissions characteristics of the production line testing (see 40 CFR Part engines, EPA issues a license to the engine family over its useful life at the 91). engine manufacturer known as a time of certification (e.g., to determine EPA believes that these alternative certificate of conformity. This license a deterioration factor, or ‘‘df’’, for the programs, designed to provide a means enables the manufacturer to introduce engine family), nor does it contain to address emission exceedances, engines covered under the certificate mandatory in-use testing provisions. should meet several criteria in order to into commerce in the United States. EPA promulgated such a program for be considered as effective as EPA’s This step typically includes some means Phase 1 for several reasons, including traditional mandatory recall programs. of projecting the emissions the belief that for a first phase of First, they should provide an incentive characteristics of the engine family over emission controls, significant emission to manufacturers to build emission- its useful life. If the manufacturer reductions would occur in this sector durable engines. Second, they should be demonstrates according to the even with the ‘‘new engine’’ standards. practical to implement. Third, they regulatory provisions that the engine Equally important was the lack of data should provide an incentive to perform family meets the emission standards for available to the Agency at the time of accurate testing. Fourth, such programs the useful life of the engines, EPA issues the rulemaking on which to base an in- should offset additional emissions that a certificate of conformity. use program (e.g., information occur as a result of the exceedence of The second step is production line supporting appropriate regulatory useful the standards. Finally, such programs testing where the engine manufacturer life periods and engine deterioration should not be unduly burdensome to demonstrates that actual production line rates). In addition, EPA made clear its manufacturers. engines meet emission standards. intention to address in-use issues in a The compliance programs proposed Production line testing provides an second Phase of regulation. today for small SI nonhandheld and opportunity for EPA and the In addition to determining handheld engines are intended to meet manufacturer to verify that designs appropriate useful life periods and these criteria. While EPA retains the approved based on certification testing engine emission deterioration authority to order a recall if a are translated into mass production characteristics for this proposed Phase 2 substantial number of engines are found engines that meet standards and to catch program, the Agency has also faced a to be in nonconformity, and while this production problems before they key challenge of how to conduct an Phase 2 proposal does include become in-use problems. effective in-use testing program for these regulatory language governing EPA’s The last step involves the testing of engines, and whether or not a recall action in ordering recalls (see proposed in-use engines to ascertain whether the program modeled on the traditional on- Subparts I and M), EPA anticipates engines continue to meet standards highway recall program could be an considering programs which would be during their useful lives in the hands of effective compliance tool for this sector effective alternatives to ordering a typical customers. EPA has the of the nonroad engine industry. As EPA mandatory recall of Phase 2 certified authority under Section 207(c) of the has begun to regulate a wide range of engines. Instead, EPA would expect Clean Air Act to require a mandatory nonroad engines pursuant to Section these alternatives to recall would recall of vehicles or engines that have 213 of the Clean Air Act, it has become address the exceedances of the emission been shown not to comply with evident that a mandatory recall standards in ways that meet the five standards for their useful life. Such program, as has been traditionally criteria identified above. For recalls are instigated based on evidence conducted for the on-highway industry, nonhandheld engines, in some cases, of nonconformities discovered through a may not be the most effective program the use of certification credits would be variety of means, the most common of for some sectors of the nonroad engine allowed to offset exceedances of the which are cases in which industry, as compared with other means family emission limit 11, 12 in the event nonconformities are found either of assuring compliance in-use. This is of PLT exceedances. For handheld through production line testing or especially true for the small SI engine engines, the use of in-use credits would through in-use testing programs. In industry, in which many of the engines be allowed as one means of addressing EPA’s on-highway emission control are installed in consumer products potential exceedances of standards in programs, EPA’s recall authority and which are not registered and thus would the event of exceedances determined recall practices have provided clear be difficult to track in the event of a through production line testing or in- incentives to manufacturers to produce recall, and in which the cost of use testing programs. For both emissions durable engines and vehicles. conducting a potential recall could be nonhandheld and handheld engines, large relative to the cost of the actual other possible alternatives for 2. Compliance Programs for the Small SI engines being recalled. addressing exceedances of emissions Engine Industry For certain nonroad engine industry standards would include voluntary The Phase 1 emission control program sectors, such as the spark-ignition recall and other possible alternative for small SI engines does not follow this marine engine sector and the small SI projects (these issues are discussed typical three-step compliance program. engine sector, EPA has sought to This is because, unlike other programs, develop alternative programs designed 11, 12 For nonhandheld engines participating in the Phase 1 program includes ‘‘new to provide reasonable means to address the averaging, banking, and trading program described in more detail in Section IV.A.5, engine’’ standards only, that is, emissions exceedances identified compliance would be demonstrated with the family standards that the engines must meet through production line testing and in- emission limit, or FEL, rather than the standard. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3957 further in Section IV.D of this burden. Following full useful life handheld engines, manufacturers may preamble). certification, these engines would not be age engines on bench cycles, in lieu of subject to further in-use testing field aging, provided that a field/bench 3. The Proposed Phase 2 Compliance requirements. Third, for all handheld adjustment factor has previously been Program engines, manufacturers would certify established, as discussed in Section Today’s program proposes ‘‘in-use’’ their engines to full useful life standards IV.C. EPA requests comment on the standards for the first time for this at the time of certification using new proposal to allow manufacturers in industry.13 New elements of the Phase 2 engine test values and dfs determined some cases to age engines on bench compliance program include processes based on ‘‘good engineering judgment.’’ cycles in lieu of field aging. for determining deterioration factors Handheld engine manufacturers would In addition, for nonhandheld engine (‘‘dfs’’) at the time of certification, a then conduct an in-use testing program, manufacturers, who could be field aging manufacturer-run Production Line by which each manufacturer would age engines for the OHV Field Durability Testing program, and in-use testing and emissions test engines to ensure Program and also for the field/bench components. compliance in-use. A handheld engine adjustment program, EPA is proposing a i. Certification and In-Use Testing. manufacturer would in-use test up to 25 cap on the number of field engine tests Today’s proposal includes three percent of its engine families each year. required in a given year. EPA requests different approaches to certification df Other than the addition of the comments on all aspects of the determination and in-use testing, based requirements to demonstrate that compliance program proposed today for on engine class and engine technology, engines meet the emission standards Phase 2 small SI engine regulation. which are discussed briefly below. throughout their useful lives, and to 4. Alternative Compliance Program These approaches comprise the basic determine a deterioration factor at the Options program proposed today. EPA is also time of certification, the certification proposing additional procedures for procedures proposed today for the The program proposed today for some engine classes and engine Phase 2 program are essentially the Phase 2 regulation of small SI engines technologies to increase the flexibility of same as those for Phase 1. In particular, is essentially the same as the program the rule.14 All the approaches are EPA is proposing to retain a streamlined described in the ANPRM for this discussed in more detail in Section certification application form and rulemaking. EPA received comments on IV.D. process, with simple procedures for the ANPRM relating to the differences First, for nonhandheld OHV electronic submittal of information, as between the nonhandheld and handheld technology engines, manufacturers discussed further in Section IV.D.1. sides of the industry, and the merits of would be allowed to apply an assigned ii. Production Line Compliance. applying concepts and programs deterioration factor or ‘‘assigned df’’ to Today’s proposal would add a outlined for one side of the industry to new engine test values at the time of manufacturer-run Production Line the other. One commenter stressed that certification to determine a useful life Testing program known as CumSum to the nonhandheld and handheld engine certification value. Compared to an replace a Selective Enforcement Audit industries are very different in alternative of testing an engine over its (SEA) program as the primary method of composition, in marketing, in full useful life to determine determining the compliance of new technology, as well as in application. deterioration, these engines would be production engines. SEA would remain This commenter suggested that the allowed to undergo this lower burden an optional or backstop program program for nonhandheld engines certification effort, in return for depending upon the class of engine, as described in the ANPRM is an participation in an industry-wide OHV described in Section IV.D.2. integrated whole, with each provision field durability and in-use emission iii. Aging Engines To Their Useful linked to other provisions, and that it performance demonstration program (as Lives. EPA believes that aging engines in would be a mistake to graft parts of the described in Sections IV.D.1 and field usage in typical representative handheld program on to the IV.D.3). Second, for nonhandheld side- applications would be the most accurate nonhandheld program. Another valve technology engines and engines possible program for verifying in-use commenter suggested that the Agency with aftertreatment, manufacturers emissions. As such, the proposed OHV should take a comprehensive and would certify their engines based on field durability and in-use emissions balanced view of the program for the accumulating hours on the engines to performance program (‘‘Field Durability two sides of the industry, and that the engines’ full useful lives at the time Program’’) is designed to produce elements of the two proposals should be of certification. This relatively heavier significant quantities of reliable test data used to create a simpler and more burden at the time of certification is from OHV engines aged in typical field effective regulation. balanced by a decreased in-use testing usage, and to verify that the conclusions EPA is concerned that any changes to used in the certification process with the programs being proposed today 13 The fact that the proposed Phase 2 emissions respect to the durability of OHV engines should be considered carefully as to standards are ‘‘in-use’’ standards, compared with are accurate. their impact on the program as a whole, the Phase 1 standards which are ‘‘new engine’’ While aging engines in typical field given linkages between the various standards, together with the fact that these engines usage would be the optimal program for elements of the programs proposed do experience emissions deterioration over time, is why, when compared numerically with the Phase assuring the emission reductions are today. For example, the compliance 1 levels, Phase 2 levels in fact are higher in the case being achieved in use, EPA recognizes program proposed for nonhandheld of Class I. Despite this apparent numerical that costs associated with aging engines OHV technology engines is designed as discrepancy, EPA still anticipates important in the field and administering a field an integrated whole. The proposal to reductions from all engine classes as a result of the proposed Phase 2 standards. Since Phase 2 designs aging program could be higher than, for allow manufacturers to use the assigned will account for in-use deterioration, in-use example, costs of a bench aging dfs for certification is reasonable emission levels will be lower under the proposed program. It is for this reason that EPA because it is linked to the proposal for Phase 2 regulations compared to Phase 1 engines. is proposing that for full useful life an industry-wide OHV Field Durability 14 For example, for nonhandheld OHV technology engines, manufacturers would have an option to use certification for nonhandheld side-valve Program designed to verify the a ‘‘calculated df’’ rather than the ‘‘assigned df’’ technology engines or engines with assumptions with respect to stable and described below. aftertreatment, and for in-use testing for low dfs. In addition, EPA believes this 3958 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules conversion of engines to OHV or IV. Description of Proposed Program stringent than is achievable for this comparably clean and durable Section IV of today’s document nationwide program after consideration technology, together with the OHV Field contains a description of the programs of cost and lead time according to Durability Program, is one of the proposed for nonhandheld and section 213(a)(3) of the CAA. Although strongest elements of today’s proposal, handheld small SI engines for Phase 2 California is constrained by similar an element which links stringent regulations, including discussion of criteria per the authorization criteria of standards forcing clean technology with standards and related provisions, test section 209(e), consideration of such a field testing program to verify that procedures, a field/bench adjustment criteria is limited to the State of those emission reductions are being program, compliance programs, California. The Agency must consider achieved in use. flexibilities, nonregulatory programs, cost and lead time when nonroad and other general provisions. emission regulations affect the nation as However, EPA believes that there are a whole. As discussed in the remainder multiple ways to design effective A. Standards and Related Provisions of this section, the Agency believes the programs for reducing emissions from This section provides a detailed standards contained in today’s proposal small SI engines, and for ensuring that discussion of the standards being meet the section 213(a)(3) requirements those reductions are achieved in use. proposed for the Phase 2 program, as to consider cost and lead time in setting EPA requests comment on alternative well as related provisions including Federal standards. compliance options. For example, EPA useful life categories, certification requests comment on an option which averaging, banking, and trading 1. HC+NOX Emission Standards would allow nonhandheld provisions, and certification fuel. The Agency believes the level of the The Agency is aware of the levels manufacturers to establish certification standards contained in today’s proposal which the California Air Resources dfs for SV engines and engines with would achieve the greatest degree of Board (CARB) is considering for their aftertreatment through good engineering emission reduction achievable through Tier 2 standards for their Utility, Lawn, judgment (instead of the proposed application of technology which will be program for full useful life aging for and Garden Engine regulation. The CARB Tier 2 levels are more stringent available and considering lead time certification), linked to a program for under the proposed schedule of field aging SV engines and engines with and occur in a shorter time frame than the levels being proposed by the Agency compliance, noise, energy, safety, and aftertreatment to verify the dfs for a Federal Phase 2 program. Although cost factors associated with applying established through good engineering EPA’s approach is not structured such technology to a nationwide judgment. EPA also requests comment identically with CARB regulations, EPA program. The sections below discuss on applying the in-use testing program believes there are two valid reasons for how EPA addressed and weighed these proposed today for handheld engines to the distinction. First, Congress has factors in developing the proposed the nonhandheld side of the industry. recognized the need for California to standards. EPA requests comments on these or maintain its own mobile source EPA is proposing in-use HC+NOX other ways in which programs for the emission control program (see section standards of 25 g/kW-hr effective in two sides of the industry could be 209 of the CAA) because it faces model year 2001 for Class I engines, and designed to achieve the goals of difficult and distinct air pollution 12.1 g/kW-hr to be phased-in between providing assurance of environmental problems and, as a result, may need to model years 2001 and 2005 for Class II benefits in-use, easing the adopt measures more stringent than engines, as presented in Table 6. EPA implementation burden for EPA and the those that apply in the nation as a whole expects that the Class II levels would industry, and achieving greater (see, e.g., Motor & Equipment result in a complete shift in engine commonality in the programs for the Manufacturers Association v. EPA, 627 technology from side-valve (SV) to two sides of the industry, where F.2d 1095, 1110–11 (D.C. Cir. 1979)). cleaner overhead valve (OHV) or appropriate. Second, EPA’s nonroad emission comparably clean and durable standards are not allowed to be more technology by 2005.

TABLE 6. HC+NOX EMISSION STANDARDS FOR NONHANDHELD ENGINES [In g/kW-hr]

Model year Model year Model year Model year Model year Engine class 2001 2002 2003 2004 2005

Class I ...... 25.0 25.0 25.0 25.0 25.0 Class II ...... 18.0 16.6 15.0 13.6 12.1

EPA is proposing in-use HC+NOX emissions levels for Class III, IV and V engines to be phased-in between model years 2002 and 2005 based on a percentage of U.S. sales as presented in Table 7.

TABLE 7.ÐHC+NOX EMISSION STANDARDS FOR HANDHELD ENGINES [In g/kW-hr]

HC+NO X Model year Model year Model year Model year Engine class emission standard (g/ 2002 2003 2004 2005 kW-hr) (percent) (percent) (percent) (percent)

Class III ...... 210 Class IV ...... 172 20 40 70 100 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3959

TABLE 7.ÐHC+NOX EMISSION STANDARDS FOR HANDHELD ENGINESÐContinued [In g/kW-hr]

HC+NOX emission Model year Model year Model year Model year Engine class standard (g/ 2002 2003 2004 2005 kW-hr) (percent) (percent) (percent) (percent)

Class V ...... 116

Unlike the nonhandheld Phase 2 performance of Phase 1 engines is Class I marketplace, but they have program, for handheld engines, the presented. This information is used to hovered between 10 and 15 percent of phase-in process of mandatory assess the current status of the small total U.S. sales for the past eight years. percentages would result in Phase 1 and engine industry, which is critical for the ii. In-use HC and NOX Emission Phase 2 handheld engines being Agency’s analysis when trying to Performance of Uncontrolled Class I produced in the same model year, i.e., predict the impact of technology Engines at least 20 percent of the engines changes on the industry; (iv) produced in model year 2002 would be Technologies Considered for Phase 2 Unregulated Class I engines have Phase 2 engines subject to the Phase 2 HC+NOX Standards—Discussion of the demonstrated high new engine emission program, and up to 80 percent of the technologies the Agency considered rates for HC and CO, and low levels of handheld engines produced in model when determining the level of the NOX, as well as poor in-use performance year 2002 would be Phase 1 engines proposed standards is presented. This (large deterioration factors) for HC and subject to the Phase 1 program, followed includes a discussion of new and in-use CO, with little deterioration of new 15 by a 40/60 split in model year 2003, and emission performance of each engine NOX values. HC deterioration a 70/30 split between Phase 2/Phase 1 technology, and the per engine cost has been shown to be greater than two engines in model year 2004. associated with each technology, and; times the new engine value in as little (v) Proposed Phase 2 HC+NOX as four years of engine use. The remainder of this section Standard—A discussion of the Phase 2 describes the analysis and supporting standards the Agency is proposing, iii. New Engine and In-use HC and NOX data for the proposed HC+NOX including information on why the Performance of Phase 1 Class I standards for Class I nonhandheld proposed standards are achievable, the Technology Engines engines, Class II nonhandheld engines, proposed lead time, and a discussion Phase 1 engines have improved new and Class III, IV, and V handheld and request for comment on more engine emission performance over engines. Each of these subsections is stringent standards (such as the CARB uncontrolled engines, and may have organized into the following topics: (i) Tier 2 levels). improved in-use performance. The Draft Historical Sales Trends by Engine a. HC+NOX Emission Standard for RSD for this proposal contains publicly Technology—Historical trends are Class I Nonhandheld Engines. This available information on engine families important to consider when assessing section presents information used by the from all engine classes certified to the the range of field proven technologies. Agency to determine the appropriate Phase 1 program. This information Historical trends assist in understanding level for the proposed HC+NOX exhaust shows both SV and OHV technology can what technologies have been emission standards for nonhandheld meet the Phase 1 Class I new engine demonstrated in actual use, what Class I engines. A more detailed standard. manufacturers’ current production explanation of the engine technologies The Agency has recently examined capabilities are, and the availability of and costs described in this section is new and in-use emission performance information presented by several engine contained in the Draft Regulatory manufacturers concerning emissions data; (ii) In-use HC and NOX Emission Support Document (RSD) for this deterioration from Phase 1 technology Performance of Uncontrolled Engines— proposal, a copy of which is available in The Agency presents this information to Class I side-valve and over-head valve the public docket for this rule. 16 highlight the in-use performance engines. A more detailed discussion of characteristics associated with small i. Class I Historical Sales Trends by this data is presented in the Draft RSD. engine technologies and the need for Engine Technology This information covers over 50 Class I careful consideration of the in-use Class I engine (<225 cc nonhandheld engines field aged by manufacturers, performance of various control engines) sales have historically been with usage varying from 20 to 300 technologies. Phase 1 new engine dominated by low cost four-stroke side- hours. Table 8 contains a summary of emission performance data is available valve engines. Two-stroke gasoline Class the HC+NOX deterioration factors from Federal certification data. I engines are currently less than 10 resulting from an analysis of this data. However, in-use emission performance percent of annual sales and will 15 See ‘‘Emission Tests of In-use Small Utility on engines pulled from the field is continue to decline as a result of the Engines’’ Southwest Research Institute, Sept. 1991, limited; therefore, a discussion of the in- Phase 1 emission standards, which EPA Air Docket A–91–24, Item #II–A–8, and use performance of uncontrolled effectively calls for their phase-out by ‘‘Nonroad Engine and Vehicle Emission Study’’ engines is warranted; (iii) New Engine 2003 due to their high HC emissions. U.S. EPA Report #21A–2001, Nov. 1991, EPA Air and In-use HC and NOX Performance of Prior to 1986, OHV engines represented Docket A–91–24, Item #II–A–10. Phase 1 Technology Engines—A less than one percent of annual Class I 16 See ‘‘Tier 1 Deterioration Factors for Small summary of the information available engine sales. In the past decade OHV Nonroad Engines’’, Sept. 1996, a report by Air on the new and in-use emission engines have begun to penetrate the Improvement Resources, available in EPA Air Docket A–96–55, Item #II–D–11. 3960 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

TABLE 8.ÐSUMMARY OF IN-USE DETE- in better combustion chamber sealing experience with on-highway catalyst RIORATION OF PHASE 1 TECH- and lower oil consumption and lower technology has shown considerable in- NOLOGY CLASS I ENGINES combustion chamber deposits; use deterioration of catalysts can occur. continued structural improvements to In recent years several technical papers Class I Class I cylinder design to lower cylinder have been published regarding catalyst OHV SV distortion inherent in side-valve durability on small engines, however, configurations; and addition of valve these papers have relied on laboratory Estimated HC+NOX stem seals to limit the creepage of oil durability programs, such as aging df at 66 Hours ...... 1.35 1.87 into the combustion chamber. As catalysts on dynamometers 17. The presented in the Draft RSD, the Agency Agency is not aware of any actual field- Analysis of this information indicates estimates the improvements to Class I aged in-use catalyst durability Class I SV HC+NOX deterioration is SV engines would cost the manufacturer information. The Agency requests higher than Class I OHV engines. The as much as $4 to $7 per engine, comment on the relationship between lower new engine emission levels of depending on the engine family volume. laboratory durability data and in-use Class I OHV over SVs combined with The Agency estimates changes would field data, any information on typical lower in-use deterioration results in result in improvements to both new and in-use aged catalyst performance, and better in-use emission performance for in-use emission performance, all available data on individual catalysts Class I OHV engines compared to Class combining for a 10 to 20 percent aged under typical in-use conditions I SV engines. improvement in the in-use HC+NOX experienced by equipment using Class I iv. Technologies Considered for Phase 2 performance beyond Phase 1 designs. engines. The Agency requests additional Class I HC+NOX Standards As indicated by Table 8, Phase 1 OHV information regarding new engine engines have better in-use performance The Agency analyzed the emission emission performance, in-use emission compared to Phase 1 SV engines. A new performance and cost of several performance, and cost of catalyst engine level equal to the Phase 1 technology for Class I SV and OHV technologies which could be applied to standard of 16.1 g/kW-hr combined with Class I engines, including improvements engines. a HC+NOX df of 1.35 at 66 hours results to existing SV engines, conversion of in an in-use emission rate of 21.7 g/kW- v. Proposed Phase 2 Class I HC+NOX existing SV engines to OHV technology, hr. This level is well below the Standard and the application of catalytic performance of Class I SV engines, The Agency is proposing a corporate converters to existing SV and OHV therefore the Agency has considered the average exhaust emission level of 25 g/ engines. Four-stroke SV technology conversion of existing Class I SV to kW-hr HC+NOX for Class I engines utilizes an engine configuration in OHV engines in developing the beginning in model year 2001 (for which the intake and exhaust valves are proposed Phase 2 levels. Based on the discussion of the averaging, banking, located to one side of the combustion Federal Phase 1 new engine certification and trading program, see Section chamber (also called an L-head design), data analyzed for this proposal, the IV.A.5). The Agency believes this level as compared to four-stroke OHV average Class I OHV engine emits is technologically achievable, and, as technology in which the intake and around 10.5 g/kW-hr. Based on the discussed previously, can be met by exhaust valves are located directly deterioration information presented in improvements to existing Class I SV above the combustion chamber. Table 8 and design improvements engines. The Agency has performed an Catalytic converters are add-on after discussed elsewhere, the Agency analysis using the existing Phase 1 treatment devices which operate by estimates a well designed nonhandheld certification data (which contains chemically reducing or oxidizing OHV engine could have an HC+NOX confidential sales projections) combined exhaust gases. The Draft RSD for this deterioration factor of 1.3. Assuming a with reasonable assumptions for in-use proposal contains additional 10 percent compliance margin, these deterioration. This analysis indicates an information regarding these three specific Class I OHV engines could averaging standard of 25 g/kW-hr is technologies. achieve an average in-use emission level achievable with improvements to As discussed previously, the majority of around 15 g/kW-hr. However, it existing SV engines and considering the of Class I engines utilize SV technology. should be noted that only about 10 emission performance of existing Phase Table 8 shows that Class I SV percent of current Class I engines are 1 OHV engines. A standard of 25 g/kW- technology have HC+NOX deteriorations OHV designs. The performance of these hr would not require an increase in the on the order of 1.87 times new engine specific engines may not be penetration of Class I OHV sales. levels at 66 hours of use. Combining this representative of what would occur if all Manufacturers would need to make with the Phase 1 certification level of Class I engines were converted to OHV improvements to existing SV engine 16.1 g/kW-hr HC+NOX indicates an in- technology. families which would require use level of approximately 30 g/kW-hr Federal certification data indicates a improvements to several engine HC+NOX. The Agency believes small number of Class I engines have components. However, major retooling additional reductions can be achieved certified to the Federal Phase 1 of engine production lines would not be with improvements to existing Phase 1 standards using catalyst technology. required. In addition, the use of ABT SV engines. A more detailed discussion Though it is technologically feasible to provides manufacturers with of these improvements is contained in apply catalysts to both SV and OHV considerable flexibility for determining the Draft RSD. A summary of the engines, the Agency has little the most appropriate expenditure of improvements are: lowering of new information regarding in-use durability resources when deciding which engine engine emission levels achieved through and emission performance of engines families will need specific enleanment of intake air-fuel ratio; equipped with catalysts. As discussed improvements to meet the proposed improvements to valve seat material previously, the in-use emission levels. The lead time between the which will lower in-use distortion, performance of small engines is a resulting in decreased valve leakage and critical component of the analysis EPA 17 See Society of Automotive Engineers Technical deposit formation; improvements in has undertaken in the development of Papers 930076, 932445, 941807, and 961735 for cylinder ring design, which will result the Phase 2 proposal. The Agency’s bench aged catalyst information. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3961 finalization of this rule and model year also concerned that possible adverse I standards which would mandate the 2001 would be sufficient for impact on sales and the potential need conversion of Class I engines to OHV or manufacturers to meet the proposed for additional lead time could result in comparably clean technology. However, HC+NOX level. reduction in at least the near term the Agency requests comment on such The Agency has considered emission emission benefits anticipated by this an option. EPA specifically requests standard levels more stringent than the proposal. The Agency requests comment additional supporting information proposed 25 g/kW-hr HC+NOX. As on the market concerns expressed by regarding this issue to be made available discussed above, a level more stringent engine manufacturers, on the potential to the Agency through the public than 25 g/kW-hr could be met by the impact on lead time associated with comment process on this proposed rule conversion of existing SV technology more stringent Class I standards and on to supplement that which informed engines to OHV technology. The the potential for delay in at least the EPA’s analysis of CARB’s proposed Tier Agency’s analysis of existing Phase 1 near term emission reduction benefits 2 levels and EPA’s cost estimates of certification data combined with available from Class I engines if more converting Class I engines to OHV. The confidential sales information indicates stringent standards were adopted. Agency requests comment on all aspects an in-use level of around 15 g/kW-hr The Agency is aware of the emission of the proposed Class I standards. standards being considered by CARB for could be met by current Phase 1 Class b. HC+NOX Emission Standard for I OHV engines with some design the CARB Tier 2 Utility, Lawn, and Class II Nonhandheld Engines.This improvements to assure in-use Garden Engine (ULGE) regulation. The section presents information used by the Agency’s current understanding is that emissions durability. However, these Agency to determine the appropriate CARB is considering Class I engine in- Class I OHV engines represent only level for the proposed HC+NOX exhaust use standards of 16.1g/kW-hr about 10 percent of Class I sales; it is emission standards for nonhandheld NMHC+NOX to be met by model year uncertain what level of emission could Class II engines. A more detailed 2000, followed by a standard of 12.0g/ be achieved by complete conversion to explanation of the engine technologies kW-hr in model year 2004. In their OHV technology. As discussed and costs described in this section is comments to the ANPRM, California previously, the percentage of Class I contained in the Draft RSD for this recommended a nationwide level of OHV engine sales has remained fairly proposal, a copy of which is available in control equivalent to that being constant for the past eight years, despite the public docket. considered by CARB. Further, CARB superior durability, performance, and suggested these standards could be met i. Class II Historical Sales Trends by fuel economy. Several Class I engine with the use of available technology, Engine Technology manufacturers, including the two largest specifically, total conversion to OHV Class II engine sales have been which represent the majority of the technology to achieve compliance with market in terms of sales, have discussed dominated by 4-stroke SV engines in the a 16.1 g/kW-hr NMHC+NOX standard past. As described in the Draft RSD, with the Agency their past attempts to and the addition of catalyst control to sell low cost OHV engines, likely in Class II engines were predominantly SV meet a 12.0 g/kW-hr NMHC+NOX competition with less expensive SV technology in the 1970’s and early standard. EPA understands that CARB is 1980’s. Beginning in about 1985, OHV engines. Manufacturers have indicated still evaluating its Tier 2 ULGE program they have seen little success in drawing engines have steadily increased their and may adopt regulations which differ annual sales penetration into the Class consumers away from the even lower from these specific levels or cost Class I SV engines. Engine II market, averaging about a 3 percent implementation dates or both. As increase per year; by 1995 OHV engine manufacturers have indicated that the discussed under Section IV.A of this principle reason for the failure of OHVs sales represented approximately 35 proposal, section 209 of the CAA allows percent of the Class II market, with the to penetrate further into the Class I California to set its own standards, remaining 65 percent being SV engines. market is the cost difference between considering criteria as they apply to the the two engine technologies, and State of California. However, as ii. In-use HC and NOX Emission consumers’ unwillingness to pay this discussed later in this section, the Performance of Uncontrolled Class II premium. Several engine manufacturers Agency requests comment on whether Engines have indicated that low cost Phase 1 application of these emission control Information regarding new engine and Class I SV engines have manufacturing technologies as being considered by in-use emission performance of costs on the order of $60 to $70 per CARB are appropriate for a Federal uncontrolled Class II engines is limited. engine. Engine manufacturers contend program at this time, the level of While some new engine data is that for these low cost engines, the cost emission control expected from such available, the Agency does not have in- increase to purchase an OHV engine is application of these technologies and use emission information on large enough to prevent a larger market what adjustments to the proposed uncontrolled Class II engines. The penetration by OHV engine, at least Federal program might be necessary to limited new engine information from when they would have to compete in accommodate standards which would uncontrolled engines comes from the the market with SV engines (see 62 FR require such widespread application of 14752, ‘‘Class I OHV Demonstration CARB Technical Support Document for OHV and catalyst technology. 18 Program’’). The Agency estimates the The Agency has considered the the CARB ULGE program. The Agency manufacturer’s cost for conversion to potential impacts associated with the used this information to estimate the OHV to be between $5 and $14 per conversion of Class I SVs to OHV new engine emission factors for the engine. Engine manufacturers have technology. Due to uncertainties as to 1991 Nonroad Engine and Vehicle indicated concern over what they consumer acceptance of OHV engines in Emission Report. Those estimates were perceive to be the potentially dramatic typical Class I equipment applications between 15.2 and 15.4 g/kW-hr for impacts on the Class I engine sales and as to how a more stringent Class I which would result from a standard standard might effect lead time for the 18 California Air Resources Board Mail Out #92– 06, Technical Support Document for California which requires conversion to OHV program as a whole and the resulting Exhaust Emission Standards and Test Procedure for technology. As discussed in the uncertainty of emissions benefits, the 1994 and Subsequent Model Year Utility and Lawn Overview Section III.A, above, EPA is Agency has chosen not to propose Class and Garden Equipment Engines, January 1992. 3962 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

typical new engine Class II HC+NOX iii. New Engine and In-use HC and NOX fueled SV and OHV engine families emission factors. Performance of Phase 1 Class II certified to the Federal Phase 1 Technology Engines regulations as of September 1997. Table 9 is a summary of the new engine emission values for gasoline

TABLE 9.ÐSUMMARY OF FEDERAL PHASE 1 CLASS II GASOLINE FUELED ENGINE FAMILIES

Technology Number of families Average new Minimum new Maximum new HC+NOX (g/kW-hr) HC+NOX (g/kW-hr) HC+NOX (g/kW-hr)

Federal Phase 1 OHV ...... 64 9.0 5.3 12.9 Federal Phase 1 SV ...... 14 11.3 9.4 12.9

The values in Table 9 are an average II SV engines. As discussed in the Draft located at the top of the combustion of the certified new engine rates. EPA RSD, several areas for improvement chamber directly above the piston. The has access to manufacturers’ potentially exist, including: OHV location offers many performance confidential sales estimates for model improvements to carburetors to lower advantages over the SV engine, year 1997. Using these projections the variability and maintain more precise including lower valve seat distortion, sales weighted new engine HC+NOX air/fuel control; enhancements to the lower combustion chamber surface-to- emission rate is 11.7g/kW-hr for Class II cylinder structural integrity; volume ratio, and the ability to run SV engines, and 8.3g/kW-hr for Class II improvements to valve stems and valve stably at leaner air-fuel ratios. These OHV. This certification data shows that seats; and changes in piston ring design. differences are described in more detail OHV new engine HC+NOX emissions These improvements would lower in the Draft RSD. These differences can tend to be lower than SV emissions. production variability and improve both result in better new engine and in-use In 1996 the Agency received a report new engine and in-use emission HC+NOX emission performance for from several engine manufacturers performance. The Agency estimates OHV over SV technology. Based on regarding the deterioration of Phase 1 these changes would cost the confidential Phase 1 Class II OHV technology Class II SV and OHV manufacturer as much as $7 to $20 per 19 Federally certified engine families sales engines. A more detailed discussion of engine depending on engine family projections, the Agency believes an this information is contained in the volume and the improvements required. average new engine emission rate of 9.3 Draft RSD for this proposal. Table 10 However, the Agency believes the g/kW-hr, which includes a 10 percent contains a summary of this information. improvement in the in-use emission compliance margin, is achievable from performance from Phase 1 levels would OHV technology engines. This would TABLE 10.ÐSUMMARY OF IN-USE DE- be small. All spark-ignited engines have result in an in-use emission level of 12.1 TERIORATION FACTORS FOR PHASE a lean performance limit, i.e., an air/fuel g/kW-hr (1.3 * 9.3 g/kW-hr), which is a 1 CLASS II ENGINES ratio beyond which additional enleanment will result in unstable 42 percent reduction from Phase 1 SV Class II Class II combustion and poor engine levels (Phase 1 SV = 13.4 g/kW-hr * 1.6 OHV SV performance. The basic design of the SV = 20.1 g/kW-hr). As presented in the combustion chamber results in a lean Draft RSD, the Agency estimates the Estimated HC+NOX conversion of Class II SV to OHV df 250 hours ...... 1.4 1.6 performance limit which is reached relatively soon (compared to OHV technology would cost the manufacturer technology). Improvements in the in-use between $10 and $17 per engine, iv. Technologies Considered for Phase 2 performance can be made, but the depending on the engine family volume. Class II HC+NOX Standards Agency believes these improvements Engine manufacturers have indicated The Agency analyzed the emission will also be relatively small. The the higher cost associated with performance and cost of several Agency estimates that the improvements conversion of Class II SV to Class II technologies which could be applied to to SV technology considered would OHV technology is reasonable because Class II engines, including result in an overall 10 to 20 percent the equipment using Class II engines is improvements to existing SV engines, reduction in the in-use emissions from typically more expensive than the conversion of existing SV engines to Phase 1 SV levels. With the Phase 1 equipment targeted toward the OHV technology, improvements to Class II new engine standard equal to residential market, and the increased existing OHV engines, and the 13.4 g/kW-hr HC+NOX, and a Phase 1 cost resulting from conversion to OHV application of catalytic converters to Class II SV df of 1.6, the Phase 1 in-use design would not have a significant existing SV and OHV engines. The Draft emission rate is 20.1g/kW-hr at 250 adverse impact on Class II engine sales. RSD for this proposal contains hours. A 10 to 20 percent reduction While EPA has no independent additional information regarding these translates to an in-use emission rate information on consumer price technologies. between 16.8 and 18.9 g/kW-hr. sensitivity for equipment using Class I The Agency considered the costs and As described above in Section engines, it is understandable that the emission performance potential which IV.A.1.a, the principal difference higher price of this equipment and the would result from manufacturers between SV and OHV engines is the typical commercial use of such making improvements to Phase 1 Class location of the intake and exhaust equipment could allow the valves with respect to the combustion performance, fuel efficiency, and 19 ‘‘Tier 1 Deterioration Factors for Small Nonroad durability benefits of Class II OHV Engines’’ September 1996, a report by Air chamber; in SV engines the valves are Improvement Resources, available in EPA Air located to one side of the combustion engines to outweigh the incremental Docket A–96–55, Item #II–D–11. chamber, while in OHV the valves are impact on equipment price. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3963

The Agency also considered catalyst technology has shown that years of the Phase 2 phase-in (i.e., the improvements to existing Phase 1 OHV considerable in-use deterioration can 2001 standard of 18g/kW-hr and the engines in determining the appropriate occur. As previously discussed in the 2002 standard is 16.6 g/kW-hr) may not level of the Class II standard. In many Class I standard section, information on require additional reductions in Class II cases, engine manufacturers have laboratory aged small engine catalysts engine emissions. At the same time, the already optimized new engine emission has appeared in recent years in the Phase 1 standards do not require a shift performance and have incorporated technical journals. The Agency requests to clean, durable OHV technology or improvements to engine designs to comment on the relationship between comparably clean technology, and optimize in-use emission performance. laboratory and field aged catalyst several Class II engine manufacturers However, as discussed in the Draft RSD, durability data, any information on currently produce a significant number the Agency believes that for some Class typical in-use aged catalyst performance of SV engines. For manufacturers who II OHV engine families internal engine and all available data on individual are relying on SV technology the improvements can still be made which catalysts aged under typical in-use proposed phase-in period will allow would result in lower new engine and/ conditions experienced by equipment them to shift their production to new, or better in-use performance. These using Class II engines. The Agency cleaner technology which is capable of changes include leaner carburetor requests additional information meeting the 2005 standard of 12.1g/kW- calibrations to lower new engine regarding the new engine emission hr. The Agency believes the phase-in HC+NOX, optimization of combustion performance, in-use emission standards will address the inequities chamber design, and improvements to performance, and cost of catalyst among manufacturers’ current oil control. As discussed previously, the technology for Class II engines, technology mixes but will also require sales weighted new engine Phase 1 particularly Class II engines designed manufacturers to produce the clean, Class II OHV HC+NOX level is 8.3g/kW- for lawn and garden type applications. durable 12.1g/kW-hr engines in 2005. hr, and as shown in Table 10, the Class v. Proposed Phase 2 Class II HC+NOX Manufacturers have indicated the early II HC+NOX df is estimated to be 1.4 at Standard banking provision will pull ahead clean 250 hours. The Agency believes changes technology and ease the transition to the to existing Class II OHV engines will The Agency is proposing a corporate 12.1 standard. However, due to the wide primarily improve in-use emission average HC+NOX emission standard of discrepancy between manufacturers’ performance. As presented in the Draft 12.1 g/kW-hr which will be phased in current technology mixes, some RSD, the Agency estimates these over five years, beginning in model year manufacturers may generate significant 2001. Based on the information changes would cost the manufacturer as credits during the phase-in period. The presented in this section, the Agency much as $3 to $8 per engine, depending Agency has recently performed an believes an in-use level of 12.1g/kW-hr on the engine family production volume analysis, based on Federal Phase 1 can be met by the conversion of Phase and the improvements required. certification data, which indicates under 1 SV engines to OHV technology, and by However, the Agency believes many some conditions, early banking would internal improvements to some existing engine families have already result in significant credits being Phase 1 OHV engines. incorporated these design The proposed standards would generated during the phase-in period improvements. Based on existing require significant production line which may in fact undermine the Federal certification data and the changes for many Class II engine Agency’s assumptions that the 12.1 deterioration information contained in manufacturers to convert existing SV standard in model year 2005 would Table 10, the Agency estimates these models to OHV designs, as well as require a virtual 100 percent shift to improvements will result in an in-use modifications to some Phase 1 OHV OHV or comparably clear technology for HC+NOX deterioration rate of 1.3 at 250 models which may need internal Class II engines. To insure the EPA’s hours, and average new engine emission improvements to meet the 12.1 g/kW-hr goals are met, the Agency is proposing rates (including a ten percent level. To accommodate a smooth a declining set of caps on how high the compliance margin) of 9.3 g/kW-hr, for transition of existing SV engine family sales-weighed average level of HC+NOX an average in-use emission rate of 12.1 production lines to the new OHV family emission limits (FELs) could be g/kW-hr. technology or other comparably clean for Class II engine families beginning in Federal certification data indicates a technology, the Agency is proposing a 2005. A discussion of this proposal is small number of Class II SV and OHV five year phase-in period, starting with contained in Section IV.A.5. engines families have certified to the a level of 18 g/kW-hr in 2001 and Engine manufacturers have Federal Phase 1 standards using catalyst ramping down to the final year level of commented that, while 12.1 g/kW-hr technology. However, the majority of 12.1 in model year 2005. The Agency HC+NOX can be met with engines these engines are intended for indoor expects the proposed standards for Class designed for a typical 250-hour useful use on applications such as generators II engines would result in increased life, engines designed for the longer or floor buffers, where lowering CO penetration of and virtual total proposed useful life categories of 500 emissions appears to be the primary conversion to clean OHV technology by and 1000 hours need a higher standard focus. The majority of these catalyst 2005. However, the proposal does not due to their higher expected df as equipped Class II engine families preclude other technologies from measured over these longer hour operate on propane fuel. No catalyst meeting the proposed standard. periods.20 Specifically, they recommend equipped Class II engine families have The Agency recognizes that there are a 500-hour engine standard of 13.0 g/ certified to the Phase 1 rule for use in large differences in technology mixes kW-hr and a 1000-hour standard of 14.0 lawn and garden equipment. Though it currently being produced by Class II g/kW-hr HC+NOX. In arriving at these is technologically feasible to apply engine manufacturers. Some Class II recommendations, the manufacturers catalysts to both SV and OHV engines, engine manufacturers have already the Agency has little information made significant investments in OHV 20 See the discussion in the March 27, 1997, ANPRM, 62 FR 14740, and the Memo to the Docket regarding in-use emission performance technology prior to and during the regarding the October 3, 1997 meeting between U.S. of engines equipped with catalysts. The Phase 1 program. For some of these EPA and the Engine manufacturers Association, Agency’s experience with on-highway manufacturers the standards in the early EPA Air Docket A–96–55, Item #II–E–11. 3964 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules assumed the new engine emission levels more stringent than the Agency’s 12.1 g/ of which is available in the public would be the same regardless of useful kW-hr proposal. CARB suggests an in- docket for this rule. life category; this is also assumed by the use 9.4g/kW-hr standard would require i. Class III, IV and V Historical Sales Agency in developing its proposal. technology beyond conversion to OHV, Trends by Engine Technology However, while the manufacturers also such as an OHV engine equipped with predict improvements in in-use a catalyst. The Agency believes the costs Handheld engine sales have emission durability, they do not expect and lead time which could be necessary historically been dominated by these improvements would allow a to achieve a 9.4 g/kW-hr level for a crankcase charge scavenged two-stroke constant deterioration factor (full useful national program would be considerably engines (‘‘traditional 2-strokes’’). life emission level divided by new greater than the program contained in Historical sales data indicate that until engine emission level) regardless of today’s proposal. However, as discussed the recent introduction by one useful life category. Rather, the under Section IV.A of this proposal, manufacturer, Ryobi, of a 4-stroke manufacturers expect improved section 209 of the CAA allows trimmer, 100 percent of gasoline engine durability would allow typical California to set their own standards, powered handheld equipment used deterioration factors of around 1.4 for considering criteria as they apply to the traditional 2-stroke engines. 500-hour engines and 1.5 for 1000-hour State of California. However, as ii. In-use HC and NOX Emission engines. In making these discussed below, the Agency requests Performance of Uncontrolled Class III, recommendations, the manufacturers comment on whether the application of IV and V Engines acknowledge that they have not the technology anticipated by the provided any data or analyses to standards being considered by CARB Information on uncontrolled 2-stroke validate their recommendations, but would be appropriate for a Federal engines is limited. However, what also argue that the Agency has no full program at this time. information is available indicates 2- useful life data for these higher hour The Agency requests comment on all stroke technology has the potential to categories which substantiate the aspects of the proposed Class II experience high rates of in-use feasibility of the Agency’s proposed standards, and especially requests data, deterioration of HC, on the order of two standards. EPA requests any additional analyses and other information on the times the new engine value.21 data and other pertinent information expected emission performance This same information indicated that which would help the Agency reassess capability of Class II engines designed little in-use deterioration of NOX the appropriate level of standards for for in-use operating lives of 500 hours emissions occur from traditional 2- the 500-hour and 1000-hour engines. and 1000 hours. stroke engines. Based on the May, 1997 CARB c. HC+NOX Emission Standards for Workshop on their Tier 2 standards, the Class III, IV and V Handheld Engines. iii. New Engine and In-use HC and NOX Agency believes CARB may propose a This section presents information used Performance of Class III, IV and V Phase Tier 2 in-use standard of 12.0 g/kW-hr by the Agency to determine the 1 Technology Engines NMHC+NOX in model year 2000, appropriate level for the proposed Federal Phase 1 certification data followed by a level of 9.4 g/kW-hr HC+NOX exhaust emission standards for shows that over 150 two-stroke engine NMHC+NOX in model year 2004. handheld engines (engine Class III, IV families have been certified for the 1997 CARB’s 12.0 level may be achievable and V). A more detailed explanation of and 1998 model years. A summary of with OHV technology and is very the engine technologies and costs the emission performance of these Phase similar to the Agency’s proposed Phase described in this section is contained in 1 technology engine families is shown 2 level. CARB’s 9.4 g/kW-hr level is the Draft RSD for this proposal, a copy in Table 11.

TABLE 11.ÐSUMMARY OF FEDERAL PHASE 1 HANDHELD 2-STROKE ENGINE FAMILIES

Engine class Number of families Average new Minimum New Maximum New HC+NOX (g/kW-hr) HC+NOX (g/kW-hr) HC+NOX (g/kW-hr)

Class III ...... 4 216 177 258 Class IV ...... 131 189 97 236 Class V ...... 19 136 90 161

The average emission rates for the the Federal rule. The average HC+NOX a test program which included Phase 1 Class III, IV and V traditional 2- certification levels for these engine manufacturer controlled field testing of stroke engines are 28 percent, 23 families are 27 and 165 g/kW-hr seven Phase 1 technology 2-stroke percent and 18 percent below the respectively. engines, six aged to 50 hours, and one 22 combined Phase 1 HC and NOX Information on in-use emission to 225 hours. This data shows standards. Federal certification data also performance of Phase 1 technology 2- relatively low deterioration in HC+NOX show three Class IV four-stroke strokes is also limited. In preparation for emissions, with dfs ranging from technology engine families and three the Phase 1 regulation, several members slightly less than 1.0 to approximately Class IV two-stroke with catalysts of the Portable Power Equipment 1.2 at 50 hours, and slightly less than engine families have been certified to Manufacturers Association (PPEMA) ran 1.0 for the 225 hour engine.

21 See ‘‘Emission Tests of In-use Small Utility Research Institute, March 1994, EPA Air Docket A– 22 See Appendix C of ‘‘Regulatory Support Engines’’ Southwest Research Institute, September 93–25, Item #II–A–06, and ‘‘Regulatory Impact Document, Control of Air Pollution, Emission # 1991, EPA Air Docket A–91–24, Item II–A–8, Analysis and Regulatory Support Document, Standards for New Nonroad Spark-Ignition Engines ‘‘Nonroad Engine and Vehicle Emission Study’’ Control of Air Pollution, Emission Standards for at or Below 19 kilowatts’’ U.S. EPA, May 1995, EPA U.S. EPA Report #21A–2001, November 1991, EPA New Nonroad Spark-Ignition Engines at or Below Air Docket A–93–25, Item #V–B–01. Air Docket A–91–24, Item #II–A–10, ‘‘Emission 19 kilowatts’’ U.S. EPA, May 1995, EPA Air Docket Testing of In-use Handheld Engines’’ Southwest A–93–25, Item #V–B–01. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3965

The Agency has little information on The Agency also analyzed the benefits not have information regarding the the in-use performance of 4-stroke and associated costs which would occur actual in-use performance of this or handheld technology or on handheld from the conversion of existing 2-stroke other catalyst equipped 2-stroke catalyst technology. handheld engines to 4-stroke designs. engines. The Agency estimates the cost Two engine manufacturers, Ryobi and of adding a catalytic convertor to an iv. Technologies Considered for Phase 2 Honda, have successfully demonstrated improved 2-stroke handheld engine Class III, IV and V HC+NOX Standards that 4-stroke designs are viable in at would cost the manufacturer between The Agency analyzed the emission least some handheld equipment $6 and $12 per engine, depending on performance and cost of several applications, notably a string trimmer the production volume of the family. technologies which could be applied to application. However, the Agency is This cost estimate does not include any handheld engines. These include uncertain that 4-stroke technology of the additional improvements to the improvements to existing 2-stroke would be viable in all handheld Phase 1 technology 2-stroke mentioned engines, conversion of existing 2-stroke applications, particularly those previously, such as combustion engines to 4-stroke technology, and the applications which require high power chamber improvements or scavenging application of catalytic converters to and low weight, such as large, design improvements. As previously existing 2-stroke engines. The Draft RSD commercial chainsaw applications, discussed, such improvements to for this proposal contains additional where the lower power-to-weight ratio existing 2-stroke designs would cost the information regarding these of 4-stroke engines may impede manufacturer an additional $2 to $6 per technologies. equipment performance. Four-stroke engine. Therefore, the Agency estimates For Phase 1 2-stroke technology technology does not have the an improved 2-stroke design with a engines, fuel lost during the scavenging scavenging loss problem associated with catalytic convertor would cost the process represents the largest fraction of traditional 2-strokes. Therefore 4-stroke manufacturer from $8 to $18 per engine. exhaust HC emissions, and HC exhaust HC emissions are substantially Comments are requested on these cost emissions represent greater than 95 below those of a 2-stroke design. Federal estimates. percent of the exhaust HC+NOX Phase 1 certification data for Class IV emissions. The Agency believes several v. Class III, IV and V Proposed Phase 2 engines indicates a 4-stroke string types of improvements can be made to HC+NOX Standard trimmer produces new engine HC+NO Phase 1 technology 2-stroke engines. X emission rates of about 27 g/kW-hr, The Agency is proposing an in-use The following is a summary of potential which is approximately 80 percent HC+NOX standard of 210, 172 and 116 areas for lowering HC+NOX emissions: below the Phase 1 standard. g/kW-hr for Class III, IV and V engines, (1) improvements in carburetors to respectively. As presented in Table 7, reduce production variability and Deterioration information on small displacement 4-stroke engines is the proposed standards would begin in tighter air/fuel ratio control; (2) redesign model year 2002, with a requirement of the combustion chamber to promote limited, and the Agency has no deterioration information on handheld that 20 percent of a manufacturer’s U.S. more complete combustion; (3) sales meet the standards, followed by an optimizing port shapes and timing to 4-stroke engines. The Agency has heard from one small engine manufacturer increased percentage each year until reduce scavenging losses; (4) leaner model year 2005, when 100 percent of carburetor calibrations to reduce HC that the smaller 4-stroke engines would likely have higher deterioration than a manufacturer’s U.S. sales would be emissions; and (5) tighter manufacturing required to meet the proposed tolerances for engine components to Class I OHV 4-stroke engines, which is on the order of 1.4 at 66 hours.23 The standards. reduce component variation. These The Agency expects the proposed in- Agency requests comment and improvements are discussed in more use standards can be met primarily additional information on the detail in the Draft RSD. As described in through improvements to existing Phase deterioration of smaller 4-stroke the Draft RSD, the Agency estimates the 1 technology 2-stroke engines. As engines. As described in the Draft RSD, cost of these improvements would cost presented previously, the Agency the Agency estimates the cost of the manufacturer as much as $2 to $6 believes improvements to Phase 1 converting an existing handheld 2- per engine, depending on the technology 2-stroke engines should stroke to a 4-stroke engine would cost production volume of the engine family result in approximately a 30 percent the manufacturer between $7 and $10 and the improvements required. The reduction in the in-use emissions of per engine, depending on the Agency would expect these changes to Phase 1 engines, which would be production volume of the engine family. lower the new and in-use emission rates required to meet the proposed of Phase 1 two-stroke technology The Agency also considered the standards. engines. PPEMA members have application of catalytic convertors to PPEMA members have indicated the indicated they believe a well designed, Phase 1 2-stroke technology. One proposed standards would require properly maintained 2-stroke engine is handheld engine manufacturer, significant research and development capable of performing with no in-use Husquvarna, has certified three engine time as well as a large capital deterioration of HC+NOX emissions. families to the Phase 1 rule which investment to change existing Based on the small amount of in-use utilize a 2-stroke engine with catalyst. production capabilities. The proposed data from Phase 1 technology engines, This engine has been designed for lower phase-in period plus the lead time the Agency estimates the in-use scavenging losses to reduce engine out anticipated after this rule is finalized performance of an improved Phase 1 emissions, has improved fuel metering, will allow manufacturers at least 6 years technology 2-stroke engine would and also uses a catalyst to further reduce to make the necessary changes to deteriorate approximately 10 percent exhaust emissions. EPA’s testing of this existing product lines in order to meet during its useful life. The Agency engine showed new engine emission the proposed standards, which should estimates that for the majority of results for HC+NOX at the nominal accommodate the manufacturers’ handheld engines, improvements to carburetor setting on the order of 90 g/ concerns regarding lead time. Phase 1 2-stroke designs would result in kW-hr, which is 63 percent below the a 30 percent reduction in the in-use combined Phase 1 Class IV HC+NOX 23 See Item # II–E–08 in EPA Air Docket A–96– emission rates from Phase 1 designs. new engine standard. The Agency does 55 referencing a meeting between EPA and Honda. 3966 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

The Agency has not proposed a market concerns expressed by these 72 g/kW-hr level for a national program handheld standard which would require engine manufacturers as well as the could be considerably higher than the catalyst or 4-stroke technology. The potential impact on lead time of a more program contained in today’s proposal. Agency’s experience with on-highway stringent standard and information on However, as discussed under Section technology indicates catalysts and the cost to the consumer and in-use IV.A of this proposal, section 209 of the engine technology evolved together to emissions performance if 2-stroke CAA allows California to set its own prevent significant in-use deterioration. engines were required to be equipped standards, considering criteria as they As previously discussed in the section with a catalyst. apply to the State of California. on the Class I engine standard, publicly The Agency believes that during the However, as discussed below, the available information on bench aged next several years additional Agency requests comment on whether catalysts used on 4-stroke engines has information regarding the in-use 4-stroke technology for all handheld become available in recent years. The performance of new technologies, such applications would be appropriate for a Agency requests comment on the as handheld 4-strokes, or traditional 2- Federal program at this time. The relationship between bench aged and strokes equipped with catalysts, may Agency requests comment on all aspects typical in-use aged catalyst become available, perhaps in response of the proposed handheld standards, performance, and all available data on to the CARB Tier 2 program. In and on what adjustments to the individual catalysts aged under typical addition, EPA recognizes that proposed Federal program might be in-use conditions experienced by technological advances and/or cost necessary to accommodate such handheld equipment. The Agency reductions may occur after standards. requests additional information on the promulgation of the Phase 2 rule that d. Proposed California Standards. As new and in-use emission performance of could make greater, but still cost- mentioned previously, the State of catalyst-equipped handheld engines. effective reductions feasible in California has proposed standards for Two engine manufacturers have handheld emission levels. The Agency both handheld and nonhandheld small introduced 4-stroke engines into string proposes to conduct a technology SI engines which are considerably more trimmer applications. There are likely review to address this possibility. In this stringent than the standards which the some applications, such as high power review, EPA expects to examine issues Agency is proposing today. In this chainsaws, where 4-stroke technology including the potential for further proposal, the Agency has noted several may not be feasible as a power unit reductions from existing 2-stroke reasons why the level of control being because of weight concerns. As engines, stratified charge 2-stroke considered by California is not being previously discussed, the Agency technology, direct injection 2-stroke proposed today, including uncertainties estimates that conversion to 4-stroke injection, the use of catalysts on regarding cost, the possible impact of designs would cost the manufacturer handheld engines, and the conversion to potential price increases on consumer between $7 and $10 per engine. PPEMA 4-stroke technology. Following a sales, and the lead time necessary for has reported that in 1993 and 1994 the technical review, the Agency intends to the industry should they be required to average retail price of a 2-stroke gasoline publish a Notice of Proposed adopt the required changes in powered string trimmer or leaf blower Rulemaking in 2001 announcing any technology nationwide. However, EPA was approximately $100, and the possible amendments to the standard requests comment on the feasibility in average retail price of a chainsaw was levels or other program elements, or the Federal program of requiring such approximately $200. PPEMA members, EPA’s intention to maintain the existing technology as anticipated by the who do not currently manufacture 4- handheld standards or program. The standards being considered by stroke handheld products, have Agency expects that the final California, the level of emission control expressed concern regarding what they rulemaking would be completed by which would result, the costs of such perceive to be the potential negative 2002 and, if adopted, Phase 3 standards technology for a nationwide program, impacts on sales which would result would be phased in on a percentage and any impact on lead time necessary from a large increase in engine costs, basis and over of a period of time to allow the adoption of such levels of such as the cost of conversion to 4- similar to Phase 2, beginning no earlier control nationwide. stroke technology for handheld engines. than model year 2007. This schedule is 2. NMHC+NOX Emission Standards for While EPA has no independent intended to provide a minimum five Class I and II Natural Gas Fueled information on consumer price year period before the implementation Nonhandheld Engines sensitivity, it is concerned that the of any Phase 3 standards in order to higher cost of equipment which would allow manufacturers to recoup their EPA is proposing optional separate likely result if catalyst or 4-stroke investments in Phase 2 technology and standards for Class I and Class II natural technology were necessitated by a more ensure the cost-effectiveness of the gas fueled engines only, due to the fact stringent standard could result in Phase 2 program. that for these engines methane has very significant financial burden if the The Agency is aware that CARB is low ozone forming potential, i.e., low industry were to absorb the cost impact considering a Tier 2 standard for all reactivity. The total hydrocarbon (THC or adverse impact on sales if the handheld engines of 72 g/kW-hr or HC) emissions from Phase 1 increase in cost were passed along to the HC+NOX, which is more stringent than technology 4-stroke gasoline engines is consumer. EPA is also concerned that the levels being proposed for the between 5 and 10 percent methane by mandating near term conversion to 4- Federal program. CARB has stated this mass. For natural gas engines, methane stroke technology could significantly level could be met by the complete is on the order of 70 percent of total HC increase the lead time necessary before conversion of existing 2-stroke mass emissions. For natural gas fueled implementing the standards and delay technology to 4-stroke technology. The nonhandheld engines, the Agency is the emission benefits of the standards. Agency believes the costs and lead time proposing an optional NMHC+NOX The Agency requests comment on the which would be necessary to achieve a standard, as presented in Table 12. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3967

TABLE 12.ÐNMHC + NOX EMISSION STANDARDS FOR NATURAL GAS FUELED NONHANDHELD ENGINES [g/kW-hr]

Model year Model year Model year Model year Model year Engine class 2001 2002 2003 2004 2005

Class I ...... 23.0 23.0 23.0 23.0 23.0 Class II ...... 16.7 15.3 14.0 12.7 11.3

These proposed NMHC+NOX requests comment on this approach, and technologies which have this potential, standards have been adjusted so that on whether it poses a meaningful risk of other than natural gas fueled engines, these standards are of equivalent allowing over generation of positive which represent less than 1 percent of stringency to the HC+NOX standards for credits in the ABT program. annual sales. Therefore, because a gasoline fueled engines, i.e., 11.3 g/kW- The NMHC+NOX standard would national NMHC standard would result hr NMHC+NOX is a deteriorated new require an additional testing burden for in increased testing cost for little or no engine NMHC+NOX level, assuming a natural gas engine manufacturers, benefit, the Agency is not proposing new engine THC+NOX level of 9.3 g/ because these manufacturers would NMHC standards for all small engines at kW-hr, a NMHC+NOX deterioration need an additional emission analyzer to this time. factor of 1.3, and a new engine split of measure the methane content of the 3. CO Emission Standards 54 percent NMHC, 6 percent methane exhaust gas. However, because natural and 40 percent NOX. gas engine manufacturers have In addition to HC and NOX standards, The Agency is proposing that for requested this optional NMHC standard, the Phase 1 final rulemaking (60 FR natural gas fueled engines, the standard and the Agency does not see any 34582) put in place a cap on the level be based on the level of NMHC+NOX adverse effects for the formation of of CO emissions from small SI engines. reduction which a Phase 2 technology ozone, the Agency believes it is That cap was subsequently modified for gasoline fueled nonhandheld engine appropriate for this proposal. EPA is not Class I and II engines (61 FR 58296). In could be expected to meet, not on the proposing NMHC + NOX standards for today’s action EPA is proposing that the performance of a Phase 2 technology handheld engines. EPA is not aware of Phase 1 CO standards be adjusted to natural gas fueled engine. Natural gas any natural gas fueled handheld reflect in-use standards and to maintain fueled engines represent less than 1 applications. Therefore, no NMHC+NOX the same level of stringency as afforded percent of annual small engine sales and standard is needed. by the Phase 1 standards. Specifically, EPA recognizes that this is a technology The Agency is aware that CARB may EPA proposes to take the Phase 1 that as a matter of environmental policy use a NMHC+NOX standard for all standards and multiply them by the it may be desirable to encourage. The handheld and nonhandheld engine projected CO dfs over the useful lives of Agency believes very little manufacturers. At this time, EPA does the engines to arrive at the Phase 2 in- environmental benefit would occur from not believe an emissions benefit would use CO standards. For Class I and II basing this optional NMHC+NOX occur by replicating this action for the engines, available data indicates that the standard on the performance of Phase 2 Federal program. The Agency would df ranges considerably between less technology natural gas engines. In need to adjust all standards downward than 1.0 and something in excess of 2.0 consideration of the energy and safety to maintain equivalent stringency and depending on the engine. For Class III, factors associated with using natural gas require all manufacturers to begin IV and V engines, available data technology rather than gasoline testing for methane. If manufacturers of indicates that the df for CO ranges more technology, EPA is proposing the small SI engines were able to selectively narrowly and typically falls between 1.0 NMHC+NOX standard at a level that target reductions in NMHC as compared and 1.1. Consequently, EPA proposes gives manufacturers a greater incentive, to THC, an NMHC standard may be of that the following in-use CO standards as a result of the ABT program, to use some value to manufacturers. However, in Table 13 apply for the Phase 2 natural gas technology. The Agency the Agency is not aware of small engine program:

TABLE 13.ÐIN-USE CO EMISSION STANDARDS FOR SMALL SI ENGINES [In g/kW-hr]

Engine Class I II III IV V

CO Standard (g/kW-hr) ...... 610 610 805 805 603

These CO standards would not be would be effective in the 2001 model This seemingly disparate treatment for subject to the averaging, banking, and year for a manufacturer’s entire product handheld and nonhandheld is trading provisions of the rule available line. For Class III, IV and V engines, consistent with the other provisions of for nonhandheld engines. Rather, these those engine families complying with the program (e.g., phase-in from Phase standards would serve as caps on the Phase 2 HC+NOX levels under the 1 to Phase 2 for handheld but not for CO emissions allowed from all engine proposed phase-in for HC+NOX nonhandheld engines) and protects families. standards for handheld engines would manufacturers from having to have EPA is proposing that for Class I and be required to also comply with CO engine families comply with Phase 2 CO Class II engines, the proposed CO levels levels on the same phase-in schedule. requirements prior to those same engine 3968 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules families being subject to the other Phase Health Alert 26 raised serious health available as to the emission durability of 2 requirements. concerns regarding the operation of the engine being purchased, EPA is EPA believes it is appropriate not to gasoline powered engines inside proposing that an indication of the go beyond the Phase 1 stringency for CO buildings or other partially enclosed useful life hours be included on the emissions for two main reasons. First, in spaces due to potential CO poisoning. engine’s certification label. Finally, in most parts of the country CO is The NIOSH Alert contains a list of order to ensure that the air quality primarily a wintertime problem suggested practices for the proper use of benefits anticipated by the proposed (November through February), while the equipment powered by small gasoline rule will in fact accrue, EPA is vast majority of engines covered by this engines which should be followed. The proposing that manufacturers select the rulemaking are used almost exclusively NIOSH alert does not recommend a useful life category most appropriate for during the summer months. As a result, more stringent CO standard for gasoline the engine family. This section most additional CO emission reductions powered small SI engines. discusses the useful life categories resulting from any increase in the Even without a more stringent CO proposed today for nonhandheld and stringency of the standard would not standard for Phase 2, CO emissions from handheld engines, proposed provisions occur at a time when they would small engines will likely continue to for inclusion of the useful life hours on provide nonattainment areas with decrease as manufacturers improve the engines’ label, and proposed measurable benefit toward meeting the production quality (reduce tolerances provisions relating to manufacturer National Ambient Air Quality Standard and variability) and improve durability selection of the appropriate useful life (NAAQS) for CO. to meet the more stringent HC+NOX category. standards proposed for Phase 2. To the a. Useful Life Hours. EPA is proposing Second, CO is a diminishing ambient extent that this does occur, and Phase 2 24 three useful life categories each for Class air quality problem. There has been engines are shown to clearly achieve the I and Class II nonhandheld engines, and approximately an 80 percent reduction Phase 2 CO emission standards, the two useful life categories each for Class in the number of nationwide proposal would allow EPA the III, IV and V handheld engines, as exceedances of the NAAQS for CO since flexibility to waive the reporting of CO shown in Tables 14 and 15. These the Clean Air Act Amendments of 1990, emissions in the future, thereby categories are based on information of and this trend is expected to continue decreasing the compliance costs the ranges of useful lives experienced by without further tightening of CO associated with the program as it the engines in these Classes. requirements for small SI engines. Many transitions to one more focussed on of the CO nonattainment areas in 1990 HC+NOX emissions. EPA requests TABLE 14.ÐNONHANDHELD ENGINE have already been redesignated as being comment on this aspect of the proposed USEFUL LIFE CATEGORIES in attainment, many more are in the rule. To the extent that engines do [Hours] process of requesting redesignation, and exceed the Phase 2 CO emission many of those not currently requesting standard, EPA could also consider in Category Category Category redesignation are expected to before the the future setting a more stringent CO C B A time the Phase 2 standards would go standard, taking into account cost, lead into effect. time, energy and safety factors as Class I ... 66 250 500 Taken together, these two reasons required by the Clean Air Act. Class II .. 250 500 1000 indicate that it does not make sense to 4. Useful Life Categories. pursue more stringent CO standards at TABLE 15.ÐHANDHELD ENGINE Section 213(a)(3) of the Clean Air Act the national level for small SI engines at USEFUL LIFE CATEGORIES this time. Should this situation change, provides that regulations promulgated EPA can take appropriate action at that for nonroad engines shall apply to the [Hours] time. useful lives of the engines. EPA is proposing that engine families meet the ``Residential'' ``Commercial'' While EPA does not believe it is proposed Phase 2 emission standards appropriate at this point in time to Class throughout their useful lives, a pursue more stringent CO standards for III .... 50 300 requirement new to this Phase 2 small engines, we nevertheless do Class program for small SI engines. Small SI believe it is important to maintain the IV ... 50 300 engines can experience a wide range of Class current level of stringency for CO. As useful lives, depending upon the V .... 50 300 discussed in the Phase 1 rulemaking, applications and usage patterns, even uncontrolled small SI engines do within a single engine class. EPA EPA is aware that the small SI engine contribute approximately 1 percent of believes that the three useful life and equipment industry is comprised of the emissions toward the national categories each for Class I and Class II a wide variety of equipment with a wide winter CO inventory.25 As a result, engines, and the two useful life range of usage patterns. Handheld and while emissions from small SI engines categories each for Class III, IV and V nonhandheld engines are designed for represent a small piece of the inventory, engines proposed today would provide many different types of applications, they are significant. Furthermore, many a means of sorting engines for regulatory with each application having specific small SI engines are used outside in purposes to reflect expected usage, design criteria, resulting in different close proximity to the equipment users, without establishing an overly complex expected lifetimes. The most obvious raising possible concerns over user system of useful life categories. So that example of these differences is the health effects. A recent National consumers have the best information distinction between commercial (or Institute of Occupational Safety and professional) operators and residential 26 ‘‘Preventing Carbon Monoxide Poisoning from (or home) operators. In general, 24 See ‘‘National Air Pollution Emission Trends, Small Gasoline-Powered Engines and Tools,’’ commercial operators, such as 1900–1995,’’ EPA–454/R–96–007, October 1997. Department of Health and Human Services commercial lawn-care companies or 25 Nonroad Engine and Vehicle Emission Study— Publication #96–118. Information on how to obtain Report, U.S. EPA, November 1991, EPA Air Docket this publication is contained in EPA Air Docket A– rental companies, expect to accumulate A–91–24, Item #II–A–10. 96–55, Item #II–B–1. high numbers of hours on equipment on Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3969 an annual basis, while a residential Based on these sources of a number of features of engine and/or operator, such as a residential chain saw information, EPA is proposing for equipment design are reflective of the owner, expects to accumulate a regulatory purposes three useful life intended or expected usage of the relatively low number of hours on an categories for nonhandheld engines, and engines. As discussed below, annual basis. Several organizations have two useful life categories for handheld manufacturers would be expected to investigated the issues related to average engines. The determination of which have information in support of their life and annual use of equipment useful life category is appropriate for a useful life category selections for powered by small SI engines, including specific engine is largely dependent on handheld engines. industry organizations, the California its intended application. For example, EPA received comments on the Air Resources Board, and EPA (see Class II engines going into a consumer ANPRM arguing that an intermediate Chapter 3 of the Draft RSD for a ride-on mower application may most useful life category for some handheld summary of several of these reports). appropriately have a regulatory useful products might be appropriate, for On the nonhandheld engine side, a life of ‘‘250 hours.’’ The longer useful example, in the case of products with 1992 phone survey of over 6,000 life categories would be appropriate for intended useful lives of 150 hours. EPA households collected information on engines placed into ‘‘commercial’’ types believes that the 50 and 300 hour useful usage rates for consumer-owned walk- of usage. For example, a Class II engine life hour categories are sufficient to behind and ride-on mowers, showing going into a ‘‘commercial’’ generator set distinguish residential and commercial that on average consumers accumulated application, may most appropriately usage, respectively. EPA has not 100 hours of use on walk-behind have a regulatory useful life of 1000 received additional data in support of mowers (typical of Class I ‘‘residential’’ hours. EPA believes that a number of an intermediate useful life, and believes engines) over a five year period of time, features of engine and/or equipment that it is desirable to avoid a and 207 hours of use on ride-on mowers design are reflective of the intended or proliferation of useful life categories. over a six year (five and six years being expected usage of the engines. As Thus, EPA is not proposing an the estimates of when one-half of the discussed below, manufacturers would intermediate useful life category for mowers are no longer in service, or ‘‘B– be expected to have information on the handheld engines. However, EPA 50’’ life, 27 for walk-behind and ride-on intended application of their engines requests comment and data on the issue mowers, respectively).28 On the which support their useful life category of whether an intermediate category is handheld side, a 1990 study selections. appropriate, what would be the demonstrated the large disparity EPA received comments on the appropriate hours for an intermediate between consumer and professional use, ANPRM arguing that the Class I shortest category, and what features of an engine with consumer equipment expected life useful life (66 hours) is too short, and with an intermediate useful life might time estimates ranging from 53 to 80 that the minimum lifetime compliance distinguish it from engines more hours, and professional equipment period for Class I engines should be set appropriately certified to a 50 or a 300 expected life time estimates ranging at 120 or 125 hours to reflect an average hour useful life. from 225 to 536 hours.29 A 1990 study six year life with an average use of 20 EPA also received comments on the of both nonhandheld and handheld hours a year for mower engines. While ANPRM regarding the use of equipment in residential and the Agency agrees that 120 or 125 hours ‘‘residential’’ and ‘‘commercial’’ to commercial applications showed a large may be more representative of the ‘‘B– indicate the useful life for handheld disparity in average lifespan between 50’’ life of residential Class I engines, engines. Several commenters suggested equipment used by residential and EPA selected 66 hours as sufficient to that the terms ‘‘residential’’ and commercial applications, with determine the emission durability ‘‘commercial’’ are potentially residential equipment implied average performance characteristic of engines in misleading to consumers of handheld lifespan estimates ranging from 35 to this Class I design category. EPA did so engines. One commenter was concerned 394 hours, and commercial equipment under the assumptions that certifying that dealers would have the implied average lifespan estimates Class I engines to 66 hours rather than responsibility to ‘‘qualify’’ a buyer of ranging from 274 to 3024 hours.30 120 or 125 hours would still provide equipment, and in the event of injury, adequate assurance of in-use emission the dealer would be at risk for having 27 The ‘‘B–50’’ is the point at which one-half of performance over the life of the engines sold the wrong buyer the wrong the equipment are no longer in service. For without the added burden which would equipment. This commenter suggested regulatory purposes, EPA anticipates that engines would be certified to a ‘‘useful life’’ which most be incurred with testing to the higher instead that EPA categorize engines in accurately reflects this ‘‘B–50’’ value. Thus, for a hours. If this proves not to be the case, terms of power, size, weight, or other Class II engine family certified to the 250 hour EPA would likely have to adjust the factors that clearly would not risk useful life category, half of those engines would be useful life, deterioration factors and making dealers think they have a expected to no longer be in service after 250 hours. responsibility to classify the expertise of 28 ‘‘Useful Life, Annual Usage, and In-Use standards accordingly to provide such Emissions of Consumer Utility Engines,’’ memo assurance. EPA requests comment on the buyer. A second commenter from the OPEI CAAC In-Use Working Group to Ms. the tradeoff between compliance suggested EPA could base the useful life Gay MacGregor, U.S. EPA, EPA Air Docket A–96– on technical properties of engines such # demonstration and in-use compliance 55, Item II–D–13. assurance associated with the 66 hour as ‘‘half crank’’ and ‘‘full crank’’ rather 29 ‘‘A 1989 California Baseline Emissions Inventory for Total Hydrocarbon and Carbon useful life proposal. than ‘‘commercial’’ and ‘‘residential.’’ A Monoxide Emissions from Portable Two-Stroke For handheld engines, the 50 hours third industry commenter suggested that Power Equipment,’’ prepared by Heiden Associates, category reflects ‘‘residential’’ usage, it is unnecessary and unwise for Inc., for the Portable Power Equipment and the 300 hour category reflects manufacturers to differentiate handheld Manufacturers Association, July 24, 1990, available in EPA Air Docket A–96–55, Item #II–D–14. ‘‘commercial’’ usage. For example, a engine families by the terms 30 ‘‘Utility Engine Emission report,’’ prepared by trimmer in residential use may most ‘‘residential’’ and ‘‘commercial,’’ since Booz, Allen and Hamilton Inc., for the California appropriately be certified to a regulatory these terms are not airtight, and in fact Air Resources Board, November 20, 1990, available useful life of 50 hours, while a chainsaw have substantial overlap for some # in EPA Air Docket A–93–25, Item II–I–02. These in commercial use may more models. This commenter suggested implied average lifespan estimates were calculated from average annual use and estimated ‘‘B–50’’ appropriately be certified to a useful life using useful life categories ‘‘A’’ and ‘‘B’’ values. of 300 hours. Again, EPA believes that instead, where a Category A engine (or 3970 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules engine family) would be ‘‘a handheld the Agency believes there should be a on the engine’s label, with information engine model or family designated by limit on the number of categories, to on the emissions compliance period in the manufacturer, at the time of prevent an overly complex hours in the owners manual, is an certification, as an engine intended categorization system. Based on the effective substitute to achieve this goal primarily for commercial use. Such an information presented in this section, of educating consumers. engine or family would be subject to the Agency believes the proposed useful In the case of handheld engines, the testing requirements and warranty life categories presented in Tables 14 manufacturer would add to the obligations for its regulatory useful life. and 15 are appropriate. The Agency compliance statement on the engine’s The regulatory useful life of a Category requests comment on these proposed label, for residential engines, A engine shall be 300 hours.’’ A useful life categories. ‘‘EMISSIONS COMPLIANCE PERIOD: Category B engine (or engine family) b. Useful Life on the Engine’s Label. 50 HOURS,’’ and for commercial would be ‘‘an engine model or family EPA is proposing that manufacturers engines, ‘‘EMISSIONS COMPLIANCE designated by the manufacturer, at the would indicate their selection of useful PERIOD: 300 HOURS.’’ Again, EPA time of certification, as an engine life category by adding information believes that including the useful life, in intended primarily for residential use. concerning the engine’s ‘‘emissions hours, on the engine’s label, is an Such an engine or engine family would compliance period’’ to the engine’s important mechanism for educating be subject to testing requirements and label. This information would be an consumers as to the emissions warranty obligations for its regulatory important tool for consumers and durability of the engine. EPA requests useful life. The regulatory useful life of purchasers of engines. EPA anticipates comment on whether requiring the a Category B engine shall be 50 hours.’’ that manufacturers will use the useful designation ‘‘EMISSIONS EPA agrees that commercial and life hours of the engine as a marketing COMPLIANCE PERIOD: 50 residential are not airtight terms. tool. For example, a manufacturer might RESIDENTIAL HOURS,’’ or However, EPA is proposing the advertise that an engine family is ‘‘EMISSIONS COMPLIANCE PERIOD: following definitions for these terms emissions durable to 1000 hours, or is 300 COMMERCIAL HOURS’’ would be and requests comments on these certified by EPA as a ‘‘commercial’’ more effective as the proposed definitions. A ‘‘residential engine’’ engine. Thus, the requirement that requirement to only include the would mean a handheld engine for manufacturers indicate the emissions emissions compliance period, by hours, which the engine manufacturer makes compliance period on the engine’s label on the label. Similar to the option for the statement to EPA that such engine would also have potential as a nonhandheld engines, EPA is requesting and the equipment it is installed in by marketplace mechanism to help comment on an option which would the engine manufacturer, where encourage manufacturers to select allow handheld engine manufacturers to applicable, is not produced, advertised, longer useful life categories. use label statements which include a marketed or intended for commercial or For nonhandheld engines, EPA is useful life category code (such as A, B, professional usage. A ‘‘commercial proposing that the manufacturer would or C) and referencing the owner’s engine’’ would mean a handheld engine add to the compliance statement on the manual to determine what the code that is not a residential engine. engine’s label, ‘‘EMISSIONS means. In response to the commenter’s COMPLIANCE PERIOD: [useful life] c. Manufacturer selection of useful life concerns about dealer responsibilities, HOURS.’’ In addition, consistent with category. One of EPA’s goals in the EPA believes that inclusion of the terms the ANPRM, EPA is proposing as an proposed Phase 2 program is to assure ‘‘residential’’ and ‘‘commercial’’ should option for nonhandheld manufacturers, that engines are emissions durable for not pose a risk to dealers, and that the rather than indicating the useful life in their useful lives, so that the air quality proposed duty of engine manufacturers hours, the manufacturer may add to the benefits anticipated for the rule are in to certify and label their engines for compliance statement on the engine’s fact achieved. EPA believes that the purposes of emissions durability would label ‘‘EMISSIONS COMPLIANCE selection of the appropriate useful life not transfer into a duty on the dealer’s PERIOD: CATEGORY [A, B, OR C]. category for an engine family is essential part to restrict sale of ‘‘commercial’’ REFER TO OWNER’S MANUAL FOR to achieving this goal. An appropriate products to ‘‘residential’’ purchasers. FURTHER INFORMATION.’’ In this useful life selection is important from EPA requests comment on all aspects of case, the owner’s manual would be an emissions compliance durability the proposal for handheld useful life required to contain the statement: ‘‘This perspective, in terms of assuring that categories and the proposed definitions engine has been shown to meet engines meet the appropriate emissions of ‘‘commercial’’ and ‘‘residential’’, or emission standards for a period of standards for the period of time that other alternative designations for the 50 [useful life] hours.’’ EPA is proposing they are expected to be in service. and 300 hour useful life categories. In this option in light of concerns voiced However, EPA is concerned that since particular, EPA requests comment on by manufacturers that putting the useful the useful life of engines, in hours, eliminating the use of residential and life of the engine, in hours, on the would be included in certification credit commercial as regulatory terms, and engines’ label, could be misleading to calculations for nonhandheld engines, simply retaining the ‘‘50’’ and ‘‘300’’ consumers in that the emissions and in-use credit calculations for hour useful life categories. compliance period may or may not handheld engines, and since these In summary, the Agency’s analysis represent the expected lifetime of the credits have real value, a manufacturer indicates there is a large disparity in the engine. Nevertheless, EPA believes that may have an important incentive to useful life of engines within all five putting the engine’s useful life in hours choose a useful life category for a engine classes. The Agency is interested on the engine’s label could serve as an particular family to maximize the in striking a compromise between the important mechanism to educate and manufacturer’s credit balance, rather need for representative useful lives, and inform consumers as to the emissions than to reflect the most accurate useful the reality that different engines within durability of the product they are life selection for that family. a single class are designed for vastly considering. EPA requests comment on For example, in the case of a different usage patterns. For this reason whether the option to allow a nonhandheld engine family whose FEL the Agency believes it is appropriate to manufacturer to instead designate the is significantly below the standard and have multiple useful life categories, but useful life by using Category [A, B or C] is therefore generating substantial Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3971 credits, a manufacturer could generate that additional requirements that if all or the major portion of a four times as many certification credits manufacturers support their useful life manufacturer’s credit-using engine if that family were certified to 1000 selections are not needed. EPA families were certified to the shortest hours rather than 250 hours. Similarly, understands that manufacturers have useful life categories. for a handheld engine family whose in- strong views regarding the nonhandheld EPA is proposing that data in support use test results are well below the SOP’s discussion of useful life selection. of a useful life category selection could standard, that family could generate six However, the SOP indicates that it include: surveys of the life spans of the times as many in-use credits if certified would be appropriate to certify engines equipment in which the engines are to 300 hours rather than 50 hours. to longer useful life categories when installed; engineering evaluations of However, in cases where the credit they are intended for longer hours of field aged engines to ascertain when generating engine is not expected to be operations in-use. The signatories of the engine performance deteriorates to the used for 1000 hours (or 300 hours, in SOP further recognized that the greater point where usefulness and/or the handheld example), those clean air use of an engine during the ozone reliability is impacted to a degree benefits may never be realized if the season directly relates to its impact on sufficient to necessitate overhaul or typical engine for that family is air quality. In addition, since the signing replacement; warranty statements and scrapped substantially before reaching of the SOP, EPA has become concerned warranty periods; marketing materials 1000 hours of use. The ‘‘surplus’’ credits that a number of various incentives are regarding engine life; failure reports might be used to make up for higher at play for the manufacturer when it from engine customers; and engineering emissions of other engine families even comes to selection of a useful life evaluations of the durability, in hours, though the credits were generated based category for an engine, including the of specific engine technologies, engine on an overestimation of the useful life. requirement to demonstrate the engines’ materials, or engine designs. EPA On the other hand, for engines which emissions durability, testing expects that retaining these types of data are emitting above the standard, the requirements and warranty obligations, at their facilities would not be unduly manufacturer might have an incentive to generation or use of emissions credits, burdensome to manufacturers, and that certify to the shortest useful life period, consumer education, and marketing and in most cases these types of data would to minimize the credits needed to offset competitive issues. EPA is concerned be information that the manufacturer that engine’s higher emissions. This that a manufacturer might already has on hand. EPA requests could become an even greater concern if inappropriately select useful life comment on these types of data and that engine is in fact expected to be categories for certification so as to put their usefulness in helping to placed into an application which itself in a position of competitive distinguish the most accurate and experiences longer hours of use than advantage compared to other appropriate useful life category for a indicated by the selected useful life manufacturers that fairly and accurately particular engine family. Finally, EPA proposes that in the category. select useful life categories, and that the event that EPA reviewed data provided From an air quality perspective, a risk of this could cause other by the manufacturer in support of the consumer education perspective, as well manufacturers to follow suit in order to useful life selection, and upon review of as from a marketing or competitive remain competitive. perspective, EPA believes that selection that and such other information of an appropriate useful life is Therefore, to assure that no individual available and discussion with the important, and certifying an engine to manufacturer is unfairly biasing its manufacturer EPA believed that a an inappropriate or inaccurate useful useful life selections in order to take different useful life category would be life presents serious problems. However, advantage of the credits programs, EPA more appropriate, the Agency would no one technical feature of an engine is proposing that all manufacturers work with that manufacturer to model would necessarily dictate that it would declare the applicable useful life determine a more appropriate selection be placed in one or another useful life category for each engine family at the of useful life categories. EPA requests category, and the distinctions between time of certification, and would be comment on all aspects of this proposal. the useful life categories proposed today required to retain at their facilities data 5. Certification Averaging, Banking and are not based on objective technical appropriate to support their selections Trading Program differences between engines (e.g., half of useful life categories, to be furnished crank, full crank). to the Administrator upon request. The With today’s notice, EPA is proposing EPA also recognizes that historically manufacturer would be required to a certification averaging, banking and engine manufacturers have not always select the category which most closely trading (ABT) program for nonhandheld tracked the sale of engines, and may not approximates the actual useful lives of small SI engines. The proposed program have been able to ascertain the type of the equipment into which the engines would be the first ABT program for application in which an engine is used. are expected to be installed. The rule nonhandheld small SI engines. The On the other hand, EPA is also aware would also require manufacturers to Phase 1 rule did not include an ABT that in many cases manufacturers are have data supporting their selections program due to uncertainties regarding able to determine the end application sufficient to show that the majority of the in-use emission levels of engines for a particular engine, and that in many engines or a sales weighted average of certified to the Phase 1 standards. (The cases an engine is designed for a engines of that family are used in Phase 1 standards apply to ‘‘new’’ specific end use. applications having a useful life best engines and do not require any Manufacturers, stressing that the represented by the chosen category. EPA determination of in-use deterioration as nonhandheld SOP, as reflected in the would not expect to request such data the proposed Phase 2 standards do.) March 1997 ANPRM, discussed useful unless there is evidence of problems The Agency is not proposing a life selection as being solely at the with a manufacturer’s useful life certification ABT program for handheld manufacturer’s discretion, have selections. Such problems might be engines at this time. Based on the levels maintained that marketing and indicated, for example, if all or the of the proposed standards and competitive concerns would ensure that major portion of a manufacturer’s credit- discussion with engine manufacturers, manufacturers select the most accurate generating engine families were certified EPA does not believe a certification and appropriate useful life category, and to the longest useful life categories, or ABT program is warranted or desired for 3972 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules handheld engines. The Agency for Class I and Class II engines are allowing certain engine families to act specifically requests comment on this feasible for all affected nonhandheld as trailblazers for new technology. This issue. As discussed later, EPA is engines within the time available to can help provide valuable information proposing an in-use credit program for manufacturers, is based in part on the to manufacturers on the technology handheld small SI engines that would availability of the proposed ABT prior to manufacturers needing to apply be used to address potential in-use program. In addition, the flexibilities the technology throughout their product emission exceedances. The reader is provided to engine manufacturers via an lines. An incentive for early directed to Section IV.D.3 of today’s ABT program should allow compliance introduction arises because the banked notice for further details of the proposed with the proposed standard at a lower credits could subsequently be used by in-use credit program for handheld cost than may otherwise be the case. It the manufacturer to ease the compliance engines. is also possible that ABT allows the burden of new, more stringent The nonhandheld small SI engine standard to be implemented sooner standards. ABT program proposed today is a since, for example, not every family may Trading means the exchange of market-based incentive program need to be redesigned to meet the lower emission credits between engine designed to provide an incentive for standard. If each engine family had to manufacturers which then can be used early introduction of clean technologies, comply with the standards, the for averaging purposes, banked for and provides engine manufacturers with standards might be higher and/or the future use, or traded to another engine additional flexibility for meeting the standards might need to be manufacturer. Trading can be proposed HC+NOX standards, while implemented later. advantageous to smaller manufacturers protecting the environmental benefits of As noted above, the three aspects of who might have limited opportunity to the program. Implementation of the the proposed ABT program are optimize their costs through the use of program should also reduce the cost of averaging, banking, and trading. averaging. Trading can also be controlling HC+NOX emissions from Averaging means the exchange of advantageous to larger manufacturers nonhandheld engines. emission credits among engine families because extending the effective EPA believes that the proposed ABT within a given engine manufacturer’s averaging set through trading can allow program is consistent with the statutory product line. Averaging allows a for overall optimization of costs across requirements of section 213 of the Clean manufacturer to certify one or more manufacturers. Air Act. Although the language of engine families at levels above the EPA is proposing that participation in section 213 is silent on the issue of applicable emission standard. However, the proposed ABT program for Phase 2 averaging, it allows EPA considerable the increased emissions would have to nonhandheld small SI engines would be discretion in determining what be offset by one or more engine families voluntary. For those manufacturers who regulations are most appropriate for within that manufacturer’s product line choose to utilize the program, implementing section 213. The statute certified below the same emission compliance of individual engine does not specify that a specific standard standard, such that the average families with their FELs would be or technology must be implemented, emissions in a given model year from all determined and enforced in the same and it requires EPA to consider costs, the manufacturer’s families (weighted manner as compliance with the lead time, and other factors in making for engine power, useful life, load factor, emission standards in the absence of an its determination of ‘‘the greatest degree and sales) are at or below the level of ABT program. In addition, except where of emissions reduction achievable the emission standard. Averaging results specifically permitted in the case of through the application of technology would be calculated for each specific production line testing failure (see which the Administrator determines model year and, as proposed today, section IV.D.2. of today’s notice), the will be available.’’ As noted in the would be calculated for each engine final number of credits available to the proposal for Tier I nonroad class. The mechanism by which this is manufacturer in each engine class at the compression-ignition engine standards, accomplished would be certification of end of a model year after considering which also contained a certification the engine family to a ‘‘family emission the manufacturer’s use of credits from ABT program, section 213(a)(3) also limit’’ (FEL) set by the manufacturer, ABT would have to be greater than or indicates that EPA’s regulations may which may be above or below the equal to zero. Specific elements of the apply to nonroad engine classes in the standard. An FEL that is established proposed ABT program for aggregate, and need not apply to each above the standard could not exceed an nonhandheld small SI engines are nonroad engine individually (see 58 FR upper limit specified in the ABT discussed below. 28809, May 17, 1993). regulations. Once an engine family is a. Calculation of Credits. Credits At the same time, EPA believes that certified to an FEL, that FEL would would be calculated as a function of the any ABT program must be consistent become the enforceable emissions limit difference between the applicable Phase with the statutory requirement that used for compliance purposes and each 2 emission standard and the FEL, the standards reflect the greatest degree of engine in the engine family would be power, the useful life, the load factor, emission reduction achievable through subject to compliance with the FEL. and the number of eligible engines sold the application of available technology. Banking means the retention of of the engine family participating in the EPA believes the proposed ABT emission credits by the engine program. (Since the standards are program is fully consistent with such a manufacturer generating the credits for expressed in terms of grams/kW-hour, requirement. The proposed HC+NOX use in future model year averaging or the ‘‘power’’ and ‘‘load factor’’ variables emission standard of 25.0 g/kW-hr for trading. EPA believes that banking, are included to allow averaging across Class I engines and the series of including today’s proposed provision engines designed to different power.) declining HC+NOX standards for Class II which would allow early banking under EPA would expect manufacturers to engines were developed under the certain conditions during the two years follow the regulations for establishing assumption that an ABT program would prior to implementation of the its engine families and not disaggregate take effect at the same time as proposed standards, would improve the feasibility their families into multiple families or standards, once adopted. In fact, as of meeting standards by encouraging the combine their existing families into discussed earlier in Section IV.A.1, the development and early introduction of fewer families to maximize credit conclusion that the proposed standards advanced emission control technology, generation or minimize credit usage. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3973

EPA is proposing the following equation engines were included, then the credits limited use of Phase 1 engines in the for calculating the emission credits from generated by California sales would Phase 2 time frame. To avoid penalizing a given engine family, whether allow more engines with higher manufacturers that produce engines to generating positive or negative credits. emission rates to be sold in states be used under the proposed flexibility Credits=(Standard¥FEL)×(Power)× outside of California. This would detract provisions, EPA is proposing that (Useful Life)×(Load Factor)× (Sales) from the goals of the Phase 2 program, manufacturers exclude such engines ‘‘Standard’’ represents the applicable and possibly undermine the emissions from the ABT program calculations. In Phase 2 emission standard as proposed reductions expected to be achieved by other words, engine manufacturers by EPA. ‘‘FEL’’ is the family emission the program throughout the country. would not be required to use credits to limit for the engine family as Engines sold outside of the United certify these Phase 1 engines used for established by the manufacturer. States, including Canada and Mexico, the proposed flexibility provisions even ‘‘Power’’ represents the engine’s would also be excluded from the though they would likely exceed the maximum modal power produced manufacturer’s estimates of sales unless proposed Phase 2 standards. Another proposed flexibility during the certification test cycle. For those engines are subsequently provision described in Section IV.E of those engine families that contain more imported back into the United States in today’s notice would allow engine than one configuration with different a new piece of nonhandheld equipment. Because only those engines sold in manufacturers to certify beyond the power ratings, EPA is proposing that the the United States, excluding engines 2005 model year Class II side-valve ‘‘Power’’ term be the sales-weighted subject to California’s standards, would engine families with annual sales of less maximum modal power determined be included in the ABT program, than 1,000 units to an HC+NOX cap of across all configurations within the manufacturers would need to determine 24.0 g/kW-hr. For such engine families, engine family. EPA assumes the number of such engines sold each EPA is proposing that manufacturers do manufacturers know the general power year to yield accurate estimates of credit not need to include such families in the characteristics of each of their engine generation and usage. Due to the ABT program calculations for 2005 and configurations they are producing, and difficulty in tracking point of first retail later model years. For the interim years, therefore, determining the power sales in the nonhandheld market 2001 through 2004, a manufacturer information necessary for the ABT compared to other markets (e.g., the on- could also exclude Class II side-valve calculations will not place any highway segment where a more direct engine families with annual sales of less additional testing burden on engine and vehicle distribution system than 1,000 units from the ABT program manufacturers. EPA requests comment exists), EPA is requesting comments on calculations as long as the deteriorated on this assumption. alternative methods manufacturers HC+NOX emission level of the engine is ‘‘Useful Life’’ is the useful life could use to determine their eligible less than 24.0 g/kW-hr. Class II side- category to which the engine family is sales for credit calculations. One valve engine families with annual sales certified, and represents the period of possible option would be to allow of less than 1,000 units that are certified time for which the manufacturer is engine manufacturers to query their above the 24.0 g/kW-hr HC+NOX level responsible for compliance with the customers, on an annual basis, to must be included in the manufacturers’ emissions standards. ‘‘Load Factor’’ ascertain the percentage of Phase 2 ABT calculations during the interim refers to the fraction of rated power at engines of each family that constitute years. which the engine operates in use, on eligible sales. Based on the results of the EPA is proposing an upper limit on average. For the two main certification query, the Agency could allow the level of emissions allowed from test cycles, referred to as cycle ‘‘A’’ and manufacturers to extrapolate those those engine families a manufacturer cycle ‘‘B’’, which EPA believes results, assuming they received wishes to include in the ABT program. represent typical in-use operation, a responses sufficient to cover some high Under the proposal, manufacturers load factor of 0.47 is proposed. For percentage of their sales, say 90 percent would not be allowed to certify engines alternative test cycles, as approved by or more, to its total sales of engines in that have FELs above the upper limits EPA, the load factor would need to be the United States. The Agency is open described below. Typically, when EPA calculated based on the characteristics to considering other alternative methods adopts an ABT program, the upper limit of the test procedure as described in the for tracking engines for credit is set at the level of the previous proposed regulations. calculation purposes that provide high standard. However, because the Phase 1 ‘‘Sales’’ represents the eligible levels of confidence that eligible sales standards did not require manufacturers number of Phase 2 engines sold in the are accurately counted. EPA specifically to take into account deterioration over United States in the applicable model requests comments on such alternatives the useful life of the engine as the year, excluding those engines subject to and other information that would proposed Phase 2 standards do, EPA California regulations. Manufacturers further address the Agency’s concerns believes it is appropriate to use the would be allowed to use sales that eligible sales estimates be as Phase 1 standards as the basis for projections for initial certification. accurate as possible. In addition, the calculating the upper limits and apply However, actual sales based on the Agency requests comments on a deterioration factor to determine the location of the point of first retail sale appropriate methods for estimating the equivalent deteriorated level of the (for example, retail customer or dealer) export of engines and the sales of Phase 1 emission standards. Based on would have to be submitted at the end engines subject to California’s the predominant side-valve engine of the model year to verify end-of-year standards, since one method for technology certified under the Phase 1 compliance. The Agency is proposing estimating eligible sales for ABT program, EPA estimates that a typical that manufacturers exclude engines purposes could be to deduct these two Phase 1 engine would have emissions at subject to California’s emission groups from total sales. the end of the useful life period about standards from the estimates of eligible As discussed in Section IV.E of twice its new engine emission level.31 engine sales because California will today’s notice, EPA is proposing several likely require all engines sold in compliance flexibility provisions for 31 See ‘‘Summary of EPA Analysis Regarding California to meet its own tighter engine manufacturers and equipment Upper Limits for Phase 2 Averaging, Banking & HC+NOX standards. If California manufacturers that would allow the Continued 3974 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

Therefore a deterioration factor of 2.0 is during the transition years. However, current nonhandheld sales), EPA is appropriate for estimating the EPA is concerned that some proposing to allow manufacturers to equivalent useful life level of engines manufacturers, because their current freely exchange NMHC+NOX credits designed to meet the Phase 1 standards. product line is predominantly made up from nonhandheld engines fueled by Based on the Phase 1 HC+NOX of OHV technology, would be able to natural gas with HC+NOX credits from standards and a deterioration factor of accumulate significant credits during nonhandheld engines fueled by fuels 2.0, EPA is proposing HC+NOX upper the phase-in years without any other than natural gas in the ABT limits of 32.2 g/kW-hr for Class I additional effort to improve emission program. engines and 26.8 g/kW-hr for Class II performance. These credits could be, in b. Life of Credits. For all credits engines. Therefore, a manufacturer turn, used by such manufacturers generated by Class I and Class II engines would be allowed to certify an engine beginning in 2005 to, in effect, delay the under the certification ABT program, family only if the HC+NOX FEL were at need for that manufacturer to produce EPA is proposing an unlimited credit or below these proposed levels (and engines meeting the proposed 2005 life. EPA believes that unlimited life for only if they had the appropriate number model year standard. This action could these credits will promote the feasibility of credits to offset the family’s credit put such manufacturers in a of the proposed Phase 2 Class I and needs). For families not participating in competitively advantageous position Class II standards because it increases the ABT program, each family must compared to manufacturers who did not the value of these credits to the comply with the standard which in have substantial credits and therefore manufacturer by providing greater effect is an analogous upper limit. EPA needed to produce a product line flexibility for the use of the credits. It is requests comment on the which, on average, met the 2005 model consistent with the general emission appropriateness of the proposed upper year standard. Such action could reduction goal of ABT programs, not limits for engine families included in similarly undermine the goal of this rule only because of the increased the ABT program. (and the SOP) to have 100 percent OHV manufacturer incentive but also because Due to concerns over the amount of technology (or similar technology it reduces the incentive for credits manufacturers could meeting the 2005 model year standards) manufacturers to use their credits as accumulate, as described below, EPA is in place across the industry for Class II quickly as possible. As a result, unused proposing a declining set of caps on by 2005. credits, which are extra emission how high the sales-weighted average In order to ensure that this transition reductions beyond what the EPA level of HC+NOX FELs could be for to cleaner technology occurs by the regulations require, may remain off the Class II engine families beginning in 2005 model year and to minimize the market longer. It should be noted that 2005. Based on the certification risk of credit ‘‘build-up’’ resulting in a EPA would expect to reconsider the information of Phase 1 nonhandheld delay of conversion to OHV or OHV- appropriate life of Phase 2 emission engines submitted by manufacturers to comparable technology, EPA is credits in connection with any post- EPA and assumptions about typical proposing that a manufacturer’s sales- Phase 2 rulemaking for nonhandheld deterioration factors and compliance weighted average of Class II HC+NOX engines. margins, it appears that some engine FELs may not exceed 13.6 g/kW-hr in c. Early Use of the ABT Program. EPA manufacturers have the potential to earn 2005, 13.1 g/kW-hr in 2006, and 12.6 g/ is proposing that manufacturers be significant credits from their Class II kW-hr in 2007 or later. EPA believes allowed to use the ABT program prior engines prior to the 2005 model year. this approach would ensure that Class II to implementation of the Phase 2 (Because the proposed emission engines are converted to OHV or OHV- standards to provide an incentive to standard for Class I engines assumes comparable technology by roughly 2005 accelerate introduction of cleaner side-valve technology and because most while still encouraging the early technologies into the market. The Class I engines are expected to remain introduction of cleaner, more durable Agency believes that making bankable side-valve technology, it does not technology and ensuring that credits available prior to 2001 would appear that there would be the same manufacturers have the flexibility they reward those manufacturers who take potential for significant credit need to comply with the proposed on the responsibility of complying with generation by Class I engine standards. EPA requests comment on the proposed standards sooner than manufacturers.) Manufacturers who the proposed caps and alternative required and would result in early adopt OHV technology earlier than approaches that would ensure the environmental benefits. Under the anticipated by the proposed Class II introduction of OHV or OHV- proposed provisions, manufacturers phase-in standards appear best comparable technology by would be allowed to begin using positioned to accumulate significant approximately 2005 while maintaining portions of the ABT program starting credits. The ability to generate credits the flexibility offered to manufacturers two model years before the proposed during the transition years would occur by ABT and the encouragement to pull standards take effect provided the primarily because the typically lower- ahead cleaner, more durable technology. manufacturer certifies and complies emitting OHV engines could earn As described earlier, EPA is proposing with the proposed 2001 model year credits up to the proposed applicable separate NMHC+NOX standards for standards of 25.0 g/kW-hr for Class I model year standards (which, as noted natural gas-fueled engines which are engines and 18.0 g/kW-hr for Class II earlier, would decline for each model intended to be as stringent as the engines for their entire product line in year between 2001 and 2005 and proposed HC+NOX standards for the a given nonhandheld engine class. The assume an industry changeover to the remaining nonhandheld small SI manufacturer could show it is in cleaner OHV engines from the higher- engines. All credit calculations for compliance with the proposed emitting side-valve engines). natural gas-fueled engines would be standards for each individual engine The environment benefits when a calculated against those standards. In family or on average using the averaging manufacturer produces engines which, addition, because the proposed provisions of the proposed ABT on average, are cleaner than required standards are equivalent in stringency, program. If a manufacturer meets this and the market for nonhandheld natural condition, the manufacturer could Trading Program for Nonhandheld Engines’’, Item gas-fueled small SI engines is extremely generate early credits to be banked for #II–B–05 in EPA Air Docket A–96–55. small (i.e., less than 0.1 percent of use in the 2001 or later model years Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3975 from only those engines certified below Therefore, EPA is proposing that Class II engines to credit using Class I 16.0 g/kW-hr HC+NOX for Class I manufacturers only be allowed to use engines for certification purposes. engines and below 12.1 g/kW-hr for early banked credits beginning in 2001 However, due to the competitive Class II engines (or 15.0 g/kW-hr or later if they are meeting the OEP concerns noted above, EPA is not NMHC+NOX for Class I natural-gas production phase-in schedule estimates proposing to allow the exchange of fueled engines and 11.3 g/kW-hr for for that model year. EPA believes credits from credit generating Class I Class II natural-gas fueled engines). prohibiting the use of early banked engines to credit using Class II engines However, all early credits would be credits unless manufacturers meet such for certification purposes. calculated against the initial Phase 2 conditions will encourage the e. Use of Credits to Address standards of 25.0 g/kW-hr HC+NOX for manufacturers to meet the OEP Nonconformity Determined After Class I engines and 18.0 g/kW-hr production phase-in schedule assumed Certification. As noted elsewhere in HC+NOX for Class II engines (or the in developing the proposed Phase 2 today’s notice, EPA is proposing a corresponding NMHC+NOX standards of standards. number of provisions that address post- 23.0 g/kW-hr and 16.7 g/kW-hr, d. Cross-Class Exchange of Credits for certification compliance aspects of the respectively, for natural-gas fueled Certification Purposes. Today’s proposal proposed standards. In two specific engines). If the manufacturer certifies its contains limitations on the cross-class cases, EPA is proposing to allow product line to the proposed Phase 2 exchange of credits during certification. manufacturers to use credits from the standards early through the use of The limitations are meant to assure the certification ABT program to address averaging, the manufacturer could bank ABT program fulfills its intended noncompliance determined after the credits for use in 2001 and later, but function of encouraging a transition to time of certification. As noted in the could only bank credits from those cleaner, more durable technology for discussion on compliance, EPA does not engines which were not needed to show both classes of nonhandheld engines believe that the typical type of early compliance with the proposed and achieves the expected enforcement action that could be taken Phase 2 standards. In other words, environmental benefits of the program. when a substantial nonconformity is manufacturers would not be allowed to The proposed limitations are also identified (i.e., an engine family recall bank credits from engines whose credits intended to assure that the proposed order) would generally be workable for were already used to offset other ABT program does not affect nonhandheld small SI engines given the engines with FELs above the proposed competition between engine nature of the nonhandheld market. Phase 2 standards. This would prevent manufacturers. Whereas handheld engine manufacturers from ‘‘double counting’’ With regard to encouraging cleaner, nonconformities after certification credits needed to show early more durable technology, the proposed would be addressed through the use of schedule of standards for Class II compliance with the proposed in-use credits, EPA is not proposing an engines was established with the standards. Manufacturers would not be in-use credit program for nonhandheld assumption that engine manufacturers allowed to trade their early credits to engines, as discussed in Section IV.D. will phase-in OHV technology over Instead, EPA is proposing to allow other manufacturers until the 2001 roughly the five year period from 2001 manufacturers to use certification ABT model year or later. to 2005 based on the schedule noted credit to address two different types of In establishing the proposed set of earlier. In order to encourage nonconformance. First, manufacturers declining standards for Class II engines, manufacturers to follow the assumed would be allowed to use ABT credits to EPA assumed a certain phase-in of OHV OEP production phase-in schedule, EPA offset limited emission shortfalls for or comparably clean and durable is proposing that limited cross-class past production of engines determined technology. As described in the March exchange of credits for certification through the Production Line Testing 1997 ANPRM, the proposed series of purposes, as noted below, would be (PLT) program as described in Section Class II HC+NOX standards were based allowed only if a manufacturer’s Class II IV.D.2. of today’s notice. Second, on the assumption that 50 percent of engine production meets or exceeds the manufacturers would be allowed to use Class II engines would employ OHV or assumed OEP production phase-in ABT credits to offset emission shortfalls comparably clean and durable schedule for Class II engines presented from Class II OHV engines that arise as technology in 2001 (i.e., could meet a earlier. a result of an adjustment to 12.1 g/kW-hr HC+NOX standard without With regard to competition in the deterioration factors originally the use of credits). For the remaining nonhandheld market, about two-thirds determined through good engineering years, the phase-in schedule assumed of nonhandheld engine manufacturers judgement, as described in Section IV.E for ‘‘OHV emission performance’’ currently produce both Class I and Class of today’s notice. Under the proposed (‘‘OEP’’) technology was 62.5 percent in II engines. The remaining one-third of provisions, manufacturers would be 2002, 75 percent in 2003, 87.5 percent the nonhandheld engine manufacturers allowed to use all credits available to in 2004, and 100 percent in 2005. EPA produce only Class II engines. At this them to offset such emission shortfalls. believes this phase-in of OHV or time, EPA is not aware of any EPA does not believe it is necessary to comparably clean and durable nonhandheld engine manufacturers that limit the use of cross-class credits for technology is important due to the only produce Class I engines. Allowing these situations. Allowing inherent emission benefits anticipated manufacturers to exchange credits manufacturers to exchange credits from from this technology in use. Related to across engine classes could cause a one class to another should not raise the the concerns discussed above regarding competitive disadvantage for those same concerns with regard to new credit life for pre-2005 credits, the manufacturers who only produce Class engine competition as noted earlier Agency is concerned that manufacturers II engines because they would not have because the manufacturer is addressing of Class II engines could bank early the advantage of being able to use a nonconformance problem for engines credits and use such credits to continue positive credits from Class I engines. that have already been sold and used in certifying a line of engine families that Therefore, with regard to the cross-class the field for a significant period of time. do not meet the OEP production phase- exchange of credits, EPA is proposing EPA requests comment on the proposed in schedule assumed by EPA in that manufacturers would be allowed to provisions for using certification ABT establishing the proposed standards. exchange credits from credit generating credits to address nonconformance with 3976 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules the Phase 2 emission standards Certification Guidance, Section X In general, the Agency believes the determined after certification. ‘‘Certification Fuel’’, manufacturers Phase 1 test procedures are appropriate EPA is not proposing to allow have four options for choice of for measuring engine emissions from manufacturers to use ABT credits to certification fuel for Phase 1 32; EPA is Phase 2 engines.33 In today’s action, remedy a past production proposing that these options would EPA is proposing the Phase 1 test nonconformance situation in the continue for this rule. procedures with the following minor Selective Enforcement Audit (SEA) The first option is to use average in- changes. First, nonhandheld engines program. As described in today’s notice, use gasoline specified at 40 CFR Part 90, sold with an engine rotational speed EPA is planning to primarily rely on the Subpart D, Appendix A, Table 3. The governor would have to use the PLT program to monitor the emissions second option is federal certification governor for speed control while performance of production engines. fuel (e.g., Indolene), specified at 40 FR running the appropriate test cycle. However, in the case of nonhandheld 86.1313–94(a), Table N94–1. Third, Second, the mode weightings for the engines only, manufacturers would in manufacturers may use other fuels, such handheld test cycle, Cycle C, would be some cases have the option of as natural gas, propane, methanol, or adjusted to 0.85 for Mode 1 and 0.15 for traditional SEA in lieu of PLT as a others, under conditions described at 40 Mode 2. Finally, appropriate changes to production line compliance program. In CFR 90.308(b)(2) and (3). Fourth, the test procedure and emission addition, SEAs could be conducted in manufacturers may request EPA calculations have been proposed for the cases where EPA has evidence of approval for certification testing on measurement of methane from natural improper testing procedures or fuels such as California ‘‘Phase 2’’ gas fueled engines in order to determine nonconformities not being addressed reformulated gasoline, which do not non-methane hydrocarbon emissions for through PLT. As discussed in section meet the requirements for ‘‘other fuels’’ natural gas fueled nonhandheld engines. IV.D.3, if EPA determines that an engine under 40 CFR 90.308(b)(2) or (3). For These proposed changes are discussed family is not complying with the this option, manufacturers would below. EPA requests comment on these standards as the result of an SEA, EPA request EPA approval of an alternate test issues. plans to work with the manufacturer on procedure (e.g., alternate test fuel) under 1. Test Cycle: Requirement for the Use a case-by-case basis to determine an 40 CFR 90.120(b)(1). Manufacturers may appropriate method for dealing with the of a Speed Governor Operation for elect to use an alternative test procedure Testing of Nonhandheld Engines nonconformity. The option(s) agreed provided it yields results equal to the upon by EPA and the engine results from the specified test Many small engines manufactured manufacturer may, or may not, include procedures (e.g., test fuels described at today make use of a speed control the use of ABT credits to make up for 40 CFR 90.308(b)), its use is approved governor (‘‘governor’’) to regulate engine any ‘‘lost’’ emission benefits uncovered by EPA, and the basis for equivalent rotational speed. In general, the by the SEA. results is fully described in the governor is a mechanically or As noted earlier, EPA solicits manufacturer’s certification application electronically controlled device that comments on all aspects of the proposed (see 40 CFR 90.120(b)(1)). EPA would attempts to maintain engine rotational ABT program, including comments on work with manufacturers to assist them speed in a particular range as the engine the benefit of the program to in making the required technical experiences different loads. A typical manufacturers in meeting the proposed demonstrations to show equivalency of example is the walk-behind mower, emission standards and any potential air the emission results. The continuation where the governor is designed to quality impacts which might be of these Phase 1 certification fuel control engine throttle position in associated with them. requirements would continue to provide response to various loads to maintain the engine’s rotational speed, and thus, 6. Certification Fuel mechanisms for manufacturers to use the same fuel for certification to both mower blade rotating speed, to provide The program for nonhandheld engines an adequate grass cut. For the Phase 1 discussed in the March 1997 ANPRM EPA and California Air Resources Board regulations, as specified above. test procedure, manufacturers are specified that the proposed range for allowed to over-ride or disconnect the eligible certification fuels for Phase 2 B. Test Procedures speed governing device and use an would be the same as under Phase 1. Test procedures are contained in external piece of equipment, i.e., a The program for handheld engines in today’s proposal which would be used throttle controller, for the purpose of the ANPRM was silent on this issue. by engine manufacturers for the purpose replicating the speed and load EPA received comment on the ANPRM of measuring emissions and determining conditions required by the test cycle that the continued use of Phase 1 emission rates for regulated emissions (see 40 CFR 90.409(a)(3)). After the certification fuels for Phase 2 testing is for certified engines. The test finalization of the Phase 1 rule during appropriate so long as the same fuel procedures being proposed today are in the regulatory negotiation process, the may be used to certify handheld engines most respects identical to the Test Procedure Task Group formed by under both EPA and CARB regulations. procedures required for the certification the Regulatory Negotiation committee EPA is proposing today that of Phase 1 engines. Test procedures recognized that the use of the engine’s certification test fuel requirements for were discussed during the Regulatory designed governor, not an external the Phase 2 program would remain the Negotiation process, with the key issue throttle controller, may be a more same as in the Phase 1 program, as being the appropriateness of the Phase accurate prediction of an engine’s in-use specified at 40 CFR 90.308(b). While 1 test cycles for Phase 2 engines. The performance. The Test Procedure Task California ‘‘Phase 2’’ reformulated draft Regulatory Support Document for Group members generally agreed that a gasoline is not a proposed certification this proposal contains a summary of the test fuel, EPA believes that continuation test procedure issues addressed during 33 For a discussion on the adequacy of the Phase of the Phase 1 program for Phase 2 the Regulatory Negotiation process. 1 test procedure, see Chapter 1.1 in ‘‘Regulatory would continue to provide a means of Support Document, Control of Air Pollution, Emission Standards for New Nonroad Spark- harmonizing the Federal and California 32 See ‘‘U.S. EPA Small Engine Certification Ignition Engines At or Below 19 kilowatts’’ U.S. programs. As described in the February Guidance, Draft, February 19, 1997,’’ available in EPA, May 1995, EPA Air Docket A–93–25, Item #V– 1997 Draft U.S. EPA Small Engine EPA Air Docket A–96–55, Item #II–C–03. B–01. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3977

Phase 2 test procedure should require agrees with the report’s conclusion that would be used; all pollutants would be the use of the engine’s speed governor a more appropriate set of weighting measured; residential engines would be for speed control during the Federal factors for handheld engines is 85 aged to their full regulatory life but Test Procedure (FTP) for those engines percent for the 100 percent power mode commercial engines could be aged to 75 which are equipped by the and 15 percent for the idle mode. percent of their full regulatory life; manufacturer with a speed governor. Therefore this change is being proposed samples sizes would be determined in However, there was not general for Phase 2. the NPRM process; and there would be agreement or detailed discussion of the periodic spot checks of the correlation 3. Measurement of NMHC Emissions specific requirements of how the speed (ANPRM, Annex A, Section J(2)). From Natural Gas Fueled Nonhandheld governor should be used during the The ANPRM provisions for the Engines FTP. At this time the Agency believes nonhandheld engines are less the most appropriate method to operate In order to accommodate the comprehensive. For this category, the engines on the speed governor for an proposed optional non-methane correlation program was specifically emissions test would be to use fixed hydrocarbon (NMHC) standard for discussed for engines using side-valve throttle operation for the 100 percent natural gas fueled nonhandheld engines, or aftertreatment technologies. In load mode, and then to use the engine the Agency is proposing to incorporate addition, the ANPRM describes a simple governor for all subsequent power by reference the appropriate sections ‘‘correlation’’ method (ratio of mean modes (75 percent, 50 percent, 25 from 40 CFR Part 86 which relate to the emission rates); would require periodic percent and 10 percent). For each power measurement of methane emissions re-calculation (every other year for the mode, the engine speed governor set- from spark-ignited engines. These first five years of the program and then point would be adjusted to the nominal appropriate sections were published as every five years thereafter, e.g., 2001, test cycle set-point, 85 percent of rated part of a final rulemaking titled 2003, 2005, 2010, 2015, etc.); and calls speed for Cycle A, and 100 percent rated ‘‘Standards for Emissions From Natural for changes in the correlation to apply speed for Cycle B. This test method Gas-Fueled, and Liquefied Petroleum prospectively only. allows for a consistent and repeatable Gas-Fueled Motor Vehicles and Motor In today’s NPRM, EPA is proposing a method of determining the 100 percent Vehicle Engines, and Certification unified program, to be called the ‘‘field/ load condition, yet would allow the Procedures for Aftermarket bench adjustment program,’’ 36 that engine’s governor to regulate speed for Conversions’’ see 59 FR 48472, would apply to both nonhandheld the remaining load conditions. This published on September 21, 1994. The engines that use side-valve or method is also straightforward and specific sections being incorporated can aftertreatment technologies and to would be relatively simple to be found in the proposed regulatory handheld engines. EPA believes it is implement in a laboratory. The Agency language contained in this proposal at appropriate to design one program to requests comment on this test method § 90.301(d) and § 90.401(d). apply to both categories of engines both and on other test methods which may be C. Field/Bench Adjustment Program because it is less complicated for more appropriate. manufacturers that produce both kinds The ANPRM contemplates a so-called of engines and because it simplifies the 2. Test Cycle: Adjustments for ‘‘bench field correlation program’’ for compliance program for administrative Weightings for 2-Mode Cycle for both handheld and nonhandheld small purposes. EPA seeks comment on the Handheld Engines 35 spark ignited engines. For handheld application of the same program and The Agency is proposing a change in engines, it is part of the in-use testing methodology to both categories of the weighting factors for the handheld program (ANPRM, Appendix A, Section engines. The remainder of this section test procedure. For the Phase 1 rule, a J(2)); for nonhandheld engines, it is part will set out the background for field/ weighting factor of 90 percent is applied of the certification program (ANPRM, bench adjustment and the principles of to the 100 percent power mode, and a Appendix B, Sections 4(a) and (b)). In such a program, a proposed factor of 10 percent is applied to the idle either case, the basic premise for these methodology, and various practical mode, in order to combine the modal programs is the same: to allow requirements for the application of the results for the final weighted emission manufacturers to age engines on the program. It will end with a brief bench to demonstrate expected value. The Agency is proposing for discussion of an alternative compliance in-use, it is necessary to Phase 2 that a weighting factor of 85 methodology. percent is used for the 100 percent demonstrate the ‘‘correlation’’ between power mode, and 15 percent be used for field aging and bench aging. 1. Background and Principles the idle mode. This proposal is based on The ANPRM sets out slightly different There are at least three ways to a study performed by members of requirements for the proposed handheld demonstrate compliance with in-use PPEMA during the regulatory and nonhandheld programs. standards such as those proposed in negotiation process.34 PPEMA members Specifically, the ANPRM stipulates that today’s rule. In general, the most collected real-time speed and throttle the handheld correlation program representative way is to demonstrate position data on several types of would be conducted under EPA compliance on engines that have been handheld equipment used during actual guidance; a portion of the engines aged to their full regulatory lives by in-use operation. This data was would be aged in situations in which actual end-users. This ensures that the analyzed and combined with estimates the manufacturer does not exercise emissions reflect actual in-use control over the engines’ maintenance, of annual use, load factors, and annual conditions, including the presence of or limit their usage such that the sales to weight the results of the field dirt and other matter such as clippings, engines are no longer used in a way that testing. EPA’s summary of this report is operation at several degrees of is representative of typical in-use contained in the Draft RSD. The Agency orientation, operation in very hot engines; the full federal test procedure ambient temperatures, etc. At the same 34 See ‘‘Hand Held Composite Duty Cycle time, consumer-based field aging is Report’’, February 1995, prepared by members of 35 The use of the term ‘‘correlation’’ was meant to the Portable Power Equipment Manufacturers describe an adjustment factor that can be applied Association, available in EPA Air Docket A–96–55, to bench-aged engines to approximate field-aged 36 This nomenclature more accurately reflects the Item # II–D–18. conditions, and not a true statistical correlation. purpose of the program. 3978 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules difficult, not the least because it is permitting a closer fix on the true The width of each confidence interval cumbersome to organize a program with population relationship. would then be compared to the a sufficient number of end-users. In ‘‘maximum allowable interval width’’ 2. General Methodology addition, it may take some end-use proposed today. EPA is proposing +/ consumers years to put an appropriate Drawing on the elements of the ¥20% of the standard as the maximum number of hours on the engine through ‘‘bench field correlation program’’ set allowable interval width. If the normal use. out in the ANPRM and the criteria confidence intervals around each of the The second method is to demonstrate discussed above, EPA is proposing the field-aged and bench-aged means each compliance on engines that have been following methodology to calculate the are no wider than the maximum aged to their full regulatory lives on the adjustment factor that would be applied allowable interval width (e.g, +/¥20% bench. While this method can be more to bench-aged emissions to approximate of the standard), then the adjustment practical for the manufacturer, it also field aging. EPA seeks comments on all factor that would be applied in the abstracts away many operational or aspects of this program. future to bench-aged engines to simulate environmental conditions that can affect Two samples of engines would be field aging would be the ratio of the aged, one in the field and one on the deterioration. means (xÅF/xÅB), provided this ratio is bench. The aging procedures for all greater than or equal to one. The third way, and the way being engines in the field sample would be the proposed in today’s notice, is a EPA is proposing that these same, and the aging procedures for all constraints be applied to both handheld consolidation of some elements of the engines in the bench sample would be other two methods. Under it, and nonhandheld engines, but seeks the same. The manufacturer would comment as to whether the confidence manufacturers could bench age engines develop a test plan which would specify and then adjust the emission test results levels and maximum allowable interval the conditions under which the engines widths should be different among them. to reflect actual in-use conditions as would be aged on the bench and in the represented by field aging. This would EPA chose 90% confidence levels for field. EPA would reserve the right to constructing the confidence intervals for be accomplished by developing a field/ review any test plan, for handheld or bench adjustment factor that would be the field-aged and bench-aged engines, nonhandheld engines, and to require the and +/¥20% of the standard maximum applied to emissions from bench-aged manufacturer to revise it if it does not emissions to simulate field aging. allowable interval widths, based on reflect appropriate testing conditions. computer simulations 38, 39; however, Thus, the objective of this field/bench This review would enable EPA to manufacturers or others commenting on adjustment program is to develop an exercise some oversight of the program this proposal may have information that adjustment factor based on the without requiring the entire program to suggest other levels. mathematical relationship between be performed under EPA guidance, as Under the proposed program, if either emissions from field-aged and bench- anticipated in the handheld program or both of the confidence intervals do aged engines. For obvious reasons, it is described in the ANPRM. With regard to not pass the above-described statistical very important to design a field/bench sample size, today’s proposed program test, the manufacturer would have the adjustment program that will yield an contains only two constraints: the choice of three remedies. First, the adjustment factor that is as closely bench-aged and field-aged samples must manufacturer could increase the size of related as possible to the true initially be of equal size and must the failing sample and repeat the relationship between field and bench contain at least three engines. This statistical tests with the increased aging. Any deviation will result in an minimum number is necessary to number of engines. Often, increasing the adjustment factor that either under- perform the statistical tests described size of the sample will lead to a smaller corrects or over-corrects the bench below. sample variance, although this is not results, the ultimate result being an Next, each engine would be tested on always the case with small samples. A impact on the stringency of the emission the full federal test procedure after it manufacturer could repeat this remedy limits. In addition, this field/bench has been run for its useful life. Then, for as many times as desired. Note that it adjustment program should take each sample, the mean HC+NOX would not be necessary to increase the advantage of statistical techniques, both emission rate would be calculated and size of both samples; only the sample to take into account the inherent two independent confidence intervals that failed the statistical test would need uncertainty in sampling 37 and to allow would be constructed, one around the to be increased. Alternatively, if the EPA to impose some restrictions on the mean of the field-aged engines, and one statistical tests are failed, the use of this simplified compliance around the mean of the bench-aged manufacturer could adjust the test plan method. In today’s notice, EPA is engines, using the student’s T and rerun the program, subject to EPA proposing to allow manufacturers to use distribution and a 90% confidence approval. In the third alternative, the the simple ratio of the field and bench level. manufacturer could choose to age all mean emission results as an adjustment The formula for the confidence engines in the field for the purposes of factor if the width of a confidence interval would be: the compliance program. interval around the bench-aged and field-aged mean emission rates does not x± t−α − ∗ S/ n 3. Practical Requirements of the exceed a certain percentage of the (/;1 2n 1) Program where standard. This restriction would limit This section describes several x¯ is the sample mean, the emission results for each sample, practical elements of this proposed t(1-α/2; n-1) is the appropriate field/bench adjustment program and 37 parameter from Student’s t table, To take full advantage of the field/bench how it would work if adopted as adjustment program, engine manufacturers will depending on the level of confidence presumably prefer to bench and field age only a chosen by EPA, proposed. relatively small number of engines. Thus, the s is the sample standard deviation, results of the program will heavily depend on the 38, 39 See ‘‘Simulation to Determine Confidence characteristics of the sample (it is generally the case and Level and Maximum Allowable Interval Width for that a different sample would have different n is the number of engines in the Field/Bench Adjustment Factor Program,’’ EPA Air emission results and a different adjustment factor). sample. Docket A–93–29, Item #II–B–01. 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a. Initial Field/Bench Adjustment whether a longer lead time should be or fleets where the manufacturer does Factor Calculation. The ANPRM does specified, for example, requiring the not carry out or exercise control over the not discuss an initial date by which the new adjustment factor to be applied engines’ maintenance, or limit their first correlation would have to be with the engine model being certified at usage such that engines are no longer performed, and thus the first adjustment least six months after the new used in a way that is representative of factor calculated. EPA is today adjustment factor is determined. This typical in-use conditions.’’ proposing that a manufacturer may would allow more time for engine Manufacturers would have three ways propose a field/bench adjustment manufacturers to adjust their designs, if to field-age engines: in individual usage, program test plan up to 48 months prior necessary. Finally, EPA is not proposing in an independent fleet, or in a fleet that to certification for Phase 2, and if EPA any restrictions on the direction of may be controlled by the manufacturer did not reject the proposed test plan modification of the field/bench but over which the manufacturer does within 90 days of submission of a adjustment factor that may results from not control the maintenance process or complete test plan, the proposed test future rechecks: it could be revised up inappropriately limit use. EPA proposes plan would automatically be accepted. or down, but not below 1.0. to extend this choice to both handheld c. Hours to Age. EPA is proposing that EPA is also proposing that, at least 90 and nonhandheld engines. However, all bench-aged engines be aged to their days before beginning bench aging for EPA proposes that, if the manufacturer full regulatory lives. Field-aged certification or in-use testing purposes, chooses to field-age the engines in a the manufacturer would provide a nonhandheld engines and field-aged residential handheld engines would also non-independent fleet, the applicable report to EPA for approval describing test plan must explain how the engines the aging and testing conducted for the be aged to their full regulatory lives. However, following the program will be used to approximate, as closely field/bench adjustment program. This as possible, actual in-use conditions, timing would ensure that adjustment described in the ANPRM, under the proposed program field-aged and also the kind of maintenance factors have been established in time for program to be followed, which should demonstrating compliance with Phase 2 commercial handheld engines could be approximate expected in-use standards. EPA is also proposing that field-aged to a minimum of 75 percent maintenance by end-users. The key is to the initial field/bench adjustment of their full regulatory lives. This ensure that the engines will experience program be performed on engines flexibility is proposed today to reflect similar load demands and representative of Phase 2 engines. concerns that it may be hard to age these engines in the field due to equipment environmental factors. For example, in b. Periodic Rechecks. The ANPRM problems not related to emissions and the case of lawn mowers, the test plan contemplates that both the handheld engine durability which might be for a non-independent fleet would have and the nonhandheld correlation experienced at the end of the useful life. to specify how the engine would be programs would require the correlation At the same time, as described below, exercised in a way to be representative to be periodically rechecked, although field aging need not be done by actual of typical in-use conditions, which only for the nonhandheld engines was end users but, instead, could be done by likely include cutting both high and low a specific recheck schedule provided the manufacturer using a test plan that grass, under wet and dry conditions, etc. (every other year for the first five years mimics as closely as possible actual Alternatively, if the manufacturer of the program and every five years field use. Under these conditions, the chooses to age the engines in an thereafter, e.g., 2001, 2003, 2005, 2010, equipment may be less likely to break. independent fleet, the test plan would 2015, etc.). In today’s notice, EPA is Field aging to a minimum of 75 percent have to detail how the use of the engine proposing that the recheck period be the of regulatory useful life is being will be documented and how the user same for both handheld and proposed as a cost savings measure for will ensure that it is used in a variety nonhandheld engines. However, EPA commercial engines which have the of different conditions. Finally, EPA suspects that the recheck period longest regulatory useful lives. could review this test plan and could described in the ANPRM’s nonhandheld Furthermore, EPA believes that test require changes if the plan does not program may be more comprehensive results on commercial engines aged to at adequately approximate in-use than is necessary. Specifically, it may be least 75 percent of their regulatory conditions. the case that the field/bench adjustment useful lives can be appropriately e. Technology Subgroups. For both factor will not need to be checked so extrapolated to the full regulatory useful often, especially if technologies, life of the engine due to the generally individual-manufacturer and industry- production tolerances, and emission more durable design of commercial wide programs (see f., below), the results do not change that much from engines which would tend to result in analysis could be done on engine year to year. As a result, EPA is more predictable emission technology subgroups which could be proposing that the field/bench determination performance. Therefore, expected to have similar emission adjustment factor be re-estimated as EPA seeks comment on the costs and deterioration characteristics, that is, often as every five years as determined benefits associated with field aging groups of engine families from one or by EPA on a case-by-case basis, except handheld commercial engines to their more manufacturers having similar size, that EPA may require more frequent full regulatory lives. Finally, EPA is application, useful life and emission rechecks in model years prior to the proposing that all engines in the same control equipment. It would not be 2006 model year. EPA seeks comment sample (bench or field) be aged to the appropriate for engines with significant on this proposed recheck schedule. EPA same number of hours. differences in in-use emissions also proposes that any new adjustment d. Test Plan. EPA is proposing that performance characteristics to be factor subsequent to a recheck be the manufacturer develop a test plan for included in the same technology applied regardless of how similar it is to both field and bench aging. All such test subgroup. Manufacturers would be the adjustment factor from the previous plans would be required to use the required to provide a justification correlation effort. However, the new federal test procedure. The handheld satisfactory to EPA that the engines adjustment factor would apply only program described in the ANPRM families would be expected to have prospectively, beginning with the next specified that ‘‘a portion of the field similar emission deterioration model year. EPA seeks comment on engines will be aged in individual usage characteristics, and would thus be 3980 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules appropriately grouped in the same manufacturer and the industry. This is choose among all of their test results technology subgroup. necessary to ensure that the field/bench and submit only the best emission f. Individual-Manufacturer or adjustment factor reflects only the results from a fairly large pool of Industry-Wide Estimation. EPA is experience of the engines to which it engines, thus biasing the field/bench proposing that the above-described will be applied. Presumably, a adjustment calculation. EPA does not field/bench adjustment program and manufacturer will drop out only if its believe this restriction will be estimation of the field/bench adjustment individual adjustment factor is more burdensome, since manufacturers will factor can be performed on either an favorable than the industry-wide be able to estimate a field/bench individual-manufacturer basis or on an adjustment factor. Thus, if the industry- adjustment factor with as few as two industry-wide basis. Any manufacturer wide adjustment factor is not engines (one bench-aged, one field-aged) who wants to use a field/bench recalculated, then it will understate the if they participate in an industry-wide adjustment factor instead of field aging experiences of the engines to which it program, or six engines (three bench- engines would have to either conduct its will be applied. EPA seeks comment on aged and three field-aged) if they decide own program, or participate in an whether such restrictions are necessary. to establish their own adjustment factor. industry-wide program. In other words, g. Restriction on Using Test Results h. Other Pollutants. The handheld the engines that will benefit from the for Other Purposes. One comment on program described in the ANPRM application of an adjustment factor the ANPRM requested that engine contemplated that all pollutants be would have to be included in the manufacturers be allowed to combine measured. EPA is proposing that CO sample used to estimate that adjustment certification, correlation, and in-use emissions be measured and adjustment factor. This requirement would ensure testing for a family, such that bench factors for CO be determined for both that a manufacturer could not simply results from the bench aged engines the nonhandheld and handheld apply a field/bench adjustment factor from the field/bench adjustment programs. However, EPA believes that estimated by another manufacturer that program can be used to satisfy in-use the data set upon which statistical tests may not reflect the performance of the testing requirements. EPA proposes to used to establish appropriate adjustment engines to which it is applied. factors for HC+NOX are determined are An industry-wide analysis would be allow test results from engines used for the field/bench adjustment program to sufficient to establish the relationship subject to several additional constraints. between CO emissions in the field and First, EPA is proposing that all be considered for purposes of determining handheld deterioration on the bench. Therefore, EPA proposes manufacturers participating in the same to allow manufacturers to use the same sample use the same test plan, except factors based on good engineering judgment. EPA believes this is set of data to calculate a CO adjustment that maintenance schedules could vary factor as would be used to establish the across manufacturers to reflect appropriate because in the handheld certification program compliance is HC+NOX field/bench adjustment factor. differences in manufacturer-specified EPA requests comment on this proposal. maintenance guidance to end-users. determined by applying a deterioration This is to reflect the fact that although factor to new engines. Thus, the actual 4. Alternative Methodology Considered engines that are used for certification manufacturers may pool their emissions EPA believes that the methodology are not the field-aged engines. However, results in the industry-wide program, described above is most appropriate the test results from the field/bench they may want to test their engines because it balances the desires of adjustment program would not be separately. This uniformity is important industry for a simple program with the acceptable to satisfy the in-use testing to avoid biased aggregation of results. desire of EPA to put reasonable requirements for handheld engines, Second, the sample of engines used to statistical constraints on the program since this would create a situation in estimate the field/bench adjustment without making it too difficult to which engines that were used to factor would have to include at least one perform or apply. However, there are estimate a parameter for the compliance bench engine and one field engine from other methods that can be used. program are also used to demonstrate the same engine family from each Notably, EPA considered a statistical compliance. Similarly, EPA would not participating manufacturer, but no fewer methodology in which a confidence allow the test results from the field/ than three bench-aged engines three interval would be constructed around bench adjustment program to be used field-aged engines per technology the ratio of the means, and the for demonstrating certification for the subgroup. EPA seeks comment on adjustment factor would be the upper nonhandheld program. The whether the emissions should be sales bound of that confidence interval.40 nonhandheld engine compliance weighted, to give a better picture of While both techniques attempt to program relies on emission results from emissions across the category. EPA apply statistical concepts, this engines aged to their full regulatory requests comment on how such a sales alternative methodology could be lives. As in the handheld engine in-use weighting procedure could be considered in some ways more testing example above, if the engines accomplished and still protect the statistically sound than the one used in the field/bench adjustment confidentiality of sales information that proposed above. However, it may be program were also allowed to be used to might be covered by the confidential practically more difficult to use. Most demonstrate compliance, this would business information provisions of 90 importantly, the adjustment factor create a situation in which engines that CFR part 2. Third, EPA proposes to limit derived from this alternative were used to estimate a parameter for entries into and exits from the industry- methodology would be sensitive to the the compliance program are also used to wide program: a manufacturer could number of engines tested: a larger enter or drop out only before the demonstrate compliance. Finally, EPA adjustment factor goes into use for the proposes to prohibit emission results 40 See ‘‘Simulation to Determine Confidence Level first time. This will prevent constant from engines tested to determine and Maximum Allowable Interval Width for Field/ revision of the adjustment factor. If a compliance with other parts of today’s Bench Adjustment Factor Program,’’ EPA Air manufacturer drops out of the industry- program from being used for purposes of Docket A–93–29, Item #II–B–01. For a description of this alternative approach, see ‘‘A Procedure for wide adjustment program, the field/ calculating the field/bench adjustment Adjustment of Emissions Results for Bench Aged bench adjustment factor would have to factor. This restriction is necessary Small Engines,’’ located in EPA Air Docket A–96– be recalculated, both for that because otherwise manufacturers could 55, Item #II–D–40. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3981 number of engines will most often result 1. Certification accumulate hours on the engine, and in a smaller adjustment factor, although The certification process as required then run a full test procedure at full this need not always be the case. Thus, in the Act is an annual process. The Act useful life hours to determine a test manufacturers will be faced with either prohibits the sale, importation or value for certification. testing a large number of engines to introduction into commerce of regulated The final field-aged results or the final ensure the smallest adjustment factor engines when not covered by a adjusted results of the fully bench-aged (closest to the straight ratio of the certificate. The certification process engines would be compared against the sample means) or using a larger proposed in this notice differs from that applicable standard to determine adjustment factor with concomitant required in Phase 1 in that it would compliance at the time of certification. effects on the adjusted emission rate. require the manufacturer to demonstrate In addition, a df would be calculated EPA is concerned that this dynamic that the engines will meet standards from the final test results compared could lead manufacturers to test a large throughout their useful lives. To against low hour stabilized test results. number of both bench-aged and field- account for emission deterioration over While not directly used in the aged engines. In addition, the time, manufacturers would be required certification program, this df would be adjustment factor derived from this to either age engines out to their full used to adjust the results of engines alternative methodology will always be useful lives to obtain certification, or to tested in Production Line Testing a conservative estimate of the adjust their certification test results by program described below in Section IV.D.2. relationship between bench and field- assigned or calculated deterioration For Class II SV engines and Class II aged results, because it is the upper factors (dfs), as is currently done under bound of the confidence interval, and it engines with aftertreatment certified to other EPA mobile source rules. Where the 250 hour useful life category, the will always be greater than the simple appropriate and with suitable ratio of the means. Yet, it is not clear manufacturer would have the option to justification, dfs would be allowed to be bench age the engine to less than the why choosing a conservative adjustment carried over from one model year to factor is preferable to a simple ratio of full useful life and calculate a df at the another and from one engine family to engine’s full useful life using a method the sample means. Nevertheless, EPA another. This section describes seeks comment on the use of this of data extrapolation acceptable to the nonhandheld and handheld engine methodology and other alternative Administrator, as described below in certification provisions, provisions for approaches as opposed to the proposed Section IV.E. certification to CO standards, and EPA methodology. ii. Overhead Valve Engines. As efforts to streamline the certification discussed elsewhere in this notice, EPA D. Compliance Program process. expects the Phase 2 rule to result in a This section discusses the three step a. Nonhandheld Certification. This virtually complete technological shift compliance program proposed today for notice proposes that certification for for Class II nonhandheld engines from the Phase 2 regulation of small SI Class I and Class II nonhandheld SV to OHV or comparably clean and engines, consisting of certification, engines continue as in Phase 1 except durable technology engines. In addition, production line testing, and in-use for the inclusion of an estimation of in- EPA believes that OHV technology emission testing. As discussed above in use deterioration. This deterioration engines have the potential to show low Section III, today’s proposal contains estimate would be used to predict full and stable emissions deterioration three basic elements new to the Phase useful life emission performance which characteristics as compared with SV 2 program. First, manufacturers would would then be the basis for certification technology engines. be required at the time of certification compliance decisions. The method for EPA is today proposing that to account for emissions deterioration estimating in-use deterioration for manufacturers of OHV technology throughout the useful life of the engines. certification purposes would depend on engines be allowed to use an industry- Second, EPA is today proposing a the type of engine technology. wide assigned df for certification manufacturer-run production line i. Side-Valve Engines and Engines purposes. This program should allow testing program to replace the existing with Aftertreatment. For all side-valve manufacturers to focus more of their Selective Enforcement Audit (SEA) engines and engines with aftertreatment, efforts on transitioning to a cleaner program as the primary method of this notice proposes that one engine technology, by reducing the certification determining the compliance of new from each engine family would either be test burden on the engine manufacturers production engines. Finally, EPA is field aged in a representative at the beginning of the Phase 2 program. proposing in-use emission testing application to its full useful life, or EPA believes that offering programs for nonhandheld and bench aged to its full useful life to manufacturers the opportunity to use an handheld engines. EPA is also demonstrate compliance with the industry-wide assigned df rather than proposing appropriate remedies to standards.41 If a manufacturer chose the calculated dfs is reasonable for OHVs. A address noncompliance with emission bench aging option, it would be key element of the proposal for an standards. Such remedies include required to use a bench cycle approved assigned df is the proposed requirement mandatory recall but would also in advance by the Administrator, that all manufacturers of OHV consider alternatives to mandatory adjusting the results using the field/ technology engines would participate in recall, in the event of nonconformities bench adjustment factor established an industry-wide OHV Field Durability found through production line testing or through the process described above at and In-use Performance Demonstration in-use testing programs. The basic Section IV.C. In either case, the Program (‘‘Field Durability Program’’) proposed program for nonhandheld and manufacturer would be required to run described in Section IV.D.3, below. This handheld engine compliance is the full test procedure described in this program would be designed to described in this section; Section IV.E rule when the engine is stabilized, demonstrate the validity of the assigned outlines certain compliance flexibilities df by producing significant amounts of which may be made available to certain 41 For nonhandheld engines participating in the data from real field-aged engines. If the averaging, banking and trading program described manufacturers depending on a in more detail above in Section IV.A.5, compliance OHV Field Durability Program data manufacturer’s size, the class of engines, would be demonstrated with the family emission indicate that the assigned df is or other factors. limit (FEL) rather than the standard. inappropriate, EPA would conduct a 3982 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules rulemaking to modify these proposed recommendation, these manufacturers limited, the data on Class II engines provisions to correct the assigned df believe these higher dfs and emission designed for longer useful life periods program. This section describes the standards provide a better assessment of do not point to any value other than 1.3 assigned df program for OHV engines, as equivalent stringency for these for an assigned df for longer useful life well as an option for manufacturers to categories of engines compared to 250- hours. While no data were available on calculate dfs through field testing hour engines certified with a 1.3 df to Class I engines designed for longer engines at the time of certification. a 12.1 g/kW–hr standard. useful lives, EPA believes that a 1.3 EPA also received comment that use assigned df at longer useful lives is a Assigned dfs For OHV Nonhandheld reasonable value. Longer useful life Engines of assigned dfs should be limited to small volume manufacturers as a cost engines are designed for enhanced EPA is proposing that manufacturers savings measure, and that the use of durability, and this is reflected in the of OHV technology engines would be experimentally-derived dfs is preferable emissions deterioration of the engines as allowed to use a multiplicative assigned to the use of assigned dfs. This well, with longer useful life engines df of 1.3 for OHV engines in all useful commenter argues that if the assigned df experiencing the same emissions life categories for projecting emissions level is set too high, it could penalize deterioration at longer hours as do short deterioration for compliance purposes. those manufacturers who develop useful engines at short hours. In the ANPRM, EPA discussed a value extremely durable engines, but if an Additional information on the of 1.3 as the assigned df value for Class assigned df were set too low, the result derivation of the proposed assigned df I and Class II OHV technology engines could be an underestimation of the of 1.3 is contained in the docket to this 44 in the shortest useful life categories (i.e., emissions impact associated with an rulemaking. Commenters who 66 and 250 hours, respectively). In engine family or even the entire suggested a value other than 1.3 for addition, EPA indicated that it would category. A final commenter asserted assigned dfs at longer useful life hours consider during the rulemaking process that assigned dfs are a bad idea; that the did not supply data in support of their whether or not to propose an assigned program described in the ANPRM recommendations. However, EPA df for all useful life categories, and if so, results in a program in which future recognizes that the data upon which this what the appropriate assigned df values standards are uncertain due to the proposal is based are very limited. EPA would be. EPA indicated that the possibility of another rulemaking to requests additional data on which to assigned df for Class II OHVs in the 500 adjust dfs; and that in the interval, base the analysis for determining values and 1000 hour useful life categories engines may exceed the in-use for assigned dfs for OHV engines at longer useful lives. In particular, EPA would likely fall between 1.3 and 1.5. In standards because there is little requests comment on and any data addition, if an assigned df of 1.5 at 1000 incentive for manufacturers to reduce supporting the assigned df and level of hours, for example, appeared to be the the deterioration rates of their engines. appropriate value, EPA would propose standards recommended by engine EPA believes an industry-wide manufacturers (that is, 1.4 df and 13.0 a standard for the 1000 hour category assigned df combined with the OHV adjusted by ratio to the proposed 12.1 g/ g/kW–hr for 500-hour engines, and 1.5 Field Durability Program to validate df and 14.0 g/kW–hr for 1000-hr kW-hr standard proposed for the 250 assumptions as to the durability of OHV hour category. engines). technology engines is a sound program. Finally, EPA is concerned that an EPA received comment on the The Agency fully expects the assigned ANPRM that the assigned df should be industry-wide assigned df could reduce df to accurately reflect the industry- the incentive for a manufacturer to higher than 1.3 for the higher useful life wide average df of OHV engines categories, with a corresponding higher improve the durability of its engines. If certified to the proposed standards at manufacturers would be able to rely on emission standard for the higher useful least in the near term. As manufacturers life categories. This commenter an assigned df for certification gain improved capabilities to produce performance regardless of in-use suggested that the application of a 1.3 df OHV engines (as would be expected as to longer useful life periods could emission performance, manufacturers an increasing proportion of small could design and produce engines reduce product offerings and impose engines become OHVs), the industry- unjustified costs on small equipment which actually had much higher in-use wide df could shift to a lower value. deterioration than the assigned df. manufacturers. EPA received a similar There is no expectation, however, for a recommendation for higher dfs for the Manufacturers would be motivated to shift to a higher average df. The OHV do so if they receive cost or other 500 and 1000-hour useful life Field Durability Program is expected to categories.42 Specifically, an assigned df advantages from such a strategy. This is yield significant quantities of in-use a real possibility since, in general, less of 1.4 and a HC+NOX compliance data designed to verify the assumptions expensive designs such as those with standard of 13.0 g/kW–hr were as to the emissions durability recommended for 500-hour engines and larger production tolerances or no oil characteristics of OHV technology control rings would also be expected to an assigned df of 1.5 and a HC+NOX engines underlying today’s proposal. compliance standard of 14.0 were have higher emission deterioration. To The future standards are not uncertain protect against this, EPA is proposing recommended for 1000-hour engines. In if the industry average assigned dfs making these recommendations, the limits on the use of assigned dfs. prove to be low and stable, as Specifically, EPA is proposing that if it represented manufacturers argued that anticipated by this proposed rule. EPA had no full life emission determines the manufacturer’s actual in- performance information for these EPA is today proposing a 1.3 assigned use sales weighted average df for a categories of engines. Although df for all useful life categories for Class acknowledging they were providing no I and Class II engines, based on EPA Improvement Resources, available in EPA Air analysis of available test data on engines Docket A–96–55, Item #II–D–11. data to substantiate their 44 aged in the field, provided by engine See ‘‘Summary of EPA Analysis of 43 Nonhandheld Engine HC and NOX Exhaust 42 See Memo to the Docket regarding the October manufacturers. While the data are Emission Deterioration Data for 500 Hour Useful 3, 1997 meeting between U.S. EPA and the Engine Life Class II OHV Engines,’’ EPA Memorandum, Manufacturers Association, EPA Air Docket A–96– 43 See ‘‘Tier 1 Deterioration Factors for Small August 4, 1997, available in EPA Air Docket A–96– 55, Item #II–E–11. Nonroad Engines’’, September 1996, a report by Air 55, Item #II–B–02. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3983 useful life category (e.g., all OHV choose the option of calculating their Durability Program is the primary families certified to a 500-hour useful own dfs, over the option of selecting the program for Class I and II OHV engines. life) exceeds the assigned df by more 1.3 assigned df, in cases in which their The Agency believes that any alternative than 15 percent (i.e., actual in-use df is engines exhibit superior deterioration to the primary program for nonhandheld 1.5 or greater), then EPA may require characteristics. EPA is concerned that, if OHV engines must generate emission the manufacturer to generate engine only these engines with superior data of similar accuracy as that on family-specific dfs for one or more deterioration characteristics are which the assigned df and OHV Field engine families in that useful life removed from the evaluation of the Durability Program is based. Without category. Similarly, if EPA determines industry-wide assigned df values, then this requirement, the primary program that a family has an actual in-use df the industry average would be would be undermined. The Agency has greater than 1.8, then EPA may require influenced upwards. proposed a field/bench adjustment the manufacturer to generate an engine- Therefore, to partially mitigate this program for handheld engines and for specific df for that family. In either case, concern, EPA is proposing that if a non-OHV technology Class I and II if EPA requires such engine-specific dfs, manufacturer chooses to establish its engines. In both of those programs the they would be determined on the basis own df for one engine family in a useful Agency has proposed a level of of data from three field-aged engines per life category, then it would be required confidence which would have to be met engine family. This level of testing is the to do so for all of its engine families before a field/bench adjustment factor same as that for the program being within that useful life category. Thus would be allowed, and is therefore a proposed for a manufacturer which opts the manufacturer would determine compromise between data accuracy and to not use the assigned dfs for specific dfs for all of its families in that test burden (see Section IV.C). The test certification (see discussion in the useful life category. In considering the burden associated with the assigned df following section, ‘‘Calculated dfs for types of data that would be required for and OHV Field Durability Program has OHV Nonhandheld Engines’’). EPA manufacturer-determined dfs, EPA been limited to an appropriate level requests comment on the proposed balanced the need for the program to be because it is covered by a maximum thresholds for limits on the use of the reasonable and practicable, yet rigorous number of field aged engines that a 1.3 assigned df. enough to provide confidence in the dfs. manufacturer would be required to test EPA recognizes that a requirement to EPA is today proposing that on an annual basis (see Section IV.D.3.c generate an engine-family specific df for calculated dfs for the full product line ‘‘Maximum Rates for Field Tested certification could be especially of OHV engines in a particular useful Nonhandheld Engines’’). However, the burdensome or perhaps practically life category could be generated by field proposed OHV Field Durability impossible without disrupting aging a minimum of three engines per Demonstration does not permit a production if the requirement was engine family in a representative compromise on the accuracy of the field placed on the manufacturer close to the application to their regulatory useful test data which would result from a anticipated start of production for that lives. Each engine would be emission field/bench adjustment program. family. EPA would take such issues into tested at least twice for all regulated Therefore, the Agency believes it is not consideration when making any pollutants using the full test procedure appropriate that an alternative (i.e., determination to require an engine- described in this rule. The first test manufacturer calculated dfs) to this family-specific df to be generated. point would occur after the engine had primary program should allow such a EPA requests comment on all aspects been stabilized by bench or field aging. compromise. The Engine Manufacturers of today’s proposal for assigned dfs and The second test point would occur after Association 45 has recommended to the calculated dfs for OHV technology the engine had been field aged to its Agency that manufacturers be allowed engines, including the proposals for useful life. The df for that engine family to determine their own OHV dfs by incentives for improving deterioration would be determined based on test data performing a field/bench adjustment characteristics of OHV technology by dividing the average emissions at the program. The Agency requests comment engines, and protections against misuse full useful life by the average stabilized on this suggestion. of the assigned dfs. EPA also requests emissions for that family. If the In the ANPRM, EPA indicated that it manufacturer elects to conduct more additional data on which to determine would consider during the rulemaking than one test at either test point then the the assigned dfs for OHV engines. process the appropriateness of reserving average of the data would be used. All certification credits pending verification Calculated dfs for OHV Nonhandheld test data would have to be at or below of the dfs through in-use testing for Engines the standard (FEL, if applicable). EPA is families for which the manufacturer EPA views assigned dfs for OHV also proposing that calculated dfs may generates its own df. EPA believes that technology engines as the program cover families and model years in today’s proposal for field aging three engine manufacturers would most often addition to the one upon which they engines per engine family for select due to lower costs for were generated if the manufacturer calculating dfs provides adequate data certification. However, it is desirable to submits a justification acceptable to allow manufacturers of engines having EPA at the time of certification that the up front to provide assurance as to the improved durability characteristics to affected engine families can be deterioration of these engines, and demonstrate and take credit for these reasonably expected to have similar obviates the need to reserve certification lower dfs. Therefore, EPA is proposing emission deterioration characteristics. credits pending in-use testing. However, as an option a procedure whereby a The Agency is proposing for engines for which the manufacturer manufacturer could generate its own dfs manufacturers who choose to develop calculates its own df would be subject for all engine families within a useful their own OHV dfs by field aging three to the OHV Field Durability Program. life category, in lieu of applying the engines per engine family that these EPA requests comment on the proposal assigned df for those families. engines must be actual field-aged not to reserve certification credits The assigned df is based on industry engines and not bench-aged even if 45 See Memo to the Docket regarding the October average data with some actual dfs above adjusted by a field/bench adjustment 3, 1997 meeting between U.S. EPA and the Engine 1.3 and others below 1.3. EPA factor. The proposed assigned dfs with Manufacturers Association, EPA Air Docket A–96– anticipates that manufacturers would df verification through the OHV Field 55, Item #II–E–11. 3984 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules pending verification of the dfs through CO emissions using good engineering statistical sampling and testing in-use testing. judgment. procedure which results in random Finally, to provide flexibility during d. Streamlining of the Certification periodic sampling and testing of engines the phase-in of the 12.1 g/kW–hr Class Process. Since the promulgation of the from each engine family. The proposed II standard, EPA is proposing that Phase 1 rule, EPA has taken great strides CumSum procedure is useful both as an manufacturers choosing to establish to reduce the volume of information that assessment tool for EPA and a quality their own dfs for the 500 and 1000 hour must be submitted to obtain control tool for engine manufacturers. useful life categories for Class II OHV certification. A direct final rule The CumSum procedure assures that all engine families may, with the advance published on May 8, 1996 (61 FR configurations are susceptible to testing approval of the Administrator, base 20738), greatly reduced the reporting proportional to their production, and their dfs on good engineering judgement requirements necessary to obtain provides for continuous testing (subject to future verification, as certification under the Phase 1 program. throughout the model year (except in discussed below in Section IV.E). This proposal would continue the cases in which an engine family shows b. Handheld Certification. This notice reduced reporting requirements, adding clear compliance with the standards, in proposes that the certification of only information items related to new which cases testing can halt early, in as handheld engines continue as in Phase provisions required for the Phase 2 few as two engines). The CumSum 1, except that manufacturers would be program. procedure also allows manufacturers to required to generate and apply a df to EPA has also made strides to facilitate monitor their own production and to fit their stabilized emission results. EPA is the electronic submittal of certification production line testing into their normal proposing that manufacturers would be materials. Certification applications can production quality control procedures. allowed to establish a df for each engine currently be submitted on a computer The procedure is capable of detecting family based on technically appropriate disk, and the Agency hopes soon to be significant changes in the average level analysis of test data on that engine able to receive applications through a of a process, while ignoring minor family (or engine families of sufficiently telephone data link. Further, EPA is fluctuations that are simply acceptable similar design to be expected to have working with the California Air variation in the process. In summary, the same emissions durability) to reflect Resources Board (CARB) in an effort to EPA believes that the CumSum the emission deterioration expected to develop a common application format procedure provides an effective measure occur over the useful life of the engine. that would reduce the certification for meeting EPA’s goal of assuring that Manufacturers would be required to burden for manufacturers. EPA production engines comply with the retain test data and description of their anticipates that for the Phase 2 program, applicable standards or FEL before they analysis to support their choice of dfs EPA and CARB would accept the same leave the production facility. and to furnish this information to EPA application format and would have the As testing of each engine family upon request. EPA may reject the same application submittal process. begins with a new model year, the manufacturer’s choice of df if it has CumSum process computes an action evidence that the actual df is 2. Production Line Testing limit and a test statistic based on the significantly higher or if the test data This section addresses the production deteriorated test results for each and analysis do not support the line testing program proposed today for pollutant for each family. As new data manufacturer’s determination of a df. nonhandheld and handheld engines. are received, both the action limit and Data in support of the df could include EPA is proposing that manufacturers the test statistic are updated. The action data from the field/bench adjustment conduct a manufacturer-run production limit and the test statistic are functions factor program as well as data from the line testing (PLT) program using the of the standard deviation of the sample. in-use testing program. Cumulative Sum (CumSum) procedure, If the test results are clearly below the EPA believes that the proposal to as the primary program for ensuring the standard or FEL, and the standard allow manufacturers flexibility in emission performance of production deviation of the test result is determining the test data necessary to 46 appropriately low, the process will establish dfs for handheld engine engines. The Phase 1 rule relies upon a traditional Selective Enforcement declare a halt to testing. With very low families is a reasonable program emitting engines, this can occur in as designed to assure the environmental Auditing (SEA) program for production line compliance. SEA is a statistical few as two tests. If test data are highly benefits of the program are met without variable or the test results are very close sampling and testing scheme that must placing an undue burden on to the standard or FEL, testing may be initiated by EPA and provides a manufacturers at the time of proceed to as many as thirty tests per snapshot indication of whether a given certification. EPA requests comment on family (the proposed maximum test engine family complies with applicable all aspects of the proposed provisions limit) spread equally throughout the standards or FELs at a given point in for certification of handheld engines model year. If the test statistic crosses time. and determination of emission the action limit for two sequential tests, In the proposed Phase 2 PLT program, deterioration factors for compliance then the process indicates a manufacturers would conduct purposes. nonconformity and the manufacturer continuous production line testing of all c. Certification to CO Emissions would be required to take corrective Standards. EPA is proposing that engine families and feed the results of measures. provisions for establishing CO emission that testing back into their design and EPA is proposing a manufacturer-run dfs for use in the certification and production processes. CumSum is a PLT program for both nonhandheld and production line testing programs would handheld engines. However, for 46 The CumSum procedure has been promulgated be the same as the provisions for for marine engines in EPA’s spark-ignition marine nonhandheld engines, while PLT is the established HC+NOX (or NMHC+NOX) rule at 40 CFR Part 91 (61 FR 52088, October 4, preferred option, EPA also is proposing emission dfs, except in the case of OHV 1996). In this section, ‘‘PLT’’ refers to the an alternative program under which technology engines for which the manufacturer-run CumSum procedure, or other manufacturers would have the option to manufacturer-run production line testing procedure manufacturer elected to use an assigned approved by EPA. ‘‘PLT’’ does not include Selective elect to be subject to the traditional SEA df. For these engines, the manufacturer Enforcement Auditing (SEA), which is addressed program (rather than PLT), as described would be allowed to establish a df for separately in Section IV.D.2.d. in Section IV.D.2.d, below. In addition, Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3985

EPA is proposing to retain SEA for The maximum required sample rate to any knowledge of the emission levels ‘‘backstop’’ purposes when for an engine family, regardless of the of CumSum engines or engines used for manufacturer-run PLT is being result of the sample size equation, additional testing. conducted for nonhandheld and would be the lesser of three tests per In cases where the CumSum sample handheld engines, as described below. month to a maximum of 30 per year, or size equation indicates that testing can Under the proposal, in some cases, some one percent of projected annual be halted, the CumSum process manufacturers or engine families may production, distributed evenly indicates that there is 95 percent have the option not to conduct throughout the model year. For probability for each pollutant that the production line testing requirements, example, if the sample size equation mean emission level for the engine including manufacturers of very clean produces a value of 252 tests for a family is below the applicable standard engine families, or manufacturers or family with annual production of 20,000 (or FEL). In cases where the test statistic families which qualify for small volume engines, a manufacturer could elect to exceeds the action limit for two flexibilities, as described in Section test only three engines per month to a consecutive tests, then EPA is highly IV.E. The following discussions outline maximum of 30 per year, instead of confident, based on extensive computer the proposed CumSum procedure, either 21 per month (which would be simulations of the CumSum program, reporting of PLT results, procedures in required if 252 tests were distributed that the mean emission level of the the event of PLT failures, the use of evenly throughout the model year), or engine family for that pollutant exceeds SEA, and other topics related to 17 per month (which would be required the standard (or FEL), i.e., that the production line compliance testing. if one percent of annual production engine family is in noncompliance for a. The CumSum Procedure. The were distributed evenly throughout the that pollutant. The risk that a complying proposed CumSum procedure is model year). engine family will incorrectly be outlined in this section. At the start of Although the sample size equation determined to be noncomplying each model year, manufacturers would may calculate sample sizes greater than (manufacturer risk) is set at similar begin to test each newly-certified engine the proposed maximum sample rates, levels as in EPA’s historical SEA family at a rate of one percent of EPA believes that above some sample program. The risk that a noncomplying production. After conducting two tests, size, the cost of testing would become engine family will incorrectly be a manufacturer would determine the unnecessarily burdensome for determined to be in compliance required sample size for the rest of the manufacturers of small SI engines. (consumer risk) is set at improved model year according to the sample size Further, EPA believes that the proposed (lower) levels as in EPA’s SEA program. equation.47 For carry-over engine maximum sample rates (e.g., 30 engines) The Agency requests comment on all families, to reduce testing burden, the are sufficiently large to adequately aspects of the proposed production line manufacturer would determine the characterize the emission levels of the testing program and CumSum necessary sample size by conducting engine family for the purpose of making procedure. For more information on the one test, then combining the test result a compliance decision. After derivation of the sample size and with the last test result from the determining the appropriate sample CumSum equations and some examples previous model year, and finally size, the manufacturer would construct of the CumSum procedure, see the calculating the required sample size for a CumSum equation for each regulated document ‘‘Proposed Procedure for the rest of the model year according the pollutant for each engine family. Quality Audits of Marine and Small Following each emission test, sample size equation. Tests would be Engines: A Cumulative Sum Approach’’ manufacturers would update current (EPA Air Docket A–92–28, Item # IV–B– required to be distributed evenly CumSum statistics for each pollutant 03). throughout the remainder of the model according to the CumSum equation. b. Reporting of CumSum Results. EPA year. After each new test, the sample Manufacturers would continue to proposes that production line emission size would be recalculated with the update the CumSum statistics test results, as well as sample size updated sample mean, sample standard throughout the model year.48 calculations and CumSum calculations, deviation, and 95 percent confidence Manufacturers could elect to test would be reported to EPA on a quarterly coefficient. additional engines provided that testing basis. The Agency would then review The manufacturer would be allowed of the additional engines is performed the test data, sample size and CumSum to stop testing at any time throughout in accordance with the applicable calculations to assess the validity and the model year if the sample mean for federal testing procedures for small SI representativeness of each each pollutant is less than or equal to engines. Such testing could be used, for manufacturer’s production line testing the applicable standard or FEL, and if example, to bracket a nonconformity program. If the CumSum process the number of tests required of the determined through the CumSum determines that an engine family is in manufacturer, as calculated by the procedure, and such bracketing could be noncompliance, the manufacturer sample size equation, is less than the used to reduce a manufacturer’s liability would be required to report the number of tests conducted. However, if for past production. If a manufacturer emission test results and the appropriate at any time throughout the model year elects to perform additional testing, the sample size and CumSum equation the sample mean for any pollutant is results would not be included in the calculations within two working days of greater than the applicable standard or CumSum equation. However, the results the occurrence of the noncompliance. FEL, and if the manufacturer has not of additional tests would be included in EPA received comments on the reached a ‘‘fail’’ decision, the the quarterly reports to EPA. ANPRM recommending that, in the manufacturer would be required to Manufacturers would be required to event of a PLT failure, manufacturers continue testing that engine family at randomly select which engines are to be should be required to report such the appropriate sampling rate. included in the CumSum program prior exceedances within thirty days of discovering the failure, suggesting that 47 For more discussion of the sample size 48 For more discussion of maximum sample rates thirty days provides a reasonable time equation, see Proposed Procedure for Quality and updating CumSum statistics, see Proposed for manufacturers to evaluate and verify Audits of Marine and Small Engines: A Cumulative Procedure for Quality Audits of Marine and Small Sum Approach, Item #IV–B–03 in EPA Air Docket Engines: A Cumulative Sum Approach, Item #IV– test data and determine the existence of A–92–28. B–03, in EPA Air Docket A–92–28. any production line problems. EPA 3986 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules believes that thirty days is too long a applicable federal testing procedures, proposed today for nonhandheld period for the Agency to not be made under the proposal EPA could suspend engines does not include provisions for aware of a PLT failure. Such delays or revoke the manufacturer’s certificate in-use credit generation. Since in-use would not occur, for example, under a of conformity in whole or in part for credits would not be available, and traditional SEA program. In the event of that engine family subject to a thirty day since recall of small SI engines is not a traditional SEA, EPA is aware waiting period (discussed in more detail likely to be effective, for nonhandheld immediately of the existence of an SEA below in Section IV.D.2.c.iv). EPA could engine manufacturers who use failure, and can immediately begin reinstate a certificate of conformity averaging, banking and trading to obtain working with the manufacturer to subsequent to a suspension, or reissue certification, this notice proposes that, remedy the problem. EPA is proposing one subsequent to a revocation, after the in the event of a CumSum failure, the that the appropriate PLT test results be manufacturer demonstrates that manufacturer would be permitted to reported within a two working days, a improvements or modifications have adjust its certification FEL to a level for time period consistent with that brought the engine family into which compliance could be promulgated for the gasoline marine compliance. The proposed regulations demonstrated. This adjustment would PLT program. A two-day delay in include provisions for a hearing in apply to both past and future reporting would not unnecessarily delay which a manufacturer may challenge production of that family. EPA’s ability to begin to work with EPA’s decision to suspend or revoke a EPA has held in past programs that manufacturers during that time to certificate of conformity based on the manufacturers should be liable for their determine an appropriate response to a CumSum procedure. FELs, and that the past production of PLT failure. As discussed below, the EPA is proposing procedures whereby that family is subject to recall if the manufacturer would have 30 days after a manufacturer could remedy the family exceeds its FEL during an SEA. the date of the last test before any emissions problems from engines The Agency continues to believe that suspension or revocation of a certificate produced prior to the PLT failure. In manufacturers should set FELs for the engine family would occur. The EPA’s traditional SEA program, SEA appropriately based upon adequate manufacturer could use that time to failures have typically been addressed testing and engineering analysis. Thus, determine the existence of production by a recall of the past production while proposing that nonhandheld line problems. engines for the failing family. Future engine manufacturers would be EPA also received a comment that production engines are expected to be permitted to adjust FELs for past manufacturers should not be required to brought into compliance by either production of an engine family, EPA report all resultant test data to EPA adjustments to the certification FEL, in expects that the need for manufacturers quarterly (e.g., extensive raw test data in cases where the manufacturer is to change an engine family’s FEL addition to calculated emissions participating in a certification ABT retroactively in the event of CumSum results). This commenter suggests that program, or through appropriate engine failures should be rare or nonexistent. If the submission of a completed CumSum and emission control system there are substantial occurrences of the summary data sheet, permitting EPA to modifications. As discussed in Section need to adjust FELs retroactively, this confirm that an engine family is in PLT III of this preamble, above, EPA is would suggest that manufacturers are compliance and to see where in the proposing alternative remedies in the not correctly setting FELs carefully and CumSum process compliance was event of PLT failures, given the likely accurately for individual families, in attained, should be sufficient for difficulties of applying a traditional which case the Agency should quarterly reporting, and that recall program to the small SI engine appropriately revisit this provision. manufacturers could maintain raw PLT industry. For handheld engines, these EPA is also proposing that data for a reasonable period of time and procedures include the use of in-use nonhandheld manufacturers who make such data available to EPA upon credits or other alternative remedies. experience CumSum failures could request. For nonhandheld engines, these adjust their FELs even if they did not It is not clear which raw data this procedures include the use of have adequate credits, provided that commenter would prefer be allowed to certification credits through the they could obtain the necessary credits be retained at the manufacturer’s adjustment of a family’s FEL or other by the end of the model year following facility. EPA is proposing that alternative remedies. These procedures the model year in which the production manufacturers would submit to EPA on are discussed below. line failure occurs. If sufficient credits a quarterly basis pertinent engine were still not obtained, the information, individual test results, i. Handheld Engines manufacturer would have two more relevant CumSum calculations, and EPA is proposing that when handheld years to obtain them, but would then be other information at Section 90.709(e) of manufacturers experience PLT failures, required to use credits on a 1.2 to 1 the proposed regulations. EPA does not the excess emissions from engines that basis (i.e., such credits would be believe that this reporting requirement have already been introduced into discounted twenty percent). Unlike in is overly burdensome. EPA expects that commerce could be addressed by the the proposed handheld engine in-use manufacturers will keep track of PLT application of in-use credits or another credit program, in which manufacturers data electronically, and EPA intends to alternative remedy. In-use credits are would have opportunities to generate develop a standard CumSum summary discussed in detail in Section IV.D.3, additional credits, the nonhandheld data sheet to facilitate electronic below. The emission performance of certification ABT program would not submittal of data for the quarterly future production would be addressed afford such opportunities. Thus, EPA reports. EPA requests comments on through a running change to the existing believes it is reasonable in the program these proposed provisions. configuration or certification of a new for nonhandheld small SI engines to c. Production Line Testing Failures. If configuration such that compliance is provide additional time for an engine family is determined to be in demonstrated. manufacturers to acquire certification noncompliance, or a manufacturer’s credits necessary to offset PLT submittal to EPA reveals that ii. Nonhandheld Engines exceedances. Requiring future model production line tests were not Unlike the proposed program for year credits to be discounted if used to performed in accordance with handheld engines, the program remedy past production on Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3987 noncompliance assures that the diligently with the manufacturer, as it industry. EPA solicits comment on the manufacturer will not benefit always has in the case of SEA failures, appropriateness of providing this economically from delayed compliance to provide certification of appropriate option, and on whether it would be with the standards. production line changes. Further, this better to require PLT for all families. Because EPA believes manufacturers notice proposes that EPA would Only one approach, either PLT with should set FELs accurately and approve or disapprove a manufacturer’s SEA as a ‘‘backstop’’, or manufacturers carefully, and to encourage production line change within fifteen having the choice to use either PLT or manufacturers to set FELs accurately, days of receipt, or the change would be SEA as the primary program, will be EPA is proposing that these provisions considered automatically approved. adopted as the final rule for (e.g., the retroactive use of credits, and EPA believes that these waiting nonhandheld manufacturers. the ability to carry a credit ‘‘deficit’’) periods are reasonable to afford Under this alternative program, EPA would only apply in the case of a manufacturers and EPA sufficient time is also proposing that nonhandheld manufacturer who fails no more than to work together to address problems, engine manufacturers be limited in their one engine family in a given model year, without the concern that EPA would ability to switch back and forth between or who fails more than one engine hastily suspend or revoke the certificate PLT and SEA. Manufacturers involved family but the total production of those of a family determined to be in in PLT would be required to implement families is no greater than 10 percent of nonconformity by a production line that approach for a minimum of three the manufacturer’s U.S. sales. EPA testing program. EPA believes that the consecutive model years and to provide requests comment on all aspects of this proposed time frames are reasonable, EPA with notice one complete model retroactive use of certification credits and are consistent with longstanding year prior to the model year for which and its likely impact on the accuracy of EPA practices in the SEA program of they were planning to opt out. In the FELs determined at certification. providing a waiting period following an addition, a manufacturer would not be audit failure. In such failures, EPA allowed to opt out of PLT while carrying iii. Alternative Programs and Voluntary works closely with the manufacturer to a negative certification credit balance. Recall arrive at a solution for the problem However, a manufacturer would be In the event of PLT failures, EPA engine family. With on-highway allowed to opt in to PLT at any time. prefers that handheld manufacturers use engines, such solutions have typically Finally, where small volume engine in-use credits for past production involved a recall of engines that have manufacturers or small volume engine engines and that nonhandheld engines already been produced along with the families would be entitled to be recertified to a higher FEL which recertification of the family to a new exemptions from the PLT program may require the application of FEL, or the certification of a under the proposal (see Section IV.E), certification credits, rather than some replacement engine configuration. As those families would remain subject to other alternative to recall. However, discussed above, for small SI engines, SEA, although EPA would be unlikely EPA is proposing that in the case of such solutions could involve the use of to issue test orders without evidence of handheld or nonhandheld engines certification or in-use credits, voluntary nonconformity. where the manufacturer did not have recalls, or other alternative remedies. In the event of an SEA failure for and could not obtain adequate in-use or EPA has never caused an assembly line handheld engine manufacturers, EPA is certification credits, as appropriate, a to shut down because of an audit failure proposing that the option to use in-use manufacturer could conduct a voluntary and does not intend to start such a credits or another alternative to recall recall, if it could show that an practice where other alternatives can be would be available to remedy past appropriate response rate was likely. used. production engines. For future EPA would also consider the d. Selective Enforcement Audits production, the manufacturer would be appropriateness of alternative projects. (SEA). While EPA is proposing the expected to modify the engine to come These projects are essentially CumSum manufacturer-run PLT into compliance with all applicable alternatives to recall and would be program as the preferred production standards. designed to provide an environmental line testing program for the Phase 2 In the event of an SEA failure for benefit as well as an economic incentive program, EPA still sees a function for nonhandheld engine manufacturers, the to the manufacturer to produce traditional SEA and is therefore not manufacturer would have the option to complying engines. Guidelines for such proposing to eliminate traditional SEA adjust the FEL for future production of projects are discussed in more detail in altogether. EPA is proposing that for the engine family. EPA would address a Section IV.D.4, below. A mandatory both nonhandheld and handheld remedy for the past production in the recall could be ordered by EPA for past manufacturers, SEA would remain as a event of an SEA failure on a case-by- production engines pursuant to ‘‘backstop’’ for EPA to use in cases base basis, seeking to both preserve the proposed § 90.808 in cases where the where there is evidence of improper environmental benefits of the program, manufacturer could not obtain testing procedures or nonconformities maintain incentives to accurately set appropriate credits and was unwilling not being addressed by the CumSum FELs in advance, and minimize the to perform an alternative project process. burden on the industry. Such a remedy acceptable to EPA. As mentioned earlier, the Agency is might include, for example, a also proposing an alternative program combination of measures such as iv. Suspensions and Revocations under which nonhandheld mandatory PLT for appropriate time EPA is proposing for engine families manufacturers could choose not to periods and portions of production, that fail production line compliance conduct manufacturer-run PLT program, recertification of all or part of an engine testing, that EPA would have the in which case all families would family, and generation of credits to authority to suspend or revoke the continue to be subject to an SEA remedy exceedances over an certificate for that family. However, no program as under Phase 1. Although appropriate period of time. However, suspension or revocation for a family currently not preferred by the Agency, consistent with past practice, EPA does could occur before thirty days after the EPA is considering this option since it not anticipate allowing the retroactive date of the last test. During the thirty was included in the ANPRM and use of certification credits to remedy day period, EPA intends to work received support from the nonhandheld past production failures determined via 3988 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

SEA, or the carryover of any credit would not get the same coverage of production line testing (see proposed deficits, as would be allowed if the engine families in the testing process. § 90.503(f)(4)). manufacturer chooses to conduct The regulations proposed today reflect EPA also requests comment on an manufacturer-run PLT. Since SEA only the option, consistent with the program option, not proposed, to raise the annual evaluates production line performance outlined in the ANPRM, for limit by one or two families for each during a ‘‘snap shot’’ in time and not nonhandheld manufacturers in some failing audit in a given model year in throughout the entire production cases to choose either PLT or SEA as the cases where manufacturers choose SEA period, it would be inappropriate to use primary production line compliance as the primary production line credits generated on the basis of total program. However, EPA is also compliance program, should the annual production to correct the SEA proposing in the alternative that the regulations allow SEA as the primary failure. Instead, a manufacturer would nonhandheld production line production line compliance program. likely be expected to recall the compliance program would be the same While this option is not included in the noncomplying family or conduct an as the handheld program. That is, the proposed regulatory text, EPA requests alternative remedy proposed by the manufacturer would not have the option comment on the potential benefits or manufacturer and accepted by EPA. to choose SEA as the primary costs of this option for a higher number EPA requests comments on the production line compliance method. of potential routine SEAs for proposed provisions related to remedies Rather, manufacturer-run PLT would be manufacturers who experience SEA for SEA failures. the primary program in all cases, with failures. EPA requests comment on all EPA received a comment on the SEA existing as a backstop. Again, EPA aspects of the proposal for annual limits ANPRM that handheld manufacturers requests comment on the for SEAs under the proposed Phase 2 should be permitted to elect to be appropriateness of the proposed program. subject to routine SEA testing, as they program which allows nonhandheld f. Alternate Statistical Procedures for currently are under Phase 1 emissions manufacturers the option to elect Production Line Testing. Consistent regulations, rather than conducting routine SEA testing in lieu of PLT with the program outlined in the March manufacturer-run PLT. This commentor testing. EPA also requests comment on 1997 ANPRM, EPA is proposing that suggested that manufacturers may desire the option that nonhandheld manufacturers conducting to elect SEA for reasons of cost, manufacturers would use only PLT as manufacturer-run PLT could propose confidence in their quality control, or the primary production line compliance test schemes for EPA approval on a familiarity with SEA, and that such an program, with SEA existing as a case-by-case basis other than the option could enhance the flexibility and backstop, and the effectiveness of this CumSum procedures described in this reduce the cost of the PLT process, option in providing assurance of section and proposed in today’s notice. EPA believes that this is reasonable while at the same time assuring new environmental benefits in-use, easing because there may be situations where engine compliance with Phase 2 the implementation burden for EPA and a single test scheme is not appropriate emissions regulations. the industry, and achieving greater EPA is not proposing routine SEA for a specific engine family or company. commonality in the compliance testing for handheld manufacturers. However, EPA also believes that it is programs for the handheld and EPA believes that a manufacturer-run desirable to avoid a multiplicity of nonhandheld sides of the small SI PLT program such as CumSum is a testing schemes, and is concerned about engine industry. superior method of assuring that both the burden this could place on the handheld and nonhandheld production e. Annual Limits for SEA. The Phase Agency if multiple testing schemes are line engines meet the standards, that 1 program contains annual limits on the analyzed and developed with individual testing occurs continuously throughout number of SEAs the Agency may manufacturers. This notice proposes the model year, and that each perform each year on a manufacturer, that EPA would have the right to review configuration is susceptible to testing. In based on their number of engine any alternate procedure to determine addition, PLT affords benefits to the families and sales. The Phase 1 annual the ability of the procedure to (1) manufacturers of identifying problems limits serve to restrict the maximum produce substantially the same levels of early and addressing them without the number of audits for most ‘‘producer risk’’ and ‘‘consumer risk’’ as disruption of an EPA-initiated SEA. manufacturers to a quantity equal to one the CumSum Procedure, i.e., the risk to EPA believes it is most useful and fifth of the number of engine families a manufacturer that a complying family appropriate that manufacturers be (see 40 CFR 90.503(f)(1)). However, would fail in PLT testing, or the risk to responsible for and bear the burden of under the Phase 1 program, any test the public that a failing family would continuously monitoring their own which the family fails or for which pass in PLT testing; (2) to provide for emissions. testing is not completed does not count continuous rather than point-in-time Under the production line compliance against the annual limit (see 40 CFR sampling; and (3) to include an program proposed today, EPA expects 90.503(f)(3)). In addition, even if the appropriate decision mechanism for that nonhandheld manufacturers may in annual limit is reached, EPA may determining noncompliance upon some cases choose SEA as their primary initiate additional SEA testing to test which the Administrator can suspend or production line compliance program, families for which evidence exists revoke the certificate of conformity. for cost reasons or fear of the unknown. indicating noncompliance (see 40 CFR Further, it would be the requesting However, EPA believes that the 90.503(f)(4)). manufacturer’s responsibility to provide downsides of the choice of SEA as the EPA is not proposing any changes to an analysis and documentation that primary production line compliance the Phase 1 SEA annual limit provisions demonstrated the alternative satisfied program are potentially great for all for Phase 2 except for the additional these criteria. EPA would expect to involved. EPA believes that in choosing proposed provision that EPA may reject any alternate statical procedure SEA, the manufacturers would be initiate additional SEA testing beyond that did not fully satisfy these proposed foregoing an effective quality control the annual limit for families or criteria. tool for monitoring their own configurations which the Administrator g. Test Procedures for PLT. EPA production, and would risk expensive has reason to believe are not being believes that the best way to determine and disruptive SEAs. In addition, EPA appropriately represented or tested in whether new engines meet certification Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3989 standards is to test them under the test engines, EPA does not believe that a predicted for the OHV engines are used at certification. Therefore, EPA is mandatory in-use compliance program indeed correct. The proposed OHV field proposing that the manufacturer-run which relies on recall, for example, is durability and in-use performance PLT program proposed in this notice likely to be as effective and practical as demonstration program (‘‘Field would require testing based on the full it has proven to be in EPA’s on-highway Durability Program’’) would generate federal test procedure as used for programs. Small SI engines differ from significant quantities of emission data certification and described in Subpart E motor vehicles in that they are not from engines aged in real field usage in of the attached regulations. EPA registered and are therefore difficult to representative pieces of equipment. If recognizes the potential need to permit track so that their owners can be EPA’s belief that the dfs of these engines minor adjustments to the test procedure notified. Many are not easily are stable and predictable proves to be to accommodate production line testing. transported to a servicing dealer for incorrect after receiving these data, or Consistent with other compliance test repair. The in-use programs described the assigned dfs specified in this programs for mobile sources, the below are therefore designed to provide rulemaking are significantly different proposed regulations allow the data on in-use performance and to than those that occur in real field usage Administrator to approve such test provide incentives to manufacturers to of Phase 2 engines, then EPA would procedure adjustments. produce emission-durable engines initiate appropriate programmatic h. Harmonization of Production Line without relying on the use of recall. changes through the regulatory process. Testing with CARB. EPA is interested in While the Production Line Testing The proposed Field Durability finding ways to harmonize the programs described previously are very Program is designed to provide data on production line testing requirements similar, the in-use programs proposed in the deterioration of OHV engines in proposed today for Phase 2 with any this notice differ significantly for the actual field usage. EPA is proposing that production line testing requirements two sides of the industry. Again, EPA engines for the program would be manufacturers must meet for the requests comment on alternative in-use selected from or placed into service California small engine regulatory testing programs, such as applying the with residential or professional users. program. In particular, EPA would in-use testing program proposed for This program would be designed to expect that data from production line handheld engines to the nonhandheld provide a representative picture of testing of a 50-state family conducted side of the industry, as well as applying actual in-use emissions, including for a California Quality Audit program the field durability program proposed representative age, maintenance, and could be acceptable for the CumSum for OHV engines to side-valve engines, sales mix of engines in the field. To the process, if the subject engines are sold engines with aftertreatment, and/or extent practical, engines would be nationwide and test engines are handheld engines. selected from residential customers or a. Nonhandheld Side-Valve Engines appropriately selected and tested. EPA professional users, in order to most and Engines with Aftertreatment. For will also continue to work with the accurately reflect actual usage patterns nonhandheld side-valve engines and California Air Resources Board to such as number of cold starts, typical engines with aftertreatment, the in-use harmonize reporting formats, and maintenance patterns, and program would consist of a certification similar information needs. overwintering. However, EPA would program in which the engines would be also allow engines to be selected from 3. In-use Emission Testing aged to their full useful lives during the manufacturers’ fleets, provided the EPA believes that a critical element in certification process and no certificates would be issued unless the engine engines and their operation and the success of its small SI engine maintenance are typical of in-use program is ensuring that manufacturers family can first be shown to meet standards (or FELs) for its useful life, as engines. Each engine in the program build engines that continue to meet would be baseline tested at a number of emission standards beyond certification described above in Section IV.C and Section IV.D.1. EPA believes that a hours equal to the break-in hours used and production stages and comply with in certification. The engine would then standards for their full regulatory useful program which does not rely on in-use testing after certification especially be field aged in an appropriate piece of lives. Section 213(d) of the CAA equipment to full useful life, at which specifically subjects nonroad engines to makes sense for Class II SV technology engines which are expected to be time the engine would be removed and the in-use compliance provision of retested. The df would be determined section 207.49 EPA has authority to phased out by 2005. In addition, EPA would have data on SV technologies mathematically from the two test points subject manufacturers to in-use testing from each engine. (conducted by the Agency or by the aged in the field for the field/bench Data from the OHV Field Durability manufacturer under section 208 of the adjustment factor program; if EPA and In-Use Emissions Performance Act) and to remedy any noncompliance suspected serious problems with regard Demonstration Program would not be (for example, by recall and repair of to whether the emissions reductions designed to provide a basis for EPA to engines) for the full regulatory useful anticipated by this rule were in fact make in-use compliance determinations life of an engine. In-use compliance being achieved, EPA would address as to whether a particular engine family enforcement has proven to be an these concerns through appropriate complies with its standard or FEL at the effective incentive for manufacturers to programmatic changes. EPA requests end of its useful life. Rather, the build emission durable motor vehicles. comment on the appropriateness of this program is primarily designed to However, as discussed above in full useful life certification to predict determine whether, in the aggregate, the Section III, in the case of small SI the in-use emissions durability of SV engines and engines with aftertreatment. industry-average assigned dfs for OHV 49 Section 207(c) of the Act authorizes EPA to b. Nonhandheld OHV Field Durability engines are valid. Given the number of enforce compliance by vehicles and engines to and In-use Performance Demonstration manufacturers expected to produce applicable standards in actual use. Manufacturers Program. For overhead valve OHV engines and participate in this are subject to recall ‘‘[i]f the Administrator nonhandheld engines, the proposed in- program, the program would generate determines that a substantial number of any class or category of vehicles or engines, although use program would be one whose meaningful volumes of real in-use data properly maintained and used, do not conform to primary function is to verify that the which would yield results indicating the regulations * * * when in actual use * * *’’. industry-wide deterioration factors whether assigned dfs are realistic. 3990 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

This notice proposes that the OHV manufacturers. EPA is proposing that it there was evidence of a nonconformity Field Demonstration Program testing would have the right to require field (see discussion in Section IV.E). EPA could be spread over multiple years. testing to the maximum amount, and requests comment on all aspects of the EPA proposes that manufacturers expects that the maximum testing may applicability of a cap to the number of provide a schedule to EPA each year of be required in the initial years of the field aged engines that EPA could the engine families and approximate program. Manufacturers would have the require to be tested in any one year. quantities of engines they intend to option to field test more engines than d. In-Use Testing Program for produce for U.S. sales over the coming required by EPA. EPA anticipates it Handheld Engines. In today’s action, four year period, as well as estimates of would reduce the testing burden as EPA is proposing an in-use testing the number of field aged engines that appropriate, especially for smaller program for handheld engines similar to would be tested each year for the field/ manufacturers, in subsequent years that promulgated in the gasoline spark- bench adjustment program (see Section should, for example, EPA determine ignition marine engine rule (see 40 CFR IV.C) and for calculating dfs for OHV that the data being developed is quite Part 91, Subpart I). As in the marine engines at the time of certification (see stable from year to year. rule, EPA is also proposing an in-use Section IV.D.1). In addition, The discussion of the Field Durability credit program, as well as a number of manufacturers may wish to recommend Program in the March 1997 ANPRM criteria for evaluating other alternatives a proposed testing plan for the Field indicated EPA would provide to mandatory recall. Mandatory recall is Durability Program that, for example, ‘‘appropriate delays or waivers from the the primary remedy for noncompliance. best fits testing into their marketing, requirement of the bench correlation However, as in the marine program, production, test facility and budgetary program in years when a manufacturer EPA is interested in considering options constraints. EPA would consider such also runs the field durability program’’ to mandatory recall and, if information in determining the engine (see 62 FR 14754). In the development implemented, will monitor the use of families to be field tested over that time of this proposal, EPA considered the these alternatives to make sure they are period as part of the OHV Field need to propose procedures to provide as effective as anticipated. EPA believes Durability Program. for EPA granting delays or waivers from that the successful implementation of Manufacturers have indicated their the requirements of the field/bench the in-use credits program and the other desire to perform industry-wide OHV adjustment program in years when a alternatives would provide a Field Durability Program testing to try to manufacturer also runs the OHV Field comprehensive remedy to address in- reduce the number of engines that must Durability Program. In today’s action, use emission noncompliance, as well as be field aged. EPA is proposing that it EPA is proposing no formal process by incentives to manufacturers to produce would consider requests by which manufacturers would request a emission-durable engines, without the manufacturers to work together when it waiver from the requirements of the use of recall. The program for handheld reviews a manufacturer’s plan for field/bench adjustment program. EPA engines proposed today differs from the engine families to be field aged. EPA believes that the need for delays or gasoline marine engine program in that will review proposals for joint testing to waivers is obviated by the cap on the the engines may be bench-aged rather evaluate how thoroughly they cover a number of fully field aged engines EPA than field-aged, at the manufacturer’s portion of overhead valve engine sales, would be able to require to be tested in option, provided the manufacturer has whether they will provide statistically any one year. previously established an adjustment useful quantities of data, and other The discussion of the Field Durability factor between the bench aging cycle factors to help EPA ascertain whether Program outlined in the March 1997 and field aging through the program OHV dfs from certification are accurate ANPRM also suggested that EPA would described above at Section IV.C. EPA and appropriate. propose an appropriate scaling of the requests comment on the technical c. Maximum Rates for Field Tested field engine test burden for smaller requirements which would allow bench- Nonhandheld Engines. EPA believes volume manufacturers (see 62 FR aged engines to represent the emission that emission data from real field-aged 14754). For this proposal, EPA performance of field-aged products. engines would serve a crucial role in considered proposing a cap on the validating the use of assigned dfs, number of field tested engines of fewer i. In-use Testing for Handheld Engines calculated dfs, and the aging cycles used than 24 engines per year for smaller EPA is today proposing an in-use for bench-aged certification of side- nonhandheld manufacturers by sales testing program for handheld engines valve engines. While recognizing the volume. However, EPA believes that a which would make all engine families importance of and need for these data, scaling back of the test burden would potentially subject to mandatory in-use EPA is also sensitive to the cost and not be appropriate. Such a scaling testing by the manufacturer. The testing burden associated with directing would most appropriately be based on manufacturer would age the test engines large numbers of engines to be field the inability of manufacturers to sustain in the field to their full useful lives. aged and tested in a given year. the costs associated with the OHV Field Alternatively, the manufacturer could In today’s action, EPA is proposing Durability program; however, the ability choose to age the engines on a bench that in any one year the Agency would to sustain the costs of the program cycle to their full useful lives, providing not require field testing for the OHV would not appear to differ significantly that an adjustment factor had previously Field Durability Program such that, among manufacturers. Therefore, EPA is been established between the bench- when added to the field testing a proposing the same cap on the field aged and field-aged results, through the manufacturer performs for the optional engine test burden for all manufacturers. procedures described above in Section certification df generation or for the EPA believes that this 24 engine per IV.C. The engines would then be field/bench adjustment program, it year cap is a manageable burden on the emission tested for all regulated would require the manufacturer to smaller volume manufacturers as well pollutants using the full test procedure emission test more than 24 total engines as the larger volume manufacturers. The described in this proposed rule. The that were field aged to their full useful Agency does not anticipate identifying number of engines per engine family life. EPA believes that this number will families certified by manufacturers who tested would vary depending on test provide important quantities of data would qualify as small volume engine results. Except for small volume and without placing an undue burden on manufacturers for in-use testing, unless carry-over engine families, the Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3991 minimum number of test engines would ii. In-Use Credit Program for Handheld justified since, if an engine be four. For each engine that failed any Engines demonstrates that it can remain under pollutant, the manufacturer would test As discussed above, the proposed in- standards for its full useful life, then an two additional engines, up to a use credit program for handheld engines environmental benefit has occurred and maximum of ten. Small volume engine is designed to address in-use the manufacturer is entitled to that manufacturers would begin by testing nonconformities of handheld engines benefit for later use. However, unlimited two engines, adding two more for each without the need for ordering life is not being extended beyond the failing engine up to the same maximum manufacturers to conduct recalls of Phase 2 program at this point, given the (see discussion of provisions for small nonconforming engines. A reasonable concern that Phase 2 credits could be volume engine manufacturers and other means must exist to address in-use used to effectively delay the implementation date of any Phase 3 flexibilities in Section IV.E). Carry-over noncompliance that provides incentives to manufacturers to build emission- standards. EPA requests comments on engine families would start with one all aspects of credit life for in-use durable engines, that can be engine. In the end, the emissions for credits in the handheld in-use credits implemented practically, that each pollutant would be averaged and program. the family average compared against the encourages additional in-use testing, A manufacturer could use in-use appropriate standard to ascertain that offsets additional emissions credits to average against in-use failures compliance. The in-use testing program resulting from noncompliance, and that identified in that model year’s testing. It proposed is designed as a method to is not unduly burdensome. EPA believes could bank the credits for use in a later provide adequate data on which to make that the successful implementation of model year or trade the credits to compliance decisions, while allowing the proposed in-use credit program another manufacturer. Manufacturers described below could be part of a the testing of families which are found could test additional families and would comprehensive remedy to address in- to emit below standard to conclude as generate or require additional credits use noncompliance, and that EPA expeditiously as possible. according to that testing. However, the would not, in practice, order mandatory manufacturer would be required to Manufacturers would provide a recall of Phase 2 engines. When a report all in-use testing to EPA, schedule to EPA each year of the engine manufacturer determines its average in- including any test engines that were families and approximate quantities of use emission levels for each pollutant, deleted from the aging process or testing engines they intend to produce for U.S. it would compare those numbers against process, and to provide to EPA a sale over the coming four year period. the applicable standards. Emission technical justification to support the EPA would then select engine families levels below the standards could deletion. to be in-use tested by the manufacturer generate in-use credits. Emission levels No restrictions are proposed on the over that time period or a fraction of above the standard would require the application of in-use credits from one that time period. EPA would identify no use of in-use credits. The credit formula handheld engine class to another. EPA more than 25 percent of a as proposed here would be a function of is not aware of any environmental or manufacturer’s families for in-use the sales of the engine family, the competitive concerns with allowing testing in any one year. difference between the family emission unrestricted use of in-use credits across average and the applicable standard, the handheld engine classes. EPA requests EPA received a comment on the power rating of the engine, load factor, comments on the need for cross-class ANPRM that it would be equally and the useful life of the engine. averaging restrictions, and the impact of effective and potentially less costly to In-use credits could be used to having or not having them. permit engine manufacturers to select remedy emission exceedances of EPA is also proposing an adjustment the engine families for in-use testing. previously produced engines factor to increase credits earned as the This would allow manufacturers to determined to be in nonconformity by in-use testing sample size increases, schedule in-use testing to better in-use testing, production line testing or similar to the program promulgated for conform to production, marketing and SEA failures. They would not be useable the gasoline marine engine rule (see 40 budgetary constraints, and to choose in handheld certification, and they CFR 91.1307). The proposal for an their own mixture of commercial and would not be transferrable to adjustment factor is reasonable because residential engines to test each year. nonhandheld engines, due to the EPA’s statistical certainty of the sample This commenter added that considerable differences between the mean generally will increase with manufacturers could provide a testing handheld and nonhandheld programs. sample size. schedule in advance to enable EPA to Unlike certification credits for In addition, EPA is proposing a raise any concerns it has with a nonhandheld engines, they would not provision that would require manufacturer’s test plans. be useable for offsetting the high manufacturers to apply in-use test emissions from prospective production results to two past and one future model EPA believes it is important to retain of an engine family following a PLT or year when the engine family being the authority to select engine families SEA failure. In such cases, the tested meets the carryover criteria for for in-use testing that potentially show manufacturer would be required to those model years. EPA contemplates risk of higher emissions in-use than make a product change to improve that manufacturers would not make predicted at the time of certification. emission performance of future frequent significant changes to engine Therefore, EPA is proposing to retain production. families and that carryover certification the authority select the engine families EPA is proposing that these in-use would be common. Essentially, under for in-use testing. However, EPA would credits could be used at any time during this provision, the test results from one work with manufacturers in an attempt the Phase 2 program, and that any future model year could apply to up to four to schedule testing to take into account rulemaking concerning Phase 3 model years; the one subject to testing, production, marketing, test facility and standards would address the use of the the two previous model years and the budgetary constraints and would invite Phase 2 credits in Phase 3. EPA believes next model year. In-use credits would manufacturers to recommend a testing this unlimited life for in-use credits be generated or required, as appropriate. program which best suits their needs. during the Phase 2 handheld program is EPA requests comment on the 3992 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules appropriateness of and the need for In evaluating alternatives to because the manufacturer would ‘‘break these provisions. mandatory recall, EPA would consider even’’ and may become indifferent The handheld in-use credit program is alternatives which (1) represent a new between assuring in-use durability up meant, in part, to obviate the need to initiative that the manufacturer was not front and addressing it only when resort to a traditional recall program, otherwise planning to perform at that durability problems are detected. and the Agency wants to ensure that time and that has a nexus to the EPA is proposing in this rule that in- this alternative program, or any other emission problem demonstrated by the use credits be discounted by 10 percent alternatives considered, provide subject engine family; (2) cost when they are used. If in-use credits are incentives to manufacturers to design substantially more than foregone marketed freely and their price is engine configurations that will comply compliance costs and consider the time determined by what it costs to generate with standards for their entire useful value of the foregone compliance costs them, a manufacturer would pay at least lives. EPA believes that manufacturers and the foregone environmental benefit 10 percent more than it cost another should make every effort to prove out of the subject family; (3) offset at least manufacturer to comply with the their designs prior to certification so 100 percent of the exceedance of the standards and generate the credits. This that in-use nonconformities will not standard; and (4) are able to be suggests that the minimum figure for the occur. Therefore, this notice proposes implemented effectively and cap should be at least 10 percent of the that credits be discounted by 10 percent expeditiously and completed in a failing manufacturer’s foregone costs, before they are used. This would require reasonable time. after those costs have been adjusted to a manufacturer to obtain or generate These proposed criteria would the present value. Given that under the credits sufficient to offset 110 percent of function as ground rules for evaluating proposal no more than one fourth of a the emissions from a family found to be projects to determine whether their manufacturer’s families would be in noncompliance. This discount is nature and burden is appropriate to subject to in-use testing in a given year, consistent with that applied to in-use remedy the environmental impact of the a manufacturer that produces a non- credits in the gasoline marine rule. nonconformity while providing durable, non-carryover family has at Comment is requested on the assurance to the manufacturer that EPA most a 25 percent chance that EPA appropriateness of such discounting and would not require excessive projects. would be aware that such a non-durable on the appropriate size of the discount. In addition to being evaluated family was being produced. A according to the above criteria, EPA is reasonable individual might risk a 10 4. Criteria for Evaluating Alternatives to proposing that alternatives would be percent cost penalty if the risk of Mandatory Recall subject to a cost cap, as contemplated by actually having to pay it was never more This proposal contemplates that for the proposal for handheld engines in the than 25 percent. EPA can not estimate handheld engines, in-use credits would March 1997 ANPRM. EPA proposes a the savings a manufacturer may reap by be the primary method of addressing cost cap of 75 percent above and beyond building a non-durable engine, and emission nonconformities determined the foregone costs adjusted to present therefore can not compute the expected through in-use testing or production value, provided the manufacturer can value of the savings when the 25 line testing, whether through the use of appropriately itemize and justify these percent risk factor is added in. credits banked or averaged, or credits costs. EPA believes that this is an EPA believes a figure of 75 percent purchased through available sources. appropriate value which is both more than the foregone costs adjusted to For nonhandheld engines, EPA is ‘‘substantial’’ and sufficient to present value would be both proposing that in some cases, the use of encourage manufacturers to produce ‘‘substantial’’ and sufficient to certification credits would be allowed as emission durable engines and maintain encourage manufacturers to produce a method of addressing emission positive in-use credit balances. emission durable engines and maintain exceedances determined through In deciding what cost cap to propose, positive in-use credit balances. EPA production line testing (as discussed EPA believes a figure of 75 percent more notes that these projects are alternatives above in Section IV.D.2). than the foregone costs adjusted to to recall and that a recall with a However, EPA is also proposing that present value is consistent with and response rate similar to those in the manufacturers have available informed by the principles inherent in motor vehicle program would likely alternatives to using in-use credits or the criteria for evaluating alternatives to have a much higher cost than would be certification credits, if they lack recall. For example, criterion (2) would permitted under a 75 percent cap. EPA sufficient credits and are unable to require that the alternative must cost considered proposing that the cap be obtain them, that would still avoid substantially more than the costs the tied to the cost of purchasing in-use necessitating an order for mandatory manufacturer was able to forego by credits on the open market, but is recall. One such alternative could be for producing a nondurable engine, and concerned that these alternatives would the manufacturer to conduct a voluntary consider the time value of those be needed when there are no in-use recall. However, EPA would consider foregone costs. credits available for sale. Further, based other alternatives as well. This proposal EPA believes that manufacturers on EPA experience with other ABT contains a number of criteria for should prove out the in-use durability of programs, there is no guarantee that evaluating alternatives to determine their designs carefully before routine sales of credits would ever whether they meet the goals of certification and desires to set the cost occur. EPA requests comment on the addressing the environmental impact of cap for alternative projects high enough appropriate cap and the appropriate the in-use problem while providing that manufacturers will take measures to methodology for determining the cap, incentives to the manufacturer to carefully evaluate in-use durability and the difficulties that could be faced produce emission-durable engines. EPA before certification and to bank and in trying to ascertain foregone costs. intends to allow a manufacturer to maintain substantial in-use credits to implement a reasonable alternative that handle an unforeseen problem. EPA E. Flexibilities met these criteria prior to making a believes that a cost cap which would This section addresses a variety of determination of substantial merely measure the foregone costs, and flexibilities proposed today to ease the nonconformity under section 207 of the adjust them to their present value would transition from the Phase 1 to the Phase Act. not provide the appropriate incentive, 2 program, to ensure that the Phase 2 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3993 standards are cost-efficient and flexibilities intended especially to loss in emission control. In comments to achievable, and to reduce the reduce the compliance burden on small the ANPRM, PPEMA has recommended compliance burden while maintaining volume products or small volume 10,000 units or less as a definition for the environmental benefits of the rule. engine or equipment manufacturers. small volume handheld families. Since Following an overview of the approach this definition will impact the number 2. Proposed Production Volume Cutoffs to providing compliance flexibilities, of engines families within a and a discussion of the proposed cutoffs EPA has developed proposed cutoffs manufacturer that could be exempt from for determining whether a to determine whether a manufacturer or PLT testing, EPA is uncertain as to why manufacturer, an engine family, or an engine/equipment family would qualify a larger sales volume cut-off is both equipment model would qualify for the for the flexibilities proposed today. appropriate from an enforcement flexibilities proposed today, this section These cutoffs are described here, with a perspective and of particular benefit to describes the flexibility provisions more detailed discussion in Chapter 9 of the manufacturer. EPA requests proposed today, including general the Draft RSD. EPA decided not to information on the necessity for flexibilities, phase-in flexibilities, propose the Small Business expanding its small volume engine flexibilities to address the concerns of Administration’s definition of ‘‘small family definition to include larger small volume engine manufacturers, business’’ as the criterion for a volume family sales such as flexibilities to address the concerns of manufacturer to qualify for the proposed recommended by PPEMA (and a small volume equipment manufacturers, flexibilities (the SBA definition is either comparable volume for nonhandheld and provisions to encourage engine 500 or 1000 employees, depending on engine families), especially regarding availability. While some of these the SIC code of the industry). This is the cost benefit to specific individual flexibilities may overlap, EPA is because, of 15 engine manufacturers manufacturers, and the impact such a proposing these flexibilities as a means qualifying as ‘‘small business’’ by the higher number would have on the to reduce the compliance costs of the SBA definition, at least three produce confidence EPA would have that its PLT proposed rule for those that can least large volumes of engines, between compliance program adequately afford them, while maintaining the 75,000 and 700,000 units, and have very evaluates the emission performance of environmental benefits of the proposed high annual income. EPA believes these the manufacturer’s production. rule and adopting the most stringent companies will not experience Third, equipment manufacturers emissions standards achievable. EPA significant burdens in complying with using nonhandheld engines would be requests comment on the proposed the proposed Phase 2 program. Instead, considered ‘‘small volume equipment flexibilities individually and as a whole. EPA is proposing the following manufacturers’’ when their total annual production volume cutoffs 50 for output across all models is 2500 units 1. Overview of Approach to Providing qualifying for the flexibilities proposed or less; equipment manufacturers using Compliance Flexibilities today. handheld engines would be considered In this proposal, EPA has attempted to First, nonhandheld engine ‘‘small volume equipment facilitate compliance by creating manufacturers would be considered manufacturers’’ when their total annual provisions that help avoid unnecessary ‘‘small volume engine manufacturers’’ output across all models is 5000 units hardship for engine and equipment when their total annual production is or less. Again, while over 80 percent of manufacturers but that still achieve the 10,000 units or less; handheld engine the nonhandheld equipment desired environmental benefits. EPA manufacturers would be considered manufacturers, and up to 67 percent of believes that these provisions will help ‘‘small volume engine manufacturers’’ the handheld equipment manufacturers to avoid disruption of supplies of when their total annual production is could qualify under this proposed engines needed by equipment 25,000 units or less. While over 50 cutoff, fewer than 2 percent of the manufacturers and will enable both percent of the nonhandheld engine nonhandheld engines and 1 percent of engine and equipment manufacturers to manufacturers, and up to 30 percent of the handheld engines sold in the U.S. more easily and economically make the the handheld engine manufacturers would be covered under these transition from Phase 1 to Phase 2. could qualify under this proposed thresholds. These provisions will also help ensure cutoff, fewer than 1 percent of the Finally, equipment models using that the stringent standards proposed in engines sold in the U.S. would be nonhandheld engines would be the rule are achievable with technology covered by these cutoffs. considered ‘‘small volume equipment that will be available during the Phase Second, nonhandheld small volume models’’ when 500 or fewer units are 2 time frame. engine families would be those families produced per year; equipment models Some engine manufacturers have of 1000 units of less; handheld small using handheld engines would be expressed concern that the Phase 2 volume engine families would be those considered ‘‘small volume equipment program might be too burdensome for families of 2,500 units or less. These models’’ when 2500 or fewer units are engine families with small volume proposed thresholds were selected as produced per year. On the nonhandheld production or for small volume high enough to include approximately side up to 3 percent of the equipment manufacturers. These manufacturers 30 percent of the engine families in each sold in the U.S. would be considered have stated that, without some kind of category, while low enough to account small volume equipment models. On relief, these burdens will lead them to for less than 1 percent of the engines the handheld side, up to 3.5 percent of stop producing certain engines rather sold. At these levels, EPA believes a the equipment sold in the U.S. would be than bear the additional costs. The reasonable amount of flexibility could considered small volume equipment engines most likely to be affected are be provided to a significant number of models. special engines designed for niche manufacturers without undue risk of markets. For these markets, there could 3. General Flexibilities be significant consequences to 50 Annual production volume of U.S. sales, as The program proposed today contains equipment manufacturers and operators defined by these proposed regulations. Note that the several general provisions intended to vast majority of ‘‘small’’ manufacturers together if production of special engines were to produce a very small fraction of the engines; a few facilitate compliance for engine cease. To address these concerns, EPA very large manufacturers produce the large majority manufacturers. One proposed flexibility, is proposing several compliance of the engines. available to both handheld and 3994 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules nonhandheld engine manufacturers, is manufacturers’ testing capacities may be essence, this flexibility is designed to the ability to carry-over certification substantially constrained during the reduce the compliance burden at the from one year to the next. This would transition to fully-phased-in standards, start of the program for engines that are reduce certification costs after the first EPA is proposing to allow to be phased out, and thus to allow year for those engines using technology manufacturers of Class II OHV manufacturer to focus their resources on that does not change significantly from nonhandheld engines who elect not to transitioning to engines that will meet year to year. use assigned dfs to use good engineering the 2005 standards. In addition, today’s proposal contains judgment to establish deterioration 5. Flexibilities for Small Volume Engine two sets of proposed standard structure factors for the 500 and 1000 hour useful flexibilities which differ for handheld Manufacturers and Small Volume life categories during the phase-in of the Engine Families and nonhandheld engine manufacturers. 12.1 g/kW-hr Class II standard, subject For handheld engine manufacturers, the to the approval of the Administrator. EPA is proposing five compliance standards proposed in today’s rule Recognizing the need to verify flexibilities to ensure the achievability would be phased in, on a percentage of deterioration factors established based of the standards and reduce the sales basis, which would facilitate on good engineering judgment, EPA is compliance burden on small volume compliance by allowing a manufacturer proposing that, beginning in 2006, the engine manufacturers and small volume to spread initial compliance costs out Administrator may direct manufacturers engine families, as follows. over several years. It would also provide to verify such deterioration factors using First, small volume engine an opportunity for engine manufacturers the same process as that for calculating manufacturers could opt out of to continue to supply Phase 1 engines deterioration factors described in mandatory production line testing. This to various equipment manufacturers, Section IV.D.1 above (i.e, aging at least option would apply only to including the small volume equipment three engines in the field and nonhandheld engine manufacturers with a total annual production of 10,000 manufacturers that would also benefit calculating the deterioration factor engines or less and to handheld engine from the special flexibilities described based on the average of the test data). manufacturers with a total annual below. EPA is also proposing that the production of 25,000 engines or less. For nonhandheld engine manufacturer would be allowed to offset These engines would be subject to SEA manufacturers, a declining corporate any emission shortfalls resulting from a testing. However, EPA anticipates little average standard for Class II low deterioration factor through the use such testing unless it receives evidence nonhandheld engines would achieve of certification credits (see discussion, of nonconformities or other problems. those same goals. In addition, Section IV.A.5) or other compensating nonhandheld engine manufacturers Second, manufacturers of small measures approved by the volume nonhandheld engine families would benefit from the certification Administrator. averaging, banking, and trading (those with total annual production of Second, EPA is proposing an program, which would help reduce 1000 engines or less) and manufacturers additional flexibility for manufacturers compliance costs by allowing of small volume nonhandheld engine of Class II nonhandheld engines that use manufacturers to meet the standards families (those with total annual side-valve technology engines or with the most cost-effective production of 2500 engines or less) engines with aftertreatment. During the technologies. Today’s proposal would could opt out of mandatory production transition to the Phase 2 standards, for also allow manufacturers of line testing for those engine families. As engines which the manufacturer nonhandheld overhead valve engines to above, these engines would remain commits to cease production by the end use an assigned deterioration factor for subject to SEA testing, which would of the 2004 model year, manufacturers nonhandheld overhead valve engines, likely only occur if EPA had evidence would have the option to age engines for further easing the compliance burden by of nonconformity. less than their full useful lives and reducing the number of tests needed to Third, manufacturers of very clean extrapolate the deterioration factor to determine compliance. engine families, that is, those whose the full useful life using good HC+NOX certification levels are at least For equipment manufacturers, EPA is 51 proposing that the current provisions of engineering judgment. Again, 50 percent below the standard (or FEL, 40 CFR 90.1003(b)(4) applicable for the demonstration of such good engineering if applicable) could also opt out of transition from uncontrolled to Phase 1 judgment would need to be made to the mandatory production line testing for emission regulations would also apply satisfaction of the Administrator. For those families. These engines would in concept during the transition from the engine families which the also be subject to SEA testing, although Phase 1 to Phase 2. Under today’s manufacturer commits to phase out, EPA sees little likelihood of conducting proposal, equipment manufacturers engines certified to 250 hours could be SEAs on engines certified substantially would be allowed to continue to use aged for 120 hours, engines certified to below the standard (or FEL). EPA seeks Phase 1 engines until their stocks of 500 hours could be aged to 250 hours, comment on the margin below the engines are depleted, provided they do and engines certified to 1000 hours standard (or FEL) necessary to qualify not engage in ‘‘stockpiling’’ (i.e., build could be aged to 500 hours. This for this exemption. up of an inventory of engines outside of flexibility, like the previous one, is Fourth, small volume Class II side- normal business practices). intended to reduce the testing burden valve technology engine families (whose during the phase-in of the 12.1 g/kW-hr annual production is 1,000 engines or 4. Phase-In Flexibilities standard. However, EPA is not less) would be allowed to meet an In addition to these general proposing to extend this flexibility to HC+NOX standard of 24 g/kW-hr, which flexibilities, EPA is proposing two other Class II engines which the manufacturer represents the Phase 1 standard adjusted provisions that would be applicable to does not commit to cease production. In for deterioration. Note that these all manufacturers of certain kinds of families could also opt out of mandatory nonhandheld engines to ease 51 As described in Section IV.D.1 of this preamble, production line testing, consistent with Class II side-valve engines and engines with compliance during the phase-in of the aftertreatment would be able to certify through a provision 2 above. This flexibility is standards and ensure their bench aging certification program, provided that a intended to ensure that manufacturers achievability. First, because field/bench adjustment factor had been established. can continue to produce these small Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3995 volume engines, many of which are transition to the Phase 2 program may allowed only for those equipment used in niche-market specialty disrupt their production because engine models in which a certified Phase 2 equipment. suppliers do not always provide engine will not fit, and would apply Fifth, small volume engine adequate lead time for equipment only to models in production prior to manufacturers could defer compliance redesigns needed to accommodate the effective date of the Phase 2 with Phase 2 handheld requirements engine design changes. Engine changes standards. This is to avoid encouraging and Class II nonhandheld standards could affect mounting and connection manufacturers to bring out new models until the last year of the phase in. For locations, heat rejection loads, and designed to use Phase 1 engines after handheld engines, this would mean that engine compartment requirements, for the Phase 2 standards have gone into the engine manufacturer could, at its example. In addition, some equipment effect. This exemption would also apply option, produce Phase 1 engines manufacturers cannot implement only so long as the equipment is not exclusively through the 2004 model equipment design changes quickly, even significantly modified. EPA believes year, with full Phase 2 compliance with timely information from that if the equipment manufacturer required in 2005. For nonhandheld manufacturers because of the sheer takes steps to significantly redesign a Class II engines, the engines would be volume of redesign work needed to particular model, the use of a Phase 2 subject to the Phase 2 requirements change diverse product offerings with engine should be included. Finally, this beginning in 2001, but would not have limited engineering staffs. exemption could apply only through the to comply with the actual Phase 2 EPA believes that the engine applicability of the Phase 2 program. corporate average standards until the manufacturer flexibilities described EPA seeks comments on each of these 2005 model year. These manufacturers above will extend the availability of restrictions, especially with regard to could certify Class II engines to a engines currently used by small volume how they would affect equipment standard of 24 g/kW-hr through 2004. equipment manufacturers and will help manufacturers who might incur a These engines would neither use nor ease the transition from Phase 1 to significant change in the cost of the generate certification credits. If a small Phase 2 for those entities. However, to engine if they were required to switch volume engine manufacturer desired to respond more directly to concerns to a Phase 2 engine as the result of a generate credits prior to the 2005 model raised by equipment manufacturers, significant model redesign. year, it could do so for those engines EPA is proposing three compliance Finally, EPA is proposing a hardship certified below the applicable corporate flexibilities to help enable equipment relief provision by which any average emission standard. Note that, manufacturers to make the transition equipment manufacturer could obtain consistent with the first provision from Phase 1 to Phase 2 engines. relief to continue using Phase 1 engines, above, these families would not have to First, EPA is proposing to temporarily by demonstrating to the Administrator’s be tested under mandatory production exempt small volume equipment satisfaction that, despite its best efforts, line testing. This flexibility is intended manufacturers from the requirement to the manufacturer cannot meet the to provide another mechanism to reduce use Phase 2 engines in cases where no implementation dates without incurring impact on small volume engine Phase 2 engines with appropriate substantial economic hardship, even manufacturers and help ensure that physical and performance with the transition flexibilities manufacturers can continue to produce characteristics are available to fit described above, due to unforeseeable engines for specialty equipment. existing equipment models. This factors beyond the equipment EPA is not proposing to specifically exemption would apply to those manufacturer’s control. Such a situation exempt from in-use testing any group of equipment manufacturers whose annual may occur if an engine supplier were to engines to which in-use testing output across all models uses 2500 or change or drop an engine model very requirements are applicable based on fewer nonhandheld engines, or 5000 or late in the implementation process. The the group’s or the manufacturer’s size. fewer handheld engines, and would last intent of this provision is to recognize The Agency believes that all engines through the third year after the last the concerns of equipment should meet their standards (or FELs, as applicable phase-in date for that class of manufacturers about the uncertainty of applicable) for their full useful life and engines. Thus, for example, small timely supply of engines that meet that manufacturers should design volume equipment manufacturers who equipment requirements by providing engines to be emission durable. It is use Class II nonhandheld engines in an fair, objective criteria for hardship therefore appropriate that all engines to existing piece of equipment could appeal that minimize the potential loss which in-use testing or demonstration continue using Phase 1 engines through in environmental benefit, minimize the requirements are applicable be subject the end of the 2008 model year, in cases Agency’s involvement in the financial to in-use testing. However, under this where no suitable Phase 2 engines are affairs of the affected equipment proposal, the choice of engines which available to fit existing equipment manufacturer, and avoids straining the would require in-use testing or models. Agency’s resources. demonstration is EPA’s. EPA would not Second, EPA is proposing to delay the As proposed, this hardship relief be inclined to identify for mandatory in- impact of the Phase 2 requirements on provision would require requests to be use testing a very small volume engine individual small volume equipment made in writing, submitted before the family or a family certified by a very models in cases where no suitable Phase earliest date of noncompliance, include small company unless there was 2 engines are available to fit existing evidence that failure to comply was evidence of a nonconformity. EPA equipment models. A small volume unforeseeable and was not the fault of requests comment on the model, as proposed, is one with 500 or the equipment manufacturer (such as a appropriateness of this position. less units produced per year for supply contract broken by the engine nonhandheld equipment, and 2500 or supplier), and include evidence that the 6. Flexibilities for Small Volume fewer units produced per year for inability to sell the subject equipment Equipment Manufacturers and Small handheld equipment. These small will have a major impact on the Volume Equipment Models volume models could continue to use company’s solvency. The Agency would Several equipment manufacturers Phase 1 engines throughout Phase 2, work with the applicant to ensure that who do not make their own engines except as discussed below. EPA is all other remedies available under the have expressed concern that the proposing that this exemption would be flexibility provisions are exhausted 3996 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules before granting further relief, and would flexibilities described above, or whether comment on the interest of any of these limit the period of relief to no more than EPA should rely on equipment groups in working with the Agency to one year. Furthermore, the Agency manufacturer records. develop and implement this program. proposes that applications for hardship F. Nonregulatory Programs 2. Voluntary Fuel Spillage and relief could only be submitted through Evaporative Emission Reduction the first year after the last effective date The following is a description of three Program of the phase-in period. EPA seeks nonregulatory programs which, though comment on all aspects of this outside of the scope of the regulation, EPA is planning to develop a flexibility provision and on whether the could yield important environmental voluntary fuel spillage and evaporative Agency should require those who benefits from the small SI engine sector. emission reduction program specifically receive relief to cover some of the lost The first program is a voluntary for the small engine industry and its environmental benefit, such as incentive and recognition program for customers. While this program would purchasing lower emitting engines. low-emitting nonhandheld and not impose enforceable requirements on handheld engines, which would take engine manufacturers subject to this 7. Engine Availability the form of a ‘‘green labeling’’ program rulemaking, it is important to reduce EPA recognizes that the above- to identify engines which have fuel spillage and other sources of described equipment manufacturer emissions significantly lower than evaporative emissions. Every year, flexibility provisions are of little use if required by the proposed standards. The millions of gallons of gasoline are lost Phase 1 engines are not available. second program is a voluntary fuel during refueling. It is estimated that if Therefore, to help ensure availability of spillage reduction program for a few ounces are spilled during each Phase 1 engines necessary for the above nonhandheld and handheld engines. refueling of lawn and garden relief provisions to have full effect, EPA The third program is a particulate equipment, they would total about 17 is proposing that engine manufacturers matter (PM) and hazardous air pollutant million gallons of gasoline, most of be allowed to build and sell the engines (HAP) testing program for handheld which evaporates into the air to needed to meet the market demand engines. These programs are described contribute to the ground-level ozone created by these flexibilities. in the remainder of this section. problems. To reduce and prevent this Specifically, EPA is proposing to pollution, a variety of measures will be 1. Voluntary ‘‘Green’’ Labeling Program continue to apply the Phase 1 needed, most involving increased public compliance provisions to these engines. EPA is very interested in encouraging awareness and education. Thus, these Phase 1 engines would not the design, production, and sale of small The Agency believes it is appropriate be subject to Phase 2 useful life, engines which are substantially cleaner to develop and implement a program production line testing or in-use than would be required by today’s targeted at the small SI industry and its demonstration requirements contained proposed Phase 2 programs. EPA plans customers to encourage public in today’s program, since Phase 1 to implement a voluntary program awareness and act as an incentive for engines are not currently subject to which would include consumer labeling technology investments. The Agency is those provisions. EPA desires to of engines and equipment with superior interested in a voluntary partnership minimize any disincentives that engine emission performance as a way of program which would involve EPA, manufacturers may have to producing providing public recognition and also engine manufacturers and equipment these engines for small volume allowing consumers to easily determine manufacturers, regional, state, and local equipment users and is therefore which engines have especially clean air pollution agencies, health and proposing that these engines would be emission performance. At this time, environmental organizations, fuel counted only to the extent necessary to EPA is considering a threshold of container manufacturers, and other determine the availability of the specific around 50 percent of the proposed interested parties who would all flexibility item that was being applied. standard (e.g., around 12.5 g/kW-hr for contribute to the successful These engines would not count in any Class I engines) as the level below development and implementation of a other calculation of compliance with which engines would qualify for voluntary fuel spillage and evaporative phase in requirements or against any ‘‘green’’ labeling. To develop the details emission reduction program. other ceilings or limits proposed in this of such a program, the Agency requests While the design of such a program rule. These engines would not be comment on all aspects of the program, will benefit from the thoughtful input of required to use any emission credits nor including the threshold for determining all partners, the program would likely would they be permitted to generate any a ‘‘green’’ engine, whether the sales encourage the development of such credits. weighted certification level after dfs are technology that will assist equipment However, to prevent abuse of the applied should be used to establish the users in reducing spills and evaporative ability to continue to produce Phase 1 eligibility of an engine family, the emissions, provide recognition for engines, EPA believes it is necessary to design of and information to be implementing technology developments impose some restrictions on the included on the label, and other matters that will assist equipment users in continued manufacture and sale of those relevant to the successful reducing spills, and provide education engines. Therefore, EPA is proposing implementation of the program. The and training to commercial operators of that equipment manufacturers procuring Agency requests comment on program equipment and to those persons who engines for use under the flexibility recommendations as part of today’s influence individuals doing the programs described above provide proposal. In particular, the Agency refueling (such as equipment sales staff written assurance to the supplying seeks information on when such a or small engine course instructors), and engine manufacturer that such engines program must be in place to effectively similar target audiences. are being procured for this purpose. impact the sale of especially clean Phase Initial steps in this program involve EPA requests comment on the need for 2 engines. The Agency is interested in identifying interested partners and a requirement that engine manufacturers working closely with consumer groups, convening a meeting to discuss the roles maintain or annually provide to EPA engine and equipment manufacturers and responsibilities of each partner. The records on the engines manufactured in and others with an interest in making Agency seeks comment on the proposed support of the equipment manufacturer this program work. The Agency invites voluntary partnership program, interest Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3997 in participating in this partnership, January 1 of the calendar year, ends no two-person earth augurs, breakers and appropriate strategies and target later than December 31 of the calendar rammers, and power shovels. In each audiences, and other matters pertinent year, and does not begin earlier than case, the manufacturer presented to establishing this program. January 2 of the previous calendar year. evidence to the satisfaction of the When a manufacturer has no annual Agency demonstrating the 3. Particulate Matter and Hazardous Air new model production period, model multipositional use of the equipment, Pollutant Testing Program for Handheld year would mean calendar year (see 40 and provided a discussion of any Engines CFR 90.3). Under no circumstances constraints on engine design imposed While section 213(a)(4) of the Clean would the model year definition be by the usage of the equipment. The Air Act allows EPA to establish allowed to be interpreted to let existing interpretation of multipositional use by standards for nonroad emissions of any models ‘‘skip’’ annual certification by EPA has been made relative to the air pollution which may reasonably be pulling ahead the production of every equipment category and the technology anticipated to endanger public health or other model year. available to meet the constraints welfare, today’s notice does not propose In addition, in order to provide imposed by the usage of the equipment. to establish emission standards in Phase additional lead time for the EPA received comment on the 2 for particulate matter (PM) or non- implementation of the program for ANPRM that EPA should revise the hydrocarbon hazardous air pollutants nonhandheld engines, EPA is proposing definition of handheld.52 This (HAP) listed under section 112(b) of the to adopt similar flexibilities for the commenter suggests that the Phase 1 Clean Air Act. However, EPA and other beginning of the Phase 2 program for definition of handheld restricts the parties have agreed that a PM and HAP nonhandheld engines as were available replacement of 2-strokes by significantly test program will be conducted (see 62 for the Phase 1 program (see 40 CFR cleaner 4-stroke engines, making it FR 14746). The Portable Power 90.106 (a) and (b)). Thus, for the start up difficult to introduce a significantly Equipment manufacturers Association of Phase 2, EPA is proposing that every cleaner engine for a product application. (PPEMA), in cooperation with EPA, will manufacturer of new nonhandheld This commenter suggests that a different conduct a test program to evaluate and engines produced during or after model handheld definition and interpretation quantify emissions of PM and HAP year 2001 would be required to certify would improve the environment and including, but not limited to, those engines to the Phase 2 program permit the continued use of necessary formaldehyde, acetaldehyde, benzene, requirements. Nonhandheld engines products. toluene, and 1,3 butadiene. EPA manufactured during an annual EPA believes that the current anticipates that testing will be production period beginning prior to interpretation of criteria used to conducted on Phase 2 technology September 1, 2000, would be allowed to determine applicability of Class III, IV handheld engines, with a sufficient certify to Phase 1 standards. However, and V standards addresses this concern. magnitude of engines tested to represent annual production periods beginning Provided the 4-stroke engines are the range of new basic technologies prior to September 1, 2000, would not capable of performing the same used to comply with Phase 2 small be allowed to exceed 12 months in intended functions as 2-stroke engines engine standards. EPA expects that the length. In effect, all nonhandheld engine used in similar handheld applications, information generated by this program families would be required to be then EPA would likely determine that will be useful in informing any future certified to the Phase 2 program by the 4-stroke engine also meets the implementation of section 213(a)(4) September 1, 2001. EPA is not criteria for applicability of the Class III, regarding small SI engines. proposing this provision for handheld IV or V standards. engines, which have both a later G. General Provisions effective date as well as a phase-in of 3. Small Displacement Nonhandheld This section includes a description of the Phase 2 program based on Engine Class certain other general provisions percentage of engine sales. EPA requests EPA has considered whether there is proposed in today’s notice, including comment on whether similar provisions a need for changes or additions to the provisions related to annual production for handheld engines should be adopted five classes of small SI engines for period flexibilities during the transition (except that in the case of handheld regulatory purposes. In particular, the to Phase 2, the definition of handheld engines, September 1 of each year Agency has considered whether there is engines, a small displacement would be the date that the percentage of a need for addition of a new, small nonhandheld engine class, propane engine sales requirements for Phase 2 displacement class that would be fueled indoor power equipment, dealer certification would have to be met). EPA considered ‘‘nonhandheld.’’ In responsibility, engines used in requests comments on all aspects of comments on the ANPRM, one recreational vehicles, engines used in these provisions relating to annual commenter specifically requested EPA rescue and emergency equipment, and production periods in the transition to consider proposing a new class, as replacement engines. from Phase 1 to Phase 2 certified follows: the new class would be engines. 1. Model Year Definition and Annual nonhandheld engines with Production Period Flexibilities During 2. Definition of Handheld Engines displacements less than 75cc, and be Transition to Phase 2 subject to an in-use standard of 72.4 g/ EPA is not proposing any changes to kW-hr with useful life categories of 125 The programs for nonhandheld and the criteria listed in Phase 1 used to hours and 250 hours. The commenter handheld engines proposed today determine whether engines could be believes a new class for nonhandheld is would be effective beginning with the classed as Class III, IV or V. For Phase needed for several reasons. The 2001 and 2002 model years, 2, EPA would continue to make commenter believes the existing Phase 1 respectively. EPA is not proposing to determinations of applicability of the standards did not contemplate small change the Phase 1 definition of model Class III, IV, or V standards based on the displacement nonhandheld engines, yet year for Phase 2. That is, model year criteria found at 40 CFR 90.103(a)(2). the Phase 1 rule left a void in the market (MY) would continue to mean the During Phase 1, the multipositional use manufacturer’s annual new model criterion has been used by EPA to make 52 See comments from Honda, Item #II–D–07 in production period which includes handheld determinations for certain EPA Air Docket A–96–55. 3998 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules which could be filled by small to the proven ability to calibrate LPG- their engines is limited by the low displacement nonhandheld engines. fueled engines to operate at very low number of engines modified. The commenter believes the Phase 1 carbon monoxide (CO) levels. Low CO While EPA has not done a thorough standards prevented less than 75 cc 2- performance is especially important for cost analysis for the impact of Phase 2 stroke engines from being certified into indoor equipment to minimize CO standards on this unique segment of the some nonhandheld applications which exposure to the operator and others in industry, EPA is persuaded that the utilize small displacement engines, but the building. The Occupational Health technical challenges faced by this that the proposed Phase 2 Class I and Safety Administration (OSHA) has segment are significant. Many of these standard is too stringent for less than 75 set maximum CO standards for indoor manufacturers would be considered cc 4-strokes to meet. ambient concentrations and some states ‘‘small volume engine manufacturers’’, The Agency is not proposing the have adopted even tighter indoor CO with engines produced in ‘‘small addition of a new small displacement standards. While these are ambient volume engine families’’, under the nonhandheld class. The Agency standards, not emission limits for criteria proposed today, and would believes that the proposed Class I individual pieces of equipment, therefore qualify for proposed standard, which can be met through equipment manufacturers, to compliance flexibilities for small averaging, will allow a full range of successfully market in this area, must be volume engine manufacturers and small small displacement nonhandheld assured their equipment emits very low volume engine families. These include engines to certify to the proposed Phase levels of CO and thus can be routinely both additional flexibilities in the 2 standards. If the proposed Class I used indoors without causing violations phase-in of the Phase 2 standard, and standard can be met through averaging, of OSHA or state indoor air quality also an option to opt out of mandatory the creation of a new displacement class requirements. production line testing. In effect, the with a higher standard could result in Because the specialized nature of additional phase-in flexibilities would a smaller environmental benefit from their equipment places unique demands allow nonhandheld manufacturers of the Phase 2 program. on these engines and due to the indoor LPG-fueled power equipment The Agency understands it is possible typically low sales volumes of many of engines, whose annual production of that some nonhandheld applications the pieces of equipment, many of these small SI engines is 10,000 units or less, which use small displacement engines indoor equipment manufacturers must to continue producing Class II may no longer be able to utilize two- not only design and produce their nonhandheld engines which meet a stroke engines if the Phase 2 standards equipment but also to a significant Phase 1 equivalent standard (24 g/kW- are adopted as proposed, but believes extent are responsible for the hr) until 2005. Beginning in 2005, when that complying engines, perhaps of modification of engines to power their the Phase 2 standards are proposed to be larger displacement, can be used. EPA equipment. In a number of cases these fully phased in for gasoline-fueled requests additional information on this indoor equipment manufacturers buy engines, these LPG-fueled engines are issue and the extent of its occurrence. gasoline-fueled engines and convert proposed to also be required to meet the The Agency also once again requests them to operate on LPG. Phase 2 HC+NOX standards. This extra comment on the need for a new small While manufacturers of LPG-fueled lead time would allow manufacturers to displacement class, in particular, indoor power equipment must power spread their development efforts over whether the proposed average Class I their equipment with engines which several additional years, for those standard is sufficient to cover smaller meet all the requirements of the small manufacturers choosing or required to displacement engines. The Agency also engine Phase 1 rules, the manufacturers make their own fuel modifications. In requests comment on the displacement argue that the proposed Phase 2 rules addition, while these engine families cutoff (75cc), standard (72.4g/kW-hr), would add significantly to their burden. would be certified to the Phase 2 and useful lives (125 hours and 250 While meeting the proposed federal program, the cost of the proposed hours) suggested by the ANPRM HC+NOX Phase 2 standard should not compliance program for these commenter. be particularly difficult for LPG engines manufacturers would be minimized, as compared to gasoline-fueled engines, these manufacturers and engine families 4. Liquefied Petroleum Gas Fueled the combined need to also achieve very would likely qualify for the proposed Indoor Power Equipment low CO emission levels in order to not flexibilities that would allow Manufacturers of equipment using cause violations of indoor ambient CO manufacturers to carry-over certification liquefied petroleum gas (LPG) have standards may present a design from one year to the next and to opt out argued that their situation deserves challenge. The necessary controls may of mandatory production line testing. special consideration within the Phase 2 well exceed those required to meet just The provisions for small volume engine regulations.53 The type of equipment the Phase 2 standards and may include, manufacturers and small volume engine they produce is often designed for example, the use of electronically families are discussed in more detail in specifically for indoor use including, for controlled fuel systems and perhaps Section IV.E. example, floor washing and buffing catalysts. This could add significant cost Comments are requested on the equipment. The relatively low sales to a relatively few engines. Even at a impact of this proposed phase-in (likely fewer than 10,000 annually higher cost, those equipment flexibility and other proposed nationwide for the industry) and the fact manufacturers currently being supplied compliance program flexibilities on the that many of these manufacturers likely LPG-fueled engines by an original technical and economic ability of the sell less than one thousand pieces of engine manufacturer are concerned that indoor power equipment engine equipment annually means that both their suppliers may decide it is not industry segment to successfully individually and collectively they worth the effort to supply engines comply with the Phase 2 standard account for a very small portion of the complying with the Phase 2 standards. beginning in 2005, and any air quality small SI engines sold annually. LPG is For those equipment manufacturers impact concerns such a delayed a popular fuel for indoor equipment due modifying engines to operate on LPG at implementation might cause. low CO levels, the same technical EPA is also requesting comment on 53 See EPA Air Docket A–96–55, Items #II–D–02, challenges are faced while their ability the possible deletion of the existing II–D–04, and II–D–08. to spread the development costs across § 90.1003(b)(3). EPA believes this Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 3999 provision may be of only limited utility tampered engines. Under EPA installed ‘‘speed governors’’ and with for this program and believes it could tampering policies, dealers and repair ungoverned rated speed above 5000 rpm prove problematic for small SI engines. facilities are not expected to restore still qualify as recreational. For This provision provides that certain tampered products to their originally example, engines used in typical activities connected to conversion of certified and functioning configuration recreational vehicles such as engines to alternative fuels will not be unless the repair is to the tampered snowmobiles and 4-wheel ATVs which, regarded as tampering. At one point, the system or a component of the tampered when designed for use by children have existing regulatory paragraph makes system. In such a case, the dealer or ‘‘speed governors’’ installed for safety reference to ‘‘vehicle’’ standards, of repair facility should restore the system purposes to limit the top speed of the which, of course, there are none in the to a certified and properly functioning vehicle, have been found by EPA to be small SI program. Further, it might be condition, but need not conduct ‘‘recreational vehicles’’ in misconstrued as requiring an engine emission testing to verify compliance implementation of Phase 1. These modifier to reinstall hardware that was with emission standards. With regard to vehicles are still operated in a typical removed in the conversion process after the use of emission control repair parts, fashion for recreational vehicles up to the conversion was complete. Under dealers and repair facilities may use that top speed. During the development such a misreading, a modifier engaged parts represented by their manufacturers of the Phase 1 rule, the Agency was not in converting gasoline engines to to be functionally equivalent to original aware of the existence of snowmobiles operate on propane might be viewed as equipment parts. designed for children, and therefore not having to reinstall the original gasoline aware of the existence of snowmobiles 6. Engines Used in Recreational carburetor on an engine after with ‘‘speed governors.’’ The Agency Vehicles conversion, even if that were not would like to clarify that EPA continues feasible. EPA is not proposing any changes to to believe snowmobiles should not be Existing converters of small SI the provision in the Phase 1 rule that covered under this rule, including engines are currently certifying their engines used in recreational vehicles snowmobiles designed for use by products on the alternative fuel or are would not be subject to the small SI children which may in fact have a operating under EPA’s tampering engine regulations. EPA continues to ‘‘speed governor’’ installed for safety enforcement Memorandum 1–A. In light believe that these engines are more purposes. of this, for small SI engines, EPA appropriately regulated under a believes that the discussion of the rulemaking separate from this small SI 7. Engines Used in Rescue and tampering implications of alternative engine program. Thus, these engines Emergency Equipment fuel conversions for small SI engines would remain outside the scope of the In consideration of safety factors could be best handled by the program when Phase 2 takes effect. The associated with compliance with the application of Memorandum 1–A. EPA Agency’s rationale for excluding engines Phase 2 program, today’s proposal does not expect that existing engine used to propel recreational vehicles was includes a provision that would exempt modifiers would be harmed by the presented in the preamble for the Phase engines which are used exclusively in deletion of this paragraph. 1 Notice of Proposed Rulemaking emergency and rescue equipment from Text similar to existing § 90.1003(b)(3) (NPRM) (see 59 FR 25403, 25414), and compliance with any standards if the is found in other nonroad rules. EPA the Agency addressed the comments equipment manufacturer can intends, at some future date, to review received on this topic in the Phase 1 demonstrate that no certified engine is the appropriateness and usefulness of Response to Comments document (see available to power the equipment safely this language in those rules. Section 3.8 ‘‘Non-Coverage of and practically. Although under Phase 1 Recreational Propulsion Engines’’, EPA EPA has received no reports of problems 5. Dealer Responsibility Air Docket A–93–25, Docket Item V–C– caused by the need to use certified This proposal contains no new 01). As discussed in the Preamble for engines in emergency and rescue constraints or responsibilities for the Phase 1 NPRM, ‘‘EPA’s primary equipment, EPA is concerned that such dealers and repair facilities from the reason for this exclusion is the problems could arise. EPA foresees this Phase 1 rule. Dealers and repair shops, extremely transient operation of the exemption applying especially to like all other persons, would continue to products in which these engines are handheld items used to work in tight be prohibited from tampering or causing used, which limits the ability of the places to perform such tasks as cutting tampering. Tampering refers to the proposed steady state test procedure to metal to extricate passengers from removal or rendering inoperative of any adequately represent exhaust emissions. wrecked vehicles, if the size, heat or device or element of design installed on This exclusion is not based on a other characteristics of the certified or in an engine for purposes of emission determination that these engines do not engine would render its use unsafe. EPA control. contribute to air pollution and therefore does not foresee this exemption During the Phase 2 regulatory need not be controlled.’’ (59 FR 25414) applying to portable generators, negotiation process, the issue of dealer EPA continues to be concerned that the compressors or hydraulic pumps that responsibility was frequently raised out test procedures covering the Phase 1 may be used to power rescue equipment of concern that increasingly and Phase 2 engines may not be from a distance, since such devices are sophisticated control technologies appropriate for engines used to propel not as subject to the size, weight and would result in greater numbers of recreational vehicles. other considerations surrounding a tool tampered engines being brought in for Engines used in recreational vehicles that contains its own source of power. service. Another concern was that the are defined at 40 CFR 90.1(b)(5), in part, EPA proposes this exemption to avoid Phase 2 rule not require that repair parts as having a rated speed greater than or any possible conflict between emission for emission control systems be equal to 5,000 RPM and having no control and public safety. EPA wishes to obtained from the engine manufacturer. installed speed governor. While EPA is reduce the chance that a piece of rescue While all persons, including dealers not proposing any changes to the equipment will go out of production or and repair facilities, are prohibited from provisions which exclude recreational become more cumbersome because of tampering or causing tampering, they vehicles from this rule, EPA does wish the need to use certified engines. EPA are not prohibited from working on to clarify that some engines with sees no significant air quality impact 4000 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules from such an exemption, because it ownership and possession of the old being replaced are destroyed; (3) that would apply only to engines that are engine. engine manufacturers report to EPA few in number and are subject to An environmental group has recently annually the number of uncertified infrequent use for very short periods of expressed concern to EPA about the engines sold under the replacement time. In fact, EPA is not currently aware replacement engine provisions for small engine provisions; (4) that of any engine that is used exclusively in SI engines published in the direct final manufacturers keep records, accessible emergency or rescue equipment. The rule described above. This group to EPA, of the purchasers, quantities exemption, as proposed, would apply to recommends that additional constraints and equipment applications of engines and equipment produced and controls should be placed on the replacement engines; and (5) that there during the remainder of the Phase 1 sale of these engines to prevent abuse be a limit on the time period for which period as well as Phase 2 engines and since these engines either will not be uncertified replacement engines are equipment. built to comply with any standards, or normally available. EPA requests will be built to comply with Phase 1 comment on the need for these 8. Replacement Engines standards after those standards have additional requirements, and the burden been superseded by Phase 2 standards. After promulgation of the Phase 1 they may pose to industry, equipment In today’s notice, EPA is proposing to operators and engine distributors. rule, equipment manufacturers continue the replacement engine approached EPA with concerns that, provision with an accommodation V. Environmental Benefit Assessment once the rule took effect, they would not necessary to address Phase 1 engines National Ambient Air Quality be able to obtain replacement engines to after the implementation of Phase 2. Standards (NAAQS) have been set for repair certain items of more expensive EPA is also proposing additional criteria pollutants which adversely equipment such as commercial mowing requirements to address the concerns of affect human health, vegetation, and construction equipment when their the environmental group and better materials and visibility. Concentrations engines fail. The equipment ensure that the ability to use of ozone (O3) are impacted by HC and manufacturers provided evidence that replacement engines is not abused. many Phase 1 engines, especially Class NOX emissions. Ambient concentrations During Phase 2, the universe of small of CO are, of course, impacted by CO II nonhandheld engines, would be SI engines will expand to include configured differently from uncertified emissions. EPA believes that the uncertified engines, Phase 1 engines and standards proposed today would reduce engines and would not fit in the engine Phase 2 engines. Consequently, the compartments of some pre-regulatory emissions of HC and NOX and help most provision as proposed would be areas of the nation in their progress equipment. The equipment amended to permit uncontrolled manufacturers explained that occasional towards compliance with the NAAQS engines to be sold for pre-regulatory for ozone. The following provides a engine failures are often best remedied equipment, and Phase 1 engines to be summary of the roles of HC and NOX in by replacing the engine. Commercial sold for equipment built with Phase 1 operators, many of whom are small ozone formation, the estimated engines, subject to certain constraints. emissions impact of the proposed businesses, may not be able to afford the EPA has no reason to believe that this downtime associated with waiting for regulations, and the health and welfare provision will result in significant effects of ozone, CO, hazardous air an extensive engine repair. In effect, adverse air quality impacts. In fact, repairing the engines becomes more pollutants, and particulate matter. many replacement engines for older Much of the evaluation of the health costly than replacing the engines, and equipment will be certified Phase 2 and environmental effects related to HC, may be less environmentally beneficial. engines. This provision provides NOX and CO found in this section is EPA evaluated these concerns and flexibility and cost savings for also discussed in the draft Regulatory gathered information from engine equipment operators. It affects primarily Support Document (RSD), and in the manufacturers, equipment commercial equipment where the March 1997 ANPRM. EPA encourages manufacturers and their associations. equipment cost is high enough to justify comments on the Agency’s beliefs EPA concluded that permitting the sale major engine repairs or replacement and expressed in this proposal and in the of uncertified replacement engines, the usage of the equipment is such that RSD, a copy of which is in the public which likely constitute less than one downtime for repairs is costly. docket for this rulemaking. percent of annual small SI engine sales, Replacement engines are not typically was a cheaper alternative that was no used in handheld equipment, nor in A. Roles of HC and NOX in Ozone worse for air quality than the repair or lower cost nonhandheld items such as Formation rebuilding of the failed engines, which walk behind mowers. A more detailed Both HC and NOX contribute to the were not prohibited by the Phase 1 rule. discussion of the rationale for the formation of tropospheric ozone through On August 7, 1997 (62 FR 42638), EPA replacement engine provision can be a complex series of reactions. In a recent issued a direct final rule amending the found in the preamble to the direct final report, researchers emphasize that both Phase 1 rule to allow engine rule cited above. HC and NOX controls are needed in Although EPA does not believe that manufacturers to sell uncertified most areas of the United States.55 EPA’s replacement engines will cause any engines for replacement purposes primary reason for controlling emissions significant air quality impacts, it is subject to certain controls designed to from small SI engines is the role of their 54 proposing to add safeguards and prevent abuse. These controls require HC emissions in forming ozone. Of the reporting and record keeping that the engine manufacturer ascertain major air pollutants for which NAAQS requirements to further ensure against that there is no currently certified have been designated under the CAA, abuse. EPA is proposing to amend the engine that will fit in the equipment, the most widespread problem continues existing replacement engine provisions that the engines be labeled for to be ozone, which is the most prevalent to require: (1) that manufacturers follow replacement purposes only, and that the photochemical oxidant and an engine manufacturer or its agent take specific guidelines when ascertaining that no certified engine is available 55 National Research Council, Rethinking the 54 The docket for this rulemaking, EPA Air Docket which can suitably repower a specific Ozone Problem in Urban and Regional Air #A–97–25, is incorporated by reference. item of equipment; (2) that old engines Pollution, National Academy Press, 1991. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4001 important component of smog. The and potential long-term effects on year 2025 over that expected from Phase primary ozone NAAQS represents the forests and ecosystems. 1. Reductions in CO beyond Phase 1 maximum level considered protective of High levels of ozone have been levels, due to improved technology, is public health by the EPA. Ozone is a recorded even in relatively remote areas, also to be expected by year 2025. product of the atmospheric chemical since ozone and its precursors can travel Along with the control of all reactions involving oxides of nitrogen hundreds of miles and persist for hydrocarbons, the proposed standards and volatile organic compounds. These several days in the lower atmosphere. should be effective in reducing reactions occur as atmospheric oxygen Ozone damage to plants, including both emissions of those hydrocarbons and sunlight interact with hydrocarbons natural forest ecosystems and crops, considered to be hazardous air and oxides of nitrogen from both mobile occurs at ozone levels between 0.06 and pollutants (HAPs), including benzene and stationary sources. 0.12 ppm.58 Repeated exposure to ozone and 1,3-butadiene. However, the A critical part of this problem is the levels above 0.04 ppm can cause magnitude of reduction would depend formation of ozone both in and reductions in the yields of some crops on whether the control technology downwind of large urban areas. Under above ten percent.59 While strains of reduces the individual HAPs in the certain weather conditions, the some crops are relatively resistant to same proportion as total hydrocarbons. ozone, many crops experience a loss in These emission reduction estimates combination of NOX and HC has resulted in urban and rural areas yield of 30 percent at ozone are based on in-use population exceeding the national ambient ozone concentrations below the pre-revised projections using estimates of annual 60 standard by as much as a factor of three. primary NAAQS. The value of crops engine sales, engine attrition Thus it is important to control HC over lost to ozone damage, while difficult to (scrappage), activity indicator, and wider regional areas if these areas are to estimate precisely, is on the order of $2 current new engine and proposed in-use 61 come into compliance with the ozone billion per year in the United States. emission factors. Data on activity NAAQS. The effect of ozone on complex indicators were based on the Phase 1 ecosystems such as forests is even more small SI regulation. Estimates of annual B. Health and Welfare Effects of difficult to quantify. However, there is engine sales for years from 1973 to 1995 Tropospheric Ozone evidence that some forest types are were based on engine data available negatively affected by ambient levels of from the PSR databases 66 and national Ozone is a powerful oxidant causing 62 lung damage and reduced respiratory ozone. Specifically, in the San shipment data provided by Outdoor function after relatively short periods of Bernadino Mountains of southern Power Equipment Institute (OPEI), the exposure (approximately one hour). The California, ozone is believed to be the Portable Power Equipment oxidizing effect of ozone can irritate the agent responsible for the slow decline Manufacturers Association (PPEMA), and death of ponderosa pine trees in and a study done for the California Air nose, mouth, and throat causing 63 coughing, choking, and eye irritation. In these forests since 1962. Resources Board by Booz Allen & Finally, by trapping energy radiated addition, ozone can also impair lung Hamilton (BAH). Sales projections into from the earth, tropospheric ozone may function and subsequently reduce the the future were for the most part based contribute to heating of the earth’s respiratory system’s resistance to on estimates of population growth for surface, thereby contributing to global the United States. Attrition rates disease, including bronchial infections warming (that is, the greenhouse such as pneumonia. (survival probability that an engine effect),64 although tropospheric ozone is remains in service into a specific Elevated ozone levels can also cause also known to reduce levels of UVB calendar year) for all engines included aggravation of pre-existing respiratory radiation reaching the earth’s surface, in this analysis were developed on the conditions such as asthma.56 Ozone can the increase of which is expected to assumption that the equipment attrition cause a reduction in performance during result from depletion of stratospheric function may be represented by a two- exercise even in healthy persons. In 65 ozone. parameter Weibull cumulative addition, ozone can also cause distribution function. The in-use alterations in pulmonary and C. Estimated Emissions Impact of emission factors are based on a extrapulmonary (nervous system, blood, Proposed Regulation multiplicative deterioration factor liver, endocrine) function. The emission standards proposed in 57 which is a function of the square root The newly revised primary NAAQS today’s action should reduce average in- of the hours of equipment usage. for ozone based on an 8-hour standard use exhaust HC+NOX emissions from For the analysis summarized in Table of 0.08 parts per million (ppm) is set at small SI engines 30 percent beyond 18, the emission inventories were a level that, with an adequate margin of Phase 1 standards by year 2025, by developed for the five regulated engine safety, is protective of public health. which time a complete fleet turnover is classes as well as for all pieces of EPA also believes attainment of the new realized. This translates into an annual equipment using engines covered by primary standard will substantially nationwide reduction of roughly this proposed rule. Using estimated protect vegetation. Ozone effects on 134,674 tons of exhaust HC+NOX in engine sales and attrition, EPA projected vegetation include reduction in the total in-service engine population 58 agricultural and commercial forest U.S. EPA, Review of NAAQS for Ozone, p. X– for each year from 1973 to 2025. EPA yields, reduced growth and decreased 10. 59 projected the total annual nationwide survivability of tree seedlings, increased U.S. EPA, Review of NAAQS for Ozone, p. X– 10. HC, NOX and CO emissions from small tree and plant susceptibility to disease, 60 See 62 FR 38856, Friday, July 18, 1997. SI engines included in the proposal pests, and other environmental stresses, 61 U.S. EPA, Review of NAAQS for Ozone, p. X– under the baseline (that is, with Phase 22. 1 controls applied) and controlled 56 United States Environmental Protection 62 U.S. EPA, Review of NAAQS for Ozone, p. X– 27. (Phase 2) scenarios. Agency, Review of the National Ambient Air For the controlled scenario, EPA Quality Standards for Ozone—Assessment of 63 U.S. EPA, Review of NAAQS for Ozone, p. X– Scientific and Technical Information: OAQPS Staff 29. assumed that for both handheld and Paper, EPA–450/2–92–001, June 1989, pp. VI–11 to 64 NRC, Rethinking the Ozone Problem, p. 22. 13. 65 The New York Times, September 15, 1992, p. 66 Power Systems Research, Engine Data and Parts 57 See 62 FR 38896, Friday, July 18, 1997. C4. Link data bases, St. Paul, Minnesota, 1992. 4002 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules nonhandheld engines the standards notice. Deterioration factors were supplied in-use emission data and other would be phased in on a percentage of determined using manufacturer- relevant information. production basis as proposed in today’s

TABLE 18.ÐPROJECTED ANNUAL NATIONWIDE EXHAUST HC+NOX EMISSIONS [tons/year]

Tons reduced Without pro- With proposed from Percentage Year posed controls controls Phase 1 revised reduction (Phase 1) baseline

2000 ...... 378,700 378,700 2005 ...... 368,195 297,873 70,322 19.1 2010 ...... 389,641 279,061 110,580 28.4 2015 ...... 414,626 292,829 121,797 29.4 2020 ...... 439,413 309,221 130,192 29.6 2025 ...... 452,973 318,299 134,674 29.7

For simplicity in modeling the D. Health and Welfare Effects of CO by making technical modifications to projected emission reductions, the Emissions the engine or control exhaust emissions. The toxicity of CO effects on blood Agency has assumed in the emissions Carbon monoxide (CO) is a colorless, inventory model that under the Phase 2 and tissues, and how these effects odorless gas which can be emitted or manifest themselves as organ function program, each engine would meet the otherwise enter into ambient air as a proposed standard for the minimum changes, have also been topics of result of both natural processes and substantial research efforts. Such useful life category: i.e., Class I engines human activity. Although CO exists as meet the proposed standards at 66 studies provided information for a trace element in the troposphere, establishing the National Ambient Air hours; Class 2 engines at 250 hours; and much of human exposure resulting in Quality Standard for CO. The current Classes III, IV, and V at 50 hours. elevated levels of carboxyhemoglobin primary and secondary NAAQS for CO Therefore, the Agency has under (COHb) in the blood is due to are 9 parts per million for the one-hour estimated the emission benefits of the incomplete fossil fuel combustion, as average and 35 parts per million for the proposed standards, because some occurs in small SI engines. eight-hour average. engines will be certifying to the longer The concentration and direct health useful life categories, and therefore a effect of CO exposure are especially E. Health and Welfare Effects of greater emission reduction than important in small SI engines because Hazardous Air Pollutant Emissions predicted in Table 18 will occur. The the operator of a small SI engine The focus of today’s action is Agency will attempt to address this application is typically near the reduction of HC emissions as part of the issue for a more accurate prediction of equipment as it functions. In some solution to the ozone nonattainment the emission benefits of the proposed applications, the operator must be problem. However, direct health effects program for the final rule. adjacent to the exhaust outlet and is in are also a reason for concern due to the direct path of the exhaust as it direct human exposure to emissions In addition to the reductions in leaves the engine. According to numbers from small SI engines during operation exhaust HC+NOX emissions, the Agency published in the Nonroad Engine and of equipment using such engines. Of is also estimating the proposed Vehicle Emission Study (NEVES), a 4- specific concern is the emission of standards would result in a small stroke, 2.9 kW lawnmower engine emits hazardous air pollutants (HAPs). In reduction in HC refueling emissions 1051.1 g/hr CO, while a 2-stroke, 2.9 kW some applications, the operator must be (refueling emissions are HC emissions engine emits 1188.4 g/hr CO. adjacent to the exhaust outlet and is in caused from fuel spillage and vapor A Swedish study 67±69 on occupational the direct path of the exhaust as it displacement during the refueling of a exposure to 2-stroke chainsaw exhaust leaves the engine. Today’s proposed small engine). As discussed in the RSD, concludes, among other things, that a regulations should be effective in refueling emissions represent rich fuel-air mixture results in high reducing HAPs such as benzene and 1,3- approximately an additional 89,000 levels of CO emissions (a mean butadiene, in so far as these are tons/year of HC in 2025 without Phase exposure rate of 37.0 mg/m3). The work components of the HC emissions being 2 controls. The Agency estimates that conditions that gave rise to the most reduced by the Phase 2 standards. refueling emissions would be reduced intense problems for loggers were deep Benzene is a clear, colorless, aromatic under Phase 2 by the percent reduction snow, thick forest stands and calm hydrocarbon which is both volatile and in fuel consumption under Phase 2. The weather. The main discomforts flammable. Benzene is present in both Agency estimates the proposed Phase 2 experienced by loggers from chainsaw exhaust and evaporative emissions. program would result in approximately exhaust were cough and eye, nose and Health effects caused by benzene emissions differ based on concentration a 9 percent reduction in fuel throat irritation. In view of the and duration of exposure. The consumption by 2025. Therefore, the discomfort experienced by loggers and International Agency for Research on Agency estimates refueling emissions the complex nature of the exposure to Cancer (IARC), classified benzene as a would be reduced by 9 percent. A 9 chainsaw exhaust, it was recommended that action be taken to reduce exposure Group I carcinogen., namely an agent percent reduction in refueling emissions carcinogenic to humans. Exposure to equates to an approximate 8,000 ton/ benzene has also been linked with year reduction in HC emissions in 2025. 67±69 Occupational Exposure to Chain Saw Exhausts in Logging Operations, Am. Ind. Hyg. genetic changes in humans and animals. Assoc. J48, 1987. 1,3-butadiene is a colorless, flammable Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4003 gas at room temperature. This suspected Separate from the proposed rule, California standards. Rather for the human carcinogen is insoluble in water which would not establish emission purpose of this proposal, any Phase 1 and its two conjugated double bonds standards for PM or toxic air engine design that would need to be make it highly reactive. 1,3-butadiene is contaminants listed under section modified to meet Phase 2 standards was formed in internal combustion engine 112(b) of the Clean Air Act, an assumed to incur the full cost of that exhaust by the incomplete combustion agreement with PPEMA to conduct PM/ modification including design cost. of the fuel and is assumed not present HAP testing program for handheld Similarly, the cost to equipment in evaporative and refueling emissions. engines in cooperation with EPA has manufacturers was assumed to be fully Epidemiologic studies of been reached. Testing under the attributed to this federal rule even if an occupationally exposed workers were program would be conducted on Phase equipment manufacturer would have to inconclusive with respect to the 2 technology handheld engines at EPA, make the same modifications in carcinogenity of 1,3-butadiene in industry, and/or independent facilities. response to the CARB Tier 2. Therefore, humans. IARC has classified 1,3- The test program is to be designed to in both of these cases, the cost to the butadiene as a Group 2A, probable evaluate and quantify emissions of manufacturer due to these proposed human carcinogen. Other adverse particulate matter and toxics including, rules is likely over estimated. EPA noncancer health effects due to very but not limited to: formaldehyde, high levels of exposure include heart, acetaldehyde, benzene, toluene and 1,3 requests comment on these blood and lung diseases. butadiene. assumptions. The details of EPA’s cost Since air toxic levels generally and cost-effectiveness analyses can be VI. Economic Impacts decrease in proportion to overall found in Chapters 4 and 7 of the Draft emissions once emission control EPA has calculated the cost RSD. effectiveness of this proposed rule by technology is applied, the amount of A. Engine Technologies benzene and 1,3-butadiene produced by estimating costs and emission benefits new small SI engines should diminish from these engines. EPA made best Table 19 lists the changes in after this rule becomes effective. estimates of the combination of technology, compared to Phase 1 Consequently, exposure to HAPs from technologies that an engine engines, that have been considered in new small SI engines would be reduced, manufacturer might use to meet the new the cost estimation for this rulemaking. as would associated health and standards, best estimates of resultant As discussed in Section IV.A of this environmental effects. Although there is changes to equipment design, engine preamble, the proposed standards manufacturer compliance program costs little data on direct health effects of would require different engine and engine fuel savings in order to small SI engines, the Swedish study improvements amongst the five classes assess the expected economic impact of concludes benzene emissions from and engine designs within those chain saw engines as being rather high. the proposed Phase 2 emission classes.70 For example, several Class I No study has been conducted involving standards. Emission benefits are taken SV models are expected to require some the health effects of HAP emissions from the results of the environmental internal improvements to reduce new specifically from small SI engines. The benefit assessment (Section V, above). Agency requests additional information The cost-effectiveness result of this rule engine out emissions and several additional components to increase on this topic. is $390 per ton of HC+NOX when fuel savings are not taken into account. emission durability. For the purposes of F. Particulate Matter When fuel savings are also considered, this cost analysis, Class II standards are Particulate matter, a term used for a the cost-effectiveness calculation results assumed to require that engines be of mixture of solid particles and liquid in ¥$700 per ton of HC+NOX. This clean OHV design. For Classes III–V, the droplets found in the air, has been section describes the background and proposed standards for the handheld linked to a range of serious respiratory analysis behind these results. engines are assumed to require health problems. These fine particles are The analysis for this proposed improved scavenging techniques, for the of health concern because they easily rulemaking is based on data from engine two stroke engines, to be developed to reach the deepest recesses of the lungs. families certified to EPA’s Phase 1 reduce the approximately 30 percent of Batteries of scientific studies have standards. It does not include any the air/oil/fuel mixture that traditionally linked particulate matter, especially fine engine families or production volumes escapes from these engines unburned. particles (alone or in combination with that are covered by CARB’s Tier 1 This analysis assumes that engine other air pollutants), with a series of standard. The California Air Resources manufacturers would not be required to significant health problems including Board (CARB) will implement emission adopt advanced technologies such as premature death, aggravated asthma and standards for many of these engines a catalysts or fuel injection systems. chronic bronchitis and increased year or two prior to the proposed federal Manufacturers who did adopt such hospital admissions. EPA has recently Phase 2 regulations. Therefore, this rule technologies would choose to do so for (July 1997) announced new NAAQS only accounts for costs for each engine other perceived benefits. Therefore, the standards for particulate matter (PM) , sold outside California and those cost of such optional technology is not by adding two new primary PM2.5 engines sold in California that are not included in this cost estimate. standards set at concentrations of 15 covered by the CARB Tier II rulemaking, Additional detail regarding the impact micrograms per cubic meter (µg/m3), such as those used in farm and annual arithmetic mean, and 65µg/m3, 24- construction equipment. Although EPA of these modifications can be found in hour average, to provide increased expects that engines already designed to Chapter 3 and 4 of the Draft RSD. protection against the PM-related health meet CARB’s earlier standards would effects found in community studies. incur no additional design cost to meet 70 Currently, carbureted two-stroke, four-stroke EPA believes that the new standards federal standards, no effort was made to side-valve and four-stroke overhead valve engine will protect and improve the lives of estimate which models would be sold in designs comprise the vast majority of engines used millions of Americans. California and subject to the earlier in nonhandheld and handheld applications. 4004 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

TABLE 19.ÐPOTENTIAL TECHNOLOGY IMPROVEMENTS PER CLASS AND ENGINE DESIGN

Class Engine design Technologies

I ...... 4 strokeÐSV ...... Carburetor Improvements. Combustion Chamber Improvements and Intake System. Improved Oil Consumption (Piston oil control rings, valve stem seals). I ...... 4 strokeÐOHV ...... None necessary. I ...... 2 stroke ...... None necessary. II ...... 4 strokeÐSV ...... Conversion to clean OHV. II ...... 4 strokeÐOHV ...... Piston and piston ring improvements. Improved combustion and intake system. III±V ...... 2 stroke ...... Carburetor Improvements. Improved Scavenging and Combustion Chamber Design. Manufacturing Tolerance Improvements. IV ...... 4-stroke ...... None necessary.

B. Engine Costs less expensive OHV engines would standard would not require external The engine cost increase is based on require application of the emission changes or adversely impact the incremental purchase prices for new reduction technologies. engine’s performance. The Class II engine change from SV to engines and is comprised of variable 2. Handheld Engine Costs costs (for hardware, assembly time and OHV design will have the largest impact Analysis of the Phase 1 certification on equipment changes. Review of the compliance programs), and fixed costs database for handheld engines shows (for R&D and retooling). Variable costs PSR database for equipment that nearly all engine families of two manufacturers that utilize Class II SV were applied on a per engine basis and stroke design will require technologies fixed costs were amortized at seven engines reveals that the majority (90 to reduce engine emissions. Redesign of percent) of small engine equipment is percent over five years. Engine the existing two-stroke engine is technology cost estimates were based on produced from 32 companies with the allocated to fixed costs as companies remaining 353 companies representing the study by ICF and EF&EE in October perform R&D, build prototypes and 1996 entitled ‘‘Cost Study for Phase only 10 percent of the overall perform numerous emission tests to production. Two Small Engine Emission achieve production-ready models. Regulations’’. Details of the assumed EPA’s work analyzing small business costs and analysis can be found in C. Equipment Costs impacts, as summarized in the work with ICF Incorporated,72 indicates that Chapters 4 and 7 of the Draft RSD. While equipment manufacturers many of the small businesses, indicated would bear no responsibility for 1. Nonhandheld Engine Costs by the PSR database to use SV Class II meeting emission standards, they may engines, have already converted or are Based on analysis of the EPA Phase 1 need to make changes in the design of certification database, and use of the their equipment models to in the process of converting to using ABT program available to nonhandheld accommodate the Phase 2 engines. OHV engine design due to market forces engines, it is assumed that four high EPA’s treatment of the impacts of the or changes in their engine production Class I SV engine families proposal therefore includes an analysis manufacturer’s offerings. These will need to incorporate all those of costs for equipment manufacturers. companies tend to produce professional technologies listed in Table 19. The 1996 PSR EOLINK database was or commercial equipment and Incorporation of these technologies will utilized as the source of information for competition has driven the use of OHV require the engine manufacturer to incur equipment manufacturers, models and engines. The study also revealed that at both variable and fixed costs. sales estimates for all classes. The costs least one equipment manufacturer that Analysis of Class II engine families, for equipment conversion was derived produces a large volume of equipment, from the EPA Phase 1 certification from the ICF/EF&EE cost study 71 and has already switched their lines from SV database and use of the ABT improved through the work by ICF and to OHV. For today’s proposal, EPA calculation, shows that a number of EPA on the small business impact assumed only the one large Class II SV engine families will be analysis. Full details of EPA’s cost manufacturer has already incurred the converted to OHV engine design and a analysis can be found in Chapter 4 of costs of converting to the use of OHV large number of OHV engine families the Draft RSD. EPA has assumed that engine. For the purpose of this proposal, will need to incorporate emission capital costs would be amortized at EPA has assumed that any switch from improvements. Such technologies will seven percent over ten years. SV to OHV engines by equipment require both variable and fixed manufacturers is a cost incurred due to 1. Nonhandheld Equipment expenditures. this proposal. The cost estimates were Manufacturers The proposed Phase 2 emission based on equipment application (garden standards for this diverse industry Based on engine technologies tractor, tiller, commercial turf, etc.) and would impact companies differently estimated for this rulemaking, it is in the case of the commercial turf depending on the existing product assumed that Class I engine redesign equipment, on the power of the engine offerings. Some companies currently would have no impact on equipment within that application. Flexibilities manufacture very clean Class II OHV manufacturers since the proposed within this proposal which may lessen engines geared toward the commercial market and would be required to make 71 ICF and Engine, Fuel and Emissions 72 ‘‘Small Business Impact Analysis of New Engineering, Incorporated; ‘‘Cost Study for Phase Emission Standards for Small Spark-Ignition very few changes in their current Two Small Engine Emission Regulations’’, Draft Nonroad Engines and Equipment’’, ICF models. Companies that target the Final Report, October 25, 1996, in EPA Air Docket Incorporated, September 1997, located in EPA Air consumer market with SV and perhaps A–93–29, Item #II–A–04. Docket A–96–55, Item#II–A–01 . Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4005 the impact of the costs of this 2. Handheld Engines were discounted seven percent to the rulemaking to equipment manufacturers Redesigned two-stroke engines are first year of Phase 2 regulation, 2001 for were also not taken into account. assumed to result in significant fuel nonhandheld and 2002 for handheld engine classes, respectively. A uniform 2. Handheld Equipment Manufacturers savings as fuel/oil/air scavenging is significantly reduced. annualized cost was then calculated. The majority of technologies assumed Costs per engine are calculated from the E. Cost Per Engine and Cost- uniform annualized cost for the first full in this analysis for handheld engines, Effectiveness see Table 19, include only internal year of implementation of the Phase 2 redesign and thereby no change in the 1. Cost Per Engine standard, 2005, and the last year of this analysis, 2026. The average cost per external design of the handheld engine Total costs for this proposed engine is calculated from these two is expected. Therefore, it is assumed rulemaking vary per year as engine that the outer dimensions and families are phased-in to compliance values and the results are presented in performance characteristics would be with the Phase 2 standards over several Table 20. similar to the existing models and years, capital costs are recovered and The yearly fuel savings (tons/yr) per therefore the handheld equipment compliance programs are conducted. class were calculated from the nonroad would not require any changes. The term ‘‘uniform annualized cost’’ is small engine emission model. The tons/ Equipment costs have been included for used to express the cost of this yr were converted to savings ($) per year manufacturers of augers who will need rulemaking over the years of this through conversion to gallons per year to incorporate changes to the analysis. multiplied by $0.765 (a 1995 average transmission boxes in order to The methodology used for estimating refinery price to end user). The yearly incorporate different speed-torque the uniform annualized cost per engine fuel savings were discounted by 3 signatures of Phase 2 compliant engines. is as follows. Cost estimates from 1996 percent to the first year of Phase 2 and 1997 model years, for technology regulation, 2001 for nonhandheld D. Operating Costs and compliance programs respectively, engines and 2002 for handheld engines. The total life-cycle operating costs for were estimated and increased at an The yearly results were totaled and then this proposed rulemaking include any inflation rate of 4 percent per year to the divided by an annualized factor to yield expected decreases in fuel consumption. years in which they were assumed to be the uniform annualized fuel savings. incurred. For engine technology costs, Life cycle costs have been calculated per The engine lifetime fuel savings for each one set of technologies per class and class using the nonroad small engine engine class was calculated for the engine design was assumed (see Table emission model. The model calculates production years of 2005 and 2026. The 19). The Phase 1 database was then fuel savings from the year 2001–2026 average of these two values was utilized analyzed to determine the number of and takes into account factors including as the average fuel savings per engine engine families per class that would equipment scrappage, projected yearly per class is shown in Table 20. In likely incorporate the emission sales increase per equipment type and particular, EPA notes that its estimate of reduction technologies. The estimated engine power. Details on the fuel savings for Class II engine costs per year were then calculated by assumptions and calculations on fuel conversion to OHV technology is greater multiplying the number of engine than the estimated cost of this savings are included in Chapter 4 and families and corresponding production conversion and thus would be 7 of the Draft RSD. volume by the fixed and variable costs economically beneficial to the per technology grouping, respectively. 1. Nonhandheld Engines consumer. EPA requests comment on its Retail markups used are 16 percent by analysis of the fuel economy benefit for No fuel consumption savings have the engine manufacturer, 5 percent by been assumed from Class I engines. The the equipment manufacturer and 5 Class II conversion from SV to OHV addition of oil control piston rings and percent by the mass merchandiser. All technology and information as to why valve stem seals are not expected to markups are based on industry specific the market has not responded with a affect fuel economy or maintenance information from Phase 1. For greater penetration of the more fuel requirements and changes to compliance program costs, each efficient OHV technology. carburetion are expected to be only program was outlined and assigned The average resultant cost per engine slight. The Class II SV engine costs based on the likely number of class is calculated by subtracting the conversion to OHV design is expected to participants or engine families to be average fuel savings from the average result in improved fuel economy since included in each program which were cost, see Table 20. See Chapter 7 of the data show that OHV engines can run at determined from the Phase 1 Draft RSD for more details of this leaner air to fuel ratio’s than SV engines. certification database. The costs per year analysis.

TABLE 20.ÐENGINE LIFE TIME FUEL SAVINGS AND RESULTANT COST PER ENGINE [Costs based on uniform annualized costs]

Cost per en- Savings per Resultant cost Class gine engine per engine

I ...... $0.87 $0.00 $0.87 II ...... 10.54 33.20 ($22.66) III ...... 0.74 0.45 0.29 IV ...... 1.92 0.99 0.92 V ...... 16.21 4.12 12.07 4006 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

2. Cost Effectiveness the net present value of the cost of comments on all aspects of the cost- EPA has estimated the cost- compliance per year is divided by the effectiveness analysis. effectiveness (i.e., the cost per ton of nationwide emission benefits per year The overall cost-effectiveness of this emission reduction) of the proposed over a period of 26 years. This is rule on HC+NOX emission reductions, HC+NOX standard over the typical sufficient time to achieve fleet turnover. with fuel savings, is shown in Table 21. lifetime of the small SI equipment that The resultant cost-effectiveness is $390 Table 21 contains the cost effectiveness would be covered by today’s proposed cost/ton HC+NOX without fuel savings. of other nonroad rulemakings, which rule. EPA has examined the cost- Chapter 7 of the Draft RSD contains a contain fuel savings, to which the cost- effectiveness by performing a more detailed discussion of the cost- effectiveness of this rulemaking can be nationwide cost-effectiveness in which effectiveness analysis. EPA requests compared.

TABLE 21.ÐCOST-EFFECTIVENESS OF THE PROPOSED STANDARDS WITH FUEL SAVINGS

NPV cost/NPV ton Standard (with fuel savings) Pollutants

Proposed Small SI Engines <19 kW Phase 2 ...... ¥$700 HC+NOX Small SI Engines <19 kW Phase 1 ...... $217 HC+NOX Spark Ignition Marine Engines ...... $1000 HC Proposed Nonroad CI Standards ...... $180±$400 HC+NOX

VII. Public Participation INFORMATION CONTACT) at least two The text of the proposed rule is made business days prior to the day of the available on the day of publication on A. Comments and the Public Docket hearing. The contact person should be the primary Web site listed below. The The Agency welcomes comments on given an estimate of the time required EPA Office of Mobile Sources also all aspects of this proposed rulemaking. for the presentation of testimony and publishes these notices on the All comments (preferably in duplicate), notification of any need for audio/visual secondary Web site listed below. with the exception of proprietary equipment. A sign-up sheet will be Internet (Web) information, should be directed to the available at the registration table the http://www.epa.gov/docs/fedrgstr/EPA– EPA Air Docket Section, Docket No. A– morning of the hearing for scheduling AIR/ 96–02 (see ADDRESSES). Commenters those who have not notified the contact (Either select desired data or use search who wish to submit proprietary earlier. This testimony will be feature) information for consideration should scheduled on a first-come, first-served clearly separate such information from basis, and will follow the testimony that http://www.epa.gov/OMSWWW/ other comments by: is arranged in advance. (Look in What’s New or under the • Labeling proprietary information The Agency recommends that specific rulemaking topic) ‘‘Confidential Business Information’’ approximately 50 copies of the Please note that due to differences and, statement or material to be presented be between the software used to develop • Sending proprietary information brought to the hearing for distribution to the document and the software into directly to the contact person listed (see the audience. In addition, EPA would which the document may be FOR FURTHER INFORMATION CONTACT) and find it helpful to receive an advance downloaded, changes in format, page not to the public docket. copy of any statement or material to be length, etc., may occur. • This will help ensure that presented at the hearing at least two proprietary information is not business days before the scheduled VIII. Administrative Requirements inadvertently placed in the docket. If a hearing date. This is to give EPA staff A. Administrative Designation and commenter wants EPA to use a adequate time to review such material Regulatory Analysis submission labeled as confidential before the hearing. Advance copies 73 business information as part of the basis should be submitted to the contact Under Executive Order 12866, the for the final rule, then a nonconfidential person listed. Agency must determine whether the version of the document, which regulatory action is ‘‘significant’’ and summarizes the key data or information, C. Obtaining Electronic Copies of therefore subject to OMB review and the should be sent to the docket. Documents requirements of the Executive Order. Information covered by a claim of Materials relevant to this proposed The order defines ‘‘significant confidentiality will be disclosed by EPA rule are contained in Docket No. A–96– regulatory action’’ as one that is likely only to the extent allowed by and in 55, located at the Air Docket, 401 M to result in a rule that may: accordance with the procedures set Street, S.W., Washington, DC 20460, (1) Have an annual effect on the forth in 40 CFR Part 2. If no claim of and may be reviewed in Room M–1500 economy of $100 million or more or confidentiality accompanies the from 8:00 a.m. until 5:30 p.m. Monday adversely affect in a material way the submission when it is received by EPA, through Friday. As provided in 40 CFR economy, a sector of the economy, the submission may be made available part 2, a reasonable fee may be charged productivity, competition, jobs, the to the public without notifying the by EPA for photocopying docket environment, public health or safety, or commenters. materials. State, local or tribal governments or The preamble, regulatory language communities; B. Public Hearing and draft Regulatory Support Document (2) Create a serious inconsistency or Anyone wishing to present testimony are also available electronically from the otherwise interfere with an action taken about this proposal at the public hearing EPA internet Web site. This service is or planned by another agency; (see DATES) should, if possible, notify free of charge, except for any cost you the contact person (see FOR FURTHER already incur for internet connectivity. 73 58 FR 51735 (October 4, 1993). Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4007

(3) Materially alter the budgetary rule may adversely affect in a material Washington, DC 20460 or by calling impact of entitlement, grants, user fees, way that sector of the economy involved (202) 260–2740. or loan programs or the rights and with the production of small spark- Table 22 provides a listing of this obligations of recipients thereof; ignition engines or equipment utilizing proposed rulemaking’s information (4) Raise novel legal or policy issues such engines. As such, this action was collection requirements along with the arising out of legal mandates, the submitted to OMB for review. Any appropriate information collection President’s priorities, or the principles written comments from OMB and any request (ICR) numbers. The cost of this set forth in the Executive Order. EPA response to OMB comments are in burden has been incorporated into the A regulatory support document which the public docket for this proposal. cost estimate for this rule. The Agency presents EPA’s analysis of the cost has estimated that the public reporting impacts of this proposed rule is B. Paperwork Reduction Act burden for the collection of information available for review in the public required under this rule would average docket. EPA estimates that the proposed The information collection approximately 6702 hours annually for standards and other regulatory requirements in this proposed rule have a typical engine manufacturer. The provisions, if adopted, would not have been submitted for approval to the hours spent by a manufacturer on an annual effect on the economy of Office of Management and Budget information collection activities in any more than $100 million, a criterion (OMB) under the Paperwork Reduction given year would be highly dependent which is a major determinant in Act, 44 U.S.C. 3501 et seq. Copies of the upon manufacturer specific variables, defining an ‘‘economically significant ICR document may be obtained from such as the number of engine families, regulatory action.’’ Although not Sandy Farmer, Regulatory Information production changes, emission defects ‘‘significant’’ based on this criterion, the Division, EPA, 401 M Street, SW (2137), etc.

TABLE 22.ÐPUBLIC REPORTING BURDEN

OMB control EPA ICR No. Type of information No.

151490 ...... Certification ...... 2060±0338 23420 ...... Averaging, banking and trading ...... 2060±0338 N/A ...... Production line testing ...... N/A 1675.01 ...... In-use testing ...... 2060±0292 N/A ...... In-use credits ...... N/A 0095.07 ...... Pre-certification and testing exemption ...... 2060±0007 0012 ...... Engine exclusion determination ...... 2060±0124 0282 ...... Emission defect information ...... 2060±0048 1673.01 ...... Importation of nonconforming engines ...... 2060±0294

Send comments regarding the burden significantly or uniquely affected by the 213(a)(3) of the Clean Air Act, and has estimate or any other aspect of this rule. designed the proposed rule such that it collection of information, including Under section 205 of the Unfunded will in EPA’s view be a cost-effective suggestions for reducing this burden to Mandates Act, the Agency must identify program. Because small governments Chief, Information Policy Branch, EPA, and consider a reasonable number of would not be significantly or uniquely 401 M Street, SW (PM–223Y), regulatory alternatives before affected by this proposed rule, the Washington DC 20460; and to the Office promulgating a rule for which a Agency is not required to develop a plan of Information and Regulatory Affairs, budgetary impact statement must be with regard to small governments. Office of Management and Budget, prepared. The Agency must select from D. Regulatory Flexibility Washington, DC 20503, marked those alternatives the least costly, most The Regulatory Flexibility Act (RFA) ‘‘Attention: Desk Officer for EPA.’’ The cost-effective, or least burdensome generally requires an agency to conduct final rule will contain responses to OMB alternative that achieves the objectives a regulatory flexibility analysis of any or public comments on the information of the rule, unless the Agency explains collection requirements contained in rule subject to notice and comment why this alternative is not selected or rulemaking requirements unless the this proposal. the selection of this alternative is agency certifies that the rule will not inconsistent with law. C. Unfunded Mandates Reform Act have a significant economic impact on Because this proposed rule is a substantial number of small entities. Section 202 of the Unfunded estimated to result in the expenditure by Small entities include small businesses, Mandates Reform Act of 1995 State, local and tribal governments or small not-for-profit enterprises, and (‘‘Unfunded Mandates Act’’) requires the private sector of less than $100 small governmental jurisdictions. For that the Agency prepare a budgetary million in any one year, the Agency has the reasons set out below, this proposed impact statement before promulgating a not prepared a budgetary impact rule would not have a significant impact rule that includes a Federal mandate statement or specifically addressed the on a substantial number of small that may result in expenditure by State, selection of the least costly, most cost- entities. local, and tribal governments, in effective or least burdensome EPA has identified industries that aggregate, or by the private sector, of alternative. EPA has estimated the rule would be subject to this proposed rule $100 million or more in any one year. to cost the private sector an annualized and has contacted small entities and Section 203 requires the Agency to cost of $90 million per year . However, small entity representatives to gain a establish a plan for obtaining input from the Agency has appropriately better understanding of potential and informing, educating, and advising considered cost issues in developing impacts of the proposed Phase 2 and small governments that may be this proposal as required by section program on their businesses. This 4008 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules information was useful in estimating flexibilities not considered, including a PART 90ÐCONTROL OF EMISSIONS potential impacts of this rule on affected hardship relief provision described in FROM NONROAD SPARK-IGNITION small entities, the details of which are Section IV.E, were developed too late in ENGINES fully discussed in Chapter 8 of the Draft the rule development process to be RSD. Small not-for-profit organizations included in the impact assessment, but 1. The authority citation for part 90 and small governmental jurisdictions as they were added in order to further continues to read as follows: are not expected to be impacted by this ensure the achievability of the proposed Authority: Sections 203, 204, 205, 206, proposal. Thus EPA’s impact analysis standards it is expected that they would 207, 208, 209, 213, 215, 216, and 301(a) of focuses on small businesses. For further reduce the impacts of the the Clean Air Act, as amended (42 U.S.C. purposes of the impact analysis, ‘‘small proposed rule. EPA requests comment 7522, 7523, 7524, 7525, 7541, 7542, 7543, business’’ is defined by number of as to whether these proposed provisions 7547, 7549, 7550, and 7601(a)). employees or dollars of annual receipts adequately address the needs of affected Subpart AÐGeneral according to Small Business manufacturers, and small entities in Administration (SBA) regulations. The particular. 2. Section 90.1 is amended by analysis focuses especially on impacts The results of the impact analysis removing the period at the end of to manufacturers of Class II show minimal impacts on small paragraph (b)(5)(iv) and adding a nonhandheld and Classes III–V businesses. EPA expects impacts may be semicolon in its place, by adding handheld engines and equipment, since negligible if small companies take paragraphs (b)(6) and (d) and by revising Class I side-valve engines are only advantage of those additional paragraph (c) to read as follows: expected to need minor modifications. flexibilities not considered in the § 90.1 Applicability. The economic impact of the proposed analysis, and if companies pass through * * * * * rule on engine and equipment most of their costs to customers as was manufacturers defined as small by the (b) * * * indicated as likely by most small SBA was evaluated using a ‘‘sales test’’ (6) Engines that are used exclusively companies contacted. Furthermore, approach which calculates annualized in emergency and rescue equipment EPA’s outreach activities with small compliance costs as a function of sales where no certified engines are available entities indicated that many engine and revenue. The ratio is an indication of to power the equipment safely and equipment manufacturers have already the severity of the potential impacts. practically, but not including made the switch from side-valve engine The results of the analysis suggest that generators, alternators, compressors or technology to producing or using of those small entities analyzed, one pumps used to provide remote power to overhead valve engine technology for small business engine manufacturer and a rescue tool. The equipment reasons other than today’s proposed two small business equipment manufacturer bears the responsibility to manufacturers would experience an rule, and therefore may not incur ascertain on an annual basis and impact of greater than one percent of substantial additional costs as a result of maintain documentation available to the their sales revenue. However, none of this program. Therefore, I certify that Administrator that no appropriate these small entities would experience this action will not have a significant certified engine is available from any an impact greater than three percent of economic impact on a substantial source. their sales revenue. These three number of small entities and therefore a (c) Engines subject to the provisions companies represent approximately five regulatory flexibility analysis for this of this subpart are also subject to the percent of the total small business proposal has not been prepared. The provisions found in subparts B through manufacturers on which the analysis Agency continues to be interested in the N of this part, except that subparts C, H, was based. Given this, and the ratio potential impacts of the proposed rule M and N of this part apply only to Phase levels at which these companies are on small entities and welcomes 2 engines as defined in this subpart. projected to be impacted (i.e., less than additional comments during the (d) Certain text in this part is three percent), EPA expects today’s rulemaking process on issues related to identified as pertaining to Phase 1 or proposal to have a light impact on small such impacts. In spite of the expected Phase 2 engines. Such text pertains only business entities. The analysis assumes minimal impacts on small entities, the to engines of the specified Phase. If no no passthrough of costs in price Agency is continuing its efforts to notify indication of Phase is given, the text increases and thus can be characterized other small business engine and pertains to all engines, regardless of as depicting worst case impacts. equipment manufacturers of this rule Phase. While the Agency does not consider and inform them of their opportunities 3. Section 90.3 is amended by adding these impacts to be significant, the for providing feedback to the Agency. the following definitions in alphabetical Agency desires to minimize impacts to List of Subjects in 40 CFR Part 90 order to read as follows: the extent possible for those companies which may be adversely affected and to Environmental protection, § 90.3 Definitions. ensure that the proposed emissions Administrative practice and procedure, * * * * * standards are achievable. Thus, Air pollution control, Confidential Aftertreatment means the passage of flexibility provisions for the proposed business information, Imports, Labeling, exhaust gases through a device or rule (discussed in Section IV.E) were Nonroad source pollution, Reporting system such as a catalyst whose purpose developed based on information gained and recordkeeping requirements, is to chemically alter the gases prior to through discussions with potentially Research, Warranties. their release to the atmosphere. affected small entities. Many of the Dated: December 23, 1997. * * * * * flexibilities being proposed in today’s Carol M. Browner, Commercial Engine means a handheld rule should benefit both engine and engine that is not a residential engine. Administrator. equipment manufacturers qualifying as DF or df means deterioration factor. small. Some, but not all, of these For the reasons set out in the Eligible sales or U.S. sales means provisions were considered in the preamble, title 40, chapter I of the Code Phase 2 engines sold for purposes of impact assessment on small entities (see of Federal Regulations is proposed to be being used in the United States, and Chapter 8 of the Draft RSD). Those amended as follows: includes any engine exported and Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4009 subsequently imported in a new piece of any nonhandheld engine as defined in not exceed 5000 pieces for a given equipment, but excludes any engine this subpart of the 2001 model year or model year or annual production period introduced into commerce, by itself or later including those 1999 and 2000 excluding that equipment intended for in a piece of equipment, for use in a model year engines certified under early introduction into commerce for use in a state that has established its own banking provisions described in this state that has established its own emission requirements applicable to part. Any engines exempted from the emission requirements applicable to such engines pursuant to a waiver Phase 2 standards under this part are such equipment or engines in such granted by EPA under section 209(e) of excluded from coverage under this equipment, pursuant to a waiver granted the Clean Air Act. definition. by EPA under section 209(e) of the * * * * * * * * * * Clean Air Act. For nonhandheld Family Emission Limit or FEL means Residential engine means a handheld equipment, the term ‘‘small volume an emission level that is declared by the engine for which the engine equipment manufacturer’’ has the same manufacturer to serve in lieu of an manufacturer makes a written statement meaning except that it is limited to 2500 emission standard for certification, to EPA as part of its certification pieces rather than 5000. production line testing, Selective application that such engine and the Small volume equipment model Enforcement Auditing, and in-use equipment it is installed in by the means, for handheld equipment, any testing for engines participating in the engine manufacturer, where applicable, unique model of equipment whose averaging, banking and trading program. is not produced, advertised, marketed or production subject to regulations under An FEL must be expressed to the same intended for commercial or professional this part or powered by engines number of decimal places as the usage. regulated under this part, does not applicable emission standard. Round, rounded or rounding means, exceed 2500 pieces for a given model * * * * * unless otherwise specified, that year or annual production period numbers will be rounded according to excluding that equipment intended for HC+NOX means total hydrocarbons plus oxides of nitrogen. ASTM–E29–93a, which is incorporated introduction into commerce for use in a by reference in this part pursuant to In-use credit means an emission credit state that has established its own § 90.7. that represents the difference between emission requirements applicable to the mean in-use emission results of a * * * * * such equipment or engines in such equipment, pursuant to a waiver granted regulated pollutant, CO, HC+NOX or Side valve engine means an otto- by EPA under section 209(e) of the NMHC+NOX, and the applicable cycle, four stroke engine in which the certification emission standard. In-use intake and exhaust valves are located to Clean Air Act. For nonhandheld results below the standard lead to the the side of the cylinder, not within the equipment, the term ‘‘small volume calculation of positive in-use credits, cylinder head. Such engines are equipment model’’ has the same while in-use results above the standard sometimes referred to as ‘‘L-head’’ meaning except that it is limited to 500 lead to the calculation of negative in-use engines. pieces rather than 2500. credits. Small volume engine family means Technology subgroup means a group any handheld engine family whose * * * * * of engine families from one or more eligible sales in a given model year are manufacturers having similar size, NMHC+NOX means nonmethane projected at the time of certification to hydrocarbons plus oxides of nitrogen. application, useful life and emission be no more than 2,500 engines; or any control equipment; e.g., Class III, * * * * * nonhandheld engine family whose residential, non-catalyst, two stroke Overhead valve engine means an otto- eligible sales in a given model year are engine used in generator set cycle, four-stroke engine in which the projected at the time of certification to applications. intake and exhaust valves are located be no more than 1,000 units. * * * * * above the combustion chamber within Small volume engine manufacturer the cylinder head. Such engines are means, for handheld engines, any Subpart BÐEmission Standards and sometimes referred to as ‘‘valve-in- engine manufacturer whose total Certification Provisions head’’ engines. eligible sales of handheld engines Overhead valve emission performance subject to regulation under this part are 4. Section 90.103 is amended by or OEP engine means a Class II overhead projected at the time of certification of revising paragraph (a) introductory text, valve engine, or a Class II non-overhead a given model year to be no more than and paragraphs (a)(3) and (a)(5) and by valve engine that complies with the 25,000 handheld engines; and, for adding paragraphs (a)(6) through (a)(9) applicable 2005 model year emission nonhandheld engines, any engine to read as follows: standards without using emission manufacturer whose total eligible sales credits. of nonhandheld engines are projected at § 90.103 Exhaust emission standards. Phase 1 engine means any handheld the time of certification of a given model (a) Exhaust emissions for new Phase or nonhandheld engine, that was year to be no more than 10,000 1 and Phase 2 nonroad spark ignition produced under a certificate of nonhandheld engines. engines at or below 19 kilowatts (kW), conformity issued under the regulations Small volume equipment shall not exceed the following levels. in this part and that is not a Phase 2 manufacturer means, for handheld Throughout this part, NMHC+NOX engine. equipment, any equipment standards are applicable only to natural Phase 2 engine means any handheld manufacturer whose production of gas fueled engines at the option of the engine as defined in this subpart that is handheld equipment subject to manufacturer, in lieu of HC+NOX subject to the standards that begin to regulation under this part or powered by standards. The tables for Phase 1 and phase-in in the 2002 model year; and engines regulated under this part, does Phase 2 exhaust emissions levels follow: 4010 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

TABLE 1.ÐPHASE 1 EXHAUST EMISSION STANDARDS [Grams per kilowatt-hour]

Hydrocarbons Engine displacement class + oxides of ni- Hydrocarbons Carbon mon- Oxides of ni- trogen oxide trogen (NOX) (HC+NOX)

I ...... 16.1 ...... 519 ...... II ...... 13.4 ...... 519 ...... III ...... 295 805 5.36 IV ...... 241 805 5.36 V ...... 161 603 5.36

TABLE 2.ÐPHASE 2 NONHANDHELD EXHAUST EMISSION STANDARDS BY MODEL YEAR [Grams per kilowatt-hour]

Model year Engine class Emission requirement 2005 and 2001 2002 2003 2004 later

I ...... HC+ NOX ...... 25.0 25.0 25.0 25.0 25.0 NMHC+NOX ...... 23.0 23.0 23.0 23.0 23.0 CO ...... 610 610 610 610 610 II ...... HC+NOX ...... 18.0 16.6 15.0 13.6 12.1 NMHC+NOX ...... 16.7 15.3 14.0 12.7 11.3 CO ...... 610 610 610 610 610 Assumed OEP Percentage ...... 50 62.5 75 87.5 100

TABLE 3.ÐPHASE 2 HANDHELD EXHAUST EMISSION STANDARDS SHOWING PHASE-IN BY AGGREGATE PERCENTAGE OF SALES [Grams per kilowatt-hour]

Emission standard Model year

Engine class 2002 2003 2004 2005 and HC+NOX CO later (percent) (percent) (percent) (percent)

III ...... 210 805 ...... IV ...... 172 805 20 40 70 100 V ...... 116 603 ......

* * * * * If the manufacturer exercises the option credits banked by itself or another (3) Notwithstanding paragraph (a)(2) to certify to standards regulating such manufacturer in the 1999 or 2000 model of this section, two stroke engines used emissions, such engines must meet such year as permitted under subpart C of to power lawnmowers or other standards. If the engine is to be used in this part. Compliance with OEP nonhandheld equipment may meet any equipment or vehicle other than an percentages shall be determined by Phase 1 Class III, IV or V standards and exclusively wintertime product such as dividing the manufacturer’s eligible requirements, as appropriate, through a snowthrower or ice auger, it must be sales of Class II engines that are model year 2002 subject to the certified to the applicable standard overhead valve engines or are certified provisions of § 90.107(e), (f) and (h). regulating emissions of HC, NOX, at or below the 2005 HC+NOX Such engines shall not be included in HC+NOX or NMHC+NOX as applicable. (NMHC+NOX) standard, by the any computations of Phase 2 (6) During the phase-in of Phase 2 manufacturer’s total eligible sales of nonhandheld credits or sales nor in any emission requirements for handheld Class II engines for the subject model computations used to ascertain engines, as applicable, those engine year. Side valve engine families with compliance with Phase 2 phase-in families not certified to Phase 2 annual US sales of less than 1000 may requirements for handheld engines. requirements shall be certified to and be excluded from the calculation. * * * * * shall meet Phase 1 requirements. (8) Notwithstanding the standards (5) Notwithstanding paragraph (a)(2) (7) Manufacturers of Phase 2 Class II shown in Table 2 of this section, the of this section, engines used exclusively engines must comply with the OEP HC+NOX (NMHC+NOX) standard for to power products which are used percentages shown in Table 2 of this Phase 2 Class II sidevalve engine exclusively in wintertime, such as section in each model year in cases families with annual production of 1000 snowthrowers and ice augers, at the where the manufacturer desires to or less shall be 24.0 g/kW-hr (22.0 g/kW- option of the engine manufacturer, need engage in cross class averaging of hr) for model years 2005 and later. not certify to or comply with standards emission credits as permitted under Engines produced subject to this regulating emissions of HC, NOX, subpart C of this part, and in cases provision may not exceed this standard HC+NOX or NMHC+NOX , as applicable. where the manufacturer desires to use and are excluded from the averaging, Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4011 banking and trading program and any that class of emission standards for (g)(1) Deterioration factors for related credit calculations after the 2004 purposes of certification. If any test HC+NOX and NMHC+NOX emissions model year. During the 2001 through engine representing an engine family for all nonhandheld OHV Phase 2 2004 model years these engines are has emissions adjusted multiplicatively engines without aftertreatment may be subject to applicable Phase 2 standards, by the deterioration factor determined taken from Table 1 of this section or but shall not require the application of in this section, greater than any one may be calculated according to the certification credits if their HC+NOX emission standard (FEL, where process described in paragraph (h) of (NMHC+NOX) certification level is 24.0 applicable) for a given displacement this section. Except where the g/kW-hr (22.0 g/kW-hr) or less. class, that family does not comply with Administrator directs a nonhandheld (9) Notwithstanding the standards that class of emission standards. engine manufacturer to calculate a df shown in Table 2 of this section, small (2) Except as otherwise permitted under paragraph (g)(2) or (g)(3) of this volume engine manufacturers as defined under this section, each manufacturer of section, if a manufacturer elects to in this part may, at their option, certify handheld engines must comply with the calculate a df for an engine family, it Phase 2 Class II engines to an HC+NOX Phase 2 phase-in schedule shown in must do so for all families of that class (NMHC+NOX) standard of 24.0 g/kW-hr § 90.103. Compliance with the Phase 2 in the same useful life category. Where (22.0 g/kW-hr) through the 2004 model phase-in schedule shall be determined a manufacturer elects to take an year. Such engines shall not exceed this each model year by dividing the HC+NOX or NMHC+NOX df from the standard and are excluded from the manufacturer’s total eligible sales of table, it may use good engineering averaging, banking and trading program Phase 2 handheld engines of that model judgment to determine an appropriate through the 2004 model year. year by the manufacturer’s total eligible CO df, provided it maintains and makes * * * * * sales of handheld engines subject to available to the Administrator upon 5–6. Section 90.104 is amended by regulation under this part. request, such rationale and supporting data used to determine the CO df. adding introductory text and paragraphs (3) In each model year during the (2) If the Administrator has evidence (d) through (i) to read as follows: Phase 2 phase-in period for handheld for a given class and useful life category engines (i.e. model years 2002, 2003, § 90.104 Compliance with emission indicating that a sales weighted average and 2004), manufacturers of handheld standards. of a manufacturer’s actual dfs of those engines shall project, updating as Paragraphs (a) through (c) of this families for which an assigned df is appropriate, and make available to the section apply to Phase 1 engines only. being used, exceeds the assigned df by Administrator upon request, the sales Paragraphs (d) through (i) of this section more than 15%, the Administrator may figures necessary to complete the apply only to Phase 2 engines. require the manufacturer to submit calculation required in paragraph (e)(2) * * * * * appropriate data to establish a df for of this section. Within 270 days after the (d) The exhaust emission standards some or all of the engine families. Such end of each model year in the Phase 2 (FELs, where applicable) for Phase 2 data may be generated through the phase-in period, each manufacturer engines set forth in this part apply to the process described in paragraph (h) of shall submit a report to the emissions of the engines for their full this section or through another process Administrator showing its calculation of useful lives as determined pursuant to approved by the Administrator. compliance with the phase-in schedule. § 90.105. (3) If the Administrator has evidence (e) For all Phase 2 engines: (4) Small volume manufacturers of indicating that the actual df of an engine (1) If all test engines representing an handheld engines as defined in this part family for which a manufacturer is engine family have emissions, when are not subject to the phase-in using an assigned df, exceeds 1.8, the properly tested according to procedures requirements applicable to the 2002, Administrator may require the in this part, less than or equal to each 2003 or 2004 model years. manufacturer to submit appropriate data Phase 2 emission standard (FEL, where (f) Each manufacturer of nonhandheld to establish a df for that engine family. applicable) in a given engine engines must comply with all Such data may be generated through the displacement class and given model provisions of the averaging, banking and process described in paragraph (h) of year, when multiplicatively adjusted by trading program outlined in subpart C of this section or through another process the deterioration factor determined in this part for each engine family approved by the Administrator. this section, that family complies with participating in that program. (4) Table 1 follows:

TABLE 1.ÐASSIGNED HC+NOx and NMHC+NOx DETERIORATION FACTORS FOR NONHANDHELD PHASE 2 OVERHEAD VALVE ENGINES WITHOUT AFTERTREATMENT

Class I ...... Usefule life (hours) ...... 66 250 500 Deterioration factor ...... 1.3 1.3 1.3 Class II ...... Useful life (hours) ...... 250 500 1000 Deterioration factor ...... 1.3 1.3 1.3

(h) Manufacturers shall obtain an nonhandheld engines not using the useful life of the engine except that assigned df or calculate a df, as assigned dfs from Table 1 of this no df may be less than 1.0. EPA may appropriate, for each regulated pollutant section, manufacturers shall calculate reject a df if it has evidence that the df for all Phase 2 handheld and dfs for each pollutant through one of the is not appropriate for that family. The nonhandheld engine families. Such dfs following options: manufacturer must retain actual shall be used, as applicable, for (1) For handheld engines, dfs shall be emission test data to support its choice certification, production line testing, determined using good engineering of df and furnish that data to the and Selective Enforcement Auditing. judgment and reflect the exhaust Administrator upon request. Acceptable For handheld engines, and emission deterioration expected over 4012 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules data sources include, but are not limited interpolate the emissions of each test results for such bench aged engines to: pollutant at 12 hours and at a number shall be adjusted using adjustment (i) In-use data from an earlier model of hours equal to the applicable useful factors calculated under § 90.1208 to year of this family or a closely related life. Divide the interpolated useful life determine the certification levels. The family; emissions by the interpolated emissions dfs for such engines shall be calculated (ii) Data from engines used in the at 12 hours and round this figure to two during this bench aging process using field/bench adjustment program significant figures. The resultant the techniques described in paragraphs described in subpart M of this part. number shall represent the df unless it (h)(2)(i), (ii) or (iii) of this section, (2) For nonhandheld engines: is less than 1.0, in which case the df except that bench aging of one engine (i) On at least three test engines shall be 1.0; or may be used in place of field aging. In representing the configuration chosen to (iii) Perform another process, calculating the dfs of bench aged be the most likely to exceed HC+NOX approved in advance by the nonhandheld sidevalve engines or (NMHC+NOX) emission standards, Administrator, which will have the nonhandheld engines with (FELs where applicable), and objective of adequately ascertaining the aftertreatment, the emission test data at constructed to be representative of relationship of field aged emissions at the number of hours equal to full useful production engines pursuant to full useful life with those tested with life, shall first be multiplied by the § 90.117, conduct full Federal test stabilized emissions at low hours; or adjustment factor applicable to that procedure emission testing pursuant to (iv) For manufacturers of Class II engine family and determined under the regulations of Subpart E of this part overhead valve engines certifying to 500 § 90.1208. at the number of hours representing or 1000 hour useful lives, such (2) Sidevalve Class II or stabilized emissions pursuant to manufacturers may establish dfs for aftertreatment-equipped Class II engines § 90.118. Average the results and round such engines based on good engineering for which the manufacturer commits in to the same number of decimal places judgment that has been proposed in writing, at the time of certification, to contained in the applicable standard, advance and determined to be cease production by the end of the 2004 expressed to one additional significant satisfactory to the Administrator, for model year, are eligible for reduced figure. Conduct such emission testing certification of model years 2001 certification testing, at the again following field aging in actual through 2004. The Administrator may, manufacturer’s option. Bench aging or usage to a number of hours equivalent in model year 2006 or later, direct the field aging for the certification of such to the applicable useful life hours, plus manufacturer to verify, in a period of engines may be stopped at 120 hours for or minus five percent. Average the time the Administrator determines to be engines having a useful life of 250 hours results and round to the same number reasonable, such dfs using methods as determined pursuant to regulations in of decimal places contained in the described in paragraphs (h)(2)(i), (ii) or this part; at 250 hours for engines applicable standard, expressed to one (iii) of this section. If the dfs established having a useful life of 500 hours; and at additional significant figure. Divide the by the manufacturer under this 500 hours for engines having a useful full useful life average emissions for provision underestimate the dfs life of 1000 hours. In such cases, based each regulated pollutant by the determined by the methods under on emission results from stabilized stabilized average emission results and paragraphs (h)(2)(i), (ii) or (iii) of this engines and engines aged as described round to two significant figures. The section, by 15% or more, the in this paragraph (i), the manufacturer resulting number shall be the df, unless Administrator shall provide the shall project emissions to 250, 500 or it is less than 1.0, in which case the df manufacturer with a period of two 1000 hours, as applicable, using good shall be 1.0; or model years in which to obtain engineering judgment acceptable to the (ii) On at least three test engines sufficient certification emission credits Administrator. The manufacturer shall representing the configuration chosen to from other nonhandheld engines to then adjust bench aged emissions (if be the most likely to exceed HC+NOX cover the credit shortfall calculated by applicable) with the adjustment factor (NMHC+NOX) emission standards (FELs substituting the df determined under determined pursuant to § 90.1208 for where applicable), and constructed to be this provision for the original df in the purposes of certification and representative of production engines equation in § 90.207(a). computation of credits or credit needs. pursuant to § 90.117, conduct full (3) Calculated deterioration factors The manufacturer shall compute dfs for Federal test procedure emission testing may cover families and model years in bench aged engines from the adjusted pursuant to the regulation of Subpart E addition to the one upon which they emission levels using good engineering of this part at no fewer than three points were generated if the manufacturer judgment acceptable to the as follows: at the number of hours submits a justification acceptable to the Administrator. For field aged engines, representing stabilized emissions Administrator in advance of the manufacturer shall compute dfs pursuant to § 90.118; again following certification that the affected engine from the projected 250, 500 or 1000 field aging in actual usage to a number families can be reasonably expected to hour emissions, as applicable, using of hours equivalent to the applicable have similar emission deterioration good engineering judgment acceptable useful life hours, plus or minus five characteristics. to the Administrator. percent; and also at no fewer than one (i)(1) Except as allowed in paragraph 7. Section 90.105 is revised to read as point spaced approximately equally (i)(2) of this section, nonhandheld follows: between the other two. The test results sidevalve engines or nonhandheld for each pollutant shall be rounded to engines with exhaust aftertreatment § 90.105 Useful life periods for Phase 2 the same number of decimal places shall be certified by field aging one engines. contained in the applicable standard, engine in actual usage or by bench aging (a) Manufacturers shall declare the expressed to one additional significant one engine on an aging cycle applicable useful life category for each figure and plotted as a function of hours determined to represent field aged engine family at the time of certification on the engine, rounded to the nearest engines under § 90.1207 and § 90.1208, as described in this section. Unless whole hour. The best fit straight line, to its full useful life followed by otherwise approved by the determined by the method of least emission testing using applicable test Administrator, such category shall be squares, shall be drawn. Using this line, procedures under this part. Emission that category which most closely Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4013 approximates the actual useful lives of produced during or after model year (2) Failure to comply with all the equipment into which the engines 1997 must obtain a certificate of applicable averaging, banking and are expected to be installed. conformity covering such engines; trading provisions in this part will be Manufacturers shall retain data however, engines manufactured during considered to be a failure to comply appropriate to support their choice of an annual production period beginning with the terms and conditions upon useful life category for each engine prior to September 1, 1996 are not which the certificate was issued, and family. Such data shall be sufficient to required to be certified. the certificate may be determined to be show that the majority of engines or a (2) Except as required in paragraph void ab initio. sales weighted average of engines of that (b)(3) of this section, nonhandheld (3) The manufacturer shall bear the family are used in applications having engines manufactured during an annual burden of establishing to the satisfaction a useful life best represented by the production period beginning prior to of the Administrator that the conditions chosen category. Such data shall be September 1, 2000 are not required to upon which the certificate was granted furnished to the Administrator upon meet Phase 2 requirements. were satisfied or waived. request. (b) * * * (d) The Administrator may, upon (1) For handheld engines: (3) Manufacturers who commence an request by a manufacturer, waive any (i) Engines declared by the annual production period for a requirement of this part otherwise manufacturer at the time of certification nonhandheld engine family between necessary for the issuance of a as residential, as defined in § 90.3, shall January 1, 2000 and September 1, 2000 certificate. The Administrator may set have a useful life for purposes of must meet Phase 2 requirements for that such conditions in a certificate as he or regulation under this part of 50 hours. family only if that production period she deems appropriate to assure that the (ii) Engines declared by the will exceed 12 months in length. waived requirements are either satisfied manufacturer at the time of certification * * * * * or are demonstrated, for the subject as commercial, as defined in § 90.3, 9. Section 90.107 is amended by engines, to be inappropriate, irrelevant shall have a useful life for purposes of adding a semicolon at the end of or met by the application of a different regulation under this part of 300 hours. requirement under this chapter. The (2) For nonhandheld engines: paragraph (d)(5), by removing ‘‘and’’ at Administrator may indicate on such Manufacturers shall select a useful life the end of paragraph (d)(9), by removing conditional certificates that failure to category from Table 1 of this section at the period at the end of paragraph meet these conditions may result in the time of certification, as follows: (d)(10) and adding a semicolon in its place, and by adding new paragraphs suspension or revocation or the voiding ab initio of the certificate. TABLE 1.ÐUSEFUL LIFE CATEGORIES (d)(11) and (d)(12) to read as follows: 11. Section 90.113 is amended by FOR NONHANDHELD ENGINES (HOURS) § 90.107 Application for certification. revising the section heading and adding * * * * * Category Category Category two sentences to the beginning of C B A (d) * * * paragraph (a) to read as follows: (11) This paragraph (d)(11) is Class I ... 66 250 500 applicable only to Phase 2 engines. § 90.113 In-use testing program for Phase Class II .. 250 500 1000 (i) Manufacturers of nonhandheld 1 engines. engines participating in the Averaging, (a) This section applies only to Phase (3) Data to support a manufacturer’s Banking and Trading Program as 1 engines. In-use testing requirements choice of useful life category, for a given described in Subpart C of this part shall for Phase 2 engines are found in subpart engine family, may include but are not declare the applicable Family Emission M of this part.* ** limited to: Limit (FEL) for HC+NOX (NMHC+NOX). * * * * * (i) Surveys of the life spans of the (ii) Provide the applicable useful life 12. Section 90.114 is amended by equipment in which the subject engines as determined under § 90.105; removing ‘‘and’’ at the end of paragraph are installed; (12) In cases where the regulations in (c)(9), by removing the period at the end (ii) Engineering evaluations of field § 90.114(f) are applicable, a copy of the of paragraph (c)(10) and adding a aged engines to ascertain when engine language to be included in the semicolon in its place, and by adding performance deteriorates to the point documents intended for the ultimate new paragraphs (c)(11), (c)(12) and (f) to where usefulness and/or reliability is purchaser to describe the emission read as follows: impacted to a degree sufficient to compliance period. necessitate overhaul or replacement; § 90.114 Requirement of certificationÐ (iii) Warranty statements and * * * * * engine information label. 10. Section 90.108 is amended by warranty periods; * * * * * (iv) Marketing materials regarding adding paragraphs (c) and (d) to read as follows: (c)* * * engine life; (11) For nonhandheld Phase 2 (v) Failure reports from engine § 90.108 Certification. engines, the useful life category as customers; and determined by the manufacturer (vi) Engineering evaluations of the * * * * * pursuant to § 90.105. Such useful life durability, in hours, of specific engine (c) For certificates issued for engine category shall be shown by one of the technologies, engine materials or engine families included in the averaging, following statements to be appended to designs. banking and trading program as (b) [Reserved] described in subpart C of this part: the statement required under paragraph 8. Section 90.106 is amended by (1) All certificates issued are (c)(7) of this section: revising paragraph (a) and adding new conditional upon the manufacturer (i) ‘‘EMISSIONS COMPLIANCE paragraph (b)(3) to read as follows: complying with the provisions of PERIOD: [useful life] HOURS’’; or subpart C of this part and the averaging, (ii) ‘‘EMISSIONS COMPLIANCE § 90.106 Certificate of conformity. banking and trading related provisions PERIOD: CATEGORY [fill in C, B or A (a)(1) Except as provided in § 90.2(b), of other applicable sections, both during as indicated and appropriate from the every manufacturer of new engines and after the model year of production. chart in § 90.105], REFER TO OWNER’S 4014 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

MANUAL FOR FURTHER § 90.117 Certification procedureÐtest Subpart CÐCertification Averaging, INFORMATION’’; engine selection. Banking, and Trading Provisions for Nonhandheld Engines (12) For handheld Phase 2 engines, (a) For Phase 1 engines, the the useful life category as determined by manufacturer must select, from each Sec. 90.201 Applicability. the manufacturer pursuant to § 90.105. engine family, a test engine that the 90.202 Definitions. Such useful life category shall be shown manufacturer determines to be most 90.203 General provisions. by the following statement to be likely to exceed the emission standard. 90.204 Averaging. appended to the statement required For Phase 2 engines, the manufacturer 90.205 Banking. under (c)(7) of this section: must select, from each engine family, a 90.206 Trading. ‘‘EMISSIONS COMPLIANCE PERIOD: [ test engine of a configuration that the 90.207 Credit calculation and manufacturer 50 or 300, as applicable] HOURS’’. manufacturer determines to be most compliance with emission standards. 90.208 Certification. * * * * * likely to exceed the HC+NOX 90.209 Maintenance of records. (f)(1) Manufacturers electing to use [NMHC+NOX] Family Emission Limit 90.210 End-of-year and final reports. the labeling language of paragraph (FEL), or HC+NOX [NMHC+NOX] 90.211 Request for hearing. (c)(11)(ii) of this section must provide in standard if no FEL is applicable. Subpart CÐCertification Averaging, the documents intended to be conveyed * * * * * Banking, and Trading Provisions for to the ultimate purchaser, the statement: 15. Section 90.118 is amended by Nonhandheld Engines The Emissions Compliance Period referred revising the section heading and adding to on the label entitled ‘‘Important Engine a new paragraph (e) to read as follows: § 90.201 Applicability. Information’’ indicates the number of The requirements of this subpart C are § 90.118 Certification procedureÐservice operating hours for which the engine has applicable to all Phase 2 nonhandheld been shown to meet Federal emission accumulation and usage of deterioration factors. spark-ignition engines subject to the requirements. For engines less than 225 cc provisions of subpart A of this part displacement, Category C= 66 hours, B= 250 * * * * * except as provided in § 90.103(a). These hours and A = 500 hours. For engines of 225 (e) For purposes of establishing cc or more, Category C = 250 hours, B = 500 provisions are not applicable to any hours and A = 1000 hours. whether Phase 2 engines comply with Phase 1 engines or to any Phase 2 applicable exhaust emission standards handheld engines. Participation in the (2) The manufacturer must provide, in or FELs, the test results for each averaging, banking and trading program the same document as the statement in regulated pollutant as measured is voluntary, but if a manufacturer elects paragraph (f)(1) of this section, a pursuant to § 90.119 shall be multiplied to participate, it must do so in statement of the engine’s displacement by the applicable df determined under compliance with the regulations set or an explanation of how to readily § 90.104 (g), (h) or (i). The product of the forth in this subpart. The provisions of determine the engine’s displacement. two numbers shall be rounded to the this subpart are applicable for HC+NOX The Administrator may approve same number of decimal places (NMHC+NOX) emissions but not for CO alternate language to the statement in contained in the applicable standard, emissions. paragraph (f)(1) of this section, provided and compared against the applicable that the alternate language provides the standard or FEL, as appropriate. § 90.202 Definitions. The definitions in subpart A of this ultimate purchaser with a clear 16. Section 90.122 is amended by part apply to this subpart. The following description of the number of hours revising the first sentence of paragraph represented by each of the three letter definitions also apply to this subpart: (a) and adding paragraph (d)(4) as Averaging means the exchange of categories for the subject engine’s follows: displacement. emission credits between engine families within a given manufacturer’s 13. Section 90.116 is amended by § 90.122 Amending the application and certificate of conformity. product line. revising paragraph (d)(6) and (d)(7) and Banking means the retention of adding paragraphs (d)(8) through (d)(10) (a) The engine manufacturer must emission credits by the manufacturer to read as follows: notify the Administrator when either an generating the emission credits or engine is to be added to a certificate of § 90.116 Certification procedureÐ obtaining such credits through trading, determining engine displacement, engine conformity, an FEL is to be changed, or for use in future model year averaging class, and engine families. changes are to be made to a product line or trading as permitted in this part. covered by a certificate of conformity. * * * * * Emission credits represent the amount *** of emission reduction or exceedance, by (d) * * * * * * * * an engine family, below or above the (6) The location of valves, where (d)* * * applicable HC+NOX (NMHC+NOX) applicable, with respect to the cylinder emission standard, respectively. FELs (4) If the Administrator determines (e.g., side valves or overhead valves); below the standard create ‘‘positive that a revised FEL meets the (7) The number of catalytic credits,’’ while FELs above the standard requirements of this subpart and the converters, location, volume and create ‘‘negative credits.’’ In addition, Act, the appropriate certificate of composition; ‘‘projected credits’’ refer to emission conformity will be amended, or a new credits based on the projected (8) The thermal reactor certificate will be issued to reflect the applicable production/sales volume of characteristics; revised FEL. The certificate of the engine family. ‘‘Reserved credits’’ (9) The fuel required (e.g., gasoline, conformity is revised conditional upon are emission credits generated within a natural gas, LPG); and compliance with § 90.207(b). model year waiting to be reported to (10) The useful life category. * * * * * EPA at the end of the model year. * * * * * 17. Subpart C, which was formerly ‘‘Actual credits’’ refer to emission 14. Section 90.117 is amended by reserved, is added to part 90 to read as credits based on actual applicable sales revising paragraph (a) to read as follows: follows: volume as contained in the end-of-year Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4015 reports submitted to EPA. Some or all of (FELs) above or below the applicable engine family of the same class for these credits may be revoked if EPA emission standard subject to the which the Phase 2 requirements are review of the end-of-year reports or any limitation in paragraph (f) of this applicable. Credits generated in one subsequent audit action(s) reveals section, provided the summation of the model year may not be used for prior problems or errors of any nature with manufacturer’s projected balance of model years, except as allowed under credit computations. credits from all credit transactions for § 90.207(c) or § 90.104(h)(2)(iv). Point of first retail sale means the each engine class in a given model year (2) For the 2005 model year and for point at which the engine is first sold is greater than or equal to zero, as each subsequent model year, directly to an end user. Generally, this determined under § 90.207. manufacturers of Class II engines must point is the retail engine or equipment (1) A manufacturer of an engine provide a demonstration that the sales dealer. If the engine is sold first to an family with an FEL exceeding the weighted average FEL for HC+NOX equipment manufacturer for installation applicable emission standard must (including NMHC+NOX FELs), for all of in a piece of equipment, the equipment obtain positive emission credits the manufacturer’s Class II engines, will manufacturer may be the point of first sufficient to address the associated not exceed 13.6 g/kW-hr for the 2005 retail sale if the equipment credit shortfall via averaging, banking, model year, 13.1 g/kW-hr for the 2006 manufacturer can determine with or trading. model year and 12.6 g/kW-hr for the reasonable certainty whether the engine (2) An engine family with an FEL 2007 and each subsequent Phase 2 is or is not exported or destined for below the applicable emission standard model year. Such demonstration shall retail sale in a state that has adopted may generate positive emission credits be subject to the review and approval of applicable emission standards pursuant for averaging, banking, or trading, or a the Administrator, shall be provided at to a waiver granted by EPA under combination thereof. the time of the first Class II certification section 209(e) of the Act once it has (3) In the case of an SEA failure, of that model year and shall be based on been installed in a piece of equipment. credits may be used to cover subsequent projected eligible sales for that model Trading means the exchange of production of engines for the family in year. emission credits between question if the manufacturer elects to (h) Manufacturers must demonstrate manufacturers. recertify to a higher FEL. Credits may compliance under the averaging, not be used to remedy a nonconformity banking, and trading provisions for a § 90.203 General provisions. determined by a Selective Enforcement particular model year by 270 days after (a) The certification averaging, Audit (SEA) or by in-use testing, except the end of the model year. An engine banking, and trading provisions for that the Administrator may permit the family generating negative credits for HC+NOX and NMHC+NOX emissions use of credits to address a which the manufacturer does not obtain from eligible engines are described in nonconformity determined by an SEA or generate an adequate number of this subpart. where the use of such credits is one positive credits by that date from the (b) A nonhandheld engine family may component of a multi-part remedy for same or previous model year engines use the averaging, banking and trading the previously produced engines and will violate the conditions of the provisions for HC+NOX and the remedy, including the use of credits certificate of conformity. The certificate NMHC+NOX emissions if it is subject to and the quantity of credits being used, of conformity may be voided ab initio regulation under this part with certain is such that the Administrator is pursuant to § 90.123 for this engine exceptions specified in paragraph (c) of satisfied that the manufacturer has family. this section. HC+NOX and NMHC+NOX strong and lasting incentive to credits shall be interchangeable subject accurately verify its new engine § 90.204 Averaging. to the limitations on credit generation, emission levels and will set or reset its (a) Negative credits from engine credit usage, cross class averaging and FELs for current and future model years families with FELs above the applicable other provisions described in this so that production line compliance is emission standard must be offset by subpart. assured. positive credits from engine families (c) A manufacturer shall not include (4) In the case of a production line having FELs below the applicable in its calculation of credit generation testing failure pursuant to subpart H of emission standard, as allowed under the and may exclude from its calculation of this part, a manufacturer may revise the provisions of this subpart. Averaging of credit usage, any new engines: FEL based upon production line testing credits in this manner is used to (1) Which are exported, unless the results obtained under subpart H of this determine compliance under manufacturer has reason or should have part and upon Administrator approval § 90.207(b). reason to believe that such engines have pursuant to § 90.122(d). The (b) Cross-class averaging, i.e. the use been or will be imported in a piece of manufacturer may use certification of credits from Class I engines to cover equipment; or credits to cover both past production Class II engines and vice versa, is (2) Which are subject to state engine and subsequent production of permitted only for the two situations emission standards pursuant to a waiver nonhandheld engines as needed. described in paragraphs (b)(1) and (b)(2) granted by EPA under section 209(e) of (f) No engine family may have an FEL of this section and only when the the Act, unless the manufacturer that is greater than 32.2 g/kW-hr for affected Class II manufacturer meets the demonstrates to the satisfaction of the Class I engines or 26.8 g/kW-hr for Class following minimum sales percentages Administrator that inclusion of these II engines. for Class II overhead valve emission engines in averaging, banking and (g)(1) All credits generated under this performance engines in that model year: trading is appropriate. subpart will be designated as Class I or 2001 (50%); 2002 (62.5%); 2003 (75%); (d) For an engine family using credits, Class II credits, as appropriate. Except 2004 (87.5%) and 2005 and later a manufacturer may, at its option, as described in § 90.204(b), credits (100%). A manufacturer’s sales include its entire production of that generated in a given model year by an percentage of overhead valve emission engine family in its calculation of credit engine family subject to the Phase 2 performance engines is determined by usage for a given model year. emission requirements may only be dividing the manufacturer’s eligible (e) A manufacturer may certify engine used in averaging, banking or trading, as sales (as defined in this part) of Class II families at Family Emission Limits appropriate, for any nonhandheld overhead valve emission performance 4016 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules engines certified under this part by the banked from engine families certified Sales = eligible sales as defined in this manufacturer’s total eligible sales of below 12.1 (11.3 g/kw-hr) for engines part. Annual sales projections are used to Class II engines certified under this part, where those credits are not needed to project credit availability for initial certification. Eligible sales volume is used in and multiplying the resultant quotient bring the manufacturer’s total Class II determining actual credits for end-of-year by 100. sales into compliance with the 2001 compliance determination. (1) Cross class averaging is allowed model year standard. Standard = the current and applicable for credit exchanges from credit (3) Engines certified under the Small SI engine HC+NOX (NMHC+NOX) generating Class II engines to credit provisions of this paragraph are subject emission standard in grams per kilowatt hour using Class I engines. to all of the requirements of this part as determined in § 90.103. (2) Cross class averaging is allowed applicable to Phase 2 engines. FEL = the family emission limit for the engine family in grams per kilowatt hour. for credit exchanges from Class I (c) A manufacturer may bank actual engines to Class II engines where credits Power = the sales weighted maximum credits only after the end of the model modal power, in kilowatts, as calculated from are necessary to address production line year and after EPA has reviewed the the applicable federal test procedure as testing failures as permitted in § 90.207 manufacturer’s end-of-year reports. described in this part. This is determined by or to address credit shortfalls that arise During the model year and before multiplying the maximum modal power of due to testing pursuant to submittal of the end-of-year report, each configuration within the family by its § 90.104(h)(2)(iv) . credits originally designated in the eligible sales, summing across all (c) Subject to the limitations in certification process for banking will be configurations and dividing by the eligible § 90.204(b), credits used in averaging for sales of the entire family. considered reserved and may be Useful Life = the useful life in hours a given model year may be obtained redesignated for trading or averaging in from credits generated in the same corresponding to the useful life category for the end-of-year report and final report. which the engine family was certified. model year by another engine family, (d) Credits declared for banking from Load Factor = For Test Cycle A and Test credits banked in previous model years, the previous model year that have not Cycle B, the Load Factor = 47% (i.e. 0.47). or credits of the same or previous model been reviewed by EPA may be used in year obtained through trading. The (2) For approved alternate test averaging or trading transactions. procedures, the load factor in paragraph restrictions of this paragraph However, such credits may be revoked notwithstanding, credits from a given (a)(1) of this section must be calculated at a later time following EPA review of according to the following formula: model year may be used to address the end-of-year report or any subsequent credit needs of previous model year audit actions. n engines as allowed under § 90.207(c). ∑()%MTT mode (d) The use of Class II credits from the i § 90.206 Trading. i=1 1999 and 2000 model years (early × × (a) An engine manufacturer may ()%MTS modei() WF mode i banking) is subject to regulation under exchange emission credits with other Where: this subpart and also to the provisions nonhandheld engine manufacturers in of § 90.103(a)(7). trading. %MTT modei = percent of the maximum FTP torque for mode i. (b) Credits for trading can be obtained § 90.205 Banking. %MTS modei = percent of the maximum (a) Beginning with the 2001 model from credits banked in previous model FTP engine rotational speed for mode i. year, a manufacturer of an engine family years or credits generated during the WF modei = the weighting factor for mode with an FEL below the applicable model year of the trading transaction. i. emission standard for a given model (c) Traded credits can be used for (b) Manufacturer compliance with the year may bank credits in that model averaging, banking, or further trading emission standard is determined on a year for use in averaging and trading. transactions. corporate average basis at the end of Negative credits may be banked only (d) Traded credits are subject to the each model year. A manufacturer is in according to the requirements under limitations on cross-class averaging, use compliance when the sum of positive § 90.207(c). Credits may also be banked for past model years, and the use of and negative emission credits it holds in model years 1999 and 2000 subject to credits from early banking as set forth in for each class is greater than or equal to the requirements of paragraph (b) of this § 90.204(b), (c) and (d). zero, except that the sum of positive and section. (e) In the event of a negative credit negative credits for a given class may be (b) A manufacturer may bank credits balance resulting from a transaction, less than zero as allowed under for a given class of engines in the 1999 both the buyer and the seller are liable, paragraph (c) of this section. and 2000 model years for use in the except in cases involving fraud. (c)(1) A manufacturer may use credits 2001 and later model years, provided: Certificates of all engine families from a later model year to address dfs (1) For Class I credits: the participating in a negative trade may be of model year 2001 through 2004 Class manufacturer certifies its entire Class I voided ab initio pursuant to § 90.123. II engines certified to 500 or 1000 hours, production to the applicable 2001 when the dfs are shown to be § 90.207 Credit calculation and model year requirements. HC+NOX manufacturer compliance with emission underestimated pursuant to the (NMHC+NOX) credits may only be standards. provisions of § 90.104(h)(2)(iv). banked from engine families certified (2) If, as a result of production line below 16.0 g/kW-hr (15.0 g/kW-hr) (a) (1) For each engine family, testing as required in subpart H of this where those credits are not needed to HC+NOX [NMHC+NOX] certification part, a nonhandheld engine family is bring the manufacturer’s total Class I emission credits (positive or negative) determined to be in noncompliance sales into compliance with the 2001 are to be calculated according to the pursuant to § 90.710, the manufacturer model year standard. following equation and rounded to the may raise its FEL for past and future (2) For Class II credits: the nearest gram. Consistent units are to be production as necessary. Further, a manufacturer certifies its entire Class II used throughout the following equation: manufacturer may carry a negative product line to the applicable 2001 Credits = Sales × (Standard—FEL) × credit balance (known also as a credit × × model year requirements. HC+NOX Power Useful life Load Factor deficit) for the subject class and model (NMHC+NOX) credits may only be Where: year and for the next three model years. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4017

The credit deficit may be no larger than (4) Submit calculations in accordance (2) The actual quarterly and that created by the nonconforming with § 90.207 of projected emission cumulative applicable production/sales family. If the credit deficit still exists credits (positive or negative) based on volume; after the model year following the quarterly production projections for (3) The values required to calculate model year in which the nonconformity each family. credits as given in § 90.207; occurred, the manufacturer must obtain (5)(i) If the engine family is projected (4) The resulting type and number of and apply credits to offset the remaining to have negative emission credits, state credits generated/required; credit deficit at a rate of 1.2 grams for specifically the source (manufacturer/ (5) How and where credit surpluses each gram of deficit within the next two engine family or reserved) of the credits are dispersed; and model years. The provisions of this necessary to offset the credit deficit (6) How and through what means paragraph are subject to the limitations according to quarterly projected credit deficits are met. in paragraph (d) of this section. production. (c) The manufacturer must retain all (d) Regulations elsewhere in this part (ii) If the engine family is projected to records required to be maintained under notwithstanding, if a nonhandheld generate credits, state specifically this section for a period of eight years engine manufacturer experiences two or (manufacturer/engine family or from the due date for the end-of-model more production line testing failures reserved) where the quarterly projected year report. Records may be retained as pursuant to the regulations in subpart H credits will be applied. hard copy or reduced to microfilm, ADP of this part in a given model year, the (b) All certificates issued are diskettes, and so forth, depending on manufacturer may raise the FEL of conditional upon manufacturer the manufacturer’s record retention previously produced engines only to the compliance with the provisions of this procedure; provided, that in every case extent that such engines represent no subpart both during and after the model all information contained in the hard more than 10% of the manufacturer’s year of production. copy is retained. (d) Nothing in this section limits the total eligible sales for that model year. (c) Failure to comply with all Administrator’s discretion in requiring For any additional engines determined provisions of this subpart will be the manufacturer to retain additional to be in noncompliance, the considered to be a failure to satisfy the records or submit information not manufacturer must conduct offsetting conditions upon which the certificate specifically required by this section. projects approved in advance by the was issued, and the certificate may be (e) Pursuant to a request made by the Administrator. determined to be void ab initio pursuant Administrator, the manufacturer must (e) If, as a result of production line to § 90.123. submit to the Administrator the testing under this subpart, a (d) The manufacturer bears the information that the manufacturer is manufacturer desires to lower its FEL it burden of establishing to the satisfaction required to retain. may do so subject to § 90.708(c). of the Administrator that the conditions (f) EPA may, pursuant to § 90.123, (f) Except as allowed at paragraph (c) upon which the certificate was issued void ab initio a certificate of conformity of this section, when a manufacturer is were satisfied or waived. for an engine family for which the not in compliance with the applicable (e) Projected credits based on manufacturer fails to retain the records emission standard by the date 270 days information supplied in the certification required in this section or to provide after the end of the model year, application may be used to obtain a such information to the Administrator considering all credit calculations and certificate of conformity. However, any upon request. transactions completed by then, the such credits may be revoked based on manufacturer will be in violation of review of end-of-year reports, follow-up § 90.210 End-of-year and final reports. these regulations and EPA may, audits, and any other verification steps (a) End-of-year and final reports must pursuant to § 90.123, void ab initio the considered appropriate by the indicate the engine family, the class (I certificates of engine families for which Administrator. or II), the actual sales volume, the the manufacturer has not obtained values required to calculate credits as § 90.209 Maintenance of records. sufficient positive emission credits. given in § 90.207, and the number of (a) The manufacturer must establish, credits generated/required. § 90.208 Certification. maintain, and retain the following Manufacturers must also submit how (a) In the application for certification adequately organized and indexed and where credit surpluses were a manufacturer must: records for each engine family: dispersed (or are to be banked) and/or (1) Submit a statement that the (1) EPA engine family identification how and through what means credit engines for which certification is code; deficits were met. Copies of contracts requested will not, to the best of the (2) Family Emission Limit (FEL) or related to credit trading must be manufacturer’s belief, cause the FELs where FEL changes have been included or supplied by the broker, if manufacturer to be in noncompliance implemented during the model year; applicable. The report must include a under § 90.207(b) when all credits are (3) Maximum modal power for each calculation of credit balances to show calculated for all the manufacturer’s configuration sold; that the credit summation for each class engine families. (4) Projected sales volume for the of engines is equal to or greater than (2) Declare an FEL for each engine model year; and zero (or less than zero in cases of family for HC+NOX (NMHC+NOX). The (5) Records appropriate to establish negative credit balances as permitted in FEL must have the same number of the quantities of engines that constitute § 90.207(c)). For engines subject to the significant digits as the emission eligible sales as defined in § 90.202 for provisions of § 90.203(g)(2), the report standard. each power rating for each FEL. must include a calculation of the sales (3) Indicate the projected number of (b) Any manufacturer producing an weighted average HC+NOX (including credits generated/needed for this family; engine family participating in trading NMHC+NOX) FEL. the projected applicable eligible sales reserved credits must maintain the (b) The calculation of eligible sales for volume, by quarter; and the values following records on a quarterly basis end-of-year and final reports must be required to calculate credits as given in for each such engine family: based on the location of the point of first § 90.207. (1) The engine family; retail sale (for example, retail customer 4018 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules or dealer) also called the final product Subpart DÐEmission Test Equipment Subpart EÐGaseous Exhaust Test purchase location. Upon advance Provisions Procedures written request, the Administrator will consider other methods to track engines 18. Section 90.301 is amended by 20. Section § 90.401 is amended by for credit calculation purposes that revising paragraph (a) and adding adding paragraphs (c) and (d) to read as provide high levels of confidence that paragraph (d) to read as follows: follows; eligible sales are accurately counted. § 90.301 Applicability. § 90.401 Applicability. (c)(1) End-of-year reports must be (a) This subpart describes the submitted within 90 days of the end of * * * * * equipment required in order to perform (c) Certain text in this subpart is the model year to: Manager, Engine exhaust emission tests on new nonroad identified as pertaining to Phase 1 or Compliance Programs Group (6403–J), spark-ignition engines and vehicles Phase 2 engines. Such text pertains only U.S. Environmental Protection Agency, subject to the provisions of subpart A of to engines of the specified Phase. If no Washington, DC 20460. (2) Unless otherwise approved by the this part. Certain text in this subpart is indication of Phase is given, the text Administrator, final reports must be identified as pertaining to Phase 1 or pertains to all engines, regardless of submitted within 270 days of the end of Phase 2 engines. Such text pertains only Phase. the model year to: Manager, Engine to engines of the specified Phase. If no (d) For Phase 2 Class I and Phase 2 Compliance Programs Group (6403–J), indication of Phase is given, the text Class II natural gas fueled engines, the U.S. Environmental Protection Agency, pertains to all engines, regardless of following sections from 40 CFR part 86 Washington, DC 20460. Phase. are applicable to this subpart. The (d) Failure by a manufacturer to * * * * * requirements of these sections which submit any end-of-year or final reports (d) For Phase 2 Class I and Phase 2 pertain specifically to the measurement in the specified time for any engines Class II natural gas fueled engines, the and calculation of non-methane subject to regulation under this part is following sections from 40 CFR part 86 hydrocarbon (NMHC) exhaust emissions a violation of § 90.1003(a)(2) and section are applicable to this subpart. The from otto cycle heavy-duty engines must 213(d) of the Clean Air Act for each requirements of these sections which be followed when determining the engine. pertain specifically to the measurement NMHC exhaust emissions from Phase 2 (e) A manufacturer generating credits and calculation of non-methane Class I and Phase 2 Class II natural gas for banking only who fails to submit hydrocarbon (NMHC) exhaust emissions fueled engines. Those sections are: 40 end-of-year reports in the applicable from otto cycle heavy-duty engines must CFR 86.1327–94 Engine dynamometer specified time period (90 days after the be followed when determining the test procedures, overview, 40 CFR end of the model year) may not use the NMHC exhaust emissions from Phase 2 86.1340–94 Exhaust sample analysis, 40 credits until such reports are received Class I and Phase 2 Class II natural gas CFR 86.1342–94 Calculations; exhaust and reviewed by EPA. Use of projected fueled engines. Those sections are: 40 emissions, 40 CFR 86.1344–94(d) credits pending EPA review is not CFR 86.1306–90 Equipment required Required information—Pre-test data, permitted in these circumstances. and specifications; overview, 40 CFR and 40 CFR 86.1344–94(e) Required (f) Errors discovered by EPA or the 86.1309–90 Exhaust gas sampling information—Test data. manufacturer in the end-of-year report, system; otto-cycle engines, 40 CFR 86– 21. Section 90.404 is amended by including errors in credit calculation, 1311–94 Exhaust gas analytical system; adding a sentence after the first sentence may be corrected in the final report. CVS bag sampling, 40 CFR 86.1313– of paragraph (b) to read as follows: (g) If EPA or the manufacturer 94(e) Fuel Specification—Natural gas- § 90.404 Test procedure overview. determines that a reporting error fuel, 40 CFR 86.1314–94 Analytical occurred on an end-of-year or final gases, 40 CFR 86.1316–94 Calibrations; * * * * * report previously submitted to EPA frequency and overview, 40 CFR (b) * * * For Phase 2 Class I and II under this section, the manufacturer’s 86.1321–94 Hydrocarbon analyzer natural gas fueled engines the test is credits and credit calculations must be calibration, 40 CFR 86.1325–94 Methane also designed to determine the brake- recalculated. Erroneous positive credits analyzer calibration, 40 CFR 86.1327–94 specific emissions of non-methane will be void except as provided in Engine dynamometer test procedures, hydrocarbons. * ** paragraph (h) of this section. Erroneous overview, 40 CFR 86.1340–94 Exhaust * * * * * negative credit balances may be sample analysis, 40 CFR 86.1342–94 22. Section 90.409 is amended by adjusted by EPA. Calculations; exhaust emissions, 40 CFR revising paragraph (a)(3) to read as (h) If within 270 days of the end of the 86.1344–94(d) Required information— follows: model year, EPA review determines a Pre-test data, 40 CFR 86.1344–94(e) § 90.409 Engine dynamometer test run. reporting error in the manufacturer’s Required information—Test data. favor (that is, resulting in an increased 19. Section 90.302 is revised to read (a) * * * credit balance) or if the manufacturer as follows: (3) For Phase 1 engines, at the discovers such an error within 270 days manufacturer’s option, the engine can of the end of the model year, EPA shall § 90.302 Definitions. be run with the throttle in a fixed restore the credits for use by the The definitions in § 90.3 apply to this position or by using the engine’s manufacturer. subpart. The following definitions also governor (if the engine is manufactured apply to this subpart. with a governor). In either case, the § 90.211 Request for hearing. Intermediate speed means the engine engine speed and load must meet the An engine manufacturer may request speed which is 85 percent of the rated requirements specified in paragraph a hearing on the Administrator’s voiding speed. (b)(12) of this section. For Phase 2 Class of the certificate under §§ 90.203(h), Natural gas means a fuel whose I and Class II engines equipped with an 90.206(e), 90.207(f), 90.208(c), or primary constituent is methane. engine speed governor, the governor 90.209(f), pursuant to § 90.124. The Rated speed means the speed at must be used to control engine speed procedures of § 90.125 shall apply to which the manufacturer specifies the during all test cycle modes except for any such hearing. maximum rated power of an engine. Mode 1, and no external throttle control Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4019 may be used. For Phase 2 Class I and speed governor, during each non-idle mode hold the specified speed within ± Class II engines equipped with an mode, hold both the specified speed and ten percent of the manufacturer’s engine speed governor, during Mode 1 load within ± five percent of point. specified idle engine speed (see Table 1 fixed throttle operation may be used to During the idle mode, hold speed in Appendix A to subpart E of this part determine the 100% torque value. within ± ten percent of the for a description of test Modes). * * * * * manufacturer’s specified idle engine * * * * * 23. Section 90.410 is amended by speed. For Phase 2 Class I and II engines revising paragraph (b) to read as follows: 24. In Appendix A to Subpart E of equipped with an engine speed Part 90, Table 2 is revised to read as § 90.410 Engine test cycle. governor, during Mode 1 hold both the follows: specified speed and load within ± five * * * * * Appendix A to Subpart E of Part 90— (b) For Phase 1 engines and Phase 2 percent of point, during Modes 2–5, ± Tables Class III, IV, V, and Phase 2 Class I and hold the specified load with five II engines not equipped with an engine percent of point, and during the idle * * * * * TABLE 2.ÐTEST CYCLES FOR CLASS I±V ENGINES

Mode 1 2 3 4 5 6 7 8 9 10 11

Speed Rated speed Intermediate speed Idle Mode Points A Cycle ...... 1 2 3 4 5 6 Load PercentÐA Cycle ...... 100 75 50 25 10 0 Weighting ...... 9% 20% 29% 30% 7% 5%

Mode Points B Cycle ...... 1 2 3 4 5 ...... 6 Load PercentÐB Cycle ...... 100 75 50 25 10 ...... 0 Weighting ...... 9% 20% 29% 30% 7% 5%

Mode Points C Cycle ...... 1 ...... 2 Load PercentÐC Cycle ...... 100 ...... 0 Weighting for Phase 1 Engines ...... 90% ...... 10% Weighting for Phase 2 Engines ...... 85% ...... 15%

Subpart FÐSelective Enforcement number of tests conducted on the § 90.512 Request for public hearing. Auditing engine, and rounding to the same * * * * * number of decimal places contained in 25. Section 90.503 is amended by (b) The manufacturer’s request shall the applicable standard. For Phase 2 be filed with the Administrator not later revising paragraphs (f)(3) and (f)(4) to engines only, this result shall be read as follows: than 15 days after the Administrator’s expressed to one additional significant notification of his or her decision to § 90.503 Test orders. figure. suspend, revoke or void, unless * * * * * (2) Final deteriorated test results (for otherwise specified by the (f) * * * Phase 2 test engines only) are calculated Administrator. The manufacturer shall (3) Any SEA test order for which the by applying the appropriate simultaneously serve two copies of this family or configuration, as appropriate, deterioration factors, from the request upon the Director of the Engine fails under § 90.510 or for which testing certification process for the engine Programs and Compliance Division and is not completed will not be counted family, to the final test results, and file two copies with the Hearing Clerk against the annual limit. rounding to the same number of decimal of the Agency. Failure of the (4) When the annual limit has been places contained in the applicable manufacturer to request a hearing met, the Administrator may issue standard. within the time provided constitutes a additional test orders to test those * * * * * waiver of the right to a hearing. families or configurations for which 27. Section 90.510 is amended by Subsequent to the expiration of the evidence exists indicating revising paragraph (b) to read as follows: period for requesting a hearing as of nonconformity, or for which the right, the Administrator may, in his or Administrator has reason to believe are § 90.510 Compliance with acceptable her discretion and for good cause not being appropriately represented or quality level and passing and failing criteria shown, grant the manufacturer a hearing tested in Production Line Testing for selective enforcement audits. to contest the suspension, revocation or conducted under subpart H of this part, * * * * * voiding. if applicable. An SEA test order issued (b) A failed engine is a Phase 1 engine * * * * * pursuant to this provision will include whose final test results pursuant to a statement as to the reason for its § 90.509(b), for one or more of the Subpart GÐImportation of issuance. applicable pollutants exceed the Nonconforming Engines 26. Section 90.509 is amended by emission standard. For Phase 2 engines, 29. Section 90.612 is amended by revising paragraph (b) to read as follows: a failed engine is a Phase 2 engine revising paragraph (g) to read as follows: § 90.509 Calculation and reporting of test whose final deteriorated test results results. pursuant to § 90.509(b), for one or more § 90.612 Exemptions and exclusions. of the applicable pollutants exceed the * * * * * * * * * * (b)(1) Final test results are calculated emission standard (FEL, if applicable). (g) Applications for exemptions and by summing the initial test results * * * * * exclusions provided for in paragraphs derived in paragraph (a) of this section 28. Section 90.512 is amended by (b), (c), and (e) of this section are to be for each test engine, dividing by the revising paragraph (b) to read as follows: mailed to: U.S. Environmental 4020 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

Protection Agency, Office of Mobile Auditing, it has remained under range recommended to the ultimate Sources, Engine Compliance Programs Production Line Testing for a minimum purchaser. Group (6403–J), Washington, D.C. of three model years; (c) The Administrator, on the basis of 20460, Attention: Imports. (3) It provides written notice to EPA a written application from a 30. Subpart H, which was previously one complete model year prior to the manufacturer, may approve alternate ‘‘reserved’’, is added to part 90 to read model year for which it is requesting to methods to evaluate production line as follows: change from Production Line Testing to compliance, where such alternate Subpart HÐManufacturer Production Line Selective Enforcement Auditing; methods are demonstrated by the Testing Program (4) It provides written notice to EPA manufacturer to: thirty (30) days prior to the date for (1) Produce substantially the same Sec. which it is requesting to change from levels of producer and consumer risk as 90.701 Applicability. Selective Enforcement Auditing to the Cum Sum procedure described in 90.702 Definitions. Production Line Testing; and this subpart that mean emissions of an 90.703 Production line testing by the manufacturer. (5) It is not carrying a negative credit engine family are below the appropriate 90.704 Maintenance of records; submittal of balance at the time it changes from standards (FEL, where applicable); information. Production Line Testing to Selective (2) Provide for continuous rather than 90.705 Right of entry and access. Enforcement Auditing. point-in-time sampling; and 90.706 Engine sample selection. (e) The procedures described in this (3) Include an appropriate decision 90.707 Test procedures. subpart are optional for small volume mechanism for determining 90.708 Cumulative Sum (CumSum) engine manufacturers and small volume noncompliance upon which the Procedure. engine families as defined in this part, Administrator can suspend or revoke 90.709 Calculation and reporting of test and for engine families certified to a the certificate of conformity. results. level at least 50% below the applicable 90.710 Compliance with criteria for § 90.704 Maintenance of records; HC+NOX (NMHC+NOX) standard (FEL if production line testing. submittal of information. applicable). Engine families for which 90.711 Suspension and revocation of (a) The manufacturer of any new certificates of conformity. the manufacturer opts not to conduct 90.712 Request for public hearing. testing under this subpart pursuant to small SI engine subject to any of the 90.713 Administrative procedures for this paragraph shall be subject to the provisions of this subpart must public hearing. Selective Enforcement Auditing establish, maintain, and retain the procedures of Subpart F of this part. following adequately organized and Subpart HÐManufacturer Production indexed records: Line Testing Program § 90.702 Definitions. (1) General records. A description of all equipment used to test engines in § 90.701 Applicability. The definitions in subpart A of this part apply to this subpart. The following accordance with § 90.703. Subpart D of (a) Except as described in paragraph definitions also apply to this subpart. this part sets forth relevant equipment (b) of this section, the requirements of Configuration means any requirements in §§ 90.304, 90.305, this subpart are applicable to all Phase subclassification of an engine family 90.306, 90.307, 90.308, 90.309, 90.310 2 nonroad engines subject to the which can be described on the basis of and 90.313. provisions of subpart A of this part. gross power, emission control system, (2) Individual records. These records (b) The requirements of this subpart governed speed, injector size, engine pertain to each production line test are applicable to all handheld engine calibration, and other parameters as conducted pursuant to this subpart and families described in paragraph (a) of designated by the Administrator. include: this section unless otherwise exempted Test sample means the collection of (i) The date, time, and location of in this part. Manufacturers of engines selected from the population of each test; nonhandheld engine families described an engine family for emission testing. (ii) The number of hours of service in paragraph (a) of this section may accumulated on the test engine when choose between the Production Line § 90.703 Production line testing by the the test began and ended; Testing Program described in this manufacturer. (iii) The names of all supervisory subpart for all of their engine families (a) Manufacturers of small SI engines personnel involved in the conduct of and the Selective Enforcement Auditing shall test production line engines from the production line test; Program described in Subpart F of this each engine family according to the (iv) A record and description of any part for all of their engine families, provisions of this subpart. adjustment, repair, preparation or subject to the restrictions of paragraph (b) Production line engines must be modification performed prior to and/or (d) of this section. tested using the test procedure specified subsequent to approval by the (c) Nonhandheld engine in subpart E of this part except that the Administrator pursuant to manufacturers shall notify EPA of their Administrator may approve minor § 90.707(b)(1), giving the date, selection when they begin their first variations that the Administrator deems associated time, justification, name(s) of Phase 2 model year’s certification. necessary to facilitate efficient and the authorizing personnel, and names of (d) A manufacturer of nonhandheld economical testing where the all supervisory personnel responsible Phase 2 engines may change from the manufacturer demonstrates to the for the conduct of the repair; Production Line Testing program satisfaction of the Administrator that (v) If applicable, the date the engine described in this subpart to the such variations will not significantly was shipped from the assembly plant, Selective Enforcement Auditing impact the test results. Any adjustable associated storage facility or port program described in Subpart F of this engine parameter must be set to values facility, and the date the engine was part and vice versa, provided that: or positions that are within the range received at the testing facility; (1) It does so for all of its engine recommended to the ultimate purchaser, (vi) A complete record of all emission families at the same time; unless otherwise specified by the tests performed pursuant to this subpart (2) When changing from Production Administrator. The Administrator may (except tests performed directly by Line Testing to Selective Enforcement specify values within or without the EPA), including all individual Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4021 worksheets and/or other documentation one or more EPA enforcement officers engine which is being, has been, or will relating to each test, or exact copies may enter during operating hours and be used for production line or other thereof, in accordance with the record upon presentation of credentials any of testing. requirements specified in §§ 90.405 and the following places: (2) By written request, signed by the 90.406; and (1) Any facility, including ports of Assistant Administrator for Air and (vii) A brief description of any entry, where any engine to be Radiation, and served on the significant events during testing not introduced into commerce or any manufacturer, a manufacturer may be otherwise described under paragraph emission-related component is compelled to cause the personal (a)(2) of this section, commencing with manufactured, assembled, or stored; appearance of any employee at such a the test engine selection process and (2) Any facility where any test facility before an EPA enforcement including such extraordinary events as conducted pursuant to this or any other officer. Any such employee who has engine damage during shipment. subpart or any procedure or activity been instructed by the manufacturer to (3) The manufacturer must establish, connected with such test is or was appear will be entitled to be maintain and retain general records, performed; accompanied, represented, and advised pursuant to paragraph (a)(1) of this (3) Any facility where any test engine by counsel. section, for each test cell that can be is present; and (d) EPA enforcement officers are used to perform emission testing under (4) Any facility where any record authorized to seek a warrant or court this subpart. required under § 90.704 or other order authorizing the EPA enforcement (b) The manufacturer must retain all document relating to this subpart or any officers to conduct the activities records required to be maintained under other subpart of this part is located. authorized in this section, as this subpart for a period of one year (b) Upon admission to any facility appropriate, to execute the functions after completion of all testing required referred to in paragraph (a) of this specified in this section. EPA for the engine family in a model year. section, EPA enforcement officers are enforcement officers may proceed ex Records may be retained as hard copy authorized to perform the following parte to obtain a warrant or court order (i.e., on paper) or reduced to microfilm, inspection-related activities: whether or not the EPA enforcement floppy disk, or some other method of (1) To inspect and monitor any aspect officers first attempted to seek data storage, depending upon the of engine manufacture, assembly, permission from the manufacturer or the manufacturer’s record retention storage, testing and other procedures, party in charge of the facility(ies) in procedure; provided, that in every case, and to inspect and monitor the facilities question to conduct the activities all the information contained in the in which these procedures are authorized in this section. hard copy is retained. conducted; (e) A manufacturer must permit an (c) The manufacturer must, upon (2) To inspect and monitor any aspect EPA enforcement officer(s) who request by the Administrator, submit the of engine test procedures or activities, presents a warrant or court order to following information with regard to including test engine selection, conduct the activities authorized in this engine production: preparation and service accumulation, section as described in the warrant or (1) Projected production or actual emission test cycles, and maintenance court order. The manufacturer must also production for each engine and verification of test equipment cause those in charge of its facility or a configuration within each engine family calibration; facility operated for its benefit to permit for which certification has been (3) To inspect and make copies of any entry and access as authorized in this requested and/or approved; records or documents related to the section pursuant to a warrant or court (2) Number of engines, by assembly, storage, selection, and testing order whether or not the manufacturer configuration and assembly plant, of an engine; and controls the facility. In the absence of a scheduled for production or actually (4) To inspect and photograph any warrant or court order, an EPA produced. part or aspect of any engine and any enforcement officer(s) may conduct the (d) Nothing in this section limits the component used in the assembly thereof activities authorized in this section only Administrator’s discretion to require a that is reasonably related to the purpose upon the consent of the manufacturer or manufacturer to establish, maintain, of the entry. the party in charge of the facility(ies) in retain or submit to EPA information not (c) EPA enforcement officers are question. specified by this section. authorized to obtain reasonable (f) It is not a violation of this part or (e) All reports, submissions, assistance without cost from those in the Clean Air Act for any person to notifications, and requests for approval charge of a facility to help the officers refuse to permit an EPA enforcement made under this subpart must be perform any function listed in this officer(s) to conduct the activities addressed to: Manager, Engine subpart and they are authorized to authorized in this section if the Compliance Programs Group (6403J), request the manufacturer to make officer(s) appears without a warrant or U.S. Environmental Protection Agency, arrangements with those in charge of a court order. Washington, DC 20460. facility operated for the manufacturer’s (g) A manufacturer is responsible for (f) The manufacturer must benefit to furnish reasonable assistance locating its foreign testing and electronically submit the results of its without cost to EPA. manufacturing facilities in jurisdictions production line testing using EPA’s (1) Reasonable assistance includes, where local law does not prohibit an standardized format. The Administrator but is not limited to, clerical, copying, EPA enforcement officer(s) from may exempt manufacturers from this interpretation and translation services; conducting the entry and access requirement upon written request with the making available on an EPA activities specified in this section. EPA supporting justification. enforcement officer’s request of will not attempt to make any personnel of the facility being inspected inspections which it has been informed § 90.705 Right of entry and access. during their working hours to inform local foreign law prohibits. (a) To allow the Administrator to the EPA enforcement officer of how the determine whether a manufacturer is facility operates and to answer the § 90.706 Engine sample selection. complying with the provisions of this officer’s questions; and the performance (a) At the start of each model year, the subpart or other subparts of this part, on request of emission tests on any small SI engine manufacturer will begin 4022 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

to randomly select engines from each n t95 section) is the lesser of thirty tests per engine family for production line testing model year or one percent of projected at a rate of one percent of the projected 2 ...... 6.31 annual production for that engine eligible sales of that family. Each engine 3 ...... 2.92 family for that model year. will be selected from the end of the 4 ...... 2.35 (9) Manufacturers may elect to test 5 ...... 2.13 additional engines. Additional engines, assembly line. 6 ...... 2.02 (1) For newly certified engine families: 7 ...... 1.94 whether tested in accordance with the After two engines are tested, the 8 ...... 1.90 testing procedures specified in § 90.707 manufacturer will calculate the required 9 ...... 1.86 or not, may not be included in the sample size for the model year for each 10 ...... 1.83 Sample Size and Cumulative Sum pollutant (HC+NOX(NMHC+NOX) and 11 ...... 1.81 equation calculations as defined in CO) according to the Sample Size 12 ...... 1.80 paragraph (b)(1) of this section and Equation in paragraph (b) of this 13 ...... 1.78 § 90.708(a), respectively. However, such section. 14 ...... 1.77 additional test results may be used as (2) For carry-over engine families: 15 ...... 1.76 16 ...... 1.75 appropriate to ‘‘bracket’’ or define the After one engine is tested, the 17 ...... 1.75 boundaries of the production duration manufacturer will combine the test with 18 ...... 1.74 of any emission nonconformity the last test result from the previous 19 ...... 1.73 determined under this subpart. Such model year and then calculate the 20 ...... 1.73 additional test data must be identified required sample size for the model year 21 ...... 1.72 and provided to EPA with the submittal for each pollutant according to the 22 ...... 1.72 of the official CumSum results. Sample Size Equation in paragraph (b) 23 ...... 1.72 (c) The manufacturer must produce of this section. 24 ...... 1.71 and assemble the test engines using its (b)(1) Manufacturers will calculate the 25 ...... 1.71 26 ...... 1.71 normal production and assembly required sample size for the model year 27 ...... 1.71 process for engines to be distributed for each pollutant for each engine family 28 ...... 1.70 into commerce. using the Sample Size Equation in this 29 ...... 1.70 (d) No quality control, testing, or paragraph. N is calculated for each 30 ...... 1.70 assembly procedures shall be used on pollutant from each test result. The ∞ ...... 1.645 any test engine or any portion thereof, higher of the two values for the number including parts and subassemblies, that N indicates the number of tests required (3) A manufacturer must distribute have not been or will not be used during for the model year for an engine family. the testing of the remaining number of the production and assembly of all other N is recalculated for each pollutant after engines needed to meet the required engines of that family, unless the each test. Test results used to calculate sample size N, evenly throughout the Administrator approves the the variables in the following Sample remainder of the model year. modification in production or assembly Size Equation must be final deteriorated (4) After each new test, the required procedures in advance. test results as specified in § 90.709(c): sample size, N, is recalculated using updated sample means, sample standard § 90.707 Test procedures. 2 deviations and the appropriate 95% (a)(1) For small SI engines subject to  ()t ∗σ  N =  95  +1 confidence coefficient. the provisions of this subpart, the ()x− FEL  (5) A manufacturer must continue prescribed test procedures are specified testing and updating each engine in subpart E of this part. Where: family’s sample size calculations (2) The Administrator may, on the N = required sample size for the model according to paragraphs (b)(1) through basis of a written application by a year. (b)(4) of this section until a decision is manufacturer, prescribe test procedures t95 = 95% confidence coefficient. It is made to stop testing as described in other than those specified in paragraph dependent on the actual number of paragraph (b)(6) of this section or a (a)(1) of this section for any small SI tests completed, n, as specified in noncompliance decision is made engine the Administrator determines is the table in paragraph (b)(2) of this pursuant to § 90.710(b). not susceptible to satisfactory testing section. It defines one-tail, 95% (6) If, at any time throughout the using procedures specified in paragraph confidence intervals. model year, the calculated required (a)(1) of this section. o = actual test sample standard sample size, N, for an engine family is (b)(1) The manufacturer may not deviation calculated from the less than or equal to the actual sample adjust, repair, prepare, or modify any following equation: size, n, and the sample mean, x, for HC test engine and may not perform any + NOX (NMHC+NOX) and CO is less emission test on any test engine unless ∑ − 2 than or equal to the FEL or standard if this adjustment, repair, preparation, ()Xi x σ = no FEL, the manufacturer may stop modification and/or test is documented n −1 testing that engine family. in the manufacturer’s engine assembly xii = emission test result for an (7) If, at any time throughout the and inspection procedures and is individual engine. model year, the sample mean, x, for HC actually performed by the manufacturer x = mean of emission test results of the + NOX (NMHC+NOX) or CO is greater on every production line engine or actual sample. than the FEL or standard if no FEL, the unless this adjustment, repair, FEL = Family Emission Limit or manufacturer must continue testing that preparation, modification and/or test is standard if no FEL. engine family at the appropriate required or permitted under this subpart n = The actual number of tests maximum sampling rate. or is approved in advance by the completed in an engine family. (8) The maximum required sample Administrator. (2) The following table specifies the size for an engine family (regardless of (2) The Administrator may adjust or actual number of tests (n) & 1-tail the required sample size, N, as cause to be adjusted any engine confidence coefficients (t95): calculated in paragraph (b)(1) of this parameter which the Administrator has Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4023

determined to be subject to adjustment necessary adjustment or repair only Ci=max [0 or (Ci-1+Xi-(FEL+F))] for certification, Production Line after the initial test of the engine, except Where: Testing and Selective Enforcement in cases where the Administrator has Ci=The current CumSum statistic. Audit testing, to any setting within the determined that the test would be Ci-1=The previous CumSum statistic. physically adjustable range of that impossible or unsafe to perform or Prior to any testing, the CumSum parameter, as determined by the would permanently damage the engine. statistic=0 (i.e. C0=0). Administrator, prior to the performance Engine manufacturers must report to the Xi=The current emission test result for of any test. However, if the idle speed Administrator, in the quarterly report an individual engine. parameter is one which the required by § 90.709(e), all adjustments FEL=Family Emission Limit (the Administrator has determined to be or repairs performed on test engines standard if no FEL). subject to adjustment, the Administrator prior to each test. F=0.25×σ. may not adjust it or require that it be (f) If an engine cannot complete the adjusted to any setting which causes a service accumulation or an emission test (2) After each test pursuant to lower engine idle speed than would because of a malfunction, the paragraph (a)(1) of this section, Ci is have been possible within the manufacturer may request that the compared to the action limit, H, the physically adjustable range of the idle Administrator authorize either the quantity which the CumSum statistic speed parameter if the manufacturer had repair of that engine or its deletion from must exceed, in two consecutive tests, accumulated 12 hours of service on the the test sequence. before the engine family may be engine under paragraph (c) of this (g) Testing. A manufacturer must test determined to be in noncompliance for section, all other parameters being engines with the test procedure a regulated pollutant for purposes of identically adjusted for the purpose of specified in subpart E of this part to § 90.710. the comparison. The manufacturer may demonstrate compliance with the Where: be requested to supply information applicable FEL (or standard where there H=The Action Limit. It is 5.0×σ, and is necessary to establish an alternate is no FEL). If alternate or special test a function of the standard minimum idle speed. The procedures pursuant to regulations at deviation, σ. Administrator, in making or specifying § 90.120 are used in certification, then σ=is the sample standard deviation and these adjustments, may consider the those alternate procedures must be used is recalculated after each test. effect of the deviation from the in production line testing. (b) After each engine is tested, the manufacturer’s recommended setting on (h) Retesting. (1) If an engine CumSum statistic shall be promptly emission performance characteristics as manufacturer reasonably determines updated according to the CumSum well as the likelihood that similar that an emission test of an engine is Equation in paragraph (a) of this section. settings will occur on in-use engines. In invalid because of a procedural error, (c)(1) If, at any time during the model determining likelihood, the test equipment problem, or engine year, a manufacturer amends the Administrator may consider factors performance problem that causes the application for certification for an such as, but not limited to, the effect of engine to be unable to safely perform a engine family as specified in § 90.122(a) the adjustment on engine performance valid test, the engine may be retested. A by performing an engine family characteristics and information from test is not invalid simply because the modification (i.e., a change such as a similar in-use engines. emission results are high relative to running change involving a physical (c) Service Accumulation. (1) Unless other engines of the family. Emission modification to an engine, a change in otherwise approved by the results from all tests must be reported to specification or setting, the addition of Administrator, prior to performing EPA. The engine manufacturer must a new configuration, or the use of a exhaust emission production line also include a detailed explanation of different deterioration factor) with no testing, the manufacturer may the reasons for invalidating any test in changes to the FEL (where applicable), accumulate on each test engine a the quarterly report required in all previous sample size and CumSum number of hours of service equal to the § 90.709(e). If a test is invalidated statistic calculations for the model year greater of 12 hours or the number of because of an engine performance will remain unchanged. hours the manufacturer accumulated problem, the manufacturer must (2) If, at any time during the model during stabilization in the certification document in detail the nature of the year, a manufacturer amends the process for each engine family. For problem and the repairs performed in application for certification for an catalyst-equipped engines, the order to use the after-repair test results engine family as specified in § 90.122(a) manufacturer must accumulate a for the original test results. number of hours equal to the number of (2) Routine retests may be conducted by modifying its FEL (where applicable) hours accumulated to represent if the manufacturer conducts the same for future production, as a result of an stabilized emissions on the engine used number of tests on all engines in the engine family modification, the to obtain certification. family. The results of these tests must be manufacturer must continue its (2) Service accumulation must be averaged according to procedures of calculations by inserting the new FEL performed in a manner using good § 90.709. into the sample size equation as engineering judgment to obtain specified in § 90.706(b)(1) and into the emission results representative of § 90.708 Cumulative Sum (CumSum) CumSum equation in paragraph (a) of production line engines. Procedure. this section. All previous calculations (d) Unless otherwise approved by the (a) (1) Manufacturers must construct remain unchanged. If the sample size Administrator, the manufacturer may separate CumSum Equations for each calculation indicates that additional not perform any maintenance on test regulated pollutant (HC+NOX tests are required, then those tests must engines after selection for testing. (NMHC+NOX) and CO) for each engine be performed. CumSum statistic (e) If an engine is shipped to a remote family. Test results used to calculate the calculations must not indicate that the facility for production line testing, and variables in the CumSum Equations family has exceeded the action limit for an adjustment or repair is necessary must be final deteriorated test results as two consecutive tests. Where applicable, because of shipment, the engine defined in § 90.709(c). The CumSum the manufacturer’s final credit report as manufacturer must perform the Equation follows: required by § 90.210 must break out the 4024 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules credits that result from each FEL and manufacturer must submit to the regulations under 40 CFR Part 90. No corresponding CumSum analysis for the Administrator a report which includes emission-related changes to production set of engines built to each FEL. the following information: processes or quality control procedures (3) If, at any time during the model (1) The location and description of the for the engine family tested have been year, a manufacturer amends the manufacturer’s or other’s exhaust made during this production line testing application for certification for an emission test facilities which were program that affect engines from the engine family as specified in § 90.122(a) utilized to conduct testing reported production line. All data and (or for an affected part of the year’s pursuant to this section; information reported herein is, to the production in cases where there were (2) Total production and sample sizes, best of (Company Name) knowledge, one or more mid-year engine family N and n, for each engine family; true and accurate. I am aware of the modifications), by modifying its FEL (3) The FEL (standard, if no FEL) penalties associated with violations of (where applicable) for past and/or future against which each engine family was the Clean Air Act and the regulations production, without performing an tested; thereunder. (Authorized Company engine modification, all previous (4) A description of the process to Representative.) sample size and CumSum statistic obtain engines on a random basis; calculations for the model year must be (5) A description of the test engines; § 90.710 Compliance with criteria for recalculated using the new FEL. If the (6) For each test conducted: production line testing. sample size calculation indicates that (i) A description of the test engine, (a) A failed engine is one whose final additional tests are required, then those including: deteriorated test results pursuant to tests must be performed. The CumSum (A) Configuration and engine family § 90.709(c), for HC + NOX (NMHC+NOX) statistic recalculation must not indicate identification; or CO exceeds the applicable Family that the family has exceeded the action (B) Year, make, and build date; Emission Limit (FEL)or standard if no limit for two consecutive tests. Where (C) Engine identification number; and FEL. applicable, the manufacturer’s final (D) Number of hours of service (b) An engine family shall be credit report as required by § 90.210 accumulated on engine prior to testing; determined to be in noncompliance, if must break out the credits that result (ii) Location where service at any time throughout the model year, from each FEL and corresponding accumulation was conducted and the CumSum statistic, Ci, for HC + NOX CumSum analysis for the set of engines description of accumulation procedure (NMHC+NOX) or CO, is greater than the built to each FEL. and schedule; action limit, H, for that pollutant, for (iii) Test number, date, test procedure two consecutive tests. § 90.709 Calculation and reporting of test used, initial test results before and after results. rounding, final test results before and § 90.711 Suspension and revocation of (a) Initial test results are calculated after rounding and final deteriorated test certificates of conformity. following the applicable test procedure results for all exhaust emission tests, (a) The certificate of conformity is specified in § 90.707(a). The whether valid or invalid, and the reason suspended with respect to any engine manufacturer rounds these results to the for invalidation, if applicable; failing pursuant to § 90.710 (a) effective number of decimal places contained in (iv) A complete description of any from the time that testing of that engine the applicable emission standard adjustment, modification, repair, is completed. expressed to one additional significant preparation, maintenance, and/or (b) The Administrator may suspend figure. testing which was performed on the test the certificate of conformity for an (b) Final test results are calculated by engine, was not reported pursuant to engine family which is determined to be summing the initial test results derived any other paragraph of this subpart, and in noncompliance pursuant to in paragraph (a) of this section for each will not be performed on all other § 90.710(b). This suspension will not test engine, dividing by the number of production engines; occur before thirty days after the engine tests conducted on the engine, and (v) A CumSum analysis, as required family is determined to be in rounding to the same number of decimal in § 90.708, of the production line test noncompliance and the Administrator places contained in the applicable results for each engine family; and has notified the manufacturer of its standard expressed to one additional (vi) Any other information the intent to suspend. During this thirty day significant figure. Administrator may request relevant to period the Administrator will work with (c) The final deteriorated test results the determination whether the new the manufacturer to achieve appropriate for each test engine are calculated by engines being manufactured by the production line changes to avoid the applying the appropriate deterioration manufacturer do in fact conform with need to halt engine production, if factors, derived in the certification the regulations with respect to which possible. The Administrator will process for the engine to the final test the certificate of conformity was issued; approve or disapprove any such results, and rounding to the same (7) For each failed engine as defined production line changes proposed to number of decimal places contained in in § 90.710(a), a description of the address a family that has been the applicable standard. remedy and test results for all retests as determined to be in noncompliance (d) If, at any time during the model required by § 90.711(g); under this subpart within 15 days of year, the CumSum statistic exceeds the (8) The date of the end of the engine receipt. If the Administrator does not applicable action limit, H, in two manufacturer’s model year production approve or disapprove such a proposed consecutive tests for any regulated for each engine family; and change within such time period, the pollutant, (HC+NOX (NMHC+NOX) or (9) The following signed statement proposed change shall be considered CO) the engine family may be and endorsement by an authorized approved. determined to be in noncompliance and representative of the manufacturer: (c) If the results of testing pursuant to the manufacturer must notify EPA This report is submitted pursuant to these regulations indicate that engines within two working days of such Sections 213 and 208 of the Clean Air of a particular family produced at one exceedance by the Cum Sum statistic. Act. This production line testing plant of a manufacturer do not conform (e) Within 30 calendar days of the end program was conducted in complete to the regulations with respect to which of each quarter, each engine conformance with all applicable the certificate of conformity was issued, Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4025 the Administrator may suspend the completion of testing on the failed many engines as needed from the certificate of conformity with respect to engine, which contains a description of modified engine family so that the that family for engines manufactured by the remedy and test results for each CumSum statistic, as calculated in the manufacturer at all other plants. engine in addition to other information § 90.708(a) using the newly assigned (d) Notwithstanding the fact that that may be required by this part. FEL if applicable, falls below the action engines described in the application for (h) Once a certificate for a failed limit; and certification may be covered by a engine family has been suspended (3) When the requirements of certificate of conformity, the pursuant to paragraph (b) or (c) of this paragraphs (i)(1) and (i)(2) of this Administrator may suspend such section, the manufacturer must take the section are met, the Administrator shall certificate immediately in whole or in following actions before the reissue the certificate or issue a new part if the Administrator finds any one Administrator will consider reinstating certificate, as the case may be, to of the following infractions to be the certificate: include that family. As long as the substantial: (1) Submit a written report to the CumSum statistic remains above the (1) The manufacturer refuses to Administrator which identifies the action limit, the revocation remains in comply with any of the requirements of reason for the noncompliance of the effect. this subpart. engines, describes the proposed remedy, (j) At any time subsequent to a (2) The manufacturer submits false or including a description of any proposed suspension of a certificate of conformity incomplete information in any report or quality control and/or quality assurance for a test engine pursuant to paragraph information provided to the measures to be taken by the (a) of this section, but not later than 15 Administrator under this subpart. manufacturer to prevent future days (or such other period as may be (3) The manufacturer renders occurrences of the problem, and states allowed by the Administrator) after inaccurate any test data submitted the date on which the remedies will be notification of the Administrator’s under this subpart. implemented; and decision to suspend or revoke a (4) An EPA enforcement officer is (2) Demonstrate that the engine family certificate of conformity in whole or in denied the opportunity to conduct for which the certificate of conformity part pursuant to paragraph (b), (c), or (f) activities authorized in this subpart and has been suspended does in fact comply of this section, a manufacturer may a warrant or court order is presented to with the regulations of this part by request a hearing as to whether the tests the manufacturer or the party in charge testing as many engines as needed so have been properly conducted or any of the facility in question. that the CumSum statistic, as calculated sampling methods have been properly (5) An EPA enforcement officer is in § 90.708(a), falls below the action applied. unable to conduct activities authorized limit. Such testing must comply with (k) Any suspension of a certificate of in § 90.705 because a manufacturer has the provisions of this part. If the conformity under paragraph (d) of this located its facility in a foreign manufacturer elects to continue testing section shall: jurisdiction where local law prohibits individual engines after suspension of a (1) Be made only after the those activities. certificate, the certificate is reinstated manufacturer concerned has been (e) The Administrator shall notify the for any engine actually determined to be offered an opportunity for a hearing manufacturer in writing of any in conformance with the Family conducted in accordance with §§ 90.712 suspension or revocation of a certificate Emission Limits (or standards if no FEL) and 90.713; and of conformity in whole or in part, except through testing in accordance with the (2) Not apply to engines no longer in that the certificate is immediately applicable test procedures, provided the possession of the manufacturer. suspended with respect to any failed that the Administrator has not revoked (l) After the Administrator suspends engines as provided for in paragraph (a) the certificate pursuant to paragraph (f) or revokes a certificate of conformity of this section. of this section. pursuant to this section and prior to the (f) The Administrator may revoke a (i) Once the certificate has been commencement of a hearing under certificate of conformity for an engine revoked for an engine family, if the § 90.712, if the manufacturer family after the certificate has been manufacturer desires to continue demonstrates to the Administrator’s suspended pursuant to paragraph (b) or introduction into commerce of a satisfaction that the decision to suspend (c) of this section if the proposed modified version of that family, the or revoke the certificate was based on remedy for the nonconformity, as following actions must be taken before erroneous information, the reported by the manufacturer to the the Administrator may issue a certificate Administrator shall reinstate the Administrator, is one requiring a design for that modified family: certificate. change or changes to the engine and/or (1) If the Administrator determines (m) To permit a manufacturer to avoid emission control system as described in that the proposed change(s) in engine storing non-test engines while the application for certification of the design may have an effect on emission conducting subsequent testing of the affected engine family. performance deterioration, the noncomplying family, a manufacturer (g) Once a certificate has been Administrator shall notify the may request that the Administrator suspended for a failed engine, as manufacturer within five working days conditionally reinstate the certificate for provided for in paragraph (a) of this after receipt of the report in paragraph that family. The Administrator may section, the manufacturer must take the (h)(1) of this section whether reinstate the certificate subject to the following actions before the certificate is subsequent testing under this subpart following condition: the manufacturer reinstated for that failed engine: will be sufficient to evaluate the must commit to performing offsetting (1) Remedy the nonconformity; proposed change or changes or whether measures that remedy the (2) Demonstrate that the engine additional testing will be required; nonconformity at no expense to the conforms to the applicable standards (2) After implementing the change or owners, and which are approved in (FELs, where applicable) by retesting changes intended to remedy the advance by the Administrator for all the engine in accordance with these nonconformity, the manufacturer must engines of that family produced from regulations; and demonstrate that the modified engine the time the certificate is conditionally (3) Submit a written report to the family does in fact conform with the reinstated if the CumSum statistic does Administrator, after successful regulations of this part by testing as not fall below the action limit. 4026 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

§ 90.712 Request for public hearing. § 90.713 Administrative procedures for 34. Section 90.803 is amended by (a) If the manufacturer disagrees with public hearing. revising paragraph (c) to read as follows: the Administrator’s decision to suspend The administrative procedures for a public hearing requested under this § 90.803 Emission defect information or revoke a certificate or disputes the report. basis for an automatic suspension subpart shall be those procedures set pursuant to § 90.711(a), the forth in the regulations found at * * * * * (c) The manufacturer must submit manufacturer may request a public §§ 90.513 through 90.516. References in defect information reports to EPA’s hearing. § 90.513 to § 90.511(j), § 90.512(c)(2), Engine Compliance Programs Group not (b) The manufacturer’s request shall § 90.511(e), § 90.512, § 90.511(d), more than 15 working days after an be filed with the Administrator not later § 90.503, § 90.512(c) and § 90.512(b) emission-related defect is found to affect than 15 days after the Administrator’s shall be deemed to refer to § 90.711(j), 25 or more engines manufactured in the notification of his or her decision to § 90.712(c)(2), § 90.711(e), § 90.712, same certificate or model year. suspend or revoke, unless otherwise § 90.711(d), § 90.703, and § 90.712(c) Information required by paragraph (d) of specified by the Administrator. The and § 90.712(b), respectively. References this section that is either not available manufacturer shall simultaneously serve to ‘‘test orders’’ in § 90.513 can be within 15 working days or is two copies of this request upon the ignored. significantly revised must be submitted Manager of the Engine Compliance 31. Subpart I is amended by revising to EPA’s Engine Compliance Programs Programs Group and file two copies the subpart heading to read as follows: Group as it becomes available. with the Hearing Clerk for the Agency. Subpart IÐEmission-related Defect * * * * * Failure of the manufacturer to request a Reporting Requirements, Voluntary hearing within the time provided 35. Section 90.805 is amended by Emission Recall Program, Ordered revising paragraph (a) to read as follows: constitutes a waiver of the right to a Recalls hearing. Subsequent to the expiration of § 90.805 Reports, voluntary recall plan the period for requesting a hearing as of 32. Section 90.801 is amended by filing, record retention. right, the Administrator may, in his or designating the existing text as (a) Send the defect report, voluntary her discretion and for good cause paragraph (a) and adding paragraphs (b), recall plan, and the voluntary recall shown, grant the manufacturer a hearing (c), (d), (e), (f) and (g) to read as follows: progress report to: Group Manager, to contest the suspension or revocation. Engine Compliance Programs Group, (c) A manufacturer shall include in § 90.801 Applicability. * * * * * (6403-J), Environmental Protection the request for a public hearing: Agency, Washington, D.C. 20460. (1) A statement as to which engine (b) Phase 2 engines subject to * * * * * configuration(s) within a family is to be provisions of subpart B of this part are 36. A new § 90.808 is added to the subject of the hearing; and subject to recall regulations specified in subpart I to read as follows (2) A concise statement of the issues 40 CFR part 85, subpart S, except as to be raised by the manufacturer at the otherwise provided in this section. § 90.808 Ordered recall provisions. (c) Reference to section 214 of the hearing, except that in the case of the (a) Effective with respect to Phase 2 hearing requested under § 90.711(j), the Clean Air Act in 40 CFR 85.1801 (a) is deemed to be a reference to section 216 small SI engines: hearing is restricted to the following (1) If the Administrator determines issues: of the Clean Air Act. (d) Reference to section 202 of the Act that a substantial number of any class or (i) Whether tests have been properly in 40 CFR 85.1802(a) is deemed to be a category of engines, although properly conducted (specifically, whether the reference to section 213 of the Act. maintained and used, do not conform to tests were conducted in accordance (e) Reference to ‘‘family particulate the regulations prescribed under section with applicable regulations under this emission limits as defined in part 86 213 of the Act when in actual use part and whether test equipment was promulgated under section 202 of the throughout their useful life (as defined properly calibrated and functioning); Act’’ in 40 CFR 85.1803(a) and under § 90.105), the Administrator shall (ii) Whether sampling plans and 85.1805(a)(1) is deemed to be a immediately notify the manufacturer of statistical analyses have been properly reference to ‘‘family emission limits as such nonconformity and require the applied (specifically, whether sampling defined in subpart C of this part 90 manufacturer to submit a plan for procedures and statistical analyses promulgated under section 213 of the remedying the nonconformity of the specified in this subpart were followed Act’’. engines with respect to which such and whether there exists a basis for (f) Reference to ‘‘vehicles or engines’’ notification is given. distinguishing engines produced at throughout 40 CFR part 85, subpart S, (i) The manufacturer’s plan shall plants other than the one from which is deemed to be a reference to ‘‘Phase 2 provide that the nonconformity of any engines were selected for testing which nonroad small SI engines at or below 19 such engines which are properly used would invalidate the Administrator’s kw.’’ and maintained will be remedied at the decision under § 90.711(c)); (g) In addition to the requirements in expense of the manufacturer. (3) A statement specifying reasons 40 CFR 85.1805(a)(9) for Phase 2 (ii) If the manufacturer disagrees with why the manufacturer believes it will engines include a telephone number such determination of nonconformity prevail on the merits of each of the which may be used to report difficulty and so advises the Administrator, the issues raised; and in obtaining recall repairs. Administrator shall afford the (4) A summary of the evidence which 33. Section 90.802 is amended by manufacturer and other interested supports the manufacturer’s position on adding a sentence at the end of the persons an opportunity to present their each of the issues raised. introductory text to read as follows: views and evidence in support thereof (d) A copy of all requests for public at a public hearing. Unless, as a result hearings will be kept on file in the § 90.802 Definitions. of such hearing, the Administrator Office of the Hearing Clerk and will be ** * The definitions of 40 CFR withdraws such determination of made available to the public during 85.1801 also apply to this part. nonconformity, the Administrator shall, Agency business hours. * * * * * within 60 days after the completion of Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4027 such hearing, order the manufacturer to 38. Section 90.906 is amended by § 90.1003 Prohibited acts. provide prompt notification of such revising paragraphs (a) introductory text (a) * * * nonconformity in accordance with and (a)(3) introductory text to read as (2) (i) For a person to fail or refuse to paragraph (a)(2) of this section. The follows: permit access to or copying of records manufacturer shall comply in all or to fail to make reports or provide respects with the requirements of this § 90.906 Manufacturer-owned exemption information required under § 90.1004. and precertification exemption. subpart. (ii) For a person to fail or refuse to (2) Any notification required to be (a) Any manufacturer owned nonroad permit entry, testing or inspection given by the manufacturer under engine, as defined by § 90.902, is authorized under §§ 90.126, 90.506, paragraph (a)(1) of this section with exempt from § 90.1003, without 90.705, 90.1004, or 90.1209. respect to any class or category of application, if the manufacturer (iii) For a person to fail or refuse to engines shall be given to dealers, complies with the following terms and perform tests or to have tests performed ultimate purchasers, and subsequent conditions: as required under §§ 90.119, 90.504, purchasers (if known) in such manner * * * * * 90.703, 90.1004, 90.1203, or 90.1250. and containing such information as (3) Unless the requirement is waived (iv) For a person to fail to establish or required in subparts I and M of this part. or an alternative procedure is approved maintain records as required under (3)(i) Prior to an EPA ordered recall, by the Director, Engine Programs and §§ 90.209, 90.704, 90.805, 90.1004, or the manufacturer may perform a Compliance Division, the manufacturer 90.1308. voluntary emissions recall pursuant to must permanently affix a label to each (v) For a person to fail to submit a regulations at § 90.804. Such nonroad engine on exempt status. This remedial plan as required under manufacturer is subject to the reporting label should: § 90.808. and recordkeeping requirements of * * * * * * * * * * § 90.805. (4) * * * (ii) Once EPA determines that a 39. Section 90.909 is amended by (i) To sell, offer for sale, or introduce substantial number of engines fail to revising paragraph (c) to read as follows: or deliver into commerce, a nonroad conform with the requirements of engine unless the manufacturer has section 213 of the Act or this part, the § 90.909 Export exemptions. * * * * * complied with the requirements of manufacturer will not have the option of § 90.1103. a voluntary recall. (c) EPA will maintain a list of foreign (b) The manufacturer bears all cost countries that have in force nonroad * * * * * obligation a dealer incurs as a result of emission standards identical to U.S. (iii) To fail or refuse to comply with a requirement imposed by paragraph (a) EPA standards and have so notified the requirements of § 90.808. of this section. The transfer of any such EPA. This list may be obtained by * * * * * cost obligation from a manufacturer to a writing to the following address: Group (b) * * * dealer through franchise or other Manager, Engine Compliance Programs (4) Certified nonroad engines shall be agreement is prohibited. Group, Engine Programs and used in all equipment or vehicles that (c) Any inspection of an engine for Compliance Division (6403–J), are self-propelled, portable, purposes of paragraph (a)(1) of this Environmental Protection Agency, transportable, or are intended to be section, after its sale to the ultimate Washington, D.C. 20460. New nonroad propelled while performing their purchaser, is to be made only if the engines exported to such countries must function, unless the manufacturer of the owner of such vehicle or engine comply with U.S. EPA certification equipment or vehicle can prove that the voluntarily permits such inspection to regulations. vehicle or equipment will be used in a be made, except as may be provided by * * * * * manner consistent with paragraph (2) of any state or local inspection program. the definition of nonroad engine in 40. Section 90.911 is revised to read § 90.3. Nonroad vehicle and equipment Subpart JÐExclusion and Exemption as follows: manufacturers may continue to use of Nonroad Engines From Regulations § 90.911 Submission of exemption noncertified nonroad engines built prior 37. Section 90.905 is amended by requests. to the applicable implementation date of revising paragraph (f) to read as follows: Requests for exemption or further the Phase 1 regulations in this part until noncertified engine inventories are § 90.905 Testing exemption. information concerning exemptions and/or the exemption request review depleted; further after the applicable * * * * * procedure should be addressed to: implementation date of the Phase 2 (f) A manufacturer of new nonroad Group Manager, Engine Compliance regulations in this part, nonroad vehicle engines may request a testing exemption Programs Group, Engine Programs and and equipment manufacturers may to cover nonroad engines intended for Compliance Division (6403J), continue to use Phase 1 engines until use in test programs planned or Environmental Protection Agency, Phase 1 engine inventories are depleted. anticipated over the course of a Washington, D.C. 20460. Stockpiling (i.e., build up of an subsequent one-year period. Unless inventory of uncertified engines or otherwise required by the Director, Subpart KÐProhibited Acts and Phase 1 engines beyond normal Engine Programs and Compliance General Enforcement Provisions business practices to avoid or delay Division, a manufacturer requesting compliance with the Phase 1 or Phase such an exemption need only furnish 41. Section 90.1003 is amended by 2 regulations in this part, respectively) the information required by paragraphs revising paragraphs (a)(2), (a)(4)(i), will be considered a violation of this (a)(1) and (d)(2) of this section along (b)(4), and (b)(5) and by redesignating section. with a description of the recordkeeping paragraphs (a)(4)(iii) and (a)(4)(iv) as (5) A new nonroad engine, intended and control procedures that will be paragraphs (a)(4)(iv) and (a)(4)(v) solely to replace an engine in a piece of employed to assure that the engines are respectively, and by adding new nonroad equipment that was originally used for purposes consistent with paragraphs (a)(4)(iii) and (b)(6) to read produced with an engine manufactured § 90.1004(b). as follows: prior to the applicable implementation 4028 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules date as described in §§ 90.2, 90.103 and similar alternate language approved in Phase 1 requirements, (or identified and 90.106, or with an engine that was advance by the Administrator: ‘‘THIS labeled by their manufacturer to be originally produced in a model year in engine does not comply with Federal identical to engines previously certified which less stringent standards under nonroad or on-highway emission under Phase 1 standards). To be eligible this part were in effect, shall not be requirements. Sale or installation of this for this provision, the equipment subject to the requirements of § 90.106 engine for any purpose other than as a manufacturer must have demonstrated or prohibitions and provisions of replacement engine in a nonroad to the satisfaction of the Administrator paragraphs (a)(1) and (b)(4) of this vehicle or piece of nonroad equipment that no certified Phase 2 engine is section provided that: whose original engine was not certified, available with suitable physical or (i) The engine manufacturer has or was certified to less stringent performance characteristics to power ascertained that no engine produced by emission standards than those that the equipment. The equipment itself or the manufacturer of the engine apply to the year of manufacture of this manufacturer must also certify to the that is being replaced, if different, and engine, is a violation of Federal law Administrator that the equipment model certified to the requirements of this subject to civil penalty’’; and has not undergone any redesign which subpart, is available with the (vii) Where the replacement engine is could have facilitated conversion of the appropriate physical or performance intended to replace an engine built after equipment to accommodate a Phase 2 characteristics to repower the the applicable implementation date of engine. equipment. Certified engines may be regulations under this part, but built to (iii) An equipment manufacturer ascertained to lack appropriate physical less stringent emission standards than which is unable to obtain suitable Phase characteristics where the engine is too are currently applicable, the 2 engines and which can not obtain large for the engine compartment or can replacement engine shall be identical in relief under any other provision of this not be connected to existing manifolds, all material respects to a certified part, may, prior to the date on which the air supplies, water supplies, fuel configuration of the same or later model manufacturer would become in supplies or controls without year as the engine being replaced. noncompliance with the requirement to modifications that add substantial cost (6)(i) Regulations elsewhere in this use Phase 2 engines, apply to the or result in reliability or safety concerns. part notwithstanding, for three model Administrator to be allowed to continue Certified engines may be ascertained to years after the phase-in of each set of using Phase 1 engines, through the 2002 Phase 2 standards; i.e. through the 2004 lack appropriate performance model year for Class I engines and model year for Class I nonhandheld characteristics if the horsepower or through the 2006 model year for Class engines and through model year 2008 rated speed of the engine are II, III, IV and V engines, subject to the for handheld engines and Class II significantly different from the original following criteria: nonhandheld engines, small volume engine to reduce the ability of the (A) The inability to obtain Phase 2 equipment to perform its function safely equipment manufacturers as defined in this part may continue to use, and engines is despite the manufacturer’s and efficiently; and best efforts and is the result of an (ii) The engine manufacturer or its engine manufacturers may continue to supply, engines certified to Phase 1 extraordinary action on the part of the agent: engine manufacturer that was outside (A) Accepts the old engine in standards (or identified and labeled by the control of and could not be exchange for the new engine and their manufacturer to be identical to reasonably foreseen by the equipment destroys the old engine; or engines previously certified under (B) Obtains documentation from the Phase 1 standards), provided the manufacturer; such as canceled purchaser sufficient to identify the old equipment manufacturer has production or shipment, last minute engine and prove that the purchaser has demonstrated to the satisfaction of the certification failure, unforeseen engine had the old engine destroyed by a Administrator that no certified Phase 2 cancellation, plant closing, work separate party; and engine is available with suitable stoppage or other such circumstance; (iii) The engine manufacturer retains physical or performance characteristics and records of the engine purchasers and the to power a piece of nonhandheld (B) The inability to market the makes and models of equipment for equipment in production prior to the particular equipment will bring which the engines are sold. Such 2001 model year, or handheld substantial economic hardship to the records shall be made available to the equipment in production prior to the equipment manufacturer resulting in a Administrator upon request and shall be 2002 model year. The equipment major impact on the equipment sufficient to enable the Administrator to manufacturer must also certify to the manufacturer’s solvency. determine the quantities of engines Administrator that the equipment model (iv) The written permission from the being applied to different makes and has not undergone any redesign which Administrator to the equipment models of equipment; and could have facilitated conversion of the manufacturer shall serve as permission (iv) The engine manufacturer submits equipment to accommodate a Phase 2 for the engine manufacturer to provide a written report to EPA, within 90 days engine. such Phase 1 engines required by the of the end of each model year in which (ii) Regulations elsewhere in this part equipment manufacturers under this any uncertified replacement engines, or notwithstanding, for the duration of the paragraph (b)(6). Such engines will not engines certified to an earlier model Phase 2 regulations in this part, count against an engine manufacturer’s year’s standards, were sold describing equipment manufacturers who certify to final (100%) handheld phase-in the numbers of such engines sold during the Administrator that annual eligible percentage requirements, and are the model year; and sales of a particular model of equipment excluded from the nonhandheld (v) The engine manufacturer has will not exceed 500 for a nonhandheld certification, averaging, banking and determined and documented that the model in production prior to the 2001 trading program. As Phase 1 engines, engine being replaced was no older than model year, or 2500 for a handheld these engines are exempt from ten (10) years old or ten (10) model model in production prior to the 2002 Production Line Testing requirements years old; and model year, may continue to use in that under subpart H of this part and in-use (vi) The replacement engine is clearly model, and engine manufacturers may testing requirements under subpart M of labeled with the following language, or continue to supply, engines certified to this part. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4029

Subpart LÐEmission Warranty and 90.1205 In-use test program reporting rationale behind the choice of each Maintenance Instructions requirements. family and configuration that the 90.1206 [Reserved] Administrator shall use to determine 42. Section 90.1103 is amended by the 90.1207 Bench aging adjustment factor whether the manufacturer’s plan meets revising paragraph (b) to read as follows: testing. 90.1208 Bench aging adjustment; criterion the objective of generating in-use data § 90.1103 Emission warranty, warranty for usage, calculation of adjustment on substantially all of a manufacturer’s period. factor, reporting requirements. engines within a reasonable time period, and periodically updating that data. * * * * * 90.1209 Entry and access. 90.1210—90.1249 [Reserved] (c) Based upon the schedule required (b)(1) The manufacturer of each new 90.1250 Field durability and in-use in paragraph (a) of this section, any plan Phase 1 small SI engine must warrant to emission performance demonstration submitted under paragraph (b) of this the ultimate purchaser and each program for nonhandheld engines using section, and/or such other information subsequent purchaser that the engine is overhead valve technology. as it has available, the Administrator designed, built and equipped so as to may annually identify handheld engine conform at the time of sale with Subpart MÐIn-Use Compliance Testing for Handheld Engines; Bench families and at the Administrator’s applicable regulations under section 213 option, configurations within families of the Act, and the engine is free from Aging Adjustment; In-Use Durability Demonstration Testing for which the manufacturer must then defects in materials and workmanship subject to in-use testing as described in Nonhandheld Engines which cause such engine to fail to this section and in § 90.1204. For each conform with applicable regulations for § 90.1201 Applicability. model year, the Administrator may its warranty period. The requirements of this subpart from identify a number of engine families (2) The manufacturer of each new § 90.1201 through § 90.1249 are that is no greater than the number of Phase 2 small SI engine must warrant to applicable to all handheld Phase 2 handheld engine families produced in the ultimate purchaser and each engines subject to the provisions of that model year divided by four and subsequent purchaser that the engine is subpart A of this part. The requirements rounded to the nearest whole number. If designed, built, and equipped so as to of this subpart, except for those this calculation produces a value of conform for its designated useful life involving in-use credits, in §§ 90.1201, zero, then the Administrator may with applicable regulations under 90.1202, 90.1207, 90.1208, 90.1209 and identify no more than one engine family section 213 of the Act, and is free from those from § 90.1250 through § 90.1299 for in-use testing for that manufacturer. defects in materials and workmanship are applicable to nonhandheld Phase 2 The Administrator may identify families which cause such engine to fail to engines subject to the provisions of and configurations under this paragraph conform with applicable regulations for subpart A of this part. by approving the manufacturer’s plan its warranty period. described in paragraph (b) of this * * * * * § 90.1202 Definitions. section, or by providing a written 43. Section 90.1104 is amended by For the purposes of this subpart, directive to the manufacturer. adding paragraph (e) to read as follows: except as otherwise provided, the (d) For each engine family identified definitions in subparts A and C of this by the Administrator under paragraph § 90.1104 Furnishing of maintenance part apply to this subpart. (c) of this section, engine manufacturers instructions to ultimate purchaser. shall perform emission testing of an * * * * * § 90.1203 Manufacturer in-use testing appropriate sample of in-use engines (e) If a manufacturer includes in an program. from each engine family. Manufacturers advertisement a statement respecting (a) Unless otherwise approved by the shall submit data from this in-use the cost or value of emission control Administrator, at the time of the first testing to the Administrator. devices or systems, the manufacturer certification for each model year (e) Number of engines to be tested. An shall set forth in the statement the cost beginning with the 2002 model year, engine manufacturer shall test bench or value attributed to these devices or each manufacturer shall submit a aged or field aged in-use engines from systems by the Secretary of Labor schedule to the Administrator of the each engine family or family and (through the Bureau of Labor Statistics). Phase 2 engine families, their useful configuration identified by the The Secretary of Labor, and his or her lives, their design characteristics (two or Administrator. Engines to be tested shall representatives, has the same access for four stroke; catalyst or noncatalyst, etc.), have accumulated a number of hours this purpose to the books, documents, and their anticipated eligible sales, it pursuant to paragraph (g) of this section. papers, and records of a manufacturer as intends to produce, by model year, over The number of engines to be tested by the Comptroller General has to those of the subsequent four year period (the a manufacturer shall be determined by a recipient of assistance for purposes of model year now being certified plus the the following method: section 311 of the Act. next three model years). (1) A minimum of four (4) engines per 44. A new subpart, Subpart M is (b) At the time the manufacturer family provided that no engine fails any added to part 90 to read: submits the schedule required under standard. For each failing engine, two paragraph (a) of this section, the more engines shall be tested until the Subpart MÐIn-Use Compliance Testing for manufacturer may include a proposed total number of engines equals ten (10). Handheld Engines; Bench Aging plan for the Administrator’s review and (2) For small volume engine families Adjustment; In-Use Durability approval for the in-use testing of the Demonstration Testing for Nonhandheld for the identified model year or for Engines current model year and such future small volume engine manufacturers, a model years as it chooses to include. In minimum of two (2) engines per family Sec. such plans, the manufacturer shall 90.1201 Applicability. provided that no engine fails any 90.1202 Definitions. propose the in-use testing of individual standard. For each failing engine, two 90.1203 Manufacturer in-use testing engine families and engine more engines shall be tested until the program. configurations subject to the total number of engines equals ten (10). 90.1204 Maintenance, procurement, aging requirements of this subpart. Such plans (3) If an engine family was certified and testing of engines. shall include a discussion of the using carry over emission data and has 4030 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules been previously tested under paragraphs from the end users regarding the procedure, if any, that are not necessary (e)(1) or (e)(2) of this section (and mean accumulated usage, maintenance, to determine in-use compliance with results did not exceed any applicable operating conditions, and storage of the applicable emission standards. emission standard), then only one test engines. (g) If a selected test engine fails to engine for that family must be tested. If (2) Documents used in the comply with any applicable emission that one engine fails any pollutant, procurement process must be standard, the manufacturer shall make a testing must be conducted as outlined at maintained as required in § 90.121. reasonable effort, including paragraph (e)(1) or (e)(2) of this section, (3) Each engine of a sample to be field troubleshooting, repairing and retesting, whichever is appropriate. aged shall be assigned a random to determine the cause of (f) At the discretion of the number. Unless otherwise approved by noncompliance. The manufacturer must the Administrator, the engine with the Administrator, an engine manufacturer report all such reasons of lowest number shall be tested first, may test more engines than the minima noncompliance with the in-use test followed by the next higher number described in paragraph (e) of this report required pursuant to § 90.1205. section or may concede failure before until testing is completed. testing a total of ten (10) engines. (b)(1) For an engine family which is § 90.1205 In-use test program reporting (g) The Administrator may approve to be emission tested following bench requirements. aging, test engines shall be randomly alternatives to manufacturer in-use (a) The manufacturer shall submit to chosen from normal engine production testing as described in this subpart, that the Administrator within ninety (90) or storage; or randomly chosen from are designed to determine whether an days of completion of testing for a given normal handheld equipment production engine family is in compliance with model year’s engines, all emission or storage. applicable standards in use, where: testing results generated from the in-use (2) Each engine of a sample to be (1) Engines, in their production form, testing program. The following bench aged shall be assigned a random or when removed from the piece of information must be reported for each number. In emission testing of the equipment in which they were installed, test engine: cannot safely or practically be operated bench aged engines, the engine with the and tested pursuant to subparts D and lowest number shall be tested first, (1) Engine family; E of this part; or followed by the next higher number (2) Model; (2) The Administrator finds that until testing is completed. (3) Engine serial number; (c)(1) Bench aged engines must be unique or extraordinary circumstances (4) Date of manufacture; exist that support the need for aged on a dynamometer using a bench (5) Hours of use; alternative methods. aging cycle that has been shown to be (h) Collection of in-use engines. The capable of representing field aging for (6) Date and time of each test attempt; engine manufacturer shall bench age the appropriate technology subgroup (7) Results (if any) of each test engines to their full certified useful life pursuant to the regulations at §§ 90.1207 attempt; as described in subpart B of this part and 90.1208. (8) Schedules, descriptions and (2) Unless otherwise approved by the using a bench aging procedure approved justifications of all maintenance and/or Administrator, once an engine has by the Administrator under this subpart, adjustments performed; begun the bench aging process, it can be or the engine manufacturer shall (9) Schedules, descriptions and procure field aged engines which have terminated and deleted only for catastrophic failure or safety concerns justifications of all modifications and/or been operated for at least the engine’s repairs; and useful life. Unless otherwise approved requiring major engine repair, or by the Administrator, the manufacturer because testing of the engine family has (10) Determinations of shall complete emission testing of bench been completed based upon lower noncompliance. aged engines within 12 calendar months numbered engines. (b) The manufacturer must and complete emission testing of field (d) The manufacturer may perform electronically submit the information aged engines within 24 calendar months minimal set-to-spec maintenance on required in this section using EPA’s after receiving notice that the components of a test engine that are not electronic information format. The Administrator has identified a particular subject to parameter adjustment. Unless Administrator may exempt engine family for testing. Field aged otherwise approved by the manufacturers from this requirement engines may be procured from sources Administrator, maintenance to any test upon written request with supporting associated with the engine manufacturer engine may include only that which is justification as to the manufacturer’s (i.e., manufacturer established fleet listed in the owner’s instructions for lack of adequate information processing engines, etc.) or from sources not engines with the amount of service and technology. associated with the manufacturer (i.e., age of the test engine. Documentation of (c) The report required in paragraph consumer-owned engines, all maintenance and adjustments shall (a) of this section must include a listing independently-owned fleet engines, be maintained and retained as required of any test engines that were deleted etc.). by § 90.121. from the aging process or testing process (e) At least one valid emission test, and provide a technical justification to § 90.1204 Maintenance, procurement, according to the test procedure outlined support the deletion. aging and testing of engines. in subpart E of this part, is required for This section is applicable to handheld each test engine. Unless otherwise (d) All testing reports and requests for engines used for in-use testing pursuant approved by the Administrator, no other approvals made under this subpart shall to § 90.1203. emission testing or performance testing be addressed to: Manager, Engine (a) An in-use field aged engine must may be performed on a test engine prior Compliance Programs Group (6403–J), have a maintenance and use history to the testing at the end of hour U.S. Environmental Protection Agency, representative of actual in-use accumulation using the test procedure Washington, D.C. 20460. conditions. outlined in subpart E of this part. (e) The Administrator may approve (1) To comply with this requirement, (f) The Administrator may waive and/or require modifications to a a manufacturer must obtain information portions or requirements of the test manufacturer’s in-use testing programs. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4031

§ 90.1206 [Reserved] (d) Field aging of engines shall be described in paragraph (e)(1) of this performed in representative equipment section; § 90.1207 Bench aging adjustment factor testing. in the hands of residential customers, or (4) A description of the way in which professional users or in manufacturers’ individual engines will be selected, (a) This section is applicable to the fleets, except that a minimum of one uniquely identified and tracked for both bench aging procedures for handheld third of the field aged engines but not bench and field aging and for engines for in-use emission testing and less than one engine for a given engine subsequent emission testing; to the bench aging procedures for the family or technology subgroup, shall be (5) A description of the method by full useful life certification testing of aged in individual customer usage or in which each engine selected for field nonhandheld sidevalve engines and fleets where the engine manufacturer aging will be aged, the procedures for nonhandheld engines with does not carry out or exercise control determining and carrying out aftertreatment. over the engines’ maintenance or limit appropriate engine maintenance during (b) The bench aging adjustment their usage such that the engines are not field aging and bench aging, a procedure described in § 90.1208 shall used in a way that is representative of description and rationale for any be used to determine whether a given typical in-use engines. maintenance the manufacturer proposes bench aging cycle, approved for (e) For each engine family or to perform additional to routine adjustment factor testing by the technology subgroup for which a maintenance described in the Administrator, can be used to represent manufacturer desires to use bench maintenance schedule provided to the field aged engines for handheld in-use aging, the manufacturer or group of purchaser, and a description of records testing under this subpart or for manufacturers, as applicable, shall that will be kept of both bench and field certification of nonhandheld sidevalve propose to the Administrator the bench engine operation and maintenance; and engines or nonhandheld engines with aging cycle and an engine aging plan it (6) The location(s) of the facilities or aftertreatment; and, if so, what the intends or they intend to use to sites at which each bench and field aged appropriate adjustment factor should be. demonstrate the appropriateness of such engine will be aged and tested. If both the IWB and IWF as defined in cycle to represent field aged engines. (f) Upon approval by the § 90.1208 are less than or equal to 20% Such proposals may be made up to 48 Administrator of the bench aging cycle of the appropriate HC+NOX months prior to the start of a given for evaluation testing and the engine (NMHC+NOX) standard, then the subject model year. EPA shall reject such aging plan, the manufacturer shall bench aging cycle can be used to proposed aging cycles and/or engine conduct hour accumulation to the full generate emissions data for adjustment aging plans in writing, within 90 days regulatory useful life of the engines to represent field aged emissions. of receipt, or they shall be considered according to the approved engine aging (c) (1) Nothing in this section shall be approved for adjustment factor testing plan using the approved bench aging construed to prohibit different pursuant to this section and § 90.1208. cycle. Such aging shall be followed by manufacturers from jointly Such proposals shall include: emission testing pursuant to the demonstrating that a particular bench (1) A detailed description of the requirements of subpart E of this part. aging cycle, approved by the engine families a cycle is intended to At its option, the manufacturer may age Administrator for adjustment factor cover, a justification satisfactory to the handheld commercial engines to 75% of testing, may be used to represent the Administrator that the engines can be their regulatory useful life for bench field aged emissions of engines of a expected to have similar emission aging adjustment testing. particular technology subgroup when deterioration characteristics, a (g) Handheld engines aged for they each agree to use the same bench justification of the appropriateness of adjustment factor testing pursuant to the aging cycle, when they each contribute the subject cycle to represent field aging requirements of this section may not be field and bench aged test engines for of the engines the cycle is intended to used in the Manufacturer In-use Test testing of that technology subgroup cover and data sufficient for the Program required under § 90.1203. under § 90.1208, and when they each Administrator to ascertain whether the (h) The Administrator may require provide justification satisfactory to the bench aging cycle has been previously that testing under this section and the Administrator that the engines can be determined to represent field aging for evaluation of the appropriateness of a expected to have similar emission any other engine family under the bench aging cycle to represent field deterioration characteristics and that a provisions of this section and § 90.1208; aging under § 90.1208, be repeated for a reasonable basis exists for such joint (2) A detailed description of the particular engine family or technology testing. proposed bench aging cycle including, subgroup as often as every five years; (2) Unless otherwise approved by the but not limited to, such parameters as except that the Administrator may Administrator, a manufacturer duration at each throttle setting, require that such testing be repeated participating or desiring to participate sequencing of throttle changes, loading more frequently in model years prior to in a joint adjustment factor testing and load changes, hot starts and cold the 2006 model year. program may not enter or drop out of starts, idles, acceleration times, (1) The Administrator shall notify a the joint program for that technology presence of accessory loads, periods of manufacturer or group of manufacturers subgroup after the adjustment factor shutdown and other factors as the of the requirement to conduct a bench derived from the program has been used Administrator may require; aging adjustment factor program for a one or more times for certification of (3) A description of each engine to be particular engine family or technology nonhandheld engines or in-use testing aged in the field and on the bench, subgroup and the period for completion of handheld engines. When a including make, model, engine family, of the program. The time period for manufacturer does drop out, the displacement, power rating, rated speed completion shall be no less than one adjustment factor must be recalculated and other such information as the year for engines having 500 or 1000 without that manufacturer’s data. When Administrator may require to enable the hour useful lives. an additional manufacturer is allowed Administrator to determine whether (2) Within sixty days of the date of the to join, the adjustment factor must be such engines are appropriate for Administrator’s notice, the recalculated to reflect the data generated evaluating the bench aging cycle for the manufacturer or group of manufacturers by the new manufacturer’s engines. engine families or technology subgroup shall provide a plan for the 4032 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

Administrator’s review and approval (6) Tabulations of all emission test t90=The appropriate 90% critical point meeting the requirements of paragraph results and all inputs and outcomes of from Student’s t table for 90% (e) of this section including a proposed the equations found in § 90.1208; and confidence and nb¥1 observations; bench aging cycle and an engine aging (7) A statement signed by an this value will decrease as nb plan. appropriate official of the manufacturer increases. (i) Upon completion of engine aging responsible for compliance of engines Sb=The HC+NOX (NMHC+NOX) sample and testing pursuant to the requirements with Federal emission requirements that standard deviation of the group of of this section, engine manufacturers clearly states that all engine selection, bench aged engines, where: wishing to use bench aging and the aging, maintenance, testing, results calculation, and data evaluation was 2 =() − ∑ − 2 adjustment factors calculated pursuant sb1/ n 1 () X x b to § 90.1208 for in-use emission testing performed in full accordance with the of handheld engines or for certification requirements under this part. nb=The number of bench aged engines tested. of nonhandheld sidevalve engines or § 90.1208 Bench aging adjustment; nonhandheld engines with criterion for usage, calculation of (2)(i) For the 90% confidence interval aftertreatment, as applicable, shall adjustment factor, reporting requirements. about the mean of the group of field provide a report to the Administrator (a) Manufacturers desiring to use aged engines, F90: ± describing the aging and testing bench aging prior to performing in-use F90=x¯ f IWf conducted under this section and emission tests on handheld engines or Where: § 90.1208. Such report shall be prior to performing certification testing F90=The 90% confidence interval about submitted no less than 90 days before on nonhandheld sidevalve engines or the mean of the group of field aged the initiation of any such bench aging nonhandheld engines with engines. for in-use or certification testing on the aftertreatment, must first demonstrate x¯ f=The HC+NOX (NMHC+NOX) sample engines and engine families covered by that the chosen bench aging cycle mean of the group of field aged the plan approved under this section. appropriately represents field aging as engines. The Administrator shall disapprove the determined under this section and IWf=The confidence interval width for report within 30 days of the date of § 90.1207. Where a bench aging cycle is the group of field aged engines as receipt, or the report shall be shown to appropriately represent field defined by the equation in automatically approved and the aging under this section and § 90.1207, paragraph (c)(2)(ii) of this section. manufacturer may use the bench aging manufacturers shall calculate separate cycle and adjustment factors described (ii) IWf is defined by the following multiplicative bench aging adjustment equation: in the report for its bench aging factors as described in this section to activities of the subject families. Such adjust the HC+NOX (NMHC+NOX) and = ∗() report shall contain the following CO emissions of bench aged engines. IWf t90 s f/ n f information about the field/bench (b) A minimum of six engines from Where: adjustment program conducted under each technology subgroup shall be aged t90=The appropriate 90% critical point this section and § 90.1208: and tested. Three of these engines must from Student’s t table for 90% (1) An identifying description of the be aged on the bench and three must be confidence and nb¥1 observations; bench aging cycle sufficient for the aged in the field. this value will decrease as nb Administrator to ascertain which cycle (c) Separate 90% confidence intervals increases. proposed pursuant to this section has shall be calculated around the HC+NOX Sf=The HC+NOX (NMHC+NOX) sample been evaluated; (NMHC+NOX) mean of the bench aged standard deviation of the group of engines and the HC+NOX (NMHC+NOX) (2) A description of all engines field aged engines, where: selected for bench aging and field aging mean of the field aged engines. The confidence intervals are independent of for this engine family or technology 2 =() − ∑() − 2 subgroup, as applicable. Such each other and are calculated according sf1/ n 1 X x f to the following equations: description shall include the make, nf=The number of field aged engines model, engine family, displacement, (1)(i) For the 90% confidence interval tested. about the mean of the group of bench power rating, rated speed, unique (d) Both IWb and IWf must be rounded identifying description, and other such aged engines, B90: to the same number of significant digits ± information as the Administrator may B90=xÅb IWb as contained in the appropriate require; Where: standard.

(3) A description of all maintenance B90=The 90% confidence interval about (e) If both IWb and IWf are less than performed on each engine during hour the mean of the group of bench aged or equal to 20% of the appropriate HC accumulation, including a detailed engines. +NOX (NMHC+NOX) standard as explanation of the need for any x¯ b=The HC+NOX (NMHC+NOX) sample defined by § 90.103, then separate maintenance not contained in the mean of the group of bench aged Bench Aging Adjustment factors, AFs, maintenance schedule for that model engines. can be calculated for HC+NOX engine provided to engine owners; IWb=The confidence interval width (NMHC+NOX) and CO as follows: (4) A description of how each engine for the group of bench aged engines as AF=the maximum of [(x¯ f / x¯ b) or 1.0] was aged (e.g., bench cycle, field aged- defined by the equation in paragraph (f) If either or both confidence interval manufacturer fleet, or field aged- (c)(1)(ii) of this section. widths IWb or IWf is/are greater than individual customer); (ii) IWb is defined by the following 20% of the appropriate standard as (5) A description of any engine equation: defined by § 90.103, then the selected for aging pursuant to paragraph manufacturer may elect to test (i)(2) of this section that was deleted IW= t ∗() s/ n additional engines included and from aging or testing. Include a full b90 b b described in the plan approved under explanation of the rationale for deletion; Where: § 90.1207 and recalculate the relevant Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4033 statistics. Additional testing need only §§ 90.1210Ð90.1249 [Reserved.] objective of generating in-use data be done for the group that exceeds 20% sufficient to validate the § 90.1250 Field durability and in-use of the appropriate standard. After each emission performance demonstration appropriateness of the assigned dfs on a additional test, B90, F90, IWb and IWf program for nonhandheld engines using substantial portion of a manufacturer’s shall be recalculated according to overhead valve technology. engines within a reasonable time period, paragraph (c) of this section. Additional The testing required pursuant to this and providing for periodic revalidation engines may be added until such time section shall be for the purpose of of the assigned dfs. (d) If no plan submitted pursuant to as the newly calculated confidence validating the appropriateness of paragraph (c) of this section is approved interval width (IWb or IWf, or both) are assigned deterioration factors (dfs) or by the Administrator, then, based upon less than or equal to 20% of the manufacturer determined dfs used the schedule submitted pursuant to appropriate HC+NOX (NMHC+NOX) pursuant to § 90.104 to represent the paragraph (a) of this section and other standard as defined by § 90.103. When field aged deterioration of overhead both IWb or IWf are less than or equal available information, and considering valve technology engine families. For the field aging requirements of to 20% of the appropriate standard as brevity, such testing is referred to as df defined by § 90.103, then separate §§ 90.1207, 90.1208 and 90.104(h)(2), validation testing. and any requests from manufacturers to Bench Aging Adjustment Factors, AFs, (a) Unless otherwise approved by the may be calculated for each regulated work jointly, the Administrator may Administrator, at the time of the first provide a schedule of the overhead pollutant according to paragraph (e) of certification for each model year of this section. valve engine families and associated Phase 2 engines, each manufacturer quantities of engines that must be field (g) The adjustment factors calculated shall submit a schedule to the under paragraph (e) of this section shall aged to full useful life and in-use tested Administrator of the overhead valve during those four years to validate dfs. be multiplicatively applied to the technology engine families it intends to appropriate full useful life bench-aged (e) EPA shall not require any produce over the subsequent four year nonhandheld engine manufacturer to handheld in-use test results or to the period (the model year now being appropriate full useful life certification conduct df validation emission testing certified plus the next three model such that df validation emission testing test results of nonhandheld sidevalve years) including their useful lives, their engines or nonhandheld engines with when added to that testing of field aged design characteristics (i.e.; catalyst or engines proposed by the manufacturer aftertreatment for that engine family or noncatalyst, carbureted or fuel injected, technology subgroup for all under paragraph (b) of this section etc.), and their anticipated eligible sales. would require the manufacturer to manufacturers whose engines were (b) In the schedule submitted under tested in the test program for that emission test more than 24 total field paragraph (a) of this section, and for the aged engines in one calendar year for technology subgroup, until another same time period, the manufacturer bench aging adjustment program is bench aged field adjustment testing shall specify the engine families for pursuant to §§ 90.1207 and 90.1208, df conducted for that family or technology which it intends to conduct field/bench subgroup. generation testing pursuant to adjustment testing under §§ 90.1207 and § 90.104(h)(2), and df validation testing § 90.1209 Entry and access. 90.1208 and shall also specify the pursuant to this section. (a) To allow the Administrator to engine families for which it intends to (f) The Administrator may provide a determine whether a manufacturer is compute its own dfs pursuant to schedule for engine testing to validate complying with the provisions under § 90.104(h)(2). Such schedule shall dfs pursuant to this section by this subpart, EPA enforcement officers include an estimate of the number of approving the plan submitted by the or their authorized representatives, field aged engines that will be emission manufacturer under paragraph (c) of this upon presentation of credentials, shall tested each calendar year for the section, or by a written directive to the be permitted entry, during operating programs referenced in this paragraph. manufacturer under paragraph (d) of hours, into any of the following places: (c) At the time the manufacturer this section. Unless otherwise approved (1) Any facility where engines submits the schedule required under by the Administrator, for each test undergo or are undergoing bench aging, paragraph (a) of this section, the engine tested to fulfill the testing field aging, maintenance, repair, manufacturer may include a proposed schedule provided by the Administrator preparation for aging, selection for aging plan for the Administrator’s review and under paragraph (c) or (d) of this or emission testing. approval of the overhead valve engine section, the manufacturer shall conduct (2) Any facility where records or families, configurations and associated a baseline emission test at a number of documents related to any of activities quantities of engines it plans to field age hours equal to that on the corresponding described in paragraph (a)(1) of this to full useful life and in-use test during certification engine followed by field section are kept. those four years to determine the field aging to the certified useful life. Each (3) Any facility where any engine that aged dfs for engine families for which engine shall then be emission tested is being tested or aged, was tested or assigned dfs were used in certification. using the applicable test procedures aged or will be tested or aged is present. In such plans, the manufacturer: described in this part measuring all (b) Upon admission to any facility (1) May consider the number of field regulated pollutants. Field aging shall referred to in paragraph (a) of this aged engines it plans to test in each be performed in representative section, EPA enforcement officers or calendar year from paragraph (b) of this equipment in the hands of residential EPA authorized representatives are section and the limit on additional customers, or professional users or in authorized to perform those activities testing of field aged engines that can be manufacturers’ fleets, under usage and set forth in § 90.705 (b) and also to assigned by EPA pursuant to paragraph conditions representative of typical use. inspect and make copies of records (c) of this section. (1) Unless otherwise approved by the related to engine aging (service (2) Shall include a discussion of the Administrator, equipment shall be accumulation) and maintenance. rationale for the choice of each family considered to be representative if it is of (c) The provisions of § 90.705(c), (d), and configuration sufficient to enable the type (e.g., walk behind lawnmowers (e), (f) and (g) also apply to entry and the Administrator to determine whether or concrete saws) of equipment into access under this subpart. the manufacturer’s plan meets the which at least one third of the engines 4034 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules are installed. If no one application of the § 90.1302 Definitions. pursuant to the provisions of subpart C engine constitutes one third of sales, The definitions in subpart A of this of this part are not interchangeable with then equipment shall be representative part and the definition of ‘‘point of first credits generated and used in the if it is taken from either or both of the retail sale’’ from subpart C of this part handheld engine in-use credit program. two types of applications having the apply to this subpart. The following In-use credits under this subpart may largest U.S. sales volumes. definitions shall also apply to this not be used to address the emissions of (2) Unless otherwise approved by the subpart: any nonhandheld engine. Nor may Administrator, test engines that receive Averaging means the exchange of nonhandheld certification credits be maintenance additional to that handheld engine in-use emission credits used to address any in-use credit need recommended to the purchaser in the between engine families within a given determined under this subpart. owner’s manual shall not be considered manufacturer’s product line. (d) An engine family with a representative of typical use. Banked credits refer to positive compliance level, as determined by in- emission credits based on actual use testing pursuant to subpart M of this (g) No later than 90 days following the applicable production/sales volume as part and paragraph (h) of this section, end of each model year, each contained in the end of model year in- below the applicable standard to which manufacturer subject to this section use testing reports submitted to EPA. the engine family is certified may shall provide a tabulation, by engine Some or all of these banked credits may generate emission credits for averaging, family, of all engines undergoing hour be revoked if EPA review of the end of banking, or trading in the in-use credit accumulation under this regulation, the model year in-use testing reports or any program. number of hours accumulated on each subsequent audit action(s) uncovers (e) Positive credits generated in a engine, the equipment application for problems or errors. given model year may be used in that each engine and the basis for that choice Banking means the retention of model year and/or in any subsequent of equipment. Such tabulation shall handheld engine in-use emission credits model year during the Phase 2 program. include the engine family, the engine by the manufacturer generating the (f) A manufacturer of an engine family identification number assigned for emission credits or obtaining such with a compliance level exceeding the tracking purposes, the type of credits through trading, for use in future applicable standard to which the engine application, the projected test date and model year averaging or trading as family is certified, may, prior to the date the geographic location (city and state) permitted by these regulations. of the report required under paragraph where hour accumulation is occurring. Carry-over engine family means an (i) of this section, use previously banked Such tabulation, or a separate tabulation engine family which undergoes credits, purchase credits from another submitted at the same time, shall certification using carryover test data manufacturer, or perform additional contain all in-use test results that have from previous model years. testing pursuant to paragraph (h) of this been generated during the preceding Compliance level for an engine family section to address (as calculated model year. Such tabulation shall is determined by averaging the in-use elsewhere in this subpart) the associated include the engine family, the engine test results from each test engine of the credit deficit (negative credits or a need identification number assigned for family. The compliance level for an for credits). tracking purposes, the type of individual configuration may be (g) In the case of in-use testing of application, the applicable certification determined in cases where the engine families that were certified using deterioration factor and the calculated Administrator directs the testing of an carry-over data, and in the absence of HC+NOX deterioration factor individual configuration. other applicable test data acceptable to determined from the testing required in Emission credits or in-use credits the Administrator, the test results from this subpart. represent the amount of emission one model year’s testing shall apply to reduction or exceedance, for each 45. Subpart N is added to part 90 to up to four years of production of that regulated pollutant, by a handheld read as follows: family: the model year tested, the next engine family below or above, model year (if carried over to that year), Subpart NÐIn-Use Credit Program for respectively, the applicable certification and one or two previous model years (if New Handheld Engines standard to which the engine family is carried over from the previous year or certified. Emission reductions below the the two previous years, respectively). In- Sec. standard are considered ‘‘positive use credits shall be generated or used, 90.1301 Applicability. credits,’’ while emission exceedences 90.1302 Definitions. as appropriate. above the standard are considered 90.1303 General provisions. (h) A manufacturer must notify EPA 90.1304 Averaging. ‘‘negative or required credits.’’ Trading means the exchange of of plans to test additional engine 90.1305 Banking. families beyond those identified by EPA 90.1306 Trading. handheld engine in-use emission credits 90.1307 Credit calculation. between manufacturers and/or brokers. pursuant to regulations in subpart M of 90.1308 Maintenance of records. this part for the in-use testing program. 90.1309 Reporting requirements. § 90.1303 General provisions. Such notice must be submitted 30 days 90.1310 Request for hearing. (a) The in-use credit program for prior to initiation of service eligible Phase 2 handheld engines is accumulation. If the additional testing Subpart NÐIn-Use Credit Program for described in this subpart. Participation discovers an engine family to be in New Handheld Engines in this program is voluntary. noncompliance with the applicable standard, the testing must be treated as § 90.1301 Applicability. (b) Any handheld Phase 2 engine family subject to the provisions of if it were a failure of the normal in-use Phase 2 handheld engines subject to subpart A of this part is eligible to testing requirement of an engine family. the provisions of subpart A of this part participate in the in-use credit program If the additional testing shows the are eligible to participate in the in-use described in this subpart. engine family to be in compliance with credit program described in this subpart (c) Credits generated and used in the the applicable standard, in-use credits for HC +NOX (NMHC+NOX) and CO nonhandheld engine certification may be generated subject to the emissions. averaging, banking, and trading program provisions of this subpart. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules 4035

(i) Manufacturers must demonstrate a correct any error in calculating banked nearest gram. Consistent units are to be zero or positive credit balance under the credits, if necessary. used throughout the equation: in-use credit program for all regulated × × § 90.1306 Trading. Credits = Sales (Standard—CL) pollutants for a particular model year Power × Useful life × AF × LF within 90 days of the end of the in-use (a) A handheld engine manufacturer Where: testing of that model year’s engine may exchange positive in-use emission Useful Life = the useful life in hours families. At that time manufacturers credits with other handheld engine corresponding to the useful life must file a report with EPA pursuant to manufacturers through trading. category for which the engine § 90.1309. (b) In-use credits for trading can be family was certified. (j) Manufacturers shall maintain obtained from credits banked for model Power = the sales weighted maximum separate balances for HC+NO years prior to the model year of the X modal power, in kilowatts, as (NMHC+NOX) and CO credits. HC+NOX engine family requiring in-use credits. calculated from the applicable and NMHC+NOX credits are (c) Traded in-use credits can be used federal test procedure as described interchangeable with each other but not for averaging, banking, or further trading in this part. This is determined by with CO credits. transactions. (d) Unless otherwise approved by multiplying the maximum modal § 90.1304 Averaging. EPA, a manufacturer that generates power of each configuration within (a) A manufacturer may use averaging positive in-use credits must wait 30 the family by its eligible sales, across engine families to demonstrate a days after it has both completed in-use summing across all configurations zero or positive credit balance for a testing for the model year for which the and dividing by the eligible sales of model year. Positive credits to be used credits were generated and submitted the entire family. Where testing is in averaging may be obtained from the report required by § 90.1309(a) limited to certain configurations credits generated by another engine before it may transfer credits to another designated by the Administrator, family of the same model year, credits manufacturer or broker. the maximum modal power for the banked in previous model years, or (e) In the event of a negative credit individual configuration(s) shall be credits obtained through trading. balance resulting from a transaction, used. (b) Credits used to demonstrate a zero both the buyer and the seller are liable, Sales = the number of eligible U.S. sales, or positive credit balance must be used except in cases involving fraud. Engine as defined in subpart A of this part, at a rate of 1.1 to 1. families participating in a trade that for the engine family or leads to a negative credit balance may configuration as applicable. § 90.1305 Banking. be subject to recall under subparts I and Standard = The applicable emission (a) A manufacturer of a handheld M of this part if the engine manufacturer standard to which the engine family engine family with an in-use having the negative credit balance is was certified under subpart B of compliance level below the standard to unable or unwilling to obtain sufficient this part. which the engine family is certified for credits in the time allowed under CL = compliance level of the in-use a given model year may bank positive § 90.1303(i). testing for the subject pollutant in in-use credits for that model year for use g/kW-hr. in in-use averaging and trading. § 90.1307 Credit calculation. AF = adjustment factor for the number (b) A manufacturer may consider For each participating engine family, of tests conducted as determined credits to be banked, for use in future and for each regulated pollutant from the following table, except that averaging or trading, 30 days after the (HC+NOX (NMHC+NOX) and CO) when a manufacturer concedes submission of the report required by emission credits (positive or negative) failure before completion of testing § 90.1309(a). During the 30 day period are to be calculated according to the as permitted under § 90.1203(f), the EPA will work with the manufacturer to following equation and rounded to the adjustment factor shall be 1.0:

No. Engines tested ...... 1±5 6±7 8±9 10 or more. Adjustment factor ...... 0.5 0.75 0.9 1.0

LF = Load Factor of 0.85 for test cycle family for which the manufacturer fails credits, the discounting of credits that C. For manufacturers using to retain the records required under this are used and the final credit balance. alternative or special test cycles section or to provide such information Such report shall calculate credit approved by the Administrator, the to the Administrator upon request. generation or usage for past model years Load Factor is calculated using the and estimate credit generation or usage Load Factor formula for § 90.1309 Reporting requirements. for the next model year when carry over nonhandheld engines found in (a) Any manufacturer who families are tested pursuant to § 90.207. participates in the in-use credit program § 90.1303(g). The manufacturer may submit corrections to such end of model § 90.1308 Maintenance of records. is required to submit an in-use credit report with the end of the model year year reports in a final report for a period (a) Any manufacturer that is in-use testing report required under of up to 270 days after the end of the participating in the in-use credit § 90.1205 within 90 days of the end of in-use testing of a given model year’s program set forth in this subpart shall the in-use testing of a given model engine families. establish, maintain, and retain the year’s engine families. This report must (b) The calculation of eligible sales for records required by § 90.209 with show the calculation of credits from all end-of-year and final reports must be respect to its participation in the in-use the in-use testing conducted by the based on the location of the point of first credit program. manufacturer for a given model year’s retail sale (for example, retail customer (b) EPA may void ab initio a engines. Such report shall show the or dealer) also called the final product certificate of conformity for an engine applications of credits, the trading of purchase location. Upon advance 4036 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules written request, the Administrator will (e) If EPA or the manufacturer calculation of credits due to an error in consider other methods to track engines determines that a reporting error the ‘‘point of first retail sale’’ for credit calculation purposes that occurred on an end of model year report information from the time of the original provide high levels of confidence that previously submitted to EPA under this end of model year report. eligible sales are accurately counted. subpart, or an engine family in-use § 90.1310 Request for hearing. (c) Reports shall be submitted to: testing report submitted to EPA under Manager, Engine Compliance Programs subpart I of this part, the manufacturer’s An engine manufacturer may request Group (6403–J), U.S. Environmental credits and credit calculations will be a hearing on the Administrator’s voiding Protection Agency, SW., Washington, recalculated. Erroneous positive credits of an engine family’s certificate of DC 20460. will be void. Erroneous negative credits conformity under § 90.1308(b). The (d) A manufacturer that fails to submit may be adjusted by EPA. An update of administrative procedures for a public a timely end of year report as required previously submitted ‘‘point of first hearing requested under this subpart in paragraph (a) of this section will be retail sale’’ information is not shall be those procedures set forth in considered ineligible to have considered an error and no increase in §§ 90.512, 90.513, 90.514 and 90.515. participated in the in-use credit the number of credits will be allowed [FR Doc. 98–941 Filed 1–26–98; 8:45 am] program. unless an actual error occurred in the BILLING CODE 6560±50±P federal register January 27,1998 Tuesday Notice Bank, NationalAssociation(MBNA); Proposed Exemptions;MBNAAmerica Administration Pension andWelfareBenefits Department ofLabor Part III 4037 4038 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

DEPARTMENT OF LABOR shall include a copy of the notice of the secondary market for such proposed exemption as published in the certificates; and Pension and Welfare Benefits Federal Register and shall inform (3) The continued holding of Administration interested persons of their right to certificates acquired by a plan pursuant [Application No. D±10304, et al.] comment and to request a hearing to Section I.A.(1) or (2). (where appropriate). Notwithstanding the foregoing, Section I.A. does not provide an Proposed Exemptions; MBNA America SUPPLEMENTARY INFORMATION: The Bank, National Association (MBNA) proposed exemptions were requested in exemption from the restrictions of applications filed pursuant to section sections 406(a)(1)(E), 406(a)(2) and 407 AGENCY: Pension and Welfare Benefits for the acquisition or holding of a 408(a) of the Act and/or section Administration, Labor. certificate on behalf of an Excluded 4975(c)(2) of the Code, and in ACTION: Plan, as defined in Section III.K. below, Notice of Proposed Exemptions. accordance with procedures set forth in by any person who has discretionary 29 CFR Part 2570, Subpart B (55 FR SUMMARY: This document contains authority or renders investment advice 32836, 32847, August 10, 1990). notices of pendency before the with respect to the assets of the Effective December 31, 1978, section Department of Labor (the Department) of Excluded Plan that are invested in 102 of Reorganization Plan No. 4 of proposed exemptions from certain of the certificates.1 prohibited transaction restrictions of the 1978 (43 FR 47713, October 17, 1978) B. Effective as of the date this Employee Retirement Income Security transferred the authority of the Secretary proposed exemption is granted, the Act of 1974 (the Act) and/or the Internal of the Treasury to issue exemptions of restrictions of sections 406(b)(1) and Revenue Code of 1986 (the Code). the type requested to the Secretary of 406(b)(2) of the Act and the taxes Labor. Therefore, these notices of imposed by section 4975(a) and (b) of Written Comments and Hearing proposed exemption are issued solely Requests the Code, by reason of section by the Department. 4975(c)(1)(E) of the Code, shall not Unless otherwise stated in the Notice The applications contain apply to: of Proposed Exemption, all interested representations with regard to the (1) The direct or indirect sale, persons are invited to submit written proposed exemptions which are exchange or transfer of certificates in the comments, and with respect to summarized below. Interested persons initial issuance of certificates between exemptions involving the fiduciary are referred to the applications on file the trust, the sponsor or an underwriter prohibitions of section 406(b) of the Act, with the Department for a complete and a plan when the person who has requests for hearing within 45 days from statement of the facts and discretionary authority or renders the date of publication of this Federal representations. investment advice with respect to the Register Notice. Comments and requests MBNA America Bank, National Association investment of plan assets in the for a hearing should state: (1) The name, (MBNA), Located in Newark, Delaware, certificates is (a) an obligor with respect address, and telephone number of the (Application No. D–10304) to receivables contained in the trust person making the comment or request, constituting 0.5 percent or less of the Proposed Exemption and (2) the nature of the person’s fair market value of the obligations or interest in the exemption and the The Department is considering receivables contained in the aggregate manner in which the person would be granting an exemption under the undivided interest in the trust allocated adversely affected by the exemption. A authority of section 408(a) of the Act to the certificates of the relevant series, request for a hearing must also state the and section 4975(c)(2) of the Code and or (b) an affiliate of a person described issues to be addressed and include a in accordance with the procedures set in (a); if general description of the evidence to be forth in 29 CFR part 2570, subpart B (55 (i) The plan is not an Excluded Plan; presented at the hearing. FR 32836, 32847, August 10, 1990). (ii) Solely in the case of an acquisition of certificates in connection with the ADDRESSES: All written comments and Section I—Transactions request for a hearing (at least three initial issuance of the certificates, at copies) should be sent to the Pension A. Effective as of the date this least 50 percent of each class of and Welfare Benefits Administration, proposed exemption is granted, the certificates in which plans have Office of Exemption Determinations, restrictions of sections 406(a) and 407(a) invested is acquired by persons Room N–5649, U.S. Department of of the Act and the taxes imposed by independent of the members of the Labor, 200 Constitution Avenue, NW., section 4975(a) and (b) of the Code, by Restricted Group, as defined in Section Washington, DC 20210. Attention: reason of section 4975(c)(1)(A) through III.L., and at least 50 percent of the Application No. stated in each Notice of (D) of the Code, shall not apply to the aggregate undivided interest in the trust Proposed Exemption. The applications following transactions involving trusts allocated to the certificates of a series is for exemption and the comments and certificates evidencing interests acquired by persons independent of the received will be available for public therein: Restricted Group; inspection in the Public Documents (1) The direct or indirect sale, (iii) A plan’s investment in each class Room of Pension and Welfare Benefits exchange or transfer of certificates in the of certificates of a series does not exceed Administration, U.S. Department of initial issuance of certificates between 25 percent of all of the certificates of Labor, Room N–5507, 200 Constitution the trust, the sponsor or an underwriter that class outstanding at the time of the Avenue, NW., Washington, DC 20210. and an employee benefit plan subject to acquisition; the Act or section 4975 of the Code (a (iv) Immediately after the acquisition Notice to Interested Persons plan) when the sponsor, servicer, trustee of the certificates, no more than 25 Notice of the proposed exemptions or insurer of a trust, the underwriter of percent of the assets of a plan with will be provided to all interested the certificates representing an interest persons in the manner agreed upon by in the trust, or an obligor is a party in 1 Section I.A. provides no relief from sections 406(a)(1)(E), 406(a)(2) and 407 for any person the applicant and the Department interest with respect to such plan; rendering investment advice to an Excluded Plan within 15 days of the date of publication (2) The direct or indirect acquisition within the meaning of section 3(21)(A)(ii) and in the Federal Register. Such notice or disposition of certificates by a plan in regulation 29 CFR 2510.3–21(c). Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4039 respect to which the person has in all material respects in the prospectus the trust, from a person other than the discretionary authority or renders or private placement memorandum trustee or sponsor, unless such fee investment advice is invested in provided to, investing plans before they constitutes a ‘‘qualified administrative certificates representing the aggregate purchase certificates issued by the fee’’ as defined in Section III.U. below. undivided interest in a trust allocated to trust; 3 D. Effective as of the date that the the certificates of a series and (3) The addition of new receivables or proposed exemption is granted, the containing receivables sold or serviced designation of new accounts, or the restrictions of sections 406(a) and 407(a) by the same entity; 2 and removal of receivables in previously- of the Act and the taxes imposed by (v) Immediately after the acquisition designated accounts, meets the terms sections 4975(a) and (b) of the Code, by of the certificates, not more than 25 and conditions for such additions, reason of sections 4975(c)(1)(A) through percent of the assets of a plan with designations or removals as are (D) of the Code, shall not apply to any respect to which the person has described in the prospectus or private transaction to which those restrictions discretionary authority or renders placement memorandum of such or taxes would otherwise apply merely investment advice is invested in certificates, which terms and conditions because a person is deemed to be a party certificates representing an interest in have been approved by Standard & in interest or disqualified person the trust, or trusts containing Poor’s Ratings Services, Moody’s (including a fiduciary) with respect to a receivables sold or serviced by the same Investors Service, Inc., Duff & Phelps plan by virtue of providing services to entity. For purposes of paragraphs Credit Rating Co., or Fitch Investors the plan (or by virtue of having a B.(1)(iv) and B.(1)(v) only, an entity Service, L.P., or their successors relationship to such service provider as shall not be considered to service (collectively, the Rating Agencies), and described in section 3(14)(F), (G), (H) or receivables contained in a trust if it is does not result in the certificates (I) of the Act or section 4975(e)(2)(F), merely a subservicer of that trust; receiving a lower credit rating from the (G), (H) or (I) of the Code), solely (2) The direct or indirect acquisition Rating Agencies than the then current because of the plan’s ownership of or disposition of certificates by a plan in rating of the certificates; and certificates. the secondary market for such (4) The series of which the certificates Section II—General Conditions certificates, provided that conditions set are a part will be subject to an forth in Section I. B.(1)(i), (iii) through ‘‘Economic Pay Out Event’’ (as defined A. The relief provided under Section (v) are met; and in Section III.X.), which is set forth in I is available only if the following (3) The continued holding of the pooling and servicing agreement and conditions are met: (1) The acquisition of certificates by a certificates acquired by a plan pursuant described in the prospectus or private plan is on terms (including the to Section I.B.(1) or (2). placement memorandum associated certificate price) that are at least as C. Effective as of the date that the with the series, the occurrence of which favorable to the plan as such terms proposed exemption is granted, the will cause any revolving period, would be in an arm’s-length transaction restrictions of sections 406(a), 406(b) scheduled amortization period or with an unrelated party; and 407(a) of the Act and the taxes scheduled accumulation period (2) The rights and interests evidenced imposed by section 4975(a) and (b) of applicable to the certificates to end, and by the certificates are not subordinated the Code, by reason of section 4975(c) principal collections to be applied to to the rights and interests evidenced by of the Code, shall not apply to monthly payments of principal to, or the other certificates of the same trust; transactions in connection with the accumulation of principal for the benefit (3) The certificates acquired by the servicing, management and operation of of, the certificateholders of such series plan have received a rating at the time a trust, including reassigning until the earlier of payment in full of the of such acquisition that is either: (i) in receivables to the sponsor, removing outstanding principal amount of the one of the two highest generic rating from the trust receivables in accounts certificates of such series or the series categories from any one of the Rating previously designated to the trust, termination date specified in the Agencies; or (ii) for certificates with a changing the underlying terms of prospectus or private placement duration of one year or less, the highest accounts designated to the trust, adding memorandum. short-term generic rating category from new receivables to the trust, designating Notwithstanding the foregoing, any one of the Rating Agencies; new accounts to the trust, the retention Section I.C. does not provide an provided that, notwithstanding such of a retained interest by the sponsor in exemption from the restrictions of ratings, this exemption (if granted) shall the receivables, the exercise of the right section 406(b) of the Act, or from the apply to a particular class of certificates to cause the commencement of taxes imposed under section 4975(a) only if such class (an Exempt Class) is amortization of the principal amount of and (b) of the Code, by reason of section part of a series in which credit support the certificates, or the use of any eligible 4975(c)(1)(E) or (F) of the Code, for the is provided to the Exempt Class through swap transactions, provided that: receipt of a fee by the servicer of the a senior-subordinated series structure or (1) Such transactions are carried out trust, in connection with the servicing other form of third-party credit support in accordance with the terms of a of the receivables and the operation of which, at a minimum, represents five (5) binding pooling and servicing percent of the outstanding principal agreement; 3 In the case of a private placement memorandum, such memorandum must contain substantially the balance of certificates issued for the (2) The pooling and servicing Exempt Class, so that an investor in the agreement is provided to, or described same information that would be disclosed in a prospectus if the offering of the certificates were Exempt Class will not bear the initial made in a registered public offering under the risk of loss; 2 For purposes of this proposed exemption, each Securities Act of 1933. In the Department’s view, plan participating in a commingled fund (such as the private placement memorandum must contain (4) The trustee is not an affiliate of a bank collective trust fund or insurance company sufficient information to permit plan fiduciaries to any other member of the Restricted pooled separate account) shall be considered to make informed investment decisions. For purposes Group. However, the trustee shall not be own the same proportionate undivided interest in of this proposed exemption, all references to considered to be an affiliate of a servicer each asset of the commingled fund as its ‘‘prospectus’’ include any related supplement proportionate interest in the total assets of the thereto, and any documents incorporated by solely because the trustee has succeeded commingled fund as calculated on the most recent reference therein, pursuant to which certificates are to the rights and responsibilities of the preceding valuation date of the fund. offered to investors. servicer pursuant to the terms of a 4040 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices pooling and servicing agreement made applicable to the comparable (i) Obtain a replacement swap providing for such succession upon the segment of accounts owned or serviced agreement with an Eligible Swap occurrence of one or more events of by the sponsor which are part of the Counterparty which is acceptable to the default by the servicer; same program or have the same or Rating Agency and the terms of which (5) The sum of all payments made to substantially similar characteristics; are substantially the same as the current and retained by the underwriters in (11) The pooling and servicing swap agreement (at which time the connection with the distribution or agreement limits the number of the earlier swap agreement shall terminate); placement of certificates represents not sponsor’s newly originated accounts to or more than reasonable compensation for be designated to the trust, unless the (ii) Cause the swap counterparty to underwriting or placing the certificates; Rating Agencies otherwise consent in establish any collateralization or other the consideration received by the writing, to the following: (i) With arrangement satisfactory to the Rating sponsor as a consequence of the respect to any three-month period, 15 Agency such that the then current rating assignment of receivables (or interests percent of the number of existing by the Rating Agency of the particular therein) to the trust, to the extent accounts designated to the trust as of the series of certificates will not be allocable to the series of certificates first day of such period, and (ii) with withdrawn or reduced; purchased by a plan, represents not respect to any twelve-month period, 20 (d) In the case of a Non-Ratings more than the fair market value of such percent of the number of existing Dependent Swap, shall provide that, if receivables (or interests); and the sum of accounts designated to the trust as of the the credit rating of the swap all payments made to and retained by first day of such twelve-month period; counterparty is withdrawn or reduced the servicer, to the extent allocable to (12) The pooling and servicing below the lowest level specified in the series of certificates purchased by a agreement requires the sponsor to Section III.II. hereof, the servicer, as plan, represents not more than deliver an opinion of counsel semi- agent for the trustee, shall within a reasonable compensation for the annually confirming the validity and specified period after such rating servicer’s services under the pooling perfection of each transfer of newly withdrawal or reduction: originated accounts to the trust if such and servicing agreement and (i) Obtain a replacement swap opinion is not delivered with respect to reimbursement of the servicer’s agreement with an Eligible Swap reasonable expenses in connection each interim addition; (13) The pooling and servicing Counterparty, the terms of which are therewith; substantially the same as the current (6) The plan investing in such agreement requires the sponsor and the swap agreement (at which time the certificates is an ‘‘accredited investor’’ trustee to receive confirmation from a earlier swap agreement shall terminate); as defined in Rule 501(a)(1) of Rating Agency that no Ratings Effect (i) or Regulation D of the Securities and will result from a proposed transfer of Exchange Commission (SEC) under the newly originated accounts to the trust, (ii) Cause the swap counterparty to Securities Act of 1933; or (ii) will have resulted from the post collateral with the trustee of the (7) The trustee of the trust is a transfer of all newly originated accounts trust in an amount equal to all payments substantial financial institution or trust added to the trust during the preceding owed by the counterparty if the swap company experienced in trust activities three-month period (beginning at transaction were terminated; or and is familiar with its duties, quarterly intervals specified in the (iii) Terminate the swap agreement in responsibilities, and liabilities as a pooling and servicing agreement and accordance with its terms; and fiduciary under the Act (i.e. ERISA). ending in the calendar month prior to (e) Shall not require the trust to make The trustee, as the legal owner of, or the date such confirmation is issued), any termination payments to the swap holder of a perfected security interest in, provided that a Rating Agency counterparty (other than a currently the receivables in the trust, enforces all confirmation shall not be required scheduled payment under the swap the rights created in favor of under clause (ii) for any three-month agreement) except from ‘‘Excess Finance certificateholders of such trust, period in which any additions of newly Charge Collections’’ (as defined below including plans; originated accounts occurred only after in Section III.LL.) or other amounts that (8) Prior to the issuance by the trust receipt of prior Rating Agency would otherwise be payable to the of any new series, confirmation is confirmation pursuant to clause (i); servicer or the seller; and received from the Rating Agencies that (14) If a particular series of certificates (15) Any series of certificates, to such issuance will not result in the held by any plan involves a Ratings which one or more swap agreements reduction or withdrawal of the then Dependent or Non-Ratings Dependent entered into by the trust applies, may be current rating of the certificates held by Swap entered into by the trust, then acquired or held in reliance upon this any plan pursuant to this exemption; each particular swap transaction proposed exemption only by Qualified (9) To protect against fraud, relating to such certificates: Plan Investors. chargebacks or other dilution of the (a) Shall be an Eligible Swap; B. Neither any underwriter, sponsor, receivables in the trust, the pooling and (b) Shall be with an Eligible Swap trustee, servicer, insurer, nor any servicing agreement and the Rating Counterparty; obligor, unless it or any of its affiliates Agencies require the sponsor to (c) In the case of a Ratings Dependent has discretionary authority or renders maintain a seller interest of not less than Swap, shall include as an early payout investment advice with respect to the 2 percent of the principal balance of the event, as specified in the pooling and plan assets used by a plan to acquire receivables contained in the trust; servicing agreement, the withdrawal or certificates, shall be denied the relief (10) Each receivable added to a trust reduction by any Rating Agency of the provided under Section I, if the is an eligible receivable, based on swap counterparty’s credit rating below provision in Section II.A.(6) above is not criteria of the relevant Rating a level specified by the Rating Agency satisfied for the acquisition or holding Agency(ies) and as specified in the where the servicer (as agent for the by a plan of such certificates, provided pooling and servicing agreement. The trustee) has failed, for a specified period that: pooling and servicing agreement after such rating withdrawal or (1) Such condition is disclosed in the requires that any change in the terms of reduction, to meet its obligation under prospectus or private placement the cardholder agreements must be the pooling and servicing agreement to: memorandum; and Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4041

(2) In the case of a private placement other interest in the same pool of exemption which provides relief for the of certificates, the trustee obtains a receivables; 4 operation of asset pool investment trusts representation from each initial (2) Property which has secured any of that issue asset-backed pass-through purchaser which is a plan that it is in the assets described in Section III.B.(1); 5 securities to plans that is similar in compliance with such condition, and (3) Undistributed cash or permitted format and substance to this proposed obtains a covenant from each initial investments made therewith maturing exemption (each, an Underwriter purchaser to the effect that, so long as no later than the next date on which Exemption); 7 any person directly or such initial purchaser (or any transferee distributions are to be made to indirectly, through one or more of such initial purchaser’s certificates) is certificate holders, except during a intermediaries, controlling, controlled required to obtain from its transferee a Revolving Period (as defined herein) by or under common control with such representation regarding compliance when permitted investments are made entity; and any member of an with the Securities Act of 1933, any until such cash can be reinvested in underwriting syndicate or selling group such transferees shall be required to additional receivables described in of which such firm or affiliated person make a written representation regarding paragraph (a) of this Section III.B.(1); described above is a manager or co- compliance with the condition set forth (4) Rights of the trustee under the manager with respect to the certificates. in Section II.A.(6). pooling and servicing agreement, and D. Sponsor means MBNA, or an rights under any cash collateral affiliate of MBNA that organizes a trust Section III—Definitions accounts, insurance policies, third-party by transferring credit card receivables or For purposes of this proposed guarantees, contracts of suretyship and interests therein to the trust in exchange exemption: other credit support arrangements for for certificates. any certificates, swap transactions, or A. Certificate means a certificate: E. Master Servicer means MBNA or an under any yield supplement affiliate that is a party to the pooling (1) That (i) represents a beneficial agreements,6 yield maintenance and servicing agreement relating to trust ownership interest in the assets of a agreements or similar arrangements; and receivables and is fully responsible for trust and entitles the holder to payments (5) Rights to receive interchange fees servicing, directly or through denominated as principal, interest and/ received by the sponsor as partial subservicers, the receivables in the trust or other payments made as described in compensation for the sponsor’s taking pursuant to the pooling and servicing the applicable prospectus or private credit risk, absorbing fraud losses and agreement. placement memorandum and in funding receivables for a limited period F. Subservicer means MBNA or an accordance with the pooling and prior to initial billing with respect to affiliate of MBNA, or an entity servicing agreement in connection with accounts designated to the trust. unaffiliated with MBNA which, under the assets of such trust, to the extent Notwithstanding the foregoing, the the supervision of and on behalf of the allocable to the series of certificates term trust does not include any master servicer, services receivables purchased by a plan, either currently or investment pool unless: (i) the contained in the trust, but is not a party after a revolving period during which investment pool consists only of to the pooling and servicing agreement. principal payments on assets of the trust receivables of the type which have been G. Servicer means MBNA or an are reinvested in new assets, or (ii) is included in other investment pools; (ii) affiliate which services receivables denominated as a debt instrument that certificates evidencing interests in such contained in the trust, including the represents a regular interest in a other investment pools have been rated master servicer and any subservicer or financial asset securitization investment in one of the two highest generic rating their successors pursuant to the pooling trust (FASIT), within the meaning of categories by at least one of the Rating and servicing agreement. section 860L(a) of the Code, and is Agencies for at least one year prior to H. Trustee means an entity which is issued by and is an obligation of the the plan’s acquisition of certificates independent of MBNA and its affiliates trust. pursuant to this exemption; and (iii) and is the trustee of the trust. In the case For purposes of this proposed certificates evidencing an interest in of certificates which are denominated as exemption, references to ‘‘certificates such other investment pools have been debt instruments, ‘‘trustee’’ also means representing an interest in a trust’’ purchased by investors other than plans the trustee of the indenture trust. include certificates denominated as debt for at least one year prior to the plan’s I. Insurer means the insurer or which are issued by a trust; and acquisition of certificates pursuant to guarantor of, provider of other credit this exemption. support for, or other contractual (2) With respect to which (a) MBNA C. Underwriter means an entity which or any of its affiliates is the sponsor, and counterparty of, a trust. has received from the Department an Notwithstanding the foregoing, a swap (b) MBNA, any of its affiliates, or an individual prohibited transaction ‘‘underwriter’’ (as defined in Section counterparty is not an insurer, and a person is not an insurer solely because III.C.) is the sole underwriter or the 4 The Department notes that no relief would be manager or co-manager of the available under the exemption if the participation it holds securities representing an underwriting syndicate or a selling or interests held by the trust were subordinated to the interest in a trust which are of a class placement agent. rights and interests evidenced by other subordinated to certificates representing participation interests in the same pool of B. Trust means an investment pool, an interest in the same trust. receivables. J. Obligor means any person, other the corpus of which is held in trust and 5 MBNA states that it is possible for credit card than the insurer, that is obligated to consists solely of: receivables to be secured by bank account balances or security interests in merchandise purchased with make payments with respect to any (1) Either credit cards. Thus, the proposed exemption should receivable included in the trust. (a) Receivables (as defined in Section permit foreclosed property to be an eligible trust K. Excluded Plan means any plan III.V.); or asset. 6 In a series involving an accumulation period (as with respect to which any member of (b) Participations in a pool of defined in Section III.Z.), a yield supplement receivables (as defined in Section III.V.) agreement may be used by the Trust to make up the 7 For a listing of Underwriter Exemptions, see the difference between (i) the reinvestment yield on description provided in the text of the operative where such beneficial ownership permitted investments, and (ii) the interest rate on language of Prohibited Transaction Exemption interests are not subordinated to any the certificates of that series. (PTE) 97–34 (62 FR 39021, July 21, 1997). 4042 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices the Restricted Group is a ‘‘plan sponsor’’ sale of one or more certificates to be (other than a qualified administrative within the meaning of section 3(16)(B) delivered at an agreed future settlement fee as defined in Section III.U.). of the Act. date. The term includes both mandatory W. Accounts are revolving credit card L. Restricted Group with respect to a contracts (which contemplate obligatory accounts serviced by MBNA or an class of certificates means: delivery and acceptance of the affiliate, which were originated or (1) Each underwriter; certificates) and optional contracts purchased by MBNA or an affiliate, and (2) Each insurer; (which give one party the right but not are designated to a trust such that (3) The sponsor; the obligation to deliver certificates to, receivables arising in such accounts (4) The trustee; or demand delivery of certificates from, become assets of the trust. (5) Each servicer; the other party). X. Revolving Period means a period of (6) Each swap counterparty; R. Reasonable Compensation has the time, as specified in the pooling and (7) Any obligor with respect to same meaning as that term is defined in servicing agreement, during which receivables contained in the trust 29 CFR section 2550.408c–2. principal collections allocated to a constituting more than 0.5 percent of S. Pooling and Servicing Agreement series are reinvested in newly generated the fair market value of the aggregate means the agreement or agreements receivables arising in the accounts. undivided interest in the trust allocated among a sponsor, a servicer and the Y. Amortization Period means a to the certificates of a series, determined trustee establishing a trust and any period of time specified in the pooling on the date of the initial issuance of supplement thereto pertaining to a and servicing agreement during which a such series of certificates by the trust; or particular series of certificates. In the portion of the principal collections (8) Any affiliate of a person described case of certificates which are allocated to a series will commence to in Section III.L.(1)–(7). denominated as debt instruments, be paid to the certificateholders of such M. Affiliate of another person ‘‘pooling and servicing agreement’’ also series in installments. includes: includes the indenture entered into by Z. Accumulation Period means a (1) Any person directly or indirectly, the trustee of the trust issuing such period of time specified in the pooling through one or more intermediaries, certificates and the indenture trustee. and servicing agreement during which a controlling, controlled by, or under T. Series means an issuance of a class portion of the principal collections common control with such other or various classes of certificates by the allocated to a series will be deposited in person; trust all on the same date pursuant to an account to be distributed to (2) Any officer, director, partner, the same pooling and servicing certificateholders in a lump sum on the employee, relative (as defined in section agreement, and any supplement thereto expected maturity date. 3(15) of the Act), a brother, a sister, or and restrictions therein. AA. Pay Out Event means any of the a spouse of a brother or sister of such U. Qualified Administrative Fee events specified in the pooling and other person; and means a fee which meets the following servicing agreement or supplement (3) Any corporation or partnership of criteria: thereto that results (in some instances which such other person is an officer, (1) The fee is triggered by an act or without further affirmative action by director or partner. failure to act by the obligor other than any party) in the early commencement N. Control means the power to the normal timely payment of amounts of either an amortization period or an exercise a controlling influence over the owing with respect to the receivables; accumulation period, including (1) the management or policies of a person (2) The servicer may not charge the failure of the sponsor or the servicer, other than an individual. fee absent the act or failure to act whichever is subject to the relevant O. A person will be ‘‘independent’’ of referred to in (1); obligation under the pooling and another person only if: (3) The ability to charge the fee, the servicing agreement, (i) to make any (1) Such person is not an affiliate of circumstances in which the fee may be payment or deposit required under the that other person; and charged, and an explanation of how the pooling and servicing agreement within (2) The other person, or an affiliate fee is calculated are set forth in the five (5) business days after such thereof, is not a fiduciary who has pooling and servicing agreement or payment or deposit was required to be investment management authority or described in all material respects in the made, or (ii) to observe or perform any renders investment advice with respect prospectus or private placement of its other covenants or agreements set to any assets of such person. memorandum provided to the plan forth in the pooling and servicing P. Sale includes the entrance into a before it purchases certificates issued by agreement, which failure has a material forward delivery commitment (as the trust; and adverse effect on holders of investor defined in Section III.Q. below), (4) The amount paid to investors in certificates of the relevant series and provided that: the trust is not reduced by the amount continues unremedied for 60 days; (2) a (1) The terms of the forward delivery of any such fee waived by the servicer. breach of any representation or warranty commitment (including any fee paid to V. Receivables means secured or made by the sponsor or the servicer in the investing plan) are no less favorable unsecured obligations of credit card the pooling and servicing agreement to the plan than they would be in an holders which have arisen or arise in that continues to be incorrect in any arm’s length transaction with an Accounts designated to a trust. Such material respect for 60 days; (3) the unrelated party; obligations represent amounts charged occurrence of certain bankruptcy events (2) The prospectus or private by cardholders for merchandise and relating to the sponsor or the servicer; placement memorandum is provided to services and amounts advanced as cash (4) the failure by the sponsor to convey an investing plan prior to the time the advances, as well as periodic finance to the trust additional receivables to plan enters into the forward delivery charges, annual membership fees, cash maintain the minimum seller interest commitment; and advance fees, late charges on amounts that is required by the pooling and (3) At the time of the delivery, all charged for merchandise and services servicing agreement and the Rating conditions of this exemption applicable and certain other fees (such as bad Agencies; (5) if a class of investor to sales are met. check fees, cash advance fees, and other certificates is in an Accumulation Q. Forward Delivery Commitment fees specified in the cardholder Period, the amount on deposit in the means a contract for the purchase or agreements) designated by card issuers accumulation account in any month is Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4043 less than the amount required to be on plan is dependent on the terms and counterparty is relying on its short-term deposit therein; (6) the failure to pay in conditions of the swap and the rating of rating to establish eligibility hereunder, full amounts owing to investors on the the swap counterparty, and if such such counterparty must either have a expected maturity date; and (7) the certificate rating is not dependent on the long-term rating in one of the three Economic Pay Out Event. existence of the swap and rating of the highest long-term rating categories or BB. An Economic Pay Out Event swap counterparty, such swap or cap not have a long-term rating from the occurs automatically when the portfolio shall be referred to as a ‘‘Non-Ratings applicable Rating Agency, and provided yield for any series of certificates, Dependent Swap’’. With respect to a further that if the series of certificates averaged over three consecutive months Non-Ratings Dependent Swap, each with which the swap is associated has (or such other period approved by one Rating Agency rating the certificates a final maturity date of more than one of the Rating Agencies) is less than the must confirm, as of the date of issuance year from the date of issuance of the base rate of the series averaged over the of the certificates by the trust, that certificates, and such swap is a Ratings same period. Portfolio yield for a series entering into an Eligible Swap with Dependent Swap, the swap counterparty of certificates for any period is equal to such counterparty will not affect the is required by the terms of the swap the sum of the finance charge rating of the certificates. agreement to establish any collections and other amounts treated as HH. Eligible Swap means a Ratings collateralization or other arrangement finance charge collections less total Dependent or Non-Ratings Dependent satisfactory to the Rating Agencies in defaults for the series divided by the Swap: the event of a ratings downgrade of the outstanding principal balance of the (1) Which is denominated in U.S. swap counterparty. investor certificates of the series, or Dollars; JJ. Qualified Plan Investor means a such other measure approved by one of (2) Pursuant to which the trust pays plan investor or group of plan investors the Rating Agencies. The base rate for a or receives, on or immediately prior to on whose behalf the decision to series of certificates for any period is the the respective payment or distribution purchase certificates is made by an sum of (i) amounts payable to date for the series of certificates, a fixed appropriate independent fiduciary that certificateholders of the series with rate of interest, or a floating rate of is qualified to analyze and understand respect to interest, (ii) servicing fees interest based on a publicly available the terms and conditions of any swap allocable to the series payable to the index (e.g. LIBOR or the U.S. Federal transaction used by the trust and the servicer, and (iii) any credit Reserve’s Cost of Funds Index (COFI)), effect such swap would have upon the enhancement fee allocable to the series with the trust receiving such payments credit ratings of the certificates. For payable to a third party credit enhancer, on at least a quarterly basis and purposes of the proposed exemption, divided by the outstanding principal obligated to make separate payments no such a fiduciary is either: balance of the investor certificates of the more frequently than the swap (1) a ‘‘qualified professional asset series, or such other measure approved counterparty, with all simultaneous manager’’ (QPAM),8 as defined under by one of the Rating Agencies. payments being netted; Part V(a) of PTE 84–14 (49 FR 9494, CC. CCA or Cash Collateral Account (3) Which has a notional amount that 9506, March 13, 1984); means that certain account established does not exceed either (i) the certificate (2) an ‘‘in-house asset manager’’ in the name of the trustee that serves as balance of the class of certificates to (INHAM),9 as defined under Part IV(a) credit enhancement with respect to the which the swap relates, or (ii) the of PTE 96–23 (61 FR 15975, 15982, investor certificates and holds cash and/ portion of the certificate balance of such April 10, 1996); or or permitted investments (as defined class represented by receivables; (3) A plan fiduciary with total assets below in Section III.KK.) which conform (4) Which is not leveraged (i.e. under management of at least $100 to applicable provisions of the pooling payments are based on the applicable million at the time of the acquisition of and servicing agreement. notional amount, the day count such certificates. DD. Group means a group of any fractions, the fixed or floating rates KK. Permitted Investments means number of series offered by the trust that designated in subparagraph (2) above, investments that either (i) are direct share finance charge and/or principal and the difference between the products obligations of, or obligations fully collections in the manner described in thereof, calculated on a one to one ratio guaranteed as to timely payment of the applicable prospectus or private and not on a multiplier of such principal and interest by, the United placement memorandum. difference); States or any agency or instrumentality EE. Ratings Effect means the (5) Which has a final termination date thereof, provided that such obligation is reduction or withdrawal by a Rating that is the earlier of the date on which backed by the full faith and credit of the Agency of its then current rating of the the trust terminates or the related class certificates held by any plan pursuant to of certificates is fully repaid; and 8 PTE 84–14 provides a class exemption for (6) Which does not incorporate any transactions between a party in interest with respect this proposed exemption. to an employee benefit plan and an investment fund FF. Principal Receivables Discount provision which could cause a (including either a single customer or pooled means, with respect to any account unilateral alteration in any provision separate account) in which the plan has an interest, designated by the sponsor, the portion described in subparagraphs (1) through and which is managed by a QPAM, provided of the related principal receivables that (4) above without the consent of the certain conditions are met. QPAMs (e.g. banks, insurance companies, registered investment represents a discount from the face trustee. advisers with total client assets under management value thereof and that is treated under II. Eligible Swap Counterparty means in excess of $50 million) are considered to be the pooling and servicing agreement as a bank or other financial institution experienced investment managers for plan investors finance charge receivables. which has a rating, at the date of that are aware of their fiduciary duties under ERISA. GG. Ratings Dependent Swap means issuance of the certificates by the trust, 9 PTE 96–23 permits various transactions an interest rate swap, or (if purchased which is in one of the three highest involving employee benefit plans whose assets are by or on behalf of the trust) an interest long-term credit rating categories, or one managed by an INHAM, an entity which is rate cap contract, that is part of the of the two highest short-term credit generally a subsidiary of an employer sponsoring the plan which is a registered investment adviser structure of a series of certificates where rating categories, utilized by at least one with management and control of total assets the rating assigned by the Rating Agency of the Rating Agencies rating the attributable to plans maintained by the employer to any series of certificates held by any certificates; provided that, if a swap and its affiliates which are in excess of $50 million. 4044 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

United States, or (ii) have been rated (or interest-bearing credit card receivables receivable, free and clear of liens. the obligor thereof has been rated) in which are selected under strict criteria Finally, an eligible receivable must one of the three highest generic rating approved by one or more of certain constitute the legal valid and binding categories by a Rating Agency; are nationally recognized rating agencies,10 payment obligation of the obligor, and described in the pooling and servicing from the portfolio of revolving credit constitute an ‘‘account’’ under Article 9 agreement; and are permitted by the card accounts owned by MBNA. The of the Uniform Commercial Code (the relevant Rating Agency(ies). PSA establishes the general parameters ‘‘UCC’’), as in effect in the State of LL. Excess Finance Charge Collections for the Trust, such as the requirements Delaware, so as to grant the Trust a first means, as of any day funds are for eligible receivables to be transferred priority security interest in the event of distributed from the trust, the amount to the Trust, the manner of transferring bankruptcy. Once the pool of eligible by which the finance charge collections and administering and servicing the accounts has been identified, accounts allocated to certificates of a series receivables, Seller representations and are selected at random for the transfer exceed the amount necessary to pay covenants as to receivable eligibility, of their receivables to the Trust so as to certificate interest, servicing fees and Servicer and Trustee duties and provide a combination of receivables expenses, to satisfy cardholder defaults eligibility, and other matters. that is representative of the entire pool or charge-offs, and to reinstate credit The applicant represents that any of eligible receivables. support. Trust that issues a class of Certificates MBNA represents and warrants that The Department notes that this to be covered by the proposed the receivables transferred to the Trust, proposed exemption, if granted, will be exemption would include the following and the accounts related to those included within the meaning of the term investor safeguards: receivables, meet the above-described ‘‘Underwriter Exemption’’ as it is (a) Restricted selection of receivables; standards for eligible receivables and defined in Section V(h) of the Grant of (b) Periodic reporting and monitoring accounts, and that no selection the Class Exemption for Certain of accounts; procedures adverse to the Transactions Involving Insurance (c) Minimum receivable requirements; Certificateholders have been employed Company General Accounts, which was (d) Restrictions regarding addition in selecting accounts. These restrictions published in the Federal Register on and removal of accounts; on account selection are in place to July 12, 1995 (see PTE 95–60, 60 FR (e) Servicer eligibility requirements; prevent the concentration of high risk 35925). (f) Servicer daily reports, duties and accounts. Each relevant Rating Agency public accounting firm review; requires that all of these safeguards be Summary of Facts and Representations (g) Trustee eligibility and duties; in place before a superior rating is 1. The applicant is MBNA America (h) Restrictions on investments; given. Bank, National Association (i.e. MBNA), (i) Protection from the consequences 5. Periodic Reporting and Monitoring a national banking association located of unplanned events; and of Accounts. In connection with the in Wilmington, Delaware. MBNA (j) Limited discretion. transfer of the receivables to the Trust, conducts nationwide consumer lending These investor safeguards are MBNA must record and file a UCC programs principally comprised of discussed in the following paragraphs. financing statement (including any credit card related activities. MBNA is 4. Restricted Selection of Receivables. continuation statements, when a wholly-owned subsidiary of MBNA In order for a receivable to be eligible for applicable) in order to perfect the Corporation, a bank holding company transfer to the Trust, either on the initial assignment of the receivables, and must organized under the laws of Maryland closing date or on any subsequent date, deliver a file-stamped copy of such in 1990. it must have arisen under an eligible financing or continuation statement to 2. The transactions for which an account. An eligible account is one that the Trustee. MBNA must also indicate exemption is requested are investments is in existence and owned by and in its computer system file of credit card by employee benefit plans in certain maintained with MBNA (as of the initial accounts the receivables transferred to certificates (Certificates) representing selection date or, with respect to the Trust by identifying the accounts the right to receive principal and additional accounts, as of the relevant with a unique designation, as described interest payments from the assets of addition date), and is payable in U.S. in the PSA. MBNA must deliver a various Trusts which hold credit card dollars. In addition, an eligible account complete list of all accounts in the Trust receivables. Each Trust will issue, from must have a United States address for its to the Trustee on or prior to the initial time to time, a particular series of obligor, must not have been classified as closing date and thereafter on a periodic Certificates (i.e. a Series) which will be counterfeit, canceled, fraudulent, stolen basis as required by the PSA. secured by the Trust’s assets. A Series or lost, and must not have been charged The Trustee is able to continually may include one or more classes of off by MBNA under its customary and monitor the Trust’s assets by reviewing Certificates, some of which may be usual charge-off procedures. The the monthly reports regarding pool subordinate to others. However, only eligible receivable must have been performance which are prepared for the senior certificates issued by such Trusts, created in compliance with applicable Trustee and investors by MBNA, as which meet the restrictive criteria law. All consents, licenses and other Servicer. In addition, MBNA provides designed to ensure investor safety approvals necessary for the creation of the Trustee with a complete list of discussed herein would be eligible for the receivable and the execution of the accounts on a periodic basis, as required the exemptive relief to be provided credit card agreement must have been by the PSA. Each relevant Rating under this proposed exemption. obtained and be in full force and effect, Agency requires significant monitoring and MBNA must have good title to the procedures for the servicing of The Trusts receivables to ensure investor safety 3. Each Trust is created under a 10 As noted in Section I.C.(3) above, these rating before a superior rating is granted. Pooling and Servicing Agreement (PSA) agencies are: (i) Standard & Poors Ratings Services, 6. Minimum Receivable between MBNA, as Seller and Servicer, a division of McGraw-Hill Companies Inc.; (ii) Requirements. The aggregate principal Moody’s Investors Service, Inc.; (iii) Duff & Phelps and an independent and unaffiliated Credit Rating Co.; and (iv) Fitch Investors Service, amount of the receivables held by the Trustee. Upon creation of a Trust, the L.P., or their successors (collectively, the Rating Trust must be at least equal to the sum Seller transfers to the Trust a pool of Agencies). of the principal amount of the Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4045

Certificates (prior to the commencement interest and/or principal payments to will not result in a Ratings Effect. of any related amortization or Certificate holders. MBNA states further that the amount of accumulation) for all Series then 7. Restrictions Regarding Addition any receivables that are removed must outstanding (other than a Series which and Removal of Accounts. In addition to be less than 5 percent of the aggregate is backed in full by accumulated cash or the limitations discussed above amount of principal receivables or, if permitted investments (see Paragraph 11 regarding the selection of accounts and any Series is paid in full, the amount of below)). If, on the last business day of minimum receivable requirements, the receivables removed must approximate any month, the aggregate amount of following restrictions apply to the the initial investor interest of such principal receivables is less than the addition of accounts subsequent to the Series. required minimum, MBNA must initial transfer to the Trust. Any transfer Each Rating Agency has determined designate additional accounts (or may of receivables from additional accounts that the number of additional accounts convey participations in other credit must be preceded by written notice to from which receivables may be added is card receivable pools sponsored by the Trustee, each relevant Rating generally limited to: (i) with respect to MBNA) to be transferred to the Trust so Agency and the Servicer specifying the any three-month period, 15 percent of that the aggregate principal receivables approximate aggregate amount of the number of existing accounts will meet the minimum requirement. receivables to be transferred. In designated to the Trust as of the first Interests in the assets of each Trust connection with the transfer, MBNA day of such period, and (ii) with respect are allocated among the Certificate will warrant that the additional to any twelve-month period, 20 percent holders of each Series and the Seller accounts are eligible accounts and that of the number of accounts designated to (i.e., MBNA). The interest in the Trust each receivable is an eligible receivable, the Trust as of the first day of such 12- assets allocated to the Seller is referred and that no selection procedures month period. However, if this to as the ‘‘Seller Interest.’’ To protect believed by MBNA to be materially maximum amount is greater than a against fraud, chargebacks or other adverse to the interest of the similar test (specified in the PSA) based dilution of receivables in the Trust, the Certificateholders were utilized in on the calendar year, then the calendar PSA and the Rating Agencies will selecting the accounts. MBNA must year test serves as the maximum require MBNA, as the Trust’s sponsor, deliver an opinion of counsel with addition. MBNA may be able to exceed to maintain a seller interest of not less respect to the added receivables to the the maximum addition amount if than 2 percent of the principal balance Trustee, with a copy to each relevant approval is received from each relevant of the receivables contained in the Trust Rating Agency, that such addition is Rating Agency. (referred to as the ‘‘Minimum Seller enforceable and that the Trust has either By informing the relevant Rating Interest’’). If, during any period of 30 a valid transfer of, or a grant of security Agencies of all details regarding consecutive days, the Seller Interest interest in, the additional accounts. The additions and removals, the Trust is averages less than the Minimum Seller PSA requires that the Servicer and the effectively reexamined each time these Interest, MBNA must designate Trustee receive confirmation from a events occur in order to assure that the additional accounts (or participations in Rating Agency that no Ratings Effect changes to the Trust assets will not other MBNA credit card receivable (i.e., a downgrade or withdrawal of the adversely affect the rating of any pools) to be transferred by MBNA to the then current rating of any outstanding outstanding Series. Each relevant Rating Trust in order to satisfy the minimum Series of Certificates) either (i) will Agency scrutinizes the receivables from requirement. When account payments result from a proposed transfer of the additional accounts, or the relative exceed account purchases, the total pool receivables from additional accounts to strength of the pool of receivables of receivables in the relevant Trust the Trust, or (ii) will have resulted from designated to the Trust both before and contracts. As a result, the Seller Interest the transfer of all receivables from after the removal, as the case may be, in declines, thus providing a buffer to additional accounts added to the Trust making any such re-examinations. prevent a decline in the principal during the preceding three-month 8. Servicer Eligibility Requirements. balance of the Certificates prior to the period (beginning at quarterly intervals The Servicer of the receivables must be scheduled payment of principal. Thus, specified in the PSA and ending in the either the Seller (MBNA), an affiliate of when the receivable balances in the calendar month prior to the date such MBNA, or an entity unaffiliated with accounts that secure the Certificates confirmation is issued). However, a MBNA acting as a ‘‘Subservicer’’ which decline, the Seller Interest decreases, Rating Agency confirmation will not be is qualified to service a portfolio of not the principal balance of the required for any three-month period in consumer revolving credit card accounts Certificates. When the account balances which any additions of newly originated and meets certain requirements. Under again increase, the Seller Interest is accounts occurred only after receipt of such requirements, the entity acting as increased. The Seller Interest will also a prior Rating Agency confirmation. either a Servicer or Subservicer must be decline as a result of dilution of the MBNA may remove receivables, legally qualified and have the capacity receivable portfolio resulting from subject to the minimum receivable to service the accounts, must be noncash reductions such as requirements discussed above, not more qualified to use the software used to merchandise returns or servicer errors. than once in a monthly period. MBNA service the accounts, must have The minimum receivable requirement must give the Trustee and the Servicer demonstrated the ability to and Minimum Seller Interest written notice stating the approximate professionally and competently service requirement imposed on MBNA by the aggregate principal balance of the a portfolio of similar accounts in PSA (as described above) cause the removal, and certifying that such accordance with customary standards of Trustee, Servicer or Seller to have removal must not result in a Pay Out skill and care, and must have a certain limited discretion regarding the Event. MBNA must warrant that no net worth (e.g. at least $50,000,000). minimum size of the Trust. Each selection procedures believed by it to be These requirements are in line with the relevant Rating Agency gains comfort materially adverse to the Rating Agencies’ standards for servicers. from these minimum receivable levels Certificateholders were utilized in Regardless of whether the Servicer is that the Trust will be maintained so as selecting the removed receivables. Each MBNA, an affiliate, or a third party not to adversely affect the ability of the relevant Rating Agency must have meeting the eligibility requirements Trust assets to support the promised confirmed that such proposed removal discussed above, the Servicer’s duties 4046 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices are largely ministerial and are provided organized, doing business and regulated assume the obligations of, another in detail in the PSA. The Servicer under the laws of the United States, any entity, certain provisions of the PSA administers the receivables, collects State and/or the District of Columbia ensure that the Trust assets remain payments due thereunder, makes and have a long-term unsecured debt secure. The new entity involved in the withdrawals from the various accounts rating as specified in the PSA. The merger or consolidation must be a created under the PSA which are Trustee must be independent of MBNA national banking association, a state forwarded to the Trustee on the dates and its affiliates and meet the same banking corporation or another entity and in the manner provided under the requirements that would be necessary not subject to bankruptcy laws and must PSA, commences enforcement for an eligible Servicer (as discussed be organized and regulated under the proceedings with respect to delinquent under ‘‘Servicer Eligibility laws of the United States, any State and/ receivables and makes filings and other Requirements’’ above). Any successor or the District of Columbia. The new necessary reports with the SEC and any Trustee must also meet these entity must expressly assume the state securities authorities as necessary requirements and be approved by each performance of every covenant and to comply with the law. The Servicer relevant Rating Agency. obligation of MBNA, and MBNA must must maintain fidelity bond coverage The Trustee is responsible for provide the Trustee with an opinion of insuring against losses through its own receiving collections from receivables as counsel that such assumption is legal, wrongdoing, and is entitled to receive a provided in the PSA, investing any valid and binding. Finally, each relevant reasonable servicing fee which is moneys as directed in the PSA, and Rating Agency must be notified in specifically enumerated in each PSA directing payments to Certificateholders advance of the change. Similarly, a supplement. according to the plan of allocation and merger, consolidation or assumption of 9. Servicer Daily Reports, Duties and payment detailed in the PSA. In the obligations of the Servicer also Public Accounting Firm Review. On performing these functions, the Trustee requires the same protections of a full each business day the Servicer must has little, if any, discretion. The Trustee assumption of liabilities, an opinion of prepare and make available to the is also responsible for examining any counsel and Rating Agency notification. Trustee a record of the collections resolutions, statements, certificates, processed on the preceding day and the opinions, reports or other instruments The Certificateholders of each Series aggregate amount of receivables as of the in order to determine whether they receive protection from certain close of business on the preceding day. substantially conform to the unplanned events (called ‘‘Pay Out The Servicer must prepare monthly for requirements of the PSA. The Trustee Events’’). If a ‘‘Pay Out Event’’ occurs the Trustee, the paying agent, any credit has no power to vary the corpus of the with respect to a Series, either (i) a rapid enhancement provider, and each Trust and must perform the duties of amortization period will commence relevant Rating Agency, a certificate other parties should they fail to perform during which the Certificates of such setting forth the aggregate collections under the PSA. Like the Servicer Series will be paid down periodically, processed during the preceding month restrictions, the restrictions on the as provided in the PSA Supplement, with respect to each Series outstanding, Trustee limit discretion, enhance with the principal collections allocable the aggregate amounts of the investor investor protection, and are a positive to such Series or with principal percentages of collections of finance influence on a Rating Agency’s collections allocable to other Series charge receivables and principal evaluation. which are shared within the same receivables processed during the 11. Restrictions on Investments. The Group (as discussed in Paragraph 15 preceding month with respect to each collections of principal receivables and below), or (ii) a rapid accumulation Series outstanding, the balances in the finance charge receivables held in the period will commence during which the finance charge account, the principal Trust may be invested by the Trustee Series’ principal collections will be account or any Series account during only in ‘‘permitted investments’’ during accumulated until a designated payment the preceding month, and other detailed the interim periods between collection date. Pay Out Events include ‘‘Trust Pay information. and payout to the Certificateholders. Out Events,’’ which apply to all Series, The Servicer will provide annually a Such permitted investments are detailed and ‘‘Series Pay Out Events,’’ which certificate from an officer indicating that in the PSA and represent what each apply to particular Series. ‘‘Trust Pay the Servicer’s activities over a 12-month relevant Rating Agency considers to be Out Events’’ include: (i) certain events period were reviewed and the officer secure investments that sufficiently of insolvency, conservatorship or believed such obligations were fully protect investors. Under the proposed receivership relating to MBNA; (ii) the performed under the PSA. Every year, a exemption, permitted investments Trust becomes an ‘‘investment nationally recognized firm of would be investments that either (i) are company’’ within the meaning of the independent certified public direct obligations of, or obligations fully Investment Company Act of 1940, as accountants will review the internal guaranteed as to timely payment of amended; and (iii) MBNA becomes accounting controls and their relation to principal and interest by, the United unable for any reason to transfer the servicing of the receivables as well States or any agency or instrumentality receivables to the Trust as required by as the mathematical accuracy of the thereof, provided that such obligation is the PSA. Servicer’s monthly reports, and the backed by the full faith and credit of the Series Pay Out Events generally results will be provided to the Trustee, United States, or (ii) have been rated (or include: any credit enhancement provider, and the obligor thereof has been rated) in each relevant Rating Agency. These one of the three highest generic rating (a) Failure of MBNA to make required additional reviews of the Servicer are categories by a Rating Agency. In payments or observe its other covenants designed to prevent Servicer fraud and addition, all permitted investments to the extent there is a material adverse limit Servicer discretion. These must be described in the PSA and effect on the Certificateholders of that safeguards protect investors and are a permitted by the relevant Rating Series; positive factor in a Rating Agency’s Agencies. (b) Breach by MBNA of its evaluation. 12. Protection From the Consequences representations and warranties to the 10. Trustee Eligibility and Duties. The of Unplanned Events. If MBNA should extent there is a material adverse effect Trustee must be a financial institution desire to merge or consolidate with, or on the Certificateholders of that Series; Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4047

(c) A default by the Servicer that distributed on the originally scheduled designed to ensure maximum investor would have a material adverse effect on principal payment dates), as provided in security, and minimum Trustee and the Certificateholders of that Series; and the PSA Supplement, until the senior Servicer discretion. (d) The portfolio yield for any three Certificateholders are paid in full. The Series consecutive monthly periods is less During a rapid accumulation period, than the average base rate for such also triggered by a ‘‘Pay Out Event’’, all 14. Once a Trust is established, a period (an ‘‘Economic Pay Out Event’’). principal collections allocated to the Series of Certificates may be issued With respect to item (d) above, MBNA senior Certificates are accumulated and pursuant to a PSA Supplement. One states that an ‘‘Economic Pay Out invested by the Trustee until the senior Trust typically supports multiple Series Event’’ will occur automatically when Certificateholders’ interest is backed in of Certificates over time. Each Series the portfolio yield for any series of full by cash and/or permitted issued under a Trust is secured, along certificates, averaged over three investments which will be distributed with other outstanding Series, by the consecutive months (or such other on the originally scheduled payment assets of the issuing Trust. The PSA period approved by one of the Rating date. Payments or accumulations are Supplement builds on the PSA by Agencies) is less than the base rate of then directed to the next level of specifying the parameters for the Series, the series averaged over the same Certificates below the senior such as the number and type of period. Portfolio yield for a series of Certificates, until all Certificates have Certificates, subordination and payment certificates for any period is equal to the been paid or accumulated, or the Trust structuring, and other credit sum of the finance charge collections terminates. Because this accelerated pay enhancement features. and other amounts treated as finance out or accumulation schedule is The life of a Series consists of a charge collections less total defaults for triggered as a result of poor revolving period and an amortization or the series divided by the outstanding performance, senior Certificateholders accumulation period. During both principal balance of the investor are protected from a loss which might periods, daily collections are allocated certificates of the series, or such other result from long-term yield reduction, to the Trust accounts in the manner measure approved by one of the Rating and are, to a level of certainty necessary specified in the PSA Supplement. Agencies. The base rate for a series of to support a rating of ‘‘AA’’ (or better), Interest payments are made periodically certificates for any period is the sum of likely to receive their entire investment to the Certificateholders as provided in (i) amounts payable to certificateholders return. The timing or amount of the the PSA Supplement, and principal is of the series with respect to interest, (ii) payments or accumulations is paid in a lump sum on the date servicing fees allocable to the series specifically defined in each PSA designated in the PSA Supplement (in payable to the servicer, and (iii) any Supplement, further protecting the case of an accumulation period), or credit enhancement fee allocable to the investors from mismanagement. This periodically pursuant to a schedule in series payable to a third party credit automatic pay out trigger is important to the PSA Supplement (in the case of an enhancer, divided by the outstanding each relevant Rating Agency as well, amortization period), for each class of principal balance of the investor because it strictly limits the potential Certificates. The allocation of certificates of the series, or such other losses to investors. collections and the priority of payments measure approved by one of the Rating Investors are also protected from the differs slightly during the revolving Agencies. negative consequences of an event of period and the amortization or MBNA states that an ‘‘Economic Pay Seller insolvency. If one or more of a accumulation period. Out Event’’ should not occur because number of indications of insolvency are 15. During a Series’ revolving period, the amount of receivables included present, a ‘‘Pay Out Event’’ occurs and periodic interest payments are made to within the Trust has been designed to a rapid amortization or a rapid Certificateholders. Principal payments, create ‘‘excess spread’’ between the accumulation period is triggered. As however, are not made until the yield on the receivables and the discussed above, this event accelerates amortization period or at the end of the certificate rates. Excess spread is the payments or accumulation of collections accumulation period. Principal amount by which the yield on the to maximize the probability that senior collections during the revolving period receivables held by the Trust exceeds, at Certificateholders will be paid promptly typically are shared among the Series any point in time, the amounts and in full. In addition, the Trustee also that are members of the same Group. If necessary to pay certificate interest, liquidates the receivables (unless one Series has principal receipts greater principal (if such payments are due to otherwise instructed by than needed to pay principal for that certificateholders), servicing fees and Certificateholders representing period, the excess may be used to pay expenses, and to satisfy cardholder undivided interests aggregating more principal for another Series in the defaults or charge-offs. The Rating than 50 percent of each outstanding Group which may have a need for such Agencies examine the expected amount Series) in order to further accelerate the principal collections. In such instances, of ‘‘excess spread’’ very closely before pay out or accumulation process. The the minimum principal receivable providing a high credit rating for the proceeds of the liquidation are balances required by the Rating certificates. distributed or accumulated in the tiered Agencies for all Series must be A ‘‘Pay Out Event’’ accelerates the manner discussed above in the low- maintained. The process of sharing scheduled payments or accumulation of yield scenario. within the Group spreads payment risk principal on the Certificates as specified 13. Limited Discretion. Inherent in all over a broader base of collections and within each PSA Supplement, and of the restrictions surrounding creation effectively allows concentration of eliminates shared allocations from such and management of the Trust, discussed principal collections supporting a Series, thus increasing the probability of above, is the limited ability of any party particular Series, resulting in increased full payment to senior to the transaction to make discretionary reliability of the payment streams. Certificateholders, including plan decisions that would have a major Principal collections received during investors. During a rapid amortization impact on the Trust assets. The PSA the amortization or accumulation period period, which is triggered by a ‘‘Pay Out addresses every possible important are also potentially shared, but are first Event’’, all collections are distributed decision and provides the exact course applied to the principal funding for the periodically (instead of being of action required. Each detail is Series to which they relate. The 4048 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices amortization or accumulation period and the effect of losses. Thus, such discretionary decisions. The tasks are ends on the earliest of: (i) when the collections will be applied to the senior predetermined and largely ministerial. investors interests are paid in full; (ii) (or Class A) Certificates first and then These explicit instructions, in concert the Series termination date provided in the second tier (or Class B) Certificates, with the Servicer reporting and review the PSA Supplement; or (iii) the and will be applied last to the lowest requirements, are designed to permit commencement of a rapid amortization level class of Certificates (or the each relevant Rating Agency to or rapid accumulation period. Finance Collateral Interest). Conversely, the conclude that mismanagement risks are charges and fees collected during the losses will first reduce the lowest class minimal. revolving period and the accumulation of Certificates (or the Collateral Interest), The Certificates or amortization period are applied to the only affecting the senior (or Class A) related Series, and are not generally Certificates after all other classes have 20. Each Series may include a class or shared within the Group. been reduced to zero. The result of this various classes of Certificates, some of 16. Every Trust will have a variety of tiered structure is that the senior (or which may be subordinate to others. credit enhancement features, as Class A) Certificates are protected from Certificateholders will be entitled to described in the PSA and specified in nonpayment by the lower classes. If the receive periodic payments of interest the applicable PSA Supplement. In certainty of payment provided by the based upon a fixed or variable interest addition to the Group sharing of subordination or other credit support rate which is set forth in the PSA collections discussed above, other credit mechanism is insufficient to allow each Supplement and applied to the enhancements may include relevant Rating Agency to bestow one of Certificateholder’s unpaid principal subordination and letters of credit or its two highest ratings on the senior balance. Certificateholders will also be other third party arrangements. The type Certificates, the senior Certificates entitled to receive a lump sum principal and value of credit enhancement for a would not be eligible for the relief payment on the scheduled payment particular Series is designed to provided under the proposed date, or a series of periodic payments compliment the underlying Trust exemption. beginning on the scheduled payment receivables so that, as a whole, the Trust 18. Third Party Credit Enhancement. commencement date, as specified in the assets satisfy the relevant Rating A Series may include a form of credit PSA Supplement, to the extent of the Agency’s requirements for the superior enhancement provided by an outside Certificateholder’s investor interest. rating desired. In this regard, MBNA party, such as a letter of credit, a cash As noted earlier, only Certificates that represents that the particular class of collateral account, insurance or a are not subordinate to any other class or certificates for each series to which this guaranty or other extension of credit. classes of Certificates (the ‘‘Senior proposed exemption would apply (an This arrangement will be documented Certificates’’) would be eligible for Exempt Class) will have credit support by a separate contract outlining the exemptive relief under the proposed provided to the Exempt Class through terms of the enhancement. A holder of exemption. either a senior-subordinated series the Collateral Interest (described in the 21. MBNA represents that a plan structure or other form of third party preceding paragraph) or other would invest in the Certificates for the credit support which, at a minimum, subordinate interest holder may be a same reasons any investor would invest will represent five (5) percent of the loan provider or an investor in the Class in a highly secure, ‘‘AA’’ (or better) outstanding principal balance of C Interest, and the PSA Supplement rated investment with attractive yields. certificates issued for the Exempt Class, typically requires that a minimum The Senior Certificates represent an so that an investor in the Exempt Class Collateral Interest (or subordinate investment alternative which offers all will not bear the initial risk of loss. interest) be a feature of each Series. As the benefits of a highly rated fixed- Each Series with an Exempt Class with all the forms of credit income security, such as fixed payment covered by the proposed exemption will enhancement, the terms and the amount streams, investment diversity and include one or more of the following of the Collateral Interest will be market rates of return. Permitting plans credit enhancing investor safeguards (as dependent upon an evaluation of the to invest in Senior Certificates in discussed further below): (i) other Trust assets and the additional reliance on the proposed exemption Subordination; (ii) Third Party Credit support needed to satisfy each relevant would provide plans with additional Enhancement; and (iii) Allocation of Rating Agency that the Certificates are and safe investment opportunities. Collections and Payments to sufficiently protected from default. 22. With respect to the credit ratings Certificateholders Allows No Variation. 19. Allocation of Collections and of the Certificates, MBNA states that the 17. Subordination. Typically, a Series Payments to Certificateholders Allows rating reflects a Rating Agency’s opinion will have some form of subordination No Variation. The PSA Supplement as to the relative amount of protection incorporated within the payment provides instructions to the Servicer that investors have against loss of schedule detailed in the PSA regarding each day’s collections and the principal and interest during the life of Supplement. Such a Series will consist allocation of those collections to the the security. A high rating comports of at least one class of senior Certificates various accounts created by the PSA. with a low risk of loss. In order to (typically designated as ‘‘Class A These instructions indicate how to make achieve this rating, each relevant Rating Certificates’’) which will be allocated the payments and allocations during the Agency requires the credit card collections in a more favorable manner revolving period, the amortization or securitizations effected through the than, and/or prior to, another class (or accumulation period and the rapid Trust to include a variety of other classes) of Certificates (i.e., the amortization or rapid accumulation safeguards—such as subordination or next lower level, typically designated as period, if any. The instructions also other forms of credit enhancement, ‘‘Class B Certificates’’) and often will cover the treatment of other moneys limitations on the Seller’s discretion, include an uncertificated class from loans or other credit enhancement and Rating Agency approval of certain subordinate to the Class B Certificates features, and carefully describe how to actions taken with respect to the Trust (typically designated as the ‘‘Collateral accommodate any excess collections, or or a Series of Certificates. Each relevant Interest’’ or ‘‘Class C Interest’’). The how to compensate for any shortfalls. In Rating Agency typically requires legal subordination process generally will following these detailed instructions, opinions regarding the credit card involve both the receipt of collections the Servicer does not make any securitization’s structure and performs Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4049 stress tests on the portfolio of selected 23. MBNA represents that the outstanding principal amount of each receivables in order to evaluate the statistics on Certificates backed by class of Certificates in which plans have securitization’s anticipated performance credit card trusts indicate that they are invested, and at least 50 percent of the within a range of significant market sound investments. In this regard, outstanding aggregate interest of the fluctuations. In addition, each relevant MBNA states that public credit card Trust, in connection with the initial Rating Agency performs a securitization transactions have been in issuance of the Certificates, must be comprehensive review of all documents existence since 1987 and issuers have acquired by persons independent of the related to the credit card securitization successfully sold over $230 billion in Sponsor, the Servicer and other related before the formal rating is given. Each Certificates backed by credit card parties. These restrictions are designed relevant Rating Agency must provide receivables since then with a zero to protect plan investors from the risks confirmations that additions of investor loss rate. MBNA states further inherent in excessive ownership receivables from accounts to a Trust, or that plans have invested during this concentration and related party withdrawals of existing accounts from a time in such Certificates, despite the transactions. trust, will not result in a Ratings Effect prohibited transaction provisions of the 24. MBNA represents that the on the Certificates. Act, in reliance upon the Department’s requested exemption is similar to the After its rating is assigned, the Rating regulation defining ‘‘plan assets’’ and, Underwriter Exemptions.14 The Agency monitors the performance of the specifically, the ‘‘100-Holder Underwriter Exemptions are a series of credit card receivables included in a Exception’’ for ‘‘publicly-offered’’ exemptions granted by the Department Trust in order to assess whether the securities (see 29 CFR 2510.3–101).12 to various underwriters or trust performance remains consistent with MBNA maintains that the proposed sponsors for transactions relating to the the rating. Although variations in exemption offers a number of safeguards acquisition by plans of certificates portfolio performance are expected in the form of concentration restrictions representing interests in trusts holding during a Certificate’s duration and are that are designed to provide additional various types of assets (e.g. single and factored into a Rating Agency’s analysis, protections for plan investors which are multi-family residential or commercial extreme and unexpected performance not included in the typical 100-holder mortgages, motor vehicle leases and results may result in a revision of the exception transactions. For example, for related vehicles, equipment leases or rating. MBNA makes its Trust purposes of the relief from the other secured obligations), as provided performance information available to prohibitions of section 406(b) of the in Section III.B. of the Underwriter each relevant Rating Agency in a variety Act 13 provided under Section I.B. Exemptions. of ways, in order to ensure that the herein (relating to certain obligors of the The Trusts described under the Rating Agency receives all the Trust who may have discretionary proposed exemption for Certificates information it deems necessary to make authority for a plan investing in backed by credit card receivables differ its evaluation. For example, MBNA certificates of the Trust), the proposed from trusts holding secured obligations provides information on portfolio exemption limits such plan’s in that the Trusts do not contain a fixed performance broken down by account investment in any class of Certificates of pool of assets and the receivables are balance, credit limit, account age, any Series to not more than 25 percent not secured by real or tangible personal delinquency period and geographic of the principal amount of the property. However, MBNA states that distribution. Certificates of that class outstanding at this difference in structure does not MBNA states that the receipt of one of the time of acquisition. In addition, represent a difference in the quality or the two highest generic ratings from a immediately after the acquisition of the safety of investments by plans and other Rating Agency represents the result of certificates, not more than 25 percent of investors in the Certificates. Under the an exhaustive analysis of the many risk the assets of such a plan may be proposed exemption, MBNA represents factors involved with a Series of invested in certificates representing an that the other forms of credit Certificates, and provides a comfort interest in the trust, or trusts containing enhancement provide at least the same level to investors that the potential receivables sold or serviced by the same level of security for investors in Trusts reduction in yield as a result of credit entity. Further, the proposed exemption holding credit card receivables as exists losses is minimal.11 requires that at least 50 percent of the for investors in trusts holding tangible or real property as collateral for the 11 In this regard, the Department was advised by card accounts and may have different payment rates payment obligations to representatives from two of the Rating Agencies (RA on the receivables associated with those accounts. Certificateholders. In addition, Trusts 12 Reps) of certain issues concerning the ratings of The Department’s regulation defining ‘‘plan holding credit card receivables do not certificates issued by trusts holding credit card assets’’ provides that, if a plan invests in a publicly- receivables. The RA Reps discussed, among other offered security, the plan’s assets will not include, involve the expense and administrative things, the fact that different banks use different solely by reason of such investment, any of the complexities of foreclosure procedures underwriting standards and may offer cardholders underlying assets of the entity issuing the security relating to tangible and real property. different terms on their accounts. Some banks may (i.e. the ‘‘look-through rule’’ will not apply and the 25. Certificateholders are entitled to be willing to accept cardholders with more risky operations of the entity will not be subject to credit histories while other banks may not or may scrutiny under the prohibited transaction receive periodic payments of interest offer better terms to cardholders with superior provisions of the Act). The regulation defines a based upon an interest rate, which may payment histories. The result may be that some ‘‘publicly-offered’’ security as one that is freely be variable or fixed. This interest rate is banks have a higher quality portfolio of receivables transferable, widely-held, and registered under the specified or defined in the PSA than other banks. The RA Reps stated that if a bank federal securities laws. A class of securities is securitizes a portfolio of receivables which holds a ‘‘widely held’’ if it is owned by 100 or more Supplement for the particular Series number of riskier accounts, the Rating Agencies investors who are independent of the issuer and of and is applied to the outstanding will require more credit enhancement measures one another at the conclusion of the offering (see principal balance of the Certificates. because different assumptions will have to be made 29 CFR 2510.3–101(b)(3)). This outstanding balance (net of any about the performance of the portfolio—e.g. higher 13 Section 406(b) of the Act, in pertinent part, charge-off rates will be assumed and greater ‘‘excess prohibits a plan fiduciary from dealing with the charge-offs) is known as the investor spread’’ will be necessary to avoid losses—in order assets of the plan in his own interest or for his own to achieve an ‘‘AAA’’ rating. Thus, for example, account, or from acting on behalf of a party (or 14 As indicated in Footnote 7 above, PTE 97–34 Bank A’s certificates may receive an ‘‘AAA’’ rating representing a party) whose interests are adverse to (which granted an amendment to the Underwriter along with MBNA’s certificates even though Bank the interests of the plan and its participants and Exemptions) contains the most comprehensive A may experience more charge-offs on the credit beneficiaries. listing of these exemptions. 4050 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices interest for the senior class of portion of the certificate balance of such counterparty, the servicer (as agent for Certificates. Certificateholders are also class represented by receivables; the trustee of the trust) will be required entitled to receive principal payments (d) Which is not leveraged (i.e. to either: on the scheduled payment dates, or payments are based on the applicable (i) Obtain a replacement swap sooner or later under certain limited notional amount, the day count agreement with an Eligible Swap circumstances, pursuant to the PSA fractions, the fixed or floating rates Counterparty, the terms of which are Supplement to the extent of the designated in item (b) above, and the substantially the same as the current Certificateholders’ investor interest. The difference between the products thereof, swap agreement (at which time the payments are funded from collections calculated on a one to one ratio and not earlier swap agreement will terminate); on the related receivables and allocated on a multiplier of such difference); (ii) Cause the swap counterparty to to the investor interests as provided in (e) Which has a final termination date post collateral with the trustee of the the PSA Supplement. that is the earlier of the date on which trust in an amount equal to all payments MBNA states that a Series or class of the Trust terminates or the related class owed by the counterparty if the swap Certificates may have the benefit of an of Certificates is fully repaid; and transaction were terminated; or interest rate swap agreement entered (f) Which does not incorporate any (iii) Terminate the swap agreement in into between the Trustee for a Trust and provision which could cause a accordance with its terms. a bank or other financial institution unilateral alteration in any provision Under any termination of a swap, the acting as a swap counterparty. Pursuant described in items (a) through (e) above Trust will not be required to make any to the swap agreement, the swap without the consent of the Trustee. termination payments to the swap counterparty would pay a certain rate of In addition, any Eligible Swap entered counterparty (other than a currently interest to the Trust in return for a into by the Trust will be with an scheduled payment under the swap payment of a rate of interest by the ‘‘Eligible Swap Counterparty’’, which agreement) except from ‘‘excess finance Trust, from collections allocable to the will be a bank or other financial charge collections’’ or other amounts relevant Series or class of Certificates, to institution with a rating at the date of that would otherwise be payable to the the swap counterparty. MBNA issuance of the Certificates by the Trust servicer or the seller (i.e. MBNA). In this represents that the credit rating which is in one of the three highest regard, ‘‘excess finance charge provided to a particular Series or class long-term credit rating categories, or one collections’’ will be, as of any day funds of Certificates by the relevant Rating of the two highest short-term credit are distributed from the Trust, the Agency may or may not be dependent rating categories, utilized by at least one amounts by which the finance charge upon the existence of a swap agreement. of the Rating Agencies rating the collections allocated to certificates of a Thus, in some instances, the terms and Certificates (see Section III.II above). series exceed the amounts necessary to conditions of the swap agreements will However, if a swap counterparty is pay certificate interest, servicing fees not effect the credit rating of the Series relying on its short-term rating to and expenses, to satisfy cardholder or class of Certificates to which the establish its eligibility, such defaults or charge-offs, and to reinstate swap relates (i.e. a ‘‘Non-Ratings counterparty must either have a long- credit support. Dependent Swap’’). term rating in one of the three highest With respect to Non-Ratings MBNA states that whether or not the long-term rating categories or not have Dependent Swaps, each Rating Agency credit rating of a particular Series or a long-term rating from the applicable rating the Certificates must confirm, as class of Certificates is dependent upon Rating Agency. of the date of issuance of the Certificates the terms and conditions of one or more With respect to a Ratings Dependent by the Trust, that entering into the swap interest rate swap agreements entered Swap, an Eligible Swap Counterparty transactions with the Eligible Swap into by the Trust (i.e. a ‘‘Ratings will be subject to certain Counterparty will not effect the rating of Dependent Swap’’ or a ‘‘Non-Ratings collateralization or other arrangements the Certificates, even if such Dependent Swap’’), each particular satisfactory to the Rating Agencies in counterparty is no longer an ‘‘eligible’’ swap transaction will be an ‘‘Eligible the event of a rating downgrade of such counterparty and the swap is Swap’’ as defined in Section III.HH. swap counterparty below a level terminated.15 above. specified by the Rating Agency, which Any class of senior Certificates to In this regard, an Eligible Swap will would be no lower than the level that which one or more swap agreements be a swap transaction: would make such counterparty entered into by the trust applies, will be (a) Which is denominated in U.S. ‘‘eligible’’ under this proposed acquired or held only by Qualified Plan Dollars; exemption (see Section III.II. above). If (b) Pursuant to which the Trust pays these arrangements are not established 15 RA Reps have indicated to the Department that or receives, on or immediately prior to within a specified period, as described certain series of certificates issued by a trust the respective payment or distribution in the PSA, there will be an early payout holding credit card receivables will have certificate ratings that are not dependent on the existence of date for the applicable senior class of event causing certificateholders to a swap transaction entered into by the trust. Certificates, a fixed rate of interest, or a receive an earlier than expected payout Therefore, a downgrade in the swap counterparty’s floating rate of interest based on a of principal on their certificates for the credit rating would not cause a downgrade in the publicly available index (e.g. LIBOR or series to which the swap relates. rating established by the Rating Agency for the certificates. RA Reps state that in such instances the U.S. Federal Reserve’s Cost of Funds However, with respect to a Non-Ratings there will be more credit enhancements (e.g. Index (COFI)), with the Trust receiving Dependent Swap, the PSA will not ‘‘excess spread’’, letters of credit, cash collateral such payments on at least a quarterly specify that there be an early payout accounts) for the series to protect the basis and obligated to make separate event for the series to which the swap certificateholders than there would be in a comparable series where the trust enters into a so- payments no more frequently than the relates if the credit rating of the swap called Ratings Dependent Swap. Non-Ratings counterparty, with all simultaneous counterparty falls below the level Dependent Swaps are generally used as a payments being netted; required for it to be considered an convenience to enable the trust to pay certain fixed (c) Which has a notional amount that Eligible Swap Counterparty (as interest rates on a series of certificates. However, the receipt of such fixed rates by the trust from the does not exceed either (i) the certificate described in Section III.II. above). In counterparty is not a necessity for the trust to be balance of the class of certificates to such instances, in order to protect the able to make its fixed rate payments to the which the swap relates, or (ii) the interests of the Trust as a swap certificateholders. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4051

Investors (as defined in Section III.JJ. setting forth material information (b) The rights and interests evidenced above). Qualified Plan Investors will be concerning the status of the Trust. by the senior Certificates will not be plan investors represented by an In the case of a Trust that offers and subordinated to the rights and interests appropriate independent fiduciary that sells Certificates in a registered public evidenced by other investor Certificates is qualified to analyze and understand offering, the Trustee, the Servicer or the of the Trust; the terms and conditions of any swap Sponsor will file such periodic reports (c) Any senior Certificates acquired by transaction relating to the class of senior as may be required to be filed under the a plan will have received a rating at the Certificates to be purchased and the Securities Exchange Act of 1934 (the ’34 time of such acquisition that is in one effect such swap would have upon the Act). Although some Trusts that offer of the two highest generic rating credit rating of the senior Certificates to Certificates in a public offering will file categories from any one of the Rating which the swap relates. quarterly reports on Form 10–Q and Agencies or, for certificates with a For purposes of the proposed Annual Reports on Form 10–K, many duration of one year or less, the highest exemption, such a qualified Trusts (i) obtain, by application to the short-term generic rating category from independent fiduciary will be either: SEC, a complete exemption from the any one of the Rating Agencies; (i) A ‘‘qualified professional asset requirement to file quarterly reports on (d) The Trustee of the Trust will not manager’’ (i.e. QPAM), as defined under Form 10–Q and a modification of the be an affiliate of any other member of Part V(a) of PTE 84–14; 16 disclosure requirements for annual the Restricted Group; (ii) an ‘‘in-house asset manager’’ (i.e. reports on Form 10–K; or (ii) are not (e) The sum of all payments made to INHAM), as defined under Part IV(a) of subject to such requirements for one or and retained by the underwriters in PTE 96–23; 17 or more Series of Certificates issued by the connection with the distribution or (iii) A plan fiduciary with total assets Trust. If such an exemption is obtained, placement of Certificates will represent under management of at least $100 these Trusts normally would continue not more than reasonable compensation million at the time of the acquisition of to have the obligation to file current for underwriting or placing the such Certificates. reports on Form 8–K to report material Certificates; the consideration received Disclosures Available to Investing Plans developments concerning the Trust and by the Sponsor as a consequence of the the Certificates. While the SEC’s assignment of receivables (or interests 26. In connection with the original interpretation of the periodic reporting therein) to the Trust will represent not issuance of certificates, the prospectus requirement is subject to change, more than the fair market value of such or private offering memorandum will be periodic reports concerning a Trust will receivables (or interests); and the sum of furnished to investing plans. The be filed to the extent required under the all payments made to and retained by prospectus or private offering ’34 Act. the Servicer, which are allocable to the memorandum will contain information MBNA states that at or about the time Series or class of certificates purchased pertinent to a plan’s decision to invest distributions are made to by a plan, will represent not more than in the Certificates, such as: Certificateholders, reports will be reasonable compensation for the (a) Information concerning the delivered to the Trustee as to the status Servicer’s services under the Pooling Certificates, including payment terms, of the Trust and its assets, including and Servicing Agreement and certain tax consequences of owning and underlying Receivables. Such reports reimbursement of the Servicer’s selling Certificates, the legal investment will typically contain information reasonable expenses in connection status and rating of the Certificates, and regarding the Trust’s assets, payments therewith; any special considerations with respect received or collected by the Servicer, (f) Any plan investing in such to the Certificates; the amount of delinquencies and (b) Information about the underlying Certificates will be an ‘‘accredited defaults, the amount of any payments receivables, including the types of investor’’ as defined in Rule 501(a)(1) of made pursuant to any credit support or receivables, statistical information Regulation D of the SEC under the credit enhancement feature, and the relating to the receivables, their Securities Act of 1933; amount of compensation payable to the payment terms, and the legal aspects of (g) The terms of each Series or class Servicer. Such reports will also be the receivables; of Certificates, and the conditions under (c) Information about the servicing of delivered or made available to the which MBNA may designate additional the receivables, including the identity of Rating Agency that currently rates the accounts to, or remove previously- the servicer and servicing Certificates. Such reports will be designated accounts from, the Trust will compensation; available to investors and its availability be described in the prospectus or (d) Information about the Sponsor of will be made known to potential private placement memorandum the Trust; investors. In addition, promptly after provided to investing plans; (e) A full description of the material each distribution date, (h) The Trustee of the Trust will be a terms of the Pooling and Servicing Certificateholders will receive a substantial financial institution or trust Agreement; and statement summarizing information company experienced in trust activities (f) Information about the scope and regarding the Trust and its assets and and would be familiar with its duties, nature of the secondary market, if any, the applicable Series, including responsibilities and liabilities as a for such Certificates. underlying receivables. fiduciary under the Act; Certificateholders will be provided 28. In summary, MBNA represents (i) The PSA will include ‘‘Economic with information concerning the that the proposed transactions will meet Pay Out Events’’ triggered by a decline amount of principal and interest to be the statutory criteria of section 408(a) of in the performance of the receivables in paid on Certificates in connection with the Act because, among other things: the Trust; each distribution to Certificateholders. (a) The acquisition of senior (j) To protect against fraud, Certificateholders will also be provided Certificates by a plan will be on terms chargebacks or other dilution of the with periodic information statements (including Certificate price) that are at receivables in the Trust, the PSA and least as favorable to the plan as such the Rating Agencies will require MBNA, 16 See Footnote 8 above. terms would be in an arm’s-length as the Trust’s sponsor, to maintain a 17 See Footnote 9 above. transaction with an unrelated party; seller interest of not less than 2 percent 4052 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices of the principal balance of the following transactions involving trusts Restricted Group, as defined in Section receivables contained in the Trust; and certificates evidencing interests III.L., and at least 50 percent of the (k) Each receivable added to a Trust therein: aggregate undivided interest in the trust will be an eligible receivable, based on (1) The direct or indirect sale, allocated to the certificates of a series is criteria of the relevant Rating exchange or transfer of certificates in the acquired by persons independent of the Agency(ies) and as specified in the PSA; initial issuance of certificates between Restricted Group; (l) The PSA will require that any the trust, the sponsor or an underwriter (iii) A plan’s investment in each class change in the terms of any cardholder and an employee benefit plan subject to of certificates of a series does not exceed agreements also will be made applicable the Act or section 4975 of the Code (a 25 percent of all of the certificates of to the comparable segment of accounts plan) when the sponsor, servicer, trustee that class outstanding at the time of the owned or serviced by MBNA which are or insurer of a trust, the underwriter of acquisition; part of the same program or have the the certificates representing an interest (iv) Immediately after the acquisition same or substantially similar in the trust, or an obligor is a party in of the certificates, no more than 25 characteristics; interest with respect to such plan; percent of the assets of a plan with (m) The addition of new receivables (2) The direct or indirect acquisition respect to which the person has or designation of new accounts, or or disposition of certificates by a plan in discretionary authority or renders removal of previously-designated the secondary market for such investment advice is invested in accounts, will meet the terms and certificates; and certificates representing the aggregate conditions for such additions, (3) The continued holding of undivided interest in a trust allocated to designations, or removals as described certificates acquired by a plan pursuant the certificates of a series and in the prospectus or private placement to Section I.A.(1) or (2). containing receivables sold or serviced memorandum for such Certificates, Notwithstanding the foregoing, by the same entity; 19 and which terms and conditions will have Section I.A. does not provide an (v) Immediately after the acquisition been approved by each relevant Rating exemption from the restrictions of of the certificates, not more than 25 Agency, and will not result in the sections 406(a)(1)(E), 406(a)(2) and 407 percent of the assets of a plan with Certificates receiving a lower credit for the acquisition or holding of a respect to which the person has certificate on behalf of an Excluded rating from the relevant Rating Agency discretionary authority or renders Plan, as defined in Section III.K. below, than the then current rating of the investment advice is invested in by any person who has discretionary Certificates; certificates representing an interest in authority or renders investment advice (n) Any swap transaction relating to the trust, or trusts containing with respect to the assets of the senior Certificates that are covered by receivables sold or serviced by the same Excluded Plan that are invested in the proposed exemption must satisfy the entity. For purposes of paragraphs several investor-protective conditions certificates.18 B. Effective as of the date this B.(1)(iv) and B.(1)(v) only, an entity applicable to Eligible Swaps and must shall not be considered to service be entered into by the Trust with an proposed exemption is granted, the restrictions of sections 406(b)(1) and receivables contained in a trust if it is Eligible Swap Counterparty; and merely a subservicer of that trust; (o) Any class of Certificates to which 406(b)(2) of the Act and the taxes imposed by section 4975(a) and (b) of (2) The direct or indirect acquisition one or more swap agreements entered or disposition of certificates by a plan in into by the Trust applies may be the Code, by reason of section 4975(c)(1)(E) of the Code, shall not the secondary market for such acquired or held by plans in reliance certificates, provided that conditions set upon this proposed exemption only if apply to: (1) The direct or indirect sale, forth in Section I. B.(1)(i), (iii) through such plans are represented by (v) are met; and ‘‘Qualified Plan Investors.’’ exchange or transfer of certificates in the initial issuance of certificates between (3) The continued holding of FOR FURTHER INFORMATION CONTACT: Mr. the trust, the sponsor or an underwriter certificates acquired by a plan pursuant E.F. Williams of the Department, and a plan when the person who has to Section I.B.(1) or (2). telephone (202) 219–8194. (This is not discretionary authority or renders C. Effective as of the date that the a toll-free number.) investment advice with respect to the proposed exemption is granted, the Citibank (South Dakota), N.A., Citibank investment of plan assets in the restrictions of sections 406(a), 406(b) (Nevada), N.A., and Affiliates certificates is (a) an obligor with respect and 407(a) of the Act and the taxes Located in North Sioux Falls, South Dakota imposed by section 4975(a) and (b) of (Application No. D–10313) to receivables contained in the trust constituting 0.5 percent or less of the the Code, by reason of section 4975(c) Proposed Exemption fair market value of the aggregate of the Code, shall not apply to transactions in connection with the The Department is considering undivided interest in the trust allocated to the certificates of a series, or (b) an servicing, management and operation of granting an exemption under the a trust, including the reassignment to authority of section 408(a) of the Act affiliate of a person described in (a); if (i) The plan is not an Excluded Plan; the sponsor of receivables, the removal and section 4975(c)(2) of the Code and from the trust of accounts previously in accordance with the procedures set (ii) Solely in the case of an acquisition of certificates in connection with the designated to the trust, the changing of forth in 29 CFR part 2570, subpart B (55 the underlying terms of accounts FR 32836, 32847, August 10, 1990). initial issuance of the certificates, at least 50 percent of each class of designated to the trust, the adding of Section I—Transactions certificates in which plans have invested is acquired by persons 19 For purposes of this proposed exemption, each A. Effective as of the date this plan participating in a commingled fund (such as proposed exemption is granted, the independent of the members of the a bank collective trust fund or insurance company restrictions of sections 406(a) and 407(a) pooled separate account) shall be considered to of the Act and the taxes imposed by 18 Section I.A. provides no relief from sections own the same proportionate undivided interest in 406(a)(1)(E), 406(a)(2) and 407 for any person each asset of the commingled fund as its section 4975 (a) and (b) of the Code, by rendering investment advice to an Excluded Plan proportionate interest in the total assets of the reason of section 4975(c)(1) (A) through within the meaning of section 3(21)(A)(ii) and commingled fund as calculated on the most recent (D) of the Code, shall not apply to the regulation 29 CFR 2510.3–21(c). preceding valuation date of the fund. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4053 new receivables to the trust, the of such certificates of such series, or (ii) other form of third-party credit support designation of new accounts to the trust, the series termination date specified in which, at a minimum, represents five (5) the retention of a retained interest by the prospectus or private placement percent of the outstanding principal the sponsor in the receivables, the memorandum. balance of certificates issued for the exercise of the right to cause the Notwithstanding the foregoing, Exempt Class, so that an investor in the commencement of amortization of the Section I.C. does not provide an Exempt Class will not bear the initial principal amount of the certificates, or exemption from the restrictions of risk of loss; the use of any eligible swap section 406(b) of the Act, or from the (4) The trustee is not an affiliate of transactions, provided: taxes imposed under section 4975(a) any other member of the Restricted (1) Such transactions are carried out and (b) of the Code, by reason of section Group. However, the trustee shall not be in accordance with the terms of a 4975(c)(1)(E) or (F) of the Code, for the considered to be an affiliate of a servicer binding pooling and servicing receipt of a fee by the servicer of the solely because the trustee has succeeded agreement; and trust, in connection with the servicing to the rights and responsibilities of the (2) The pooling and servicing of the receivables and the operation of servicer pursuant to the terms of a agreement is provided to, or described the trust, from a person other than the pooling and servicing agreement in all material respects in the prospectus trustee or sponsor, unless such fee providing for such succession upon the or private placement memorandum constitutes a ‘‘qualified administrative occurrence of one or more events of provided to, investing plans before they fee’’ as defined in Section III.S. below. default by the servicer; purchase certificates issued by the D. Effective as of the date that the (5) The sum of all payments made to trust; 20 proposed exemption is granted, the and retained by the underwriters in (3) The addition of new receivables or restrictions of sections 406(a) and 407(a) connection with the distribution or designation of new accounts, or the of the Act and the taxes imposed by placement of certificates represents not removal of receivables or previously- sections 4975(a) and (b) of the Code, by more than reasonable compensation for designated accounts, meets the terms reason of sections 4975(c)(1)(A) through underwriting or placing the certificates; and conditions for such additions, (D) of the Code, shall not apply to any the consideration received by the designations or removals as are transaction to which those restrictions sponsor as a consequence of the described in the prospectus or private or taxes would otherwise apply merely assignment of receivables (or interests placement memorandum for such because a person is deemed to be a party therein) to the trust represents not more certificates, which terms and conditions in interest or disqualified person than the fair market value of such have been approved by Standard & (including a fiduciary) with respect to a receivables (or interests); and the sum of Poor’s Ratings Services, Moody’s plan by virtue of providing services to all payments made to and retained by Investor Service, Inc., Duff & Phelps the plan (or by virtue of having a the servicer, that are allocable to the Credit Rating Co., or Fitch Investors relationship to such service provider as series of certificates purchased by a Service, L.P., or their successors described in section 3(14)(F), (G), (H) or plan, represents not more than (collectively, the Rating Agencies), and (I) of the Act or section 4975(e)(2)(F), reasonable compensation for the does not result in the certificates (G), (H) or (I) of the Code), solely servicer’s services under the pooling receiving a lower credit rating from the because of the plan’s ownership of and servicing agreement and Rating Agencies than the then current certificates. reimbursement of the servicer’s reasonable expenses in connection rating for the Certificates; and Section II—General Conditions (4) The series of which the certificates therewith; are a part will be subject to an Economic A. The relief provided under Section (6) The plan investing in such Early Amortization Event, which is set I is available only if the following certificates is an ‘‘accredited investor’’ forth in the pooling and servicing conditions are met: as defined in Rule 501(a)(1) of (1) The acquisition of certificates by a agreement and described in the Regulation D of the Securities and plan is on terms (including the prospectus or private placement Exchange Commission (SEC) under the certificate price) that are at least as memorandum associated with the Securities Act of 1933; favorable to the plan as such terms (7) The trustee of the trust is a series, the occurrence of which will would be in an arm’s-length transaction substantial financial institution or trust cause any Revolving Period, Controlled with an unrelated party; company experienced in trust activities Amortization Period, or Accumulation (2) The rights and interests evidenced and is familiar with its duties, Period applicable to the certificates to by the certificates are not subordinated responsibilities, and liabilities as a end, and principal collections to be to the rights and interests evidenced by fiduciary under the Act (i.e. ERISA). applied to monthly payments of other certificates of the same trust; The trustee, as the legal owner of the principal to, or accumulated for the (3) The certificates acquired by the receivables in the trust, enforces all the account of, the certificateholders of such plan have received a rating at the time rights created in favor of series until the earlier of: (i) payment in of such acquisition that is either: (i) in certificateholders of such trust, full of the outstanding principal amount one of the two highest generic rating including employee benefit plans categories from any one of the Rating subject to the Act; 20 In the case of a private placement memorandum, such memorandum must contain Agencies; or (ii) for certificates with a (8) Prior to the issuance of any new substantially the same information that would be duration of one year or less, the highest series in the trust, confirmation must be disclosed in a prospectus if the offering of the short-term generic rating category from received from the Rating Agencies that certificates were made in a registered public any one of the Rating Agencies; such issuance will not result in the offering under the Securities Act of 1933. In the Department’s view, the private placement provided that, notwithstanding such reduction or withdrawal of the then memorandum must contain sufficient information ratings, this exemption (if granted) shall current rating or ratings of the to permit plan fiduciaries to make informed apply to a particular class of certificates certificates held by any plan pursuant to investment decisions. For purposes of this proposed only if such class (an Exempt Class) is this exemption; exemption, all references to ‘‘prospectus’’ include any related supplement thereto, and any documents part of a series in which credit support (9) To protect against fraud, incorporated by reference therein, pursuant to is provided to the Exempt Class through chargebacks or other dilution of which certificates are offered to investors. a senior-subordinated series structure or receivables in the trust, the pooling and 4054 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices servicing agreement and the Rating agent for the trustee) has failed, for a (1) Such condition is disclosed in the Agencies require the sponsor to specified period after such rating prospectus or private placement maintain a seller interest of not less than withdrawal or reduction, to meet its memorandum; and the greater of (i) 2 percent of the initial obligation under the pooling and (2) In the case of a private placement aggregate principal balance of investor servicing agreement to: of certificates, the trustee obtains a certificates issued by the trust, or (ii) 7 (i) Obtain a replacement swap representation from each initial percent of the outstanding aggregate agreement with an Eligible Swap purchaser which is a plan that it is in principal balance of investor certificates Counterparty which is acceptable to the compliance with such condition, and issued by the trust; Rating Agency and the terms of which obtains a covenant from each initial (10) Each receivable added to the trust are substantially the same as the current purchaser to the effect that, so long as will be an eligible receivable, based on swap agreement (at which time the such initial purchaser (or any transferee criteria of the Rating Agency and as earlier swap agreement shall terminate); of such initial purchaser’s certificates) is specified in the pooling and servicing or required to obtain from its transferee a agreement. The pooling and servicing (ii) Cause the swap counterparty to representation regarding compliance agreement requires that any change in establish any collateralization or other with the Securities Act of 1933, any the terms of any cardholder agreements arrangement satisfactory to the Rating such transferees shall be required to also be made applicable to the Agency such that the then current rating make a written representation regarding comparable segment of Accounts owned by the Rating Agency of the particular compliance with the condition set forth or serviced by the sponsor which are series of certificates will not be in Section II.A.(6). part of the same program or have the withdrawn or reduced; Section III—Definitions same or substantially similar (d) In the case of a Non-Ratings characteristics; Dependent Swap, shall provide that, if For purposes of this proposed (11) The pooling and servicing the credit rating of the swap exemption: agreement limits the number of the counterparty is withdrawn or reduced A. Certificate means sponsor’s newly originated accounts to below the lowest level specified in (1) A certificate: be added to the trust, unless the Rating Section III.II. hereof, the servicer (as (a) That represents a beneficial Agency otherwise affirmatively agent for the trustee) shall within a ownership interest in the assets of a consents, to the following: (i) with specified period after such rating trust; respect to any three month period, 15 withdrawal or reduction: (b) That entitles the holder to percent of the number of existing (i) Obtain a replacement swap payments denominated as principal and accounts designated to the trust as of the agreement with an Eligible Swap interest, and/or other payments made in first day of such period, and (ii) with Counterparty, the terms of which are connection with the assets of such trust, respect to any calendar year, 20 percent substantially the same as the current either currently, or after a Revolving of the number of existing accounts swap agreement (at which time the Period during which principal designated to the trust as of the first day earlier swap agreement shall terminate); payments on assets in the trust are of such calendar year; or reinvested in new assets; or (12) The pooling and servicing (ii) Cause the swap counterparty to (2) A certificate denominated as a agreement requires the sponsor to post collateral with the trustee of the debt instrument that represents an deliver an opinion of counsel semi- trust in an amount equal to all payments interest in a financial asset annually confirming the validity and owed by the counterparty if the swap securitization investment trust (FASIT) perfection of each transfer of newly transaction were terminated; or within the meaning of section 860L of originated accounts to the trust; the Code, and that is issued by and is (13) The pooling and servicing (iii) Terminate the swap agreement in accordance with its terms; and an obligation of a trust; agreement requires the sponsor and the which is sold upon initial issuance by trustee to receive at specified quarterly (e) Shall not require the trust to make any termination payments to the swap an underwriter (as defined in Section intervals during the year, confirmation III.C.) in an underwriting or private from a Rating Agency that the addition counterparty (other than a currently scheduled payment under the swap placement. of all newly originated accounts added For purposes of this proposed to the trust (during the three month agreement) except from ‘‘Excess Finance Charge Collections’’ (as defined below exemption, references to ‘‘certificates period ending in the calendar month representing an interest in a trust’’ prior to such confirmation) will not in Section III.LL.) or other amounts that would otherwise be payable to the include certificates denominated as debt have resulted in a Ratings Effect; which are issued by a trust. (14) If a particular series of certificates servicer or the seller; and B. Trust means an investment pool, held by any plan involves a Ratings (15) Any Series of certificates which the corpus of which is held in trust and Dependent or Non-Ratings Dependent entails one or more swap agreements consists solely of: Swap entered into by the trust, then entered into by the trust shall be sold (1) Either each particular swap transaction only to Qualified Plan Investors. (a) Receivables (as defined in Section relating to such certificates: B. Neither any underwriter, sponsor, III.T.); or (a) Shall be an Eligible Swap; trustee, servicer, insurer, or any obligor, (b) Shall be with an Eligible Swap unless it or any of its affiliates has (b) Participations in a pool of Counterparty; discretionary authority or renders receivables (as defined in Section III.T.) (c) In the case of a Ratings Dependent investment advice with respect to the where such beneficial ownership Swap, shall include as an early plan assets used by a plan to acquire interests are not subordinated to any amortization event, as specified in the certificates, shall be denied the relief other interest in the same pool of 21 pooling and servicing agreement, the provided under Section I, if the receivables; withdrawal or reduction by any Rating provision in Section II.A.(6) above is not 21 The Department notes that no relief would be Agency of the swap counterparty’s satisfied for the acquisition or holding available under the exemption if the participation credit rating below a level specified by by a plan of such certificates, provided interests held by the trust were subordinated to the the Rating Agency where the servicer (as that: rights and interests evidenced by other Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4055

(2) Property which has secured any of format and structure to this proposed L. Restricted Group with respect to a the assets described in Section exemption (the Underwriter class of certificates means: III.B.(1); 22 Exemptions); 24 any person directly or (1) Each underwriter; (3) Undistributed cash or permitted indirectly, through one or more (2) Each insurer; investments made therewith maturing intermediaries, controlling, controlled (3) The sponsor; no later than the next date on which by or under common control with such (4) The trustee; distributions are to be made to entity; and any member of an (5) Each servicer; certificate holders, except during a underwriting syndicate or selling group (6) Each swap counterparty; Revolving Period (as defined herein) of which such firm or affiliated person (7) Any obligor with respect to when permitted investments are made described above is a manager or co- receivables contained in the trust until such cash can be reinvested in manager with respect to the certificates. constituting more than 0.5 percent of additional receivables described in D. Sponsor means Citibank or an the fair market value of the aggregate paragraph (a) of this Section III.B.(1); affiliate of Citibank that organizes a trust undivided interest in the trust allocated (4) Rights of the trustee under the by transferring credit card receivables or to the certificates of a series, determined pooling and servicing agreement, and interests therein to the trust in exchange on the date of the initial issuance of rights under any cash collateral for certificates. such series of certificates by the trust; or accounts, insurance policies, third-party E. Master Servicer means Citibank or (8) Any affiliate of a person described guarantees, contracts of suretyship and an entity affiliated with Citibank that is in Section III.L.(1)–(7). other credit support arrangements for a party to the pooling and servicing M. Affiliate of another person any certificates, swap transactions, or agreement relating to trust receivables includes: under any yield supplement and is fully responsible for servicing, (1) Any person directly or indirectly, agreements,23 yield maintenance directly or through subservicers, the through one or more intermediaries, agreements or similar arrangements; and receivables in the trust pursuant to the controlling, controlled by, or under (5) Rights to receive interchange fees pooling and servicing agreement. common control with such other received by the sponsor as partial F. Subservicer means Citibank or an person; compensation for the sponsor’s taking affiliate, or an entity unaffiliated with (2) Any officer, director, partner, credit risk, absorbing fraud losses and Citibank, which, under the supervision employee, relative (as defined in section funding receivables for a limited period of and on behalf of the master servicer, 3(15) of the Act), a brother, a sister, or prior to initial billing with respect to services receivables contained in the a spouse of a brother or sister of such accounts designated to the trust. trust, but is not a party to the pooling other person; and Notwithstanding the foregoing, the and servicing agreement. (3) Any corporation or partnership of term ‘‘trust’’ does not include any G. Servicer means Citibank or an which such other person is an officer, investment pool unless: (i) the affiliate which services receivables director or partner. investment pool consists only of contained in the trust, including the N. Control means the power to receivables of the type which have been master servicer and any subservicer or exercise a controlling influence over the included in other investment pools; (ii) their successors pursuant to the pooling management or policies of a person certificates evidencing interests in such and servicing agreement. other than an individual. O. A person will be ‘‘independent’’ of other investment pools have been rated H. Trustee means an entity which is another person only if: in one of the two highest generic rating independent of Citibank and its (1) Such person is not an affiliate of categories by at least one of the Rating affiliates and is the trustee of the trust. that other person; and Agencies for at least one year prior to In the case of certificates which are (2) The other person, or an affiliate the plan’s acquisition of certificates denominated as debt instruments, thereof, is not a fiduciary who has pursuant to this exemption; and (iii) ‘‘trustee’’ also means the trustee of the investment management authority or certificates evidencing an interest in indenture trust. renders investment advice with respect such other investment pools have been I. Insurer means the insurer or purchased by investors other than plans to any assets of such person. guarantor of, provider of other credit P. Sale includes the entrance into a for at least one year prior to the plan’s support for, or other contractual acquisition of certificates pursuant to forward delivery commitment (as counterparty of, a trust. defined in Section III.Q. below), this exemption. Notwithstanding the foregoing, a swap C. Underwriter means an entity which provided: counterparty is not an insurer, and a (1) The terms of the forward delivery has received an individual prohibited person is not an insurer solely because transaction exemption from the commitment (including any fee paid to it holds securities representing an the investing plan) are no less favorable Department that provides relief for the interest in a trust which are of a class operation of asset pool investment trusts to the plan than they would be in an subordinated to certificates representing arm’s length transaction with an that issue ‘‘asset-backed’’ pass-through an interest in the same trust. securities to plans, that is similar in unrelated party; J. Obligor means any person, other (2) The prospectus or private than the insurer, that is obligated to participation interests in the same pool of placement memorandum is provided to make payments with respect to any an investing plan prior to the time the receivables. receivable included in the trust. 22 Citibank states that it is possible for credit card plan enters into the forward delivery receivables to be secured by bank account balances K. Excluded Plan means any plan commitment; and or security interests in merchandise purchased with with respect to which any member of (3) At the time of the delivery, all credit cards. Thus, the proposed exemption should the Restricted Group is a ‘‘plan sponsor’’ conditions of this exemption applicable permit foreclosed property to be an eligible trust within the meaning of section 3(16)(B) asset. to sales are met. 23 In a series involving an accumulation period (as of the Act. Q. Forward Delivery Commitment defined in Section III.AA), a yield supplement means a contract for the purchase or agreement may be used by the Trust to make up the 24 For a listing of the Underwriter Exemptions, see difference between (i) the reinvestment yield on the description provided in the text of the operative sale of one or more certificates to be permitted investments, and (ii) the interest rate on language of Prohibited Transaction Exemption delivered at an agreed future settlement the certificates of that series. (PTE) 97–34 (62 FR 39021, July 21, 1997). date. The term includes both mandatory 4056 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices contracts (which contemplate obligatory servicing agreement that result (in some by the trustee, that serves as credit delivery and acceptance of the instances without further affirmative enhancement with respect to the certificates) and optional contracts action by any party) in an early investor certificates and consists of cash (which give one party the right but not amortization of the certificates, deposits and the proceeds of the obligation to deliver certificates to, including: (1) the failure of the sponsor investments thereon, which investments or demand delivery of certificates from, or the servicer (i) to make any payment are permitted investments, as defined the other party). or deposit required under the pooling below. R. Reasonable Compensation has the and servicing agreement or supplement CC. Permitted Investments means same meaning as that term is defined in thereto within five (5) business days investments which: (1) are direct 29 CFR section 2550.408c–2. after such payment or deposit was obligations of, or obligations fully S. Qualified Administrative Fee required to be made, or (ii) to observe guaranteed as to timely payment of means a fee which meets the following or perform any of its other covenants or principal and interest by, the United criteria: agreements set forth in the pooling and States or any agency or instrumentality (1) The fee is triggered by an act or servicing agreement or supplement thereof, provided that such obligation is failure to act by the obligor other than thereto, which failure has a material backed by the full faith and credit of the the normal timely payment of amounts adverse effect on investors and United States, or (2) have been rated (or owing with respect to the receivables; continues unremedied for 60 days; (2) a the obligor has been rated) in one of the (2) The servicer may not charge the breach of any representation or warranty three highest generic rating categories fee absent the act or failure to act made by the sponsor or the servicer in by a Rating Agency; are described in the referred to in (1); the pooling and servicing agreement or pooling and servicing agreement; and (3) The ability to charge the fee, the supplement thereto that continues to be are permitted by the Rating Agency. circumstances in which the fee may be incorrect in any material respect for 60 DD. Group means a group of any charged, and an explanation of how the days; (3) the occurrence of certain number of series offered by the trust that fee is calculated are set forth in the bankruptcy events relating to the share finance charge and/or principal pooling and servicing agreement or sponsor or the servicer; (4) the failure by collections in the manner described in described in all material respects in the the sponsor to convey to the trust the prospectus. prospectus or private placement additional receivables to maintain the EE. An Economic Early Amortization memorandum provided to the plan minimum seller interest that is required Event occurs automatically when before it purchases certificates issued by by the pooling and servicing agreement finance charge collections averaged over the trust; and and the Rating Agencies; (5) if a class of (4) The amount paid to investors in three consecutive months are less than investor certificates is in an the total amount payable on the investor the trust is not reduced by the amount Accumulation Period, the amount on of any such fee waived by the servicer. certificates, including (i) amounts deposit in the accumulation account in payable to, or on behalf of, T. Receivables means secured or any month is less than the amount unsecured obligations of credit card certificateholders, with respect to required to be on deposit therein; (6) the interest, defaults, and chargeoffs, (ii) holders which have arisen or arise in failure to pay in full amounts owing to servicing fees payable to the servicer, Accounts designated to a trust. Such investors on the expected maturity date; and (iii) any credit enhancement fee obligations represent amounts charged and (7) the Economic Early payable to the third-party credit by cardholders for merchandise and Amortization Event. services and amounts advanced as cash X. Series means an issuance of a class enhancer and allocable to the advances, as well as periodic finance or various classes of certificates by the certificateholders. With respect to a charges, annual membership fees, cash trust all on the same date pursuant to series to which an Accumulation Period advance fees, late charges on amounts the same pooling and servicing (as defined above in Section III.AA.) charged for merchandise and services agreement and any supplement thereto applies, an additional Economic Early and over-limit fees and fees of a similar and restrictions therein. Amortization Event occurs when, for nature designated by card issuers (other Y. Revolving Period means a period of any time during the Accumulation than a qualified administrative fee as time, as specified in the pooling and Period, the yield on the receivables in defined in Section III.S. above). servicing agreement, during which the Trust is less than the weighted U. Accounts are revolving credit card principal collections allocated to a average of the certificate rates of all accounts serviced by Citibank or an series are reinvested in newly generated series included in a particular Group affiliate, which were originated or receivables. within the Trust. purchased by Citibank or an affiliate, Z. Controlled Amortization Period FF. Ratings Effect means the and are designated to a trust such that means a period of time specified in the reduction or withdrawal by a Rating receivables arising in such accounts pooling and servicing agreement during Agency of its then current rating of the become assets of the trust. which a portion of the principal investor certificates of any outstanding V. Pooling and Servicing Agreement collections allocated to a series will series. means the agreement or agreements commence to be paid to the GG. Principal Receivables Discount among a sponsor, a servicer and the certificateholders of such series in means, with respect to any account trustee establishing a trust and any installments. designated by the sponsor, the portion supplement thereto pertaining to a AA. Accumulation Period means a of the related principal receivables that particular series of certificates. In the period of time specified in the pooling represents a discount from the face case of certificates which are and servicing agreement during which a value thereof and that is treated under denominated as debt instruments, portion of the principal collections the pooling and servicing agreement as ‘‘pooling and servicing agreement’’ also allocated to a series will be deposited in finance charge receivables. includes the indenture entered into by an account to be distributed to HH. Eligible Swap means an interest the trustee of the trust issuing such certificateholders in a lump sum on the rate swap, or (if purchased by or on certificates and the indenture trustee. expected maturity date. behalf of the trust) an interest rate cap, W. Early Amortization Event means BB. CCA or Cash Collateral Account that is part of the structure of a Series the events specified in the pooling and means that certain account, established of certificates: Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4057

(1) Which is denominated in U.S. JJ. Qualified Plan Investor means a exceed the amount necessary to pay Dollars; plan investor or group of plan investors certificate interest, servicing fees and (2) Pursuant to which the trust pays on whose behalf the decision to expenses, to satisfy cardholder defaults or receives on or immediately prior to purchase certificates is made by an or charge-offs, and to reinstate credit the respective payment or distribution appropriate independent fiduciary that support. date for the series of certificates, a fixed is qualified to analyze and understand The Department notes that this rate of interest, or a floating rate of the terms and conditions of any swap proposed exemption, if granted, will be interest based on a publicly available transaction used by the trust and the included within the meaning of the term index (e.g. LIBOR or the U.S. Federal effect such swap would have upon the ‘‘Underwriter Exemption’’ as it is Reserve’s Cost of Funds Index (COFI)), credit ratings of the certificates. For defined in Section V(h) of the Grant of with the trust receiving such payments purposes of the proposed exemption, the Class Exemption for Certain on at least a quarterly basis and such a fiduciary is either: Transactions Involving Insurance obligated to make separate payments no (1) A ‘‘qualified professional asset Company General Accounts, which was more frequently than the swap manager’’ (QPAM), as defined under published in the Federal Register on counterparty, with all simultaneous Part V(a) of PTE 84–14 (49 FR 9494, July 12, 1995 (see PTE 95–60, 60 FR payments being netted; 9506, March 13, 1984);25 35925). (2) An ‘‘in-house asset manager’’ (3) Which has a notional amount that Summary of Facts and Representations does not exceed either (i) the certificate (INHAM), as defined under Part IV(a) of 1. The applicants are Citibank (South balance of the class of certificates to PTE 96–23 (61 FR 15975, 15982, April 26 Dakota), N.A., Citibank (Nevada), N.A. which the swap relates, or (ii) the 10, 1996); or (3) A plan fiduciary with total assets (together referred to herein as either portion of the certificate balance of such under management of at least $100 ‘‘the Banks’’ or ‘‘Citibank’’), and their class represented by receivables; million at the time of the acquisition of Affiliates (collectively, the Applicants). (4) Which is not leveraged, (i.e. such certificates. Each of the Banks is a national banking payments are based on the applicable KK. Ratings Dependent Swap means association and an indirect wholly- notional amount, the day count an interest rate swap, or (if purchased owned subsidiary of Citicorp. fractions, the fixed or floating rates by or on behalf of the trust) an interest 2. The Banks are, collectively, through designated in (2) above, and the rate cap contract, that is part of the their securitization trust vehicles, the difference between the products thereof, structure of a series of certificates where largest issuers of credit card receivable calculated on a one to one ratio and not the rating assigned by the Rating Agency asset-backed securities (ABS) in the on a multiplier of such difference); to any series of certificates held by any United States. As of May 26, 1996, such (5) Which has a termination date that plan is dependent on the terms and vehicles had issued over $46 billion of is the earlier of the date on which the conditions of the swap and the rating of credit card receivable ABS. The Banks trust terminates or the related Series of the swap counterparty, and if such created Citibank Credit Card Master certificates is fully repaid; and certificate rating is not dependent on the Trust I (the Trust), formerly known as (6) Which does not incorporate any existence of such swap and rating of the Standard Credit Card Master Trust I, in provision which could cause a swap counterparty, such swap or cap May 1991 by entering into a pooling and unilateral alteration in a provision shall be referred to as a ‘‘Non-Ratings servicing agreement (a Pooling described in clauses (1) through (4) Dependent Swap’’. With respect to a Agreement) with Yasuda Bank and hereof without the consent of the Non-Ratings Dependent Swap, each Trust Company (U.S.A.), as trustee (the trustee. Rating Agency rating the certificates Trustee), for the purpose of securitizing II. Eligible Swap Counterparty means must confirm, as of the date of issuance a portion of each Bank’s portfolio of a bank or other financial institution of the certificates by the trust, that credit card receivables. with a rating at the date of issuance of entering into an Eligible Swap with Although the Banks, the Trust and the the certificates by the trust which is in such counterparty will not affect the Pooling Agreement are described herein, one of the three highest long-term credit rating of the certificates. the Applicants request an exemption for rating categories, or one of the two LL. Excess Finance Charge Collections any master trust similar to the Trust (a highest short-term credit rating means, as of any day funds are Similar Master Trust) 27 established by categories, utilized by at least one of the distributed from the trust, the amount either of the Banks or an Affiliate Rating Agencies rating the certificates; by which the finance charge collections pursuant to a pooling and servicing provided that, if a swap counterparty is allocated to certificates of a series agreement or other contractual relying on its short-term rating to arrangement similar to the Pooling establish eligibility hereunder, such 25 PTE 84–14 provides a class exemption for counterparty must either have a long- transactions between a party in interest with respect 27 With respect to such Similar Master Trusts, to an employee benefit plan and an investment fund term rating in one of the three highest Citibank states that the Small Business Act of 1996 (including either a single customer or pooled created a new form of statutory entity called a long-term rating categories or not have separate account) in which the plan has an interest, ‘‘financial asset securitization investment trust’’ a long-term rating from the applicable and which is managed by a QPAM, provided (FASIT) which may be used to securitize debt Rating Agency, and provided further certain conditions are met. QPAMs (e.g. banks, obligations such as credit card receivables, home insurance companies, registered investment equity loans, and automobile loans. The Applicants that if the series of certificates with advisers with total client assets under management state that a FASIT is equitably owned by a single which the swap is associated has a final in excess of $50 million) are considered to be taxable corporation and issues asset-backed maturity date of more than one year experienced investment managers for plan investors securities that are treated as debt for Federal Income from the date of issuance of the that are aware of their fiduciary duties under Tax purposes. Activities of a FASIT are generally ERISA. limited to holding a portfolio of qualified loans. For certificates, and such swap is a Ratings 26 PTE 96–23 permits various transactions local law purposes, a FASIT might be a trust, a Dependent Swap, the swap counterparty involving employee benefit plans whose assets are corporation, or a designated subset of the assets of is required by the terms of the swap to managed by an INHAM, an entity which is a trust or a corporation. The Applicants represent establish any collateralization or other generally a subsidiary of an employer sponsoring that some certificates covered by the proposed the plan which is a registered investment adviser exemption may be issued by a FASIT, assuming all arrangement satisfactory to the Rating with management and control of total assets of the conditions of the exemption are met Agency in the event of a ratings attributable to plans maintained by the employer including the requirement that the certificates be downgrade of the swap counterparty. and its affiliates which are in excess of $50 million. issued by a Trust (as defined herein). 4058 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Agreement and satisfying the conditions principal and interest therefrom. serve as credit enhancement for the set forth in this proposed exemption. In Although representing beneficial Class A and Class B Certificates or other addition, although Citibank (South interests in the Trust assets, the investor credit enhancement, and (iii) in the case Dakota) is described as the owner of certificates have a structure similar to of the Class A Certificates, the Accounts and the servicer and a seller debt instruments, with a principal subordination of the Class B Certificates. with respect to the Trust, the Applicants amount and a coupon. The investor The Applicants state that if a CCA is request an exemption for any Similar certificates are treated as debt for federal used as credit enhancement for a Series, Master Trust established by the Banks or income tax purposes, and are also only cash in the form of a loan will be one or more Affiliates of the Banks, issued in authorized denominations like contributed or deposited in a CCA. The regardless of the identity or affiliation of debt. Each Series has an expected loans made to a CCA will be made by the servicer, for which Citibank or an maturity date (the Expected Final third-party financial institutions, Affiliate acts as the Master Servicer. Payment Date) and a legal final maturity unrelated to Citibank. The Trustee will date (the Series Termination Date). have the right to draw on the CCA under The Series Citibank states that the Expected Final the terms of the Series supplement to 3. The Pooling Agreement allows the Payment Date is not the date on which the Pooling Agreement and the related Trust to issue multiple series of investor the payment of the security is legally loan agreement for the CCA. Cash certificates (each, a Series) with obligated to be paid. Rather, the deposits held in a CCA will be invested different coupons, interest payment Expected Final Payment Date is the date in certain permitted investments, as dates, maturities and other terms. The on which, to a high degree of certainty, described in the Pooling Agreement, assets of the Trust consist primarily of collections on the Receivables are and such investments will be either receivables (the Receivables) from a expected to be sufficient to repay the highly rated or otherwise approved by a portfolio of revolving credit card investors. However, the investors must Rating Agency. The Applicants state accounts (the Accounts) and collections be repaid by the Series Termination further that not all Series will have the thereon. The Banks are required to Date and, if necessary, any interest in benefit of a CCA. Some Series will have provide sufficient Receivables to allow the Receivables represented by the other forms of credit enhancement (such the reinvestment of principal collections investor certificates of such Series will as a letter of credit or a reserve fund) as during the Revolving Period (as be sold and the proceeds distributed to set forth in the applicable prospectus discussed below) for a Series. The Banks investors to make such repayment. supplement for the Series. retain an ownership interest in the Trust All Series issued by the Trust to date In general, under current Rating in the form of a seller certificate. By are subdivided into a senior class of Agency guidelines for the Master Trust, maintaining this interest, the Banks investor certificates and a junior or the Class A Certificates comprise 94 share with the certificateholders of each subordinated class of investor percent of the principal amount of a Series a pro rata mutual interest in the certificates, or have the benefit of third- Series and the Class B Certificates overall credit quality of the Receivables party credit support such that a person comprise 6 percent of the principal in the Trust. other than an investor in senior amount of a Series. Citibank states that Investor certificates of a Series may be certificates bears the initial risk of loss. where a CCA is used as enhancement sold by the Banks directly to purchasers, In this regard, Citibank represents that for a Series, the CCA will be funded at through underwriting syndicates led by the particular class of certificates for closing in an amount generally equal to one or more managing underwriters, each series to which this proposed 7 percent of the principal amount of the through an underwriter acting alone or exemption would apply (an Exempt Series. The CCA is often further divided through agents designated from time to Class) will have credit support provided into a 5 percent shared CCA, which is time. As of June 25, 1997, investors in to the Exempt Class through either a shared by the Class A and Class B the Trust owned approximately $24.5 senior-subordinated series structure or Certificateholders, but with the Class A billion in certificates issued by the other form of third party credit support Certificateholders having priority, and a Trust, comprising 33 outstanding Series. which, at a minimum, will represent 2% Class B CCA, which is for the The Banks expect to issue additional five (5) percent of the outstanding exclusive benefit of the Class B Series evidencing interests in the Trust principal balance of certificates issued Certificateholders. The CCA provider from time to time. The Banks may offer for the Exempt Class, so that an investor receives a monthly fee for providing the additional Series with terms similar to in the Exempt Class will not bear the loan. This fee is deducted from the or significantly different from an initial risk of loss. monthly finance charge collections outstanding Series. Before issuance of The subdivision of a Series into two allocated to the Series, but only after any new Series, the Banks must receive classes, along with the credit first deducting amounts payable to, or confirmation from Standard & Poor’s enhancement discussed herein, permits on behalf of, the investor Ratings Group, Moody’s Investors the senior or Class A certificates to certificateholders of such Series, as Service, Inc., Duff & Phelps Credit receive an ‘‘AAA’’ rating, the highest described below. Rating Co., or Fitch Investors Service, possible investment grade rating. The Citibank represents that the Trust may L.P. (a Rating Agency) that the ratings subordinate or Class B certificates also commence a new program (the ‘‘MTC on any outstanding Series will not be receive an investment grade rating, Program’’) for the issuance of a new reduced or withdrawn (a Ratings Effect) typically ‘‘A’’. The ratings address the Series of investor certificates to be as a result of such new issuance. The likelihood that investors will receive all comprised of senior certificates (Series particular terms of each Series are interest when due and principal by the A Certificates) and subordinate determined at the time of sale and are legal final maturity date. As discussed certificates (Series B Certificates). Under contained in a supplement to the in more detail below, these ratings are the MTC Program, the Series B Pooling Agreement (a Series based upon, among other things, (i) the Certificates will be subordinated to each Supplement). historical performance of the Series of Series A Certificates, in The investor certificates of each Series Receivables arising in the Accounts, (ii) accordance with the current Rating represent beneficial interests in the a loan made by a third party financial Agency guidelines. The Series issued assets of the Trust and evidence the institution to a cash collateral account under the MTC Program will also have right to receive distributions of (CCA) established by the Trustee to the benefit of a common CCA which Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4059 will be funded in an amount sufficient compensation for such services and alternative, a grant of a perfected to permit each of the Series A reimbursement of any reasonable security interest in the Receivables for Certificates to receive an ‘‘AAA’’ rating expenses in connection therewith. the benefit of certificateholders in the and each of the Series B Certificates to Citibank, in its role as servicer of the Trust. receive at least an ‘‘A’’ rating. Receivables in the Trust, does not The Pooling Agreement sets forth the receive fees from other persons other various requirements governing the The Receivables and the Accounts than the Trustee or sponsor. Citibank quantity and quality of Receivables that 4. The Receivables conveyed by the may receive fees from others for may be included in the Trust. In Banks to the Trust consist of all activities unrelated to the Trust, and connection with any conveyance to the amounts charged by cardholders for may receive payments from obligors on Trust, Citibank must make certain merchandise and services and amounts Receivables in the Trust because it has representations and warranties advanced as cash advances (Principal some other relationship to the obligors, regarding the Receivables, including Receivables), and all periodic finance such as the provider of credit card that the Receivables to be conveyed charges, annual membership fees, cash insurance. In this regard, Citibank states meet eligibility criteria described below advance fees, late charges on amounts that the proposed exemption would and specified in the Pooling Agreement. charged for merchandise and services permit it to receive a ‘‘qualified Citibank also must maintain the level of and certain other fees designated by the administrative fee’’ (as defined in Principal Receivables at or above a Banks (Finance Charge Receivables). Section III.S) from a person other than certain minimum amount specified by Citibank states that as of April 21, 1997, the Trustee or sponsor of the Trust the Rating Agencies (see discussion of the Trust had $35,677,604,475 in under circumstances which are similar additions of accounts in Paragraph 7 Receivables, of which $35,175,269,487 to those which were permitted in the below). were Principal Receivables and Underwriter Exemptions. Notwithstanding such requirements, $502,335,488 were Finance Charge Principal receivables are sold to the the Pooling Agreement contains Receivables. The Receivables conveyed Trust at par (or, as discussed below, at provisions analogous to the collateral to the Trust to date were generated a discount to par) in exchange for a substitution provisions in a loan under the VISA or MasterCard 28 seller certificate or to maintain investor agreement or indenture relating to a programs and were either originated by certificates during the Revolving Period. secured loan, which permit Citibank, Citibank or purchased by Citibank from Each dollar of investor certificates subject to certain conditions imposed by other credit card issuers. Citibank states entitles an investor to a dollar of the Rating Agencies, to designate new that other credit card receivables may be principal receivables. Prior to Accounts or remove certain Accounts, included in the Trust so long as the transferring principal receivables to the to cause the reassignment to Citibank of eligibility criteria discussed herein are Trust, Citibank may redesignate a previously conveyed Receivables and, met. portion of principal receivables to be subject to certain limitations, to change The Accounts are owned by Citibank classified as finance charge receivables the underlying terms of the Accounts (South Dakota), but a participation in (a/k/a the Principal Receivables with cardholders. the Receivables in certain of the Discount). This allows Citibank to 5. Representations and Warranties. Accounts was sold to Citibank (Nevada) transfer lower yielding receivables to On the issuance date for a Series of prior to their conveyance to the Trust. the Trust at a discount from their par investor certificates, Citibank makes The Accounts have been selected from value and to treat the discounted representations and warranties to the substantially all of the Eligible Accounts portion of the principal receivables Trust relating to the Receivables and (as defined under ‘‘Eligibility Criteria’’ collected as finance charge receivables Accounts to the effect, among other below) in the credit card portfolio of (a Discount Option). The Discount things, that: Citibank (South Dakota) (referred to Option enables Citibank to add (a) Each Account was an Eligible herein as ‘‘the Portfolio’’). Citibank receivables relating to credit card Account (as defined under the (South Dakota) believes that the accounts with relatively low finance ‘‘Eligibility Criteria’’ below), generally Accounts are representative of the charge rates without adversely effecting as of the date the Receivables arising Eligible Accounts in the Portfolio. the ‘‘excess spread’’ between the therein were initially conveyed to the Citibank represents in the Pooling certificate rate and the overall net yield Trust; Agreement that the inclusion of the on the receivables held in the Trust. The (b) Each of the Receivables then Accounts, as a whole, does not discounted portion of the principal existing in the Accounts is an Eligible represent an adverse selection from receivables is not counted toward any Receivable; and among the Eligible Accounts. requirements for maintaining the (c) As of the date of creation of any The Pooling Agreement designates ‘‘required minimum principal balance’’ new Receivable, such Receivable is an Citibank (South Dakota) to service the (as discussed below). Citibank states Eligible Receivable. Accounts on behalf of the Trust, that the redesignation of principal The Pooling Agreement provides that including collecting payments due receivables as finance charge receivables if Citibank breaches any such under the Receivables. Citibank, as the will not disadvantage investors as each representation or warranty, and such servicer of the Trust, receives fees for its dollar of investor certificates will breach has a material adverse effect on services from the Trustee or sponsor of always be entitled to a dollar of the investor certificateholders’ interest, the Trust. Citibank states that the sum principal receivables held in the Trust. as determined by the Trustee, the of all payments made to and retained by Upon the sale of investor certificates, Receivables with respect to the affected Citibank, as the servicer of the Trust, the transaction between Citibank and Account will be reassigned to Citibank which are allocable to the series of the Trust is characterized as a sale for if the breach remains uncured after a certificates purchased by a plan, will generally accepted accounting specified period of time. Citibank states that it also represents represent not more than reasonable principals. However, legal opinions issued in connection with such a sale and warrants to the Trust, among other 28 VISA and MasterCard are registered trademarks may conclude that the transaction is things, that as of the issuance date for of VISA U.S.A., Inc. and MasterCard International either an absolute transfer of the a Series of investor certificates the Incorporated, respectively. receivables to the Trust or, in the Pooling Agreement and Series 4060 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Supplement thereto creates a valid sale, the Banks to the Trust of all the Banks’ invested amount during the Due Period transfer and assignment to the Trust of right, title and interest therein or the preceding the first Due Period for such all right, title and interest of Citibank in grant of a first priority perfected security accumulation scheduled amortization the Receivables or the grant of a first interest therein (and in the proceeds period, early amortization period or priority perfected security interest thereof); (f) which will at all times be a Class A amortization period). Citibank under the Uniform Commercial Code as legal, valid and binding payment may, upon 30 days prior notice to the in effect in South Dakota and Nevada in obligation of the cardholder thereof Trustee, the Rating Agency and any such Receivables. If Citibank breaches enforceable against such cardholder in provider of Series credit enhancement, such representation or warranty, and accordance with its terms, subject to reduce the Required Minimum Principal such breach has a material adverse certain customary exceptions relating to Balance, provided that such reduction effect on the investor certificateholders’ the bankruptcy of the cardholder; (g) will not result in (1) a reduction or interest, the Trustee or the holders of which at the time of its transfer to the withdrawal of any Rating Agency’s the investor certificates may direct Trust, has not been waived or modified rating of the investor certificates of any Citibank to accept the reassignment of except as permitted under the Pooling outstanding Series, or (2) an adverse the Receivables in the Trust and transfer Agreement; (h) which is not at the time effect, as defined in the Pooling funds to the Trust in an amount equal of its transfer to the Trust subject to any Agreement (an Adverse Effect) on the to the outstanding principal amount of right of rescission, set off, counterclaim certificateholders of any Series, and the investor certificates plus accrued or defense (including the defense of provided further that the Required interest thereon. usury), other than certain bankruptcy- Minimum Principal Balance may never 6. Eligibility Criteria. An Eligible related defenses; (i) as to which Citibank be less than 102 percent of the sum of Account is a credit card account owned has satisfied all obligations to be the initial invested amounts of all by Citibank (South Dakota) which: (a) is fulfilled at the time it is transferred to outstanding investor certificates of all in existence and maintained by Citibank the Trust; (j) as to which Citibank has Series (or, if applicable for a particular (South Dakota); (b) is payable in U.S. done nothing, at the time of its transfer Series, the highest invested amount dollars; (c) in the case of initial to the Trust, to impair the rights of the during a Due Period, or, during any Accounts, has a cardholder with a Trust or investor certificateholders of a scheduled amortization period, early billing address located in the United Series therein, and (k) which constitutes amortization period or Class A States or its territories or possessions or either an ‘‘account’’ or a ‘‘general amortization period, the highest a military address; (d) has a cardholder intangible’’ under the Uniform invested amount during the Due Period who has not been identified as being Commercial Code as then in effect preceding the first Due Period for such involved in a voluntary or involuntary under South Dakota or Nevada state scheduled amortization period, early bankruptcy proceeding; (e) has not been law. amortization period or Class A identified as an Account with respect to 7. Additions of Accounts. To maintain amortization period). which the related card has been lost or Citibank’s seller interest in the Trust, As previously noted, the requirement stolen; (f) has not been sold or pledged the Pooling Agreement contains that Citibank maintain Principal to any other party; (g) does not have provisions analogous to collateral Receivables in an amount at least equal receivables which have been sold or maintenance requirements under a to the Required Minimum Principal pledged to any other party; and (h) in secured loan that require Citibank to Balance is one mandated by the Rating the case of the Accounts initially designate new Accounts (the receivables Agencies. The purpose of the Required assigned to the Trust, is a VISA or in which will be conveyed to the Trust) Minimum Principal Balance is to ensure MasterCard revolving credit card if, as of the end of any calendar week, that Citibank’s interest in the Trust is account. the total amount of Principal large enough to absorb dilution caused An Eligible Receivable is a Receivable: Receivables in the Trust is less than the by obligors returning merchandise (a) Which has arisen under an Eligible amount required by the Rating Agencies originally charged under their Account Account; (b) which was created in (the Required Minimum Principal (‘‘Returns’’) and possible seasonal compliance in all material respects with Balance). fluctuations in the Receivables. In all requirements of law and pursuant to The Pooling Agreement provides that assessing the size of the Required a credit card agreement which complies Citibank will be required to make a Minimum Principal Balance, Rating in all material respects with all Lump Sum Addition to the Trust in the Agencies generally consider a number of requirements of law; (c) with respect to event that the amount of Principal factors including historical portfolio which all material consents, licenses, Receivables is not maintained at a dilution, the timing of Returns, the approvals or authorizations of, or minimum level equal to the greater of: portfolio composition, rebate programs registrations with, any governmental (a) 107 percent of the sum of the and the structural provisions designed authority required to be obtained or invested amounts of all outstanding to ensure that a minimum amount of given in connection with the creation of investor certificates of all Series, or (b) Principal Receivables is maintained. such Receivable or the execution, 102 percent of the sum of the initial The Rating Agencies must affirmatively delivery, creation and performance by invested amounts of all outstanding confirm by written notice to the Trustee Citibank (South Dakota) or by the investor certificates of all Series (or, if that any reduction in the Required original credit card issuer, if not applicable for a particular Series, the Minimum Principal Balance will not Citibank (South Dakota), of the related highest invested amount during a Due result in the reduction or withdrawal of credit card agreement have been duly Period,29 or, during any accumulation the rating assigned to any outstanding obtained or given and are in full force period, scheduled amortization period, Series or class of investor certificates. and effect; (d) as to which at the time early amortization period or Class A Conveyance of additional receivables of its transfer to the Trust, the Banks or amortization period, the highest (i.e. a Lump Sum Addition) may consist the Trust have good and marketable of: title, free and clear of all liens, 29 A Due Period refers to the monthly period (a) Receivables arising in additional encumbrances, charges and security beginning at the close of business on the fourth-to- last business day of each month and ending at the Eligible Accounts from the Portfolio; interests; (e) which has been the subject close of business on the fourth-to-last business day (b) Receivables arising in portfolios of of a valid transfer and assignment from of the immediately following month. revolving credit card accounts acquired Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4061 by the Banks from other credit card Accounts Citibank may designate with Accounts from the Trust will the issuers; respect to any specified three month Trustee execute and deliver to Citibank (c) Receivables arising from certain period may not exceed 15 percent of the a written reassignment to reconvey to non-premium and premium MasterCard number of Accounts as of the first day Citibank, without recourse, the and VISA credit card accounts of such period, and the number of New Receivables arising in Removed previously transferred by Citibank to Accounts designated during any Accounts (Removed Accounts). certain trusts in securitization calendar year may not exceed 20 9. Modification to the Underlying transactions that have matured or percent of the number of Accounts as of Terms of the Accounts. Each cardholder terminated; the first day of such calendar year. The is subject to an agreement governing the (d) Receivables arising in any other Pooling Agreement also requires terms and conditions of such revolving credit card accounts of a type Citibank to deliver an opinion of cardholder’s Account. Pursuant to such which have not been previously counsel semi-annually with respect to agreement, Citibank (South Dakota), as included in the Accounts; 30 and/or the New Accounts included as owner of the Accounts, has the right to (e) Participations in a pool of Accounts, confirming the validity of change or terminate any terms, receivables. each transfer of Receivables in such conditions, services or features of the After giving effect to a Lump Sum New Accounts. Accounts (including increasing or Addition, the total amount of Principal 8. Reassignment of Receivables. decreasing periodic finance charges or Receivables in the Trust will at least Citibank has the right to require the minimum payments). Citibank has equal the Required Minimum Principal reassignment to Citibank of the covenanted in the Pooling Agreement Balance. In addition, subject to the Receivables with respect to certain that, except as otherwise required by conditions contained in the Pooling Accounts. Citibank represents that it any requirement of law or as is deemed Agreement, Citibank may from time to may desire such a reassignment, for necessary by Citibank to maintain its time, at its sole discretion, voluntarily example, to set up a new master trust or credit card business on a competitive make a Lump Sum Addition to the other securitization vehicle. However, basis, it will not take actions which Trust. such a reassignment may only occur would reduce the net portfolio yield on Subject to limitations and conditions upon satisfaction of certain conditions the Receivables (after subtracting in the Pooling Agreement, Citibank from in the Pooling Agreement under therefrom the amount of Principal time to time may also designate, at its guidelines established by the Rating Receivables that were written off as sole discretion, Receivables in newly Agencies, which are described in the uncollectible) to be less than the sum of: originated Eligible Accounts to be Series prospectus. Citibank states that in (a) the weighted average certificate rate included as Accounts (New Accounts). order to satisfy such conditions, the of each class of investor certificates of By adding Receivables in New Rating Agencies must confirm in each Series; and (b) the weighted Accounts, the Seller’s interest will be advance that such reassignment will not average of the net servicing fee rate increased, but the Seller and the cause the rating assigned to any allocable to each class of investor investors will share interests in all of outstanding Series or class of investor certificates of each Series. In addition, the Receivables, including all those certificates to be withdrawn or reduced. Citibank has agreed in the Pooling arising in New Accounts and in In addition, Citibank must deliver an Agreement that, unless required by law, Accounts previously assigned to the officers’ certificate to the effect that it will not reduce such net portfolio Trust. Citibank has designated New Citibank reasonably believes that such yield to less than the highest certificate Accounts (the Receivables in which reassignment will not, at the time of its rate for any outstanding Series or class. have been added to the Trust) since the occurrence or a future date: (a) Cause an Citibank also has covenanted in the creation of the Trust, and Citibank may early amortization event; (b) cause a Pooling Agreement that it will change continue to do so in the future. To reduction of the amounts of surplus protect the Trust from dramatic changes finance charge collections with respect (c) Citibank will represent and warrant as of each in composition, the number of New to any Series of investor certificates Removal Date that the list of Removed Accounts below the level required by the Rating delivered pursuant to (b) above, as of the Removal 30 Because additional Accounts may not be Agencies; or (c) adversely affect the Date, is true and complete in all material respects; (d) the Trustee shall have received advance accounts of the same type as previously included amount or timing of payments to in the Trust, Citibank states that there can be no confirmation from the Rating Agency that such assurance that such additional Accounts will be of investor certificateholders of any Series. removal will not result in a Ratings Effect; the same credit quality as the initial Accounts or Only after satisfaction of these and (e) Citibank will deliver to the Trustee and any the additional Accounts currently included in the other conditions set forth in the Series provider of Series Enhancement a certificate of an Trust. In addition, such additional Accounts may prospectus 31 for the removal of authorized officer, dated as of the Removal Date, to consist of credit card accounts which have different the effect that Citibank reasonably believes that terms than the initial Accounts, including lower such removal will not at the time of its occurrence periodic finance charges, which may have the effect 31 The complete conditions specified by the Series or at a future date cause an Adverse Effect (i.e., the of reducing the average yield on the portfolio of prospectus for the removal of Accounts from the occurrence of an early amortization event for any Accounts. However, as with any removal of any Trust are as follows: Series or a reduction of the amount of surplus Accounts, the designation of additional Accounts (a) on or before the fifth business day finance charge collections below the level required will be subject to the satisfaction of certain immediately preceding the date upon which such by the Rating Agencies, or an event which adversely conditions required by the Rating Agencies, Accounts are to be removed, Citibank will give the affects in any manner the timing or amount of including that (i) such addition will not result in Trustee, the Servicer, the Rating Agency and any payments to investor certificateholders of any a Ratings Effect (i.e. a lower credit rating for the provider of credit support (i.e., Series Series or any enhancement invested amounts); and certificates), and (ii) Citibank must deliver to the Enhancement) written notice of such removal (f) Citibank will deliver to the Trustee, the Rating Trustee and any provider of credit enhancement for specifying the date for removal of the Removed Agency and any provider of Series Enhancement an the Series a certificate of an authorized officer to the Accounts (the Removal Date); opinion of counsel acceptable to the Trustee that for effect that, in the reasonable belief of Citibank, such (b) on or prior to the date that is five business federal and state tax law purposes: (i) Following addition will not at the time of such addition or at days after the Removal Date, Citibank will deliver such removal the Trust will not be an association a future date cause an early amortization event or to the Trustee a list of the Removed Accounts (or publicly traded partnership) taxable as a adversely affect the timing or amount of payments specifying for each such Account, as of the removal corporation, and (ii) such removal will not to certificateholders (referred to in the Series notice date, its account number, the aggregate adversely affect the characterization of the investor prospectus as an ‘‘Adverse Effect’’—see Paragraph amount outstanding in such Account and the certificates of any Series as debt and will not cause 8 regarding the Reassignment of Receivables for aggregate amount of Principal Receivables a taxable event to holders of any such investor further discussion of an Adverse Effect). outstanding in such Account; certificates. 4062 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices the terms relating to the Accounts collections and finance charge each of the recently issued Series has: designated to the Trust only if such collections, both of which, as well as (i) an eleven-month Accumulation change is made applicable to the defaults on Principal Receivables, are Period for the Class A Certificates, comparable segment of the portfolio of allocated to each Series and to Citibank which may be shortened (and the Accounts owned or serviced by Citibank pro rata based on the relative interest of Revolving Period extended) according to which are part of the same program or each in the Trust. Investors will, an objective formula used to project the which have the same or substantially however, receive a fixed allocation of level of principal collections in the similar characteristics. The ability of principal collections during the Trust; and (ii) a one-month Citibank to change the terms of the Accumulation or Amortization Period. accumulation period for the Class B Accounts is necessary to meet the Citibank’s interest in the Trust Certificates. competitive demands of the represents the portion of the Principal 12. Finance Charge Collections. marketplace. Receivables in the Trust that is not Finance charge collections that are Citibank states that it offers a variety represented by investor certificates. allocated to Series belonging to the same of different underwriting standards and Finance charge collections are used to Group are pooled together and then terms on its credit card accounts. For pay the coupon on the investor shared among all Series in the Group example, Citibank offers Gold Visa cards certificates of each Series, as well as to based on the amount of total expenses and Regular Classic Visa cards. Citibank pay the servicing costs and cover of each Series for coupon, losses and also offers ‘‘co-branded’’ cardholder defaults on principal payments due servicing fees. 32 All Series issued to programs, in conjunction with, among from cardholders. Principal collections date have been designated as belonging others, American Airlines, under which are typically reinvested in new to Group One. As a result of this cardholders can earn frequent flyer Receivables and/or allowed to reallocation of finance charges, those miles or credits to be applied to the accumulate for a period of time, rather Series that have higher coupons will purchase price of goods or services. than distributed immediately to receive a proportionately larger share of With respect to such programs, some investors, so that the investor the finance charge income and thus may Accounts are designated to the Trust certificates’ payment characteristics will avoid suffering a shortfall which might and some are not. If Citibank determines mirror those of comparable long-term occur if finance charge income were to change an underwriting standard or debt instruments. However, the Pooling allocated based on the relative interest cardholder agreement terms under one Agreement specifies Early Amortization (based on aggregate principal amounts) of these programs, Citibank does so Events following the occurrence of of such Series in the Trust. However, if without distinguishing those affected which all principal collections will finance charge income is not sufficient Accounts designated to the Trust from commence being distributed to to cover total expenses in Group One, those affected Accounts which are not investors. all Series within Group One will share designated to the Trust. This failure to proportionately in the shortfall distinguish is mandated by the Pooling 11. Principal Collections. If principal regardless of the interest rate of the Agreement and the Rating Agencies. collections that were allocated to a investor certificates of an individual Citibank’s decisions are fundamentally Series were immediately distributed to Series. Finance charge collections decisions with respect to how to operate the investors, the investors would be allocable to a Series belonging to one its business in a competitive manner quickly repaid. For example, Citibank Group will not impact finance charge and will not treat Accounts designated states that in 1996 the average monthly collections allocable to any Series to a Trust any differently than other cardholder principal payment rate was belonging to a different Group. Accounts. 18.46 percent, which means all All Series issued under the MTC Citibank states that if changes to investors would be repaid over a six- Program will be designated as belonging underwriting standards or cardholder month period assuming all Series in the to Group Two. Finance charge agreement terms were to adversely affect Trust simultaneously amortize. To collections that are allocated to Series the performance of the Receivables in structure the investor certificates so as belonging to Group Two will be pooled the Trust (e.g. cause an increase in to perform as if they were long-term together and then shared the same way charge-offs or defaults, or a lower yield debt instruments, principal collections as the Series which are included in on the Receivables), investors are allocated to a Series are reinvested in Group One. protected by the early amortization newly generated Receivables arising in event triggers (as discussed further in the Accounts for a period of time Early Amortization Events Paragraphs 13 and 14 below) and credit specified in the Series Supplement (i.e., 13. Citibank represents that an earlier enhancement. In order for certificates the Revolving Period). Reinvestment in than scheduled payout of principal to issued by the Trust to obtain a high Receivables during the Revolving Period investor certificateholders of a Series credit rating, there must be sufficient maintains the principal amount of the will occur under certain circumstances credit enhancement to meet the Rating Series invested in the Trust for such specified in the Pooling Agreement Agency’s ‘‘high stress’’ scenarios to period. At the end of the Revolving (each condition is described as an Early ensure full and timely payment of Period, shortly before the expected Amortization Event). principal and interest. In this regard, an maturity date, a portion of the principal Generally, Early Amortization Events ‘‘economic early amortization event’’ collections allocated to a Series either include: occurs immediately upon the will commence to be paid to the occurrence of either of the two events investor certificateholders of such Series 32 In addition, Citibank states that in some in monthly installments (a Controlled instances principal collections on receivables specified in Paragraph 14 below, allocated to a particular Series may be shared with without any notice or other action on Amortization Period) or will be other Series within the same Group, provided that the part of the Trustee or the deposited in an account to be the minimum principal receivable balances certificateholders. distributed to such certificateholders in required by the Rating Agencies for all Series a lump sum on the expected maturity within the Group are maintained. However, Pass-Through of Cardholder Payments Citibank states further that under its current date (an Accumulation Period), payment structure, principal collections on 10. Cardholder payments for each depending on the terms specified in the receivables allocated to a particular Series are month are separated into principal related Series Supplement. Generally, usually not shared. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4063

(a) The failure of the Bank to either (i) principal to the investor transactions (as discussed in Paragraph make any payment or deposit required certificateholders of such Series (i.e. an 16 below) and the maintenance of the under the Pooling Agreement or any Early Amortization Period) until the ‘‘required minimum principal balance’’ Series Supplement within five (5) earlier of payment in full of the for the Receivables under guidelines set business days after such payment or outstanding principal amount of the by the Rating Agencies, to ensure timely deposit was required to be made, or (ii) certificates of such Series or the legal repayment of principal and interest to observe or perform any of its other final maturity date for such Series the certificateholders. specified in the related Series covenants or agreements set forth in the Utilization of Credit Support—The Role Supplement. If an Accumulation Period Pooling Agreement or any Series of the Master Servicer and the Role of has already begun for a Series, then all Supplement, which failure has a the Trustee material adverse effect on investors and monies that have been previously continues unremedied for 60 days; deposited in an accumulation account 15. The servicer of Citibank’s credit (b) A breach of any representation or for such Series will be withdrawn upon card ABS does not supply credit warranty made by Citibank in the the occurrence of an Early Amortization support. Further, if the servicer fails to Pooling Agreement or any Series Event and paid to the investor call upon a credit support mechanism to Supplement which continues to be certificateholders of such Series. produce needed funds, the Trustee may uncorrected in any material respect for In addition to the foregoing exercise its rights as beneficiary of the 60 days; consequences of an Early Amortization credit support to obtain the funds under (c) The occurrence of certain Event described above, if an Insolvency the credit support mechanism. bankruptcy events relating to either Event occurs, Citibank will immediately Therefore, in all cases, the Trustee will Bank (an Insolvency Event); cease to transfer Receivables to the be ultimately responsible for deciding (d) The failure by the Banks to make Trust. Thereafter, unless the requisite when to exercise its rights as beneficiary a Lump Sum Addition; number of investor certificateholders of the credit support. (e) The occurrence of any servicer instruct otherwise, the Trustee will sell In some cases, the servicer or an default by Citibank; or otherwise liquidate the Receivables affiliate will be required under the terms (f) If a class of investor certificates is in the Trust in a commercially of the Pooling Agreement to provide in an Accumulation Period, the amount reasonable manner and on commercially liquidity (but not credit) advances to the on deposit in the accumulation account reasonable terms. The proceeds of such Trust. In these cases, the servicer will in any month is less than the amount sale or liquidation will be applied first advance funds to cover shortfalls and required to be on deposit therein; to payments on the Class A Certificates, will be reimbursed on the following (g) The failure to pay in full amounts then to the Class B Certificates. distribution date from collections on the owing to investors on the expected 14. Economic Early Amortization Receivables or Series credit support. maturity date; and Events. Citibank represents that all The servicer will not be required to (h) The Economic Early Amortization outstanding Series include an Economic make any such liquidity advance unless Event described below. Early Amortization Event, which is there is sufficient Series credit support Each Series Supplement may contain triggered if finance charge collections available to ensure repayment of the other Early Amortization Events for the averaged over three consecutive months liquidity advance on the following related Series in addition to those are less than the total amounts payable distribution date. If the servicer fails to specified in the Pooling Agreement. To with respect to the Class A and Class B advance funds in respect of a shortfall date, no Early Amortization Event has Certificates (including amounts payable when obligated to do so, the Trustee occurred with respect to any Series of with respect to interest, servicing fees, will exercise its rights under any investor certificates issued by the Trust. defaults, charge-offs and any credit available credit support on the Citibank has no discretion with enhancement fee).33 Upon the following distribution date to obtain the respect to the determination whether an occurrence of an Economic Early necessary funds under the credit Early Amortization Event has occurred. Amortization Event, monies on deposit support mechanism. However, certain Early Amortization in the CCA will be used to make The servicer has servicing guidelines Events, such as the breach of a payments of principal to the Class A which include a general policy as to the representation or warranty, are qualified Certificateholders and Class B allowable delinquency period after by materiality and may be declared at Certificateholders. However, Citibank which Receivables ordinarily are the option of the Trustee. Citibank states states that because the amount on deemed uncollectible. The Pooling that in light of the complexity of these deposit in a CCA is likely to be Agreement requires the servicer to securitization transactions, such insufficient to pay outstanding principal follow its normal servicing guidelines flexibility is intended to permit the amounts in full, additional collections and also sets forth in the definition of Trustee to act in the best interests of with respect to the Receivables will be Defaulted Receivables the servicer’s investor certificateholders, which may required to fully pay down the general policy as to the period of time be to forego early amortization by reason certificates. Thus, the Trust generally after which delinquent Receivables will of a mere technical violation. Other will depend on several forms of credit be considered uncollectible. Early Amortization Events, such as the enhancement [e.g. ‘‘excess spread’’ On a monthly basis the servicer is Economic Early Amortization Event, are between the Receivables and the required to report to the Trustee the not qualified by materiality and operate certificate rate, subordination of the amount of all past-due payments along automatically. In effect, such events are Class B Certificates, letters of credit or with other current information as to always material. other third party credit enhancement], collections on the Receivables and The occurrence of an Early as well as any interest rate swap draws upon, or payments to be made Amortization Event will cause the from, the credit support. Further, the Revolving Period, Controlled 33 The Series to which an Accumulation Period servicer is required to deliver to the Amortization Period or Accumulation applies contain an additional Economic Early Trustee annually a certificate of an Amortization Event which is triggered if, during the Period, as may be applicable, to end and Accumulation Period, the yield on the Receivables officer of the servicer stating that a principal collections will be used in the Trust is less than the weighted average of the review of the servicing activities has thereafter to make monthly payments of certificate rates of all Series included in the Group. been made under such officer’s 4064 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices supervision, and either stating that the Credit Card Participation Certificates, The principal on the Class A and servicer has fulfilled all of its Series 1996–5 and $48,000,000 Floating Class B Certificates issued on August 29, obligations under the Pooling Rate Class B Credit Card Participation 1996, is scheduled to be paid on the Agreement or, if the servicer has Certificates, Series 1996–5). On the September 2003 payment date, but defaulted under any of its obligations, Series issuance date (August 29, 1996), principal and interest for such specifying any such default. The the Trustee of the Trust, for the certificates may be paid earlier under servicer’s reports are reviewed annually exclusive benefit of the Class A the circumstances described herein (e.g. by independent accountants to ensure Certificateholders, entered into two an economic early amortization event). that the servicer is following its normal Class A Interest Rate Swaps with Principal payments will not be made to servicing standards and that the Citibank (South Dakota) and Citibank Class B Certificateholders until the final servicer’s reports conform to the (Nevada), respectively, which together principal payment has been made for servicer’s internal accounting records. had a combined notional amount as of the Class A Certificates. Unless an early The results of the independent any swap payment date equal to the amortization event has occurred, the accountant’s review are delivered to the outstanding principal amount of the Revolving Period will end and the Trustee. Class A Certificates as of the close of Accumulation Period (i.e. for principal business on the preceding distribution payments to certificateholders) will Interest Rate Swap Agreements by the date. commence at the close of business on Trust Interest with respect to the investor the fourth-to-last business day of August 16. For certain Series of certificates, certificates accrues from August 29, 2002. However, Citibank, as Servicer, the Trust will have the benefit of 1996 and is payable quarterly on the may shorten the length of the interest rate swap agreements for the fifteenth day of March, June, September Accumulation Period and extend by an exclusive benefit of the Class A and December, commencing December equivalent period the length of the Certificateholders (the Class A Interest 15, 1996. Pursuant to the Class A Revolving Period based on the amount Rate Swap) and/or interest rate swap Interest Rate Swaps, on the business day of principal available to the investor agreements for the exclusive benefit of preceding each distribution date, certificates of all Series determined the Class B Certificateholders (the Class payments are made by the Trust to based on the principal payment rate on B Interest Rate Swap). Citibank (South Citibank (if the following is a positive the Receivables and the amount of Dakota) and Citibank (Nevada) may be number), or by Citibank to the Trust (if principal distributable to the counterparties to the Trust for these the following is a negative number) of certificateholders of all outstanding Interest Rate Swaps.34 an amount in the aggregate equal to: 35 Series. Pursuant to the terms and conditions (i) one quarter of the product of The Series prospectus for these of the Interest Rate Swaps, the Trust (A) the Class A Notional Amount; and certificates indicates that the CCA was will be obligated to make certain (B) 6.8691 percent (the Class A Swap funded by an initial deposit of payments periodically to the swap Rate); minus $55,860,000, of which $39,900,000 was counterparty based on either a fixed or (ii) the product of for the benefit of both the Class A and floating interest rate. In turn, the swap (A) a fraction, the numerator of which Class B Certificates, and $15,960,000 counterparty will be obligated to make is the actual number of days from and was for the exclusive benefit of the Class payments periodically to the Trust including the prior distribution date B Certificates. In the event of an based on either a fixed or floating (excluding the related distribution date), economic early amortization event, the interest rate. Payments received by the and the denominator of which is 360; 36 available shared enhancement amount Trust pursuant to the Class A Interest (B) the Class A Notional Amount; and (after giving affect to other withdrawals Rate Swaps will be available to pay (C) The Class A Certificate Rate. from the CCA on the distribution date) interest due on the Class A Certificates The Class A Certificate Rate for each will be applied to pay principal of the on each Class A interest payment date interest period is a per annum rate equal Class A Certificates and the remainder and payments received by the Trust to the arithmetic mean of London of the available CCA will be applied to pursuant to the Class B Interest Rate interbank offered quotations for United pay principal of the Class B Certificates. Swaps will be available to pay interest States dollar deposits (i.e. LIBOR) for The Series prospectus states that it due on the Class B Certificates on each the applicable three month period, plus was a condition to the issuance of the Class B interest payment date. The Trust .105 percent.37 Class A Certificates on August 29, 1996, will also have the benefit of funds on that they be rated in the highest rating deposit in a CCA or other applicable 35 If such amount is positive, it will be referred category by at least one Rating Agency. to as the ‘‘Class A Net Swap Payment’’, and if such credit support. amount is negative, it will be referred to as the Under this proposed exemption, As an example, Citibank has ‘‘Class A Net Swap Receipt’. employee benefit plan investors are able submitted information for the Series of 36 The day count fraction used in any swap would certificates issued by the Trust on correspond to the day count fraction used in the or floating rates specified in the related prospectus. August 29, 1996 (known as related Series of certificates. For example, industry If there is a decline in the prime rate, the amount convention is that fixed rate securities bear interest of Finance Charge Receivables in the Trust may be $750,000,000 Floating Rate Class A on a 30/360 day count fraction while floating rate reduced and, even if there is a similar reduction in securities often bear interest on an actual/360 day any floating rate or other rates applicable to the 34 Banks or financial institutions other than count fraction. Accordingly, any floating payments investor certificates, there will not be a similar Citibank may be swap counterparties to the Trust made by a swap counterparty to the Trust which reduction in the other amounts (e.g. servicing fees on other interest rate swaps. In addition, an interest relate to a floating rate Series of certificates with an or expenses for operating the Trust) required to be rate ‘‘cap’’ could be used where the Trust issues actual/360 day count fraction would also have an funded out of such Receivables. The subject Series floating rate certificates. In such instances, a actual/360 day count fraction and any fixed prospectus notes that this mismatch between the counterparty would be paid a premium in advance payments made by a swap counterparty to a Trust various cashflows into and out of the Trust results by Citibank (from its own funds). Under the interest which relate to a fixed rate Series of certificates in ‘‘basis risk’’ which is partially mitigated by the rate cap agreement, if the floating rate on the with a 30/360 day count fraction would also have presence of the Interest Rate Swaps. Thus, as noted certificates were to rise above a specified rate (i.e. a 30/360 day count fraction. in more detail above, payment of the Class A the cap rate), the counterparty would be required 37 It should be noted that a substantial portion of Certificate Rate and the credit rating for such to provide the Trust with the amounts in excess of the Receivables in the Trust bear interest at the certificates may be dependent, in part, on the swap the cap rate necessary to pay the balance of the prime rate plus a margin, while the investor agreements and the creditworthiness of the swap interest on the certificates. certificates will bear interest at one or more fixed counterparty. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4065 to acquire only the Class A Certificates. The Series prospectus states that counterparty must either have a long- The rating of the Class A Certificates delivery of these investor certificates term rating in one of the three highest was based primarily on the value of the was made in book-entry form through long-term rating categories or not have Receivables (see Rating Agency Analysis the facilities of the Depository Trust a long-term rating from the applicable in Paragraph 17 below), the extent of the Company (DTC), Cedel Bank and the Rating Agency. If the rating of a initial shared enhancement amount (i.e. Euroclear System on August 29, 1996. particular Series or class of certificates the CCA, etc.), the circumstances in The underwriters for the Class A is dependent upon the terms and which funds may be withdrawn from Certificates were Citibank, Goldman, conditions of an Eligible Swap entered the CCA for the benefit of the investor Sachs & Co., Merrill Lynch & Co. and into by the Trust (i.e., a ‘‘Ratings certificateholders, the terms of the Class Salomon Brothers Inc. An application Dependent’’ Swap), the swap B Certificates and the Interest Rate was made by Citibank to list the counterparty will be subject to certain Swaps and the credit ratings of the swap certificates on the Luxembourg Stock collateralization or other arrangements counterparties [e.g., Citibank (South Exchange. The Trust had previously satisfactory to the Rating Agencies in Dakota) and Citibank (Nevada)]. In the issued thirty (30) other Series of the event of a rating downgrade of the event the short-term debt rating of either investor certificates which evidence swap counterparty below a level swap counterparty is withdrawn or undivided interests in the Trust which specified by the Rating Agency, which reduced below A–1+ by Standard & were still outstanding at that time.40 The would be no lower than the level that Poor’s Ratings Group or its long-term Series prospectus states that additional would make such counterparty debt rating is withdrawn or reduced Series are expected to be issued from ‘‘eligible’’ under this proposed below Aa3 by Moody’s Investors time to time by the Trust and that exemption (see Section III.II above). If Service, the Servicer will (as agent for additional credit enhancement will be these arrangements are not established the Trustee),38 within 30 days after such provided for each additional Series within a specified period, as described rating withdrawal or reduction, use issued. in the Pooling Agreement, there will be reasonable efforts to (i) obtain a Citibank represents that the credit an early amortization event causing replacement interest rate swap rating provided to a particular Series or certificateholders to receive an earlier agreement with terms substantially the class of certificates by the relevant than expected payout of principal on same as the respective Interest Rate Rating Agency may or may not be their certificates for the series to which Swap, or (ii) establish any other dependent upon the existence of a swap the swap relates. However, with respect arrangement satisfactory to the agreement. Thus, in some instances, the to a Non-Ratings Dependent Swap, the applicable Rating Agency, such that the terms and conditions of a swap Pooling Agreement will not specify that ratings of the investor certificates by the agreement entered into by the Trust will there be an early amortization event for applicable Rating Agency will not be not effect the credit rating of the Series the series to which the swap relates if withdrawn or reduced. In the event no or class of certificates to which the swap the credit rating of the swap such replacement interest rate swap relates (i.e. a ‘‘Non-Ratings Dependent’’ counterparty falls below the level agreement is obtained, or no other Swap). Citibank states that typically required for it to be considered an arrangement satisfactory to the Rating when a swap agreement is entered into Eligible Swap Counterparty (as Agency is established within such by the Trust, the credit rating described in Section III.II. above). In period, an early amortization event will established by the Rating Agency for the such instances, in order to protect the occur. The Series prospectus states that particular Series of certificates to which interests of the trust as a swap there can be no assurance that the the swap relates will be dependent upon counterparty, the servicer (as agent for ratings of the investor certificates will the existence of the swap (i.e. a ‘‘Ratings the trustee of the trust) will be required remain for any given period of time or Dependent’’ Swap). to either: (i) Obtain a replacement swap that such ratings will not be lowered or Citibank represents further that each agreement with an Eligible Swap withdrawn entirely by the Rating particular swap transaction entered into Counterparty, the terms of which are Agency if in its judgment circumstances by the Trust will be an ‘‘Eligible Swap’’ 39 substantially the same as the current in the future so warrant. (as defined in Section III.HH. above). In swap agreement (at which time the addition, each swap transaction will be 38 In this regard, the Department notes that the earlier swap agreement will terminate); Trustee would be obligated, as a fiduciary for ‘‘plan with an ‘‘Eligible Swap Counterparty’’, (ii) Cause the swap counterparty to assets’’ held by the Trust, to ensure that the Servicer which shall be a bank or other financial post collateral with the trustee of the uses reasonable efforts to take whatever actions are institution with a rating at the date of trust in an amount equal to all payments necessary to satisfy the Rating Agency so as to avoid issuance of the certificates by the trust a reduction or withdrawal of the current rating for owed by the counterparty if the swap certificates of a particular Series following any which is in one of the three highest transaction were terminated; or reduction or withdrawal of the swap counterparty’s long-term credit rating categories, and/ (iii) Terminate the swap agreement in rating. or one of the two highest short-term accordance with its terms. 39 The Department cautions plan fiduciaries to credit rating categories, utilized by the fully understand the risks and benefits associated Under any termination of a swap, the with investments made in asset-backed securities, Rating Agencies rating the certificates. trust will not be required to make any such as credit card receivable ABS, or any other However, if a swap counterparty is termination payments to the swap fixed-income security. In this regard, section 404(a) relying on its short-term rating to counterparty (other than a currently of the Act requires, among other things, that a plan establish its eligibility, such fiduciary act prudently when making investment scheduled payment under the swap decisions on behalf of a plan. The Department also agreement) except from ‘‘excess finance cautions plan fiduciaries that if the assets of a trust Letter from Olena Berg, Assistant Secretary for charge collections’’ or other amounts Pension and Welfare Benefits, to The Honorable which issues certificates is deemed to be ‘‘plan that would otherwise be payable to the assets’’ under the Department’s regulations (see 29 Eugene A. Ludwig, Comptroller of the Currency, CFR 2510.3–101), the plan’s assets would include dated March 21, 1996. servicer or the seller (i.e. Citibank). In not only the certificates purchased but also an 40 The Series prospectus states that the aggregate this regard, ‘‘excess finance charge undivided interest in each of the underlying assets amount of Receivables in the Accounts included in collections’’ will be, as of any day funds of the trust, including any interest rate swap the Trust as of July 7, 1996 was $31,796,288,366, agreement between the trust and a bank. For a of which $31,414,439,867 were Principal are distributed from the trust, the current statement of the Department’s views on the Receivables and $381,848,499 were Finance Charge amounts by which finance charge use of ‘‘derivatives’’ by pension plans, see DOL Receivables. collections allocated to certificates of a 4066 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices series exceed the amounts necessary to review three principal areas in arriving ‘‘excess spread’’ (i.e. the amount by pay certificate interest, servicing fees at a credit enhancement level to support which the yield on the credit card and expenses, to satisfy cardholder a rating for a credit card receivable ABS: receivables exceeds amounts necessary defaults or charge-offs, and to reinstate (i) Quantitative performance of the to pay certificate interest and servicing credit support. portfolio, including historical yield, fees and to satisfy cardholder With respect to Non-Ratings loss, delinquency and monthly payment defaults). 42 Additional forms of Dependent Swaps, each Rating Agency rates, as well as credit exposure caused enhancement for a Series may include rating the Certificates must confirm, as by factors such as geographic cash collateral accounts (i.e. a CCA), of the date of issuance of the Certificates concentration of risk; reserve funds, letters of credit, the use by the Trust, that entering into the swap (ii) Qualitative portfolio factors, such of a senior-subordinated structure or a transactions with the Eligible Swap as the originator’s underwriting combination thereof. Counterparty will not affect the rating of standards, audit and control procedures, Citibank represents that, in addition the Certificates, even if such collection process and marketing to the enhancement described above, counterparty is no longer an ‘‘eligible’’ strategy; and certificates have the benefit of one or counterparty and the swap is (iii) Legal and structural issues raised more ‘‘economic early amortization terminated.41 by the securitization structure, such as event’’ triggers relating to the Any Series of certificates which priority of security interests, timeliness receivables performance. Breach of such conveys rights with respect to an of cash flow and exposures to third a trigger will cause an early Eligible Swap would only be sold to a party bankruptcy risk (e.g. seller, amortization event and an early payout Qualified Plan Investor (as defined in guarantor, obligor, servicer), etc. of principal to certificateholders, Section III.JJ. above). Qualified Plan The Applicants represent that each thereby protecting certificateholders Investors will be plan investors Rating Agency adopts a slightly from any potential future deterioration represented by an appropriate different approach to the determination of credit quality of receivables in the independent fiduciary that is qualified of credit enhancement levels. For master trust portfolio. Citibank states to analyze and understand the terms example, Moody’s Investors Service, that the combination of credit Inc. (Moody’s) generally uses a Monte and conditions of any swap transaction enhancement (sized to satisfy Rating Carlo simulation model utilizing various used by the Trust and the effect such Agency ‘‘high stress’’ scenarios) and possible cases with subjectively swap would have upon the credit early amortization event triggers assures assigned probabilities. This model then ratings of the certificates. For purposes that certificateholders will receive enables Moody’s to arrive at an estimate of the proposed exemption, such a payment in full of interest and of potential lifetime losses which must qualified independent fiduciary would principal. be either: (i) A ‘‘qualified professional be covered by the credit support for the Citibank represents that its credit asset manager’’ (i.e. QPAM), as defined securitization. Standard and Poor’s cards are marketed nationally and are Ratings Group (S&P) looks at a ‘‘worst under Part V(a) of PTE 84–14; (ii) an held by millions of individuals. The case’’ loss scenario based on ‘‘in-house asset manager’’ (i.e. INHAM), consequent size and diversity of subjectively assigned multiples of as defined under Part IV(a) of PTE 96– Citibank’s credit card accounts provide historical loss, portfolio yield and 23; or (iii) a plan fiduciary with total balanced risk distribution. For example, payment rates to reflect a severe assets under management of at least as of June 25, 1997, the largest Citibank economic downturn over the life of the $100 million at the time of the master trust held in excess of $35 billion securities. As with Moody’s, this acquisition of such certificates. of receivables, generated by more than process produces an estimate of 28 million accounts, and each Rating Agency Analysis potential lifetime losses which must be individual cardholder had a principal 17. The Applicants state that the covered by the credit support. The Applicants state that because the balance that averaged approximately rating guidelines and stress scenarios $1221. Similarly, Citibank states that its used by the Rating Agencies in credit card receivables in a master trust are unsecured revolving debt portfolios are geographically diverse assigning a rating to a credit card obligations, the Rating Agencies assume with no more than 15 percent of the receivable ABS take into consideration no recoveries on defaulted credit card receivables in Citibank’s largest master many factors and are determined on a accounts in determining credit trust being concentrated in a single state case-by-case basis. The Rating Agencies enhancement levels for each Series. and in only four states did the Stress scenarios are run reducing both percentage exceed 5 percent. Citibank 41 Representatives from two of the Rating notes that the loss experience for a Agencies (RA Reps) have indicated to the the portfolio yield (total yield on the Department that certain series of certificates issued receivables minus the sum of certificate geographically well diversified portfolio by a trust holding credit card receivables will have interest, the servicing fee and amounts certificate ratings that are not dependent on the 42 For example, the annual portfolio yield for the existence of a swap transaction entered into by the necessary to satisfy cardholder defaults) Trust in 1995 was 18.11 percent. The annual trust. Therefore, a downgrade in the swap and the monthly payment rate, in order certificate rates for each Series outstanding at that counterparty’s credit rating would not cause a to test the level of defaults that credit time varied between approximately 5.50 and 8.8 downgrade in the rating established by the Rating enhancement can withstand. Such stress percent, depending upon the date of issuance, the Agency for the certificates. RA Reps state that in expected duration, whether the particular Series such instances there will be more credit tests assume no recoveries on defaulted certificates were Class A or Class B, etc. The Series enhancements (e.g. ‘‘excess spread’’, letters of credit card accounts in the master trust. servicing rates (including interchange fees) varied credit, cash collateral accounts) for the series to For example, for ‘‘AAA’’ rated between 0.37 and 1.87 percent of the outstanding protect the certificateholders than there would be certificates, available enhancement receivables. The annual loss rate for the receivables in a comparable series where the trust enters into in the Trust, as a percentage of the average principal a so-called Ratings Dependent Swap. Non-Ratings levels are structured to enable a Series receivables outstanding was approximately 3.8 Dependent Swaps are generally used as a to withstand the worst case ‘‘AAA’’ percent during this period. Under the Rating convenience to enable the trust to pay certain fixed scenarios, just as would be the case with Agencies hypothetical ‘‘stress’’ scenarios submitted interest rates on a series of certificates. However, similarly rated transactions involving by Citibank, the annual loss rate could have been the receipt of such fixed rates by the trust from the increased to approximately 27.5 percent during this counterparty is not a necessity for the trust to be collateralized assets such as mortgage period without resulting in a failure of the Trust to able to make its fixed rate payments to the loans or automobile loans or leases. The pay any interest or principal on the AAA rated certificateholders. first level of enhancement is typically certificates. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4067 of a large number of relatively small of the servicer and servicing regarding the Trust and its assets, obligations is more stable and compensation; including underlying Receivables. predictable than a portfolio of fewer, (d) Information about the sponsor of Reasons for Plans To Enter Into the large individual obligations, and/or high the Trust; Exemption Transactions geographic concentrations. Citibank (e) A full description of the material represents that because of this terms of the Pooling Agreement; and 19. Citibank states that a plan would diversification, a Citibank master trust (f) Information about the scope and choose to purchase the investor should be able to withstand a recession nature of the secondary market, if any, certificates offered by a master trust to or similar economic downturn which for such certificates. diversify its portfolio and enhance might affect different industries or Certificateholders will be provided investment return. During the past 10 geographic regions at different times. with information concerning the years, asset-backed securities (including Citibank states that a combination of amount of principal and interest to be Citibank credit card receivable backed credit enhancement, early amortization paid on certificates at least as frequently certificates) have developed into a very triggers and portfolio characteristics are as distributions are made to significant sector of the U.S. capital among the reasons why no investor has certificateholders. Certificateholders markets. Citibank represents that in failed to receive payment in full of all will also be provided with periodic 1996, public issuance of asset-backed principal and interest on the over $51 information statements setting forth securities (i.e. ABS) totaled billion of Citibank credit card receivable material information concerning the approximately $151.7 billion and almost ABS issued from 1988 to the present. status of the Trust. equaled public issuance of corporate Citibank states further that no Citibank In the case of a Trust that offers and debt, which totaled approximately credit card securitization has ever gone sells certificates in a registered public $161.8 billion. Further, Citibank states into early amortization.43 offering, the Trustee, the servicer or the that the vast majority of public ABS sponsor will file such periodic reports issuances is AAA/Aaa-rated and, as a Disclosures Available to Investing Plans as may be required to be filed under the result, public issuance of investment 18. In connection with the original Securities Exchange Act of 1934 (the ’34 grade ABS was greater than the public issuance of certificates, the prospectus Act). Although some Trusts that offer issuance of investment grade rated or private offering memorandum will be certificates in a public offering will file corporate debt, which totaled $135.1 furnished to investing plans. The quarterly reports on Form 10–Q and billion. prospectus or private offering Annual Reports on Form 10–K, many Thus, Citibank represents that for memorandum will contain information Trusts obtain, by application to the SEC, many fixed income investors who have pertinent to a plan’s decision to invest a complete exemption from the traditionally invested a significant in the certificates, such as: requirement to file quarterly reports on portion of their portfolios in corporate (a) Information concerning the Form 10–Q and a modification of the bonds, credit card receivable ABS have certificates, including payment terms, disclosure requirements for annual become a corporate bond substitute. certain tax consequences of owning and reports on Form 10–K. If such an Citibank states that there are several selling certificates, the legal investment exemption is obtained, these Trusts primary attributes of credit card status and rating of the certificates, and normally would continue to have the receivable ABS that make them any special considerations with respect obligation to file current reports on corporate bond substitutes, including: to the certificates; Form 8–K to report material (i) Very high credit quality (most are (b) Information about the underlying developments concerning the Trust and AAA/Aaa rated); (ii) basic payment Receivables, including the types of the certificates. While the SEC’s terms which can be structured to Receivables, statistical information interpretation of the periodic reporting replicate corporate bonds (e.g. bullet relating to the Receivables, their requirement is subject to change, maturities or semiannual coupon payment terms, and the legal aspects of periodic reports concerning a Trust will payments); (iii) healthy yield spreads in the Receivables; be filed to the extent required under the comparison to U.S. Treasuries; and (iv) (c) Information about the servicing of ’34 Act. the issuance of large, liquid transactions the Receivables, including the identity The applicant states that at or about that are characterized by relatively the time distributions are made to narrow bid/offer spreads in the 43 When the Department was advised by the certificateholders, a report will be secondary market. Citibank states that Rating Agencies concerning the ratings of delivered to the Trustee as to the status for these reasons, the investor base for certificates issued by trusts holding credit card receivables, the RA Reps noted, among other things, of the Trust and its assets, including credit card receivable ABS has that different banks use different underwriting underlying Receivables. Such report expanded in recent years and today standards and may offer cardholders different terms will typically contain information includes the entire range of institutional on their accounts. Some banks may be willing to regarding the Trust’s assets, payments investors. Further, given the accept cardholders with riskier credit histories while other banks may not or may offer better terms received or collected by the servicer, the performance to date of the ABS market, to cardholders with superior payment histories. The amount of delinquencies and defaults, the Applicants expect that these result may be that some banks have a higher quality the amount of any payments made institutional investors will continue to portfolio of receivables than other banks. The RA pursuant to any credit support, and the increase the proportion of their portfolio Reps stated that if a bank securitizes a portfolio of receivables which holds a number of riskier amount of compensation payable to the devoted to ABS. The Applicants note accounts, the Rating Agencies will require more servicer. Such report will also be that on the supply side of the market, credit enhancement measures because different delivered or made available to the given projections of continued growth assumptions will have to be made about the Rating Agencies or Agency that rated in the credit card business and the performance of the portfolio—e.g. higher charge-off rates will be assumed and greater ‘‘excess spread’’ the Trust’s certificates. Such report will growing importance of securitization as will be necessary to avoid losses—in order to be available to investors and its a funding source for the credit card achieve a Triple A rating. Thus, for example, Bank availability will be made known to industry, market participants predict A’s certificates may receive a Triple A rating along potential investors. In addition, further growth in credit card ABS with Citibank’s certificates even though Bank A may experience more charge-offs on the credit card promptly after each distribution date, issuance in the near term. accounts and may have different payment rates on certificateholders will receive a As a result of these developments, the the receivables associated with those accounts. statement summarizing information Applicants believe that fixed income 4068 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices investment managers seeking liquid, (e) The trustee of the trust will not be removal of Receivables or previously- high credit quality fixed income an affiliate of any other member of the designated Accounts, will meet the securities which provide a fair yield to Restricted Group; terms and conditions for such additions, U.S. Treasuries at relatively low risk, are (f) The sum of all payments made to designations, or removals as described interested in or are already participating and retained by the underwriters in in the Pooling Agreement as well as the in the credit card ABS market. The connection with the distribution or prospectus or private placement requested exemption would facilitate placement of certificates will represent memorandum for such certificates, more investment by plans in this not more than reasonable compensation which terms and conditions will have market, and would enable the for underwriting or placing the been affirmatively approved by the Applicants to better structure offerings certificates; the consideration received Rating Agencies, and will not result in which plan asset managers would find by the sponsor as a consequence of the the certificates receiving a lower credit attractive. assignment of receivables (or interests rating from the Rating Agencies than the Citibank credit card receivable ABS therein) to the trust will represent not then current rating for the certificates; have been sold to employee benefit more than the fair market value of such (n) Any swap transaction relating to plans covered by the Act (ERISA plans) receivables (or interests); and the sum of senior Certificates that are covered by without concern regarding possible all payments made to and retained by the proposed exemption must satisfy the prohibited transactions involving the the servicer, that are allocable to the several investor-protective conditions assets of the master trusts, as ‘‘publicly- series of certificates purchased by a applicable to Eligible Swaps and must offered’’ securities described in the plan, will represent not more than be entered into by the Trust with an Department’s regulations defining ‘‘plan reasonable compensation for the Eligible Swap Counterparty; and assets’’ (see 29 CFR 2510.3–101(b)(2)). servicer’s services under the pooling (o) Any Series of certificates which However, Citibank has requested the and servicing agreement and entails one or more swap agreements proposed exemption in order to be able reimbursement of the servicer’s entered into by the Trust will be sold to sell such securities to ERISA plans reasonable expenses in connection only to Qualified Plan Investors. without having to sell to one hundred therewith; FOR FURTHER INFORMATION CONTACT: Mr. independent investors. Thus, if the (g) Any plan investing in such E.F. Williams of the Department, proposed exemption is granted, the certificates will be an ‘‘accredited telephone (202) 219–8194. (This is not Applicants would have the ability to investor’’ as defined in Rule 501(a)(1) of a toll-free number.) sell credit card receivable ABS which Regulation D of the SEC under the are designed to meet the investment Securities Act of 1933; Massachusetts Mutual Life Insurance prerequisites of more limited groups of (h) The Revolving Period for a Series Company (MassMutual), Located in investors, including ERISA plans. of investor certificates, and the Springfield, Massachusetts 20. In summary, the Applicants conditions under which Citibank may [Application No. D–10436] represent that the proposed transactions designate additional Accounts or Proposed Exemption will meet the statutory criteria of section remove previously-designated 408(a) of the Act because, among other Accounts, will be described in the The restrictions of sections 406(a), things: prospectus or private placement 406(b)(1) and (b)(2) of the Act and the (a) The acquisition of investor memorandum provided to investing sanctions resulting from the application certificates by a plan will be on terms plans; of section 4975 of the Code, by reason (including certificate price) that are at (i) The Trustee of the Trust will be a of section 4975(c)(1)(A) through (E) of least as favorable to the plan as such substantial financial institution or trust the Code, shall not apply to (1) the terms would be in an arm’s-length company experienced in trust activities proposed mergers of the following transaction with an unrelated party; and would be familiar with its duties, Connecticut Mutual Life Insurance (b) The rights and interests evidenced responsibilities, and liabilities as a Company (CML) separate investment by the investor certificates will not be fiduciary under the Act; accounts (SIAs), the assets of which subordinated to the rights and interests (j) The Pooling Agreement will include assets of employee benefit plans evidenced by other investor certificates include an Economic Early (the Plans), into the following of the trust; Amortization Event triggered by a Massachusetts Mutual Life Insurance (c) Any investor certificates acquired decline in the performance of the Company (MassMutual) SIAs: CML by a plan will have received a rating at Receivables in the Trust; Select into MassMutual SIA–A, CML the time of such acquisition that is in (k) The Pooling Agreement will Fixed Income into MassMutual SIA–E, one of two highest generic rating require Citibank to maintain a seller CML Basis into MassMutual SIA–F, categories from either of the Rating interest of not less than the greater of (i) CML Money Market into MassMutual Agencies, and/or the highest short-term 2 percent of the initial aggregate SIA–G, and CML Overseas into generic rating category from any one of principal balance of investor certificates MassMutual SIA–I (the Merger the Rating Agencies; issued by the trust, or (ii) 7 percent of Transactions); (2) the proposed transfer (d) The particular class of certificates the outstanding aggregate principal of Plan assets from CML Dimensions for each series to which this proposed balance of investor certificates issued by and CML Converts, after termination of exemption will apply (an Exempt Class) the trust; those SIAs, into MassMutual SIA–E and will have credit support provided to the (l) The Pooling Agreement will MassMutual SIA–A, respectively (the Exempt Class through a senior- require that any change in the terms of Termination Transfers); and (3) the subordinated series structure or other any cardholder agreements also will be proposed transfer of Plan assets from form of third party credit support made applicable to the comparable CML Life Style Funds designated as which, at a minimum, will represent segment of Accounts owned or serviced CML Asset Allocation A, CML Asset five (5) percent of the outstanding by Citibank which are part of the same Allocation B, and CML Asset Allocation principal balance of certificates issued program or which have the same or C, after termination of those funds, into by the Exempt Class, so that an investor substantially similar characteristics; MassMutual SIA–BC, MassMutual SIA– in the Exempt Class will not bear the (m) The addition of new Receivables BP, and MassMutual SIA–BA, initial risk of loss; or designation of new Accounts, or respectively (the Life Style Transfers; Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4069 the Termination Transfers and the Life Securities and Exchange Commission which are popular funding vehicles for Style Transfers are referred to under the Investment Company Act of Plans. The funds invested in the GACs collectively as the Transfer 1940. The assets of the CML SIAs being are allocated by the Plans’ fiduciaries or Transactions); provided the following merged or transferred and the assets of by individual participants among conditions are met: the MassMutual SIAs affected by the separate investment accounts (SIAs) (A) At least 30 days prior to the merger or transfer will be valued in a maintained by MassMutual for effective date of each Merger and single valuation using the same investment in various types and classes Transfer Transaction, MassMutual methodology by the same custodian at of assets, including the MassMutual provides to a fiduciary of each Plan the close of the same business day that Institutional Funds and other mutual participating in the CML SIAs (the Plan the Merger and Transfer Transactions fund companies affiliated with Mass Fiduciary) affected by the Transaction are effected; Mutual. For example, funds invested by full written disclosure of information (G) No later than forty five (45) days a Plan in a GAC might be allocated concerning the proposed Transaction after the Merger and Transfer among several SIAs, which in turn and the affected MassMutual SIAs, Transactions, each Plan Fiduciary will invest in various MassMutual mutual including a current prospectus and a be provided a written confirmation of funds. MassMutual represents that prior full and detailed written description of the Transactions which will include a to the Company Merger MassMutual the fees charged by the affected statement of the number of units held by maintained twenty-five SIAs (the MassMutual SIA’s and the funds in each Plan in each affected CML SIA, the MassMutual SIAs) and CML maintained which they invest, the differential unit value of each such CML SIA unit twelve SIAs (the CML SIAs). The assets between that fee level and the fee level and the aggregate dollar value of such of the MassMutual SIAs involved in this applicable to the affected CML SIAs and Plan’s CML SIA units, determined proposed exemption are invested solely the reasons why MassMutual believes immediately prior to the Transactions, in mutual funds affiliated with that the investment is appropriate for as well as the number of units held by MassMutual, whereas the assets of the the Plans. The notice will also inform each Plan in each affected MassMutual CML SIAs involved in this proposed the Plan Fiduciary of the proposed SIA, the unit value of each such exemption are invested in various effective date of the Transaction; MassMutual SIA unit, and the aggregate marketable equity and debt securities. (B) As part of the disclosure required dollar value of such Plan’s MassMutual 4. MassMutual represents that five of under paragraph (A) of this exemption, SIA units, determined immediately after the CML SIAs have investment MassMutual notifies the Plan Fiduciary the Transactions. objectives and strategies which are in writing that instead of participating (H) Neither MassMutual nor any of its substantially similar to those of five in the particular Merger or Transfer affiliates receives any fees or MassMutual SIAs, holding assets which Transaction proposed by MassMutual, commissions in connection with the are of the same or similar class and type. the Plan Fiduciary may direct that the Merger and Transfer Transactions; Since the Company Merger, these five assets of the Plan in the affected CML (I) The Plans pay no sales CML SIAs have been maintained by SIA may be transferred, without commissions or fees in connection with MassMutual with the same investment penalty, charge or adjustment, to any the Merger and Transfer Transactions; advisors and portfolio managers as the other available MassMutual SIA or (J) The Plans participating in the CML corresponding MassMutual SIAs. In liquidated, without penalty, charge or SIAs are not employee benefit plans order to eliminate duplicative adjustment, for a cash payment to the sponsored or maintained by administrative expenses and take greater Plan equal to the fair market value of the MassMutual or CML; and advantage of economies of scale, and to Plan’s interest in the affected SIA in lieu (K) All assets involved in the avoid the adverse consequences of of the Plan’s participation in the transactions are securities for which declining asset pools in the CML SIAs, proposed transaction; market quotations are readily available, MassMutual proposes to merge the five (C) Upon completion of the Merger or cash. CML SIAs (the Merging CML SIAs) into Transactions, the fair market value of the corresponding MassMutual SIAs the interests of each Plan participating Summary of Facts and Representations (the Merger Transactions). in the MassMutual SIAs immediately 1. The Plans involved in this 5. In addition to the Merger following such Merger Transactions proposed exemption are pension, profit Transactions, MassMutual also proposes equals the fair market value of such sharing and stock bonus plans which to effect transfer transactions with Plan’s interest in the affected CML SIAs are exempt from Federal income respect to (a) two other CML SIAs (the immediately before the transactions; taxation under section 501(a) of the Terminating CML SIAs) which (D) Upon completion of the Transfer Code by reason of qualifying under MassMutual has determined to have Transactions, the fair market value of section 401(a) of the Code. investment objectives and asset types the interests of each Plan participating 2. The proposed exemption is which are not widely utilized by Plans in the MassMutual SIAs immediately requested on behalf of the covered by the Act, and, consequently, following such Transfer Transactions Massachusetts Mutual Life Insurance will not maintain sufficient assets to equals the fair market value of such Company (MassMutual), a mutual life provide an appropriate investment Plan’s interest in the affected CML SIAs insurance company organized under portfolio, and (b) three CML master immediately before the transaction; Massachusetts law. Another previously- funds, called Life Style Funds. (E) The assets of each of the Plans are unrelated mutual life insurance The Terminating CML SIAs: invested in the same or similar company, Connecticut Mutual Life MassMutual states that upon the investment type or asset class before Insurance Company (CML), merged into Company Merger, it was determined and after the Merger and Transfer MassMutual on February 29, 1996 (the that MassMutual GAC funds would not Transactions; Company Merger). be invested in the Terminating CML (F) The assets of the CML SIAs will 3. MassMutual represents that it SIAs, and that CML GAC investors be valued for purposes of the Merger performs a wide variety of services for would be allowed to convert their and Transfer Transactions at the employee benefit plans, including investments to GACs issued by ‘‘independent current market price’’ opportunities for the Plans to invest in MassMutual. Since the Company within the meaning of Rule 17a–7 of the group annuity contracts (the GACs), Merger, the assets in the Terminating 4070 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

CML SIAs have declined steadily due to Life Style Funds which are held in one the fair market value of each Plan transfers and withdrawals. As a of the Terminating CML SIAs or an participating Plan’s interest in the result of these developments, Unaffected CML SIA will be sold 44 and affected CML SIAs immediately before MassMutual represents that it will be the proceeds from the sale will be the Transactions. MassMutual increasingly difficult for the transferred to the corresponding represents that the fair market value of Terminating CML SIAs to maintain MassMutual Life Style Fund. the CML SIAs involved in the well-diversified portfolios and risk and MassMutual is unable to conclude Transactions are readily ascertainable return profiles that are appropriate for that the transactions described herein by reference to external markets, and the remaining Plan investors in the do not constitute prohibited that each underlying security involved Terminating CML SIAs. Accordingly, transactions under the Act. Accordingly, in the subject transactions will be MassMutual proposes to liquidate the MassMutual is requesting an valued only at the ‘‘independent current Terminating CML SIAs by liquidation of administrative exemption from the market price’’ within the meaning of the securities held in the SIAs and prohibitions of sections 406(a) and Rule 17a–7 of the Securities and transfer of the proceeds into the two 406(b)(1) and (b)(2) of the Act for the Exchange Commission under the designated MassMutual SIAs to take Merger and Transfer Transactions. Investment Company Act of 1940 (the greater advantage of economies of scale 6. No less than thirty days in advance 1940 Act). MassMutual represents that and to avoid the adverse consequences of each Merger and Transfer Rule 17a–7 constitutes a set of standards of declining asset pools. Thus, Plans Transaction, MassMutual will provide for the determination of the previously invested in the Terminating to a fiduciary of each Plan participating independently verifiable prices for CML SIAs would own units in the in the CML SIA affected by the securities in transactions between corresponding transferee MassMutual Transaction (the Plan Fiduciary) a registered investment companies and SIAs of an equal value to their units in written notice of the proposed their affiliates.46 The Merger and the Terminating CML SIAs immediately Transaction (the Notice). The Notice Transfer Transactions will be effected prior to the transfer. will consist of a full written disclosure without payment of commissions or The Life Style Funds: The Life Style of information concerning the proposed sales charges by the Plans, including Funds are master funds, maintained by Transaction, the affected MassMutual fees payable in accordance with Rule both CML and MassMutual, which SIAs, and the proposed effective date of 12b–1 under the 1940 Act. distribute Plans’ investments in GACs the Transaction. The Notice will include 8. In addition to notification of each among various SIAs. Each of these Life a current prospectus for each of the Plan Fiduciary in advance of the Merger Style Funds offers to Plan asset mutual funds in which the affected and Transfer Transactions, as discussed investors a particular approach to asset MassMutual SIAs invest and will above, MassMutual will also provide to mix, investment philosophy and overall describe the fees charged by the affected each Plan Fiduciary a written MassMutual SIAs and the funds in management, and a Plan asset investor confirmation of the Transactions after which they invest and the differential is able to designate a Life Style Fund they have been completed. No later than between that fee level and the fee level with an approach which is most forty five days after the Merger and applicable to the affected CML SIAs. consistent and responsive to the Transfer Transactions, each Plan The proposed exemption requires that particular needs of the individual Plan. Fiduciary will be provided a written the Notice advise the Plan Fiduciary After designation of one of the Life Style confirmation of the Transactions which that in lieu of participating in the Funds, those Plan assets invested in the will include a statement of the number GACs of the insurance company are proposed Transaction, the Plan of units held by each Plan in each directed into the designated Life Style Fiduciary may direct that the assets of affected CML SIA, the unit value of each Fund, where such monies are then the Plan in the affected CML SIA may such CML SIA unit and the aggregate directed to the particular SIAs in which instead be transferred to any other dollar value of such Plan’s CML SIA the selected Life Style Fund invests. The available MassMutual SIA or liquidated units, determined immediately prior to CML Life Style Funds are designated as for a cash payment to the Plan.45 In the Transactions, as well as the number CML Asset Allocation A, CML Asset addition, the Plan Fiduciary will be of units held by each Plan in each Allocation B, and CML Asset Allocation provided with a written confirmation of affected MassMutual SIA, the unit value C. The MassMutual Life Style Funds are the subject Transaction. of each such MassMutual SIA unit, and designated as MassMutual SIA-BC, 7. In accordance with the procedures MassMutual SIA-BP, and MassMutual to be utilized by MassMutual in the aggregate dollar value of such Plan’s SIA-BA. effecting the Merger and Transfer MassMutual SIA units, determined MassMutual proposes to transfer the Transactions, the fair market value of immediately after the Transactions. assets from the CML Life Style Funds the interests of the Plans participating in into the three MassMutual Life Style the MassMutual SIAs immediately 46 Rule 17a–7 under the 1940 Act provides a general exception from Section 17(a) of the Act for Funds, as follows: The CML Life Style following the Transactions will equal certain securities transactions between registered Funds are invested in (a) different investment companies and certain of their affiliates. combinations of the Merging CML SIAs, 44 The Unaffected CML SIAs will continue to be As a general matter, Section 17(a) of the 1940 Act (b) the Terminating CML SIAs, and (c) maintained by MassMutual on behalf of investors prohibits any ‘‘affiliated person’’ of a registered other than the Life Style Funds, and only the Life investment company from selling any security to two other CML SIAs (the Unaffected Style Funds’ investments in the Unaffected CML the registered investment company. Rule 17a–7 CML SIAs) which will continue to be SIAs will be liquidated for transfer to the permits certain types of affiliate transactions if, maintained by MassMutual and will not MassMutual Life Style Funds. MassMutual chooses among other things, the transaction is effected at an be merged or terminated. Therefore, to not to transfer the CML Life Style Funds’ interests independently verifiable price, the ‘‘current in the Unaffected CML SIAs to the MassMutual Life independent market price’’ within the meaning of the extent the CML Life Style Funds Style Funds because the Unaffected CML SIAs do Rule 17a–7. MassMutual states that this standard of include investments in Merging CML not have corresponding counterpart MassMutual valuation is appropriate for the proposed exemption SIAs, the Life Style Transfers will be SIAs. for purposes of valuing the assets held in the accomplished in the same manner as the 45 MassMutual represents that such a transfer affected CML SIAs, which are not investments in would be accomplished first by accessing available registered investment companies, that will be merger of the Merging CML SIAs with cash reserves in the affected CML SIA and then, to merged or transferred into the affected MassMutual the corresponding MassMutual SIAs. the extent cash reserves are depleted, by liquidating SIAs, which are solely invested in registered However, any investments of the CML assets in the affected CML SIA. investment companies. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4071

9. In summary, the applicant FOR FURTHER INFORMATION CONTACT: (3) The proposed exemptions, if represents that the proposed Ronald Willett of the Department, granted, will be supplemental to, and transactions satisfy the criteria of telephone (202) 219–8881. (This is not not in derogation of, any other section 408(a) of the Act for the a toll-free number.) provisions of the Act and/or the Code, following reasons: General Information including statutory or administrative (a) Upon completion of the Merger exemptions and transitional rules. The attention of interested persons is and Transfer Transactions, the fair Furthermore, the fact that a transaction directed to the following: market value of the interests of each is subject to an administrative or Plan participating in the MassMutual (1) The fact that a transaction is the statutory exemption is not dispositive of SIAs immediately following the subject of an exemption under section whether the transaction is in fact a Transactions will equal the fair market 408(a) of the Act and/or section value of such Plan’s interest in the 4975(c)(2) of the Code does not relieve prohibited transaction; and affected CML SIA immediately before a fiduciary or other party in interest of (4) The proposed exemptions, if the Transaction; disqualified person from certain other granted, will be subject to the express (b) The assets of each participating provisions of the Act and/or the Code, condition that the material facts and Plan will be invested in the same or including any prohibited transaction representations contained in each similar investment type or asset class provisions to which the exemption does application are true and complete and before and after the Merger and Transfer not apply and the general fiduciary accurately describe all material terms of Transactions; responsibility provisions of section 404 the transaction which is the subject of (c) The Plans will not pay, and of the Act, which among other things the exemption. In the case of continuing MassMutual and its affiliates will not require a fiduciary to discharge his exemption transactions, if any of the receive, any fees or commissions in duties respecting the plan solely in the material facts or representations connection with the Merger and interest of the participants and Transfer Transactions; and beneficiaries of the plan and in a described in the application change (d) A fiduciary on behalf of each Plan, prudent fashion in accordance with after the exemption is granted, the who is independent of and unrelated to section 404(a)(1)(b) of the act; nor does exemption will cease to apply as of the MassMutual or any of its affiliates, will it affect the requirement of section date of such change. In the event of any receive advance written disclosure of 401(a) of the Code that the plan must such change, application for a new the Merger and Transfer Transactions, operate for the exclusive benefit of the exemption may be made to the including notification that the assets of employees of the employer maintaining Department. the Plan in the affected CML SIA may the plan and their beneficiaries; Signed at Washington, DC, this 21st day of instead be transferred, without penalty, (2) Before an exemption may be January, 1998. charge or adjustment, to any other granted under section 408(a) of the Act Ivan Strasfeld, available MassMutual SIA or liquidated, and/or section 4975(c)(2) of the Code, without penalty, charge or adjustment, the Department must find that the Director of Exemption Determinations, for a cash payment to the Plan equal to exemption is administratively feasible, Pension and Welfare Benefits Administration, the fair market value of the Plan’s in the interests of the plan and of its Department of Labor. interest in the affected SIA in lieu of the participants and beneficiaries and [FR Doc. 98–1790 Filed 1–26–98; 8:45 am] Plan’s participation in the proposed protective of the rights of participants BILLING CODE 4510±29±P transaction. and beneficiaries of the plan; federal register January 27,1998 Tuesday Rule Interchange (EDI)Transactions;Proposed of ShipmentinElectronicData Federal AcquisitionRegulation;Evidence 48 CFRPart52 Space Administration National Aeronauticsand Administration General Services Department ofDefense Part IV 4073 4074 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Proposed Rules

DEPARTMENT OF DEFENSE A. Background information collection requirements. It This proposed rule amends the clause is estimated that the revision to the FAR GENERAL SERVICES at FAR 52.247–48 to eliminate the clause at 52.247–48 will slightly ADMINISTRATION current barriers to full implementation increase, by 45 hours, to 74,795 hours, of electronic data interchange (EDI) in the annual paperwork burden associated NATIONAL AERONAUTICS AND certain contracts awarded on an f.o.b. with FAR Part 47 and related provisions SPACE ADMINISTRATION destination basis. Presently, if a contract and clauses approved by the Office of is awarded on an f.o.b. destination basis, Management and Budget (OMB) under 48 CFR Part 52 and if transportation is accomplished by OMB Control Number 9000–0061. a common carrier, the contractor is List of Subjects in 48 CFR Part 52 [FAR Case 97±011] required to provide, with the invoice, a signed copy of the commercial bill of Government procurement. RIN 9000±AH73 lading indicating the carriers receipt of Dated: January 21, 1998. the supplies or to furnish the Jeremy F. Olson, Federal Acquisition Regulation; information electronically as evidence Acting Director, Federal Acquisition Policy Evidence of Shipment in Electronic of shipment. Additionally, if Division. Data Interchange (EDI) Transactions transportation is accomplished by other Therefore, it is proposed that 48 CFR than a common carrier or parcel post, Part 52 be amended as set forth below: AGENCIES: Department of Defense (DoD), the contractor is required to provide, General Services Administration (GSA), with the invoice, a copy of the PART 52ÐSOLICITATION PROVISIONS and National Aeronautics and Space appropriate delivery document showing AND CONTRACT CLAUSES Administration (NASA). receipt at the destination specified in 1. The authority citation for 48 CFR ACTION: Proposed rule. the contract. To eliminate current barriers to transmission of signed bills Part 52 continues to read as follows: SUMMARY: The Civilian Agency of lading, or other required delivery Authority: 40 U.S.C. 486(c); 10 U.S.C. Acquisition Council and the Defense documentation through EDI, this rule chapter 137; and 42 U.S.C. 2473(c). eliminates any requirement for Acquisition Regulations Council are 2. Section 52.247–48 is revised to read contractors to provide evidence of proposing to amend the Federal as follows: Acquisition Regulation (FAR) to shipment. However, contractors will be facilitate the use of electronic data required to retain, and to make available 52.247±48 F.o.b. DestinationÐEvidence of interchange (EDI) transactions and to to the Government for review as Shipment. streamline the payment process when necessary, the evidence of shipment As prescribed in 47.305–4(c), insert supplies are purchased free on board documentation for a period of 4 years the following clause: after contract completion. (f.o.b.) destination with inspection and F.O.B. Destination—Evidence of Shipment acceptance at origin. This regulatory B. Regulatory Flexibility Act (Date) action was not subject to Office of (a) If this contract is awarded on a free on Management and Budget review under This proposed rule is not expected to have a significant economic impact on board (f.o.b.) destination basis, the Executive Order 12866, dated Contractor— September 30, 1993. This is not a major a substantial number of small entities within the meaning of the Regulatory (1) Shall not submit an invoice for payment rule under 5 U.S.C. 804. until the supplies covered by the invoice Flexibility Act, 5 U.S.C. 601, et seq., have been shipped; and DATES: Comments should be submitted because the rule applies to a limited (2) Shall retain, and make available to the on or before March 30, 1998 to be number of EDI transactions, e.g., when Government for review as necessary, the considered in the formulation of a final supplies are purchased f.o.b. following evidence of shipment rule. destination, but inspection and documentation for a period of 4 years after ADDRESSES: Interested parties should acceptance will be at origin. Therefore, completion of the contract: submit written comments to: General the rule is estimated to affect only a (i) If transportation is accomplished by Services Administration, FAR small number of entities, both large and common carrier, a signed copy of the commercial bill of lading for the supplies Secretariat (MVR), 1800 F Street, NW, small. For DoD, less than 1 percent (129) of all f.o.b. destination supply contracts covered by the Contractor’s invoice, Room 4035, Washington, DC 20405. E- indicating the carrier’s intent to ship the mail comments submitted over Internet over $25,000 (14,664) are likely to be supplies to the destination specified in the should be addressed to: farcase.97– affected by this rule. Therefore, an contract. [email protected]. Please cite FAR case 97– Initial Regulatory Flexibility Analysis (ii) If transportation is accomplished by 011 in all correspondence related to this has not been performed. Comments parcel post, a copy of the certificate of case. from small entities concerning the mailing. affected FAR subpart will be considered (iii) If transportation is accomplished by FOR FURTHER INFORMATION CONTACT: The in accordance with 5 U.S.C. 610 of the other than common carrier or parcel post, a FAR Secretariat, Room 4035, GS Act. Such comments must be submitted copy of the delivery document showing Building, Washington, DC 20405 (202) separately and should cite 5 U.S.C. 601, receipt at the destination specified in the 501–4755 for information pertaining to contract. et seq. (FAR case 97–011), in status or publication schedules. For (b) The Contractor is not required to submit correspondence. clarification of content, contact Ms. evidence of shipment documentation with its Linda Klein, Procurement Analyst, at C. Paperwork Reduction Act invoice. (End of clause) (202) 501–3775. Please cite FAR case The Paperwork Reduction Act (44 97–011. U.S.C. 3501, et seq.) is deemed to apply [FR Doc. 98–1909 Filed 1–26–98; 8:45 am] SUPPLEMENTARY INFORMATION: because the proposed rule contains BILLING CODE 6820±EP±P federal register January 27,1998 Tuesday Requirements; Notice Revised NoticeofTransition Indian HousingBlockGrantProgramÐ Development Housing andUrban Department of Part V 4075 4076 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

DEPARTMENT OF HOUSING AND numbers and addresses for these Offices Secondly, section 106(b) requires that URBAN DEVELOPMENT appear in Question 7 of this notice. HUD issue final regulations SUPPLEMENTARY INFORMATION: implementing NAHASDA no later than [Docket No. FR±4170±N±11] September 1, 1997. Further, section RIN: 2577±AB74 I. Statutory Background 106(b)(2)(A) of NAHASDA provides that The Native American Housing all regulations required under Indian Housing Block Grant ProgramÐ Assistance and Self-Determination Act NAHASDA be issued in accordance Revised Notice of Transition of 1996 (Pub. L. 104–330, approved with the procedures of the Negotiated Requirements October 26,1996) (NAHASDA) Rulemaking Act of 1990 (5 U.S.C. 561– AGENCY: Office of the Assistant reorganizes the system of Federal 570). Accordingly, the Secretary of HUD Secretary for Public and Indian housing assistance to Native Americans established the Native American Housing, HUD. by eliminating several separate Housing Assistance & Self- Determination Negotiated Rulemaking ACTION: programs of assistance and replacing Revised notice of transition Committee to negotiate and develop a requirements. them with a single block grant program. Beginning on October 1, 1997, the first proposed rule implementing SUMMARY: On January 27, 1997 (62 FR day of the 1998 fiscal year (FY), a single NAHASDA. This proposed rule was 3972), HUD published for public block grant program replaced assistance published on July 2, 1997 (62 FR comment a notice to implement that previously authorized under: 35718). part of section 106 of the Native 1. The United States Housing Act of II. The January 27, 1997 Transition American Housing Assistance and Self- 1937 (1937 Act); Notice and the July 2, 1997 Proposed Determination Act of 1996 (NAHASDA) 2. The Indian Housing Child Rule which requires HUD to establish the Development Program under Section On January 27, 1997 (62 FR 3972), requirements necessary to provide for 518 of the Cranston-Gonzalez National HUD published the transition notice the transition from the provision of Affordable Housing Act (12 U.S.C. required by section 106(a) of assistance for Indian tribes and Indian 1701z-6 note); NAHASDA. As directed by section housing authorities under the United 3. The Youthbuild Program under 106(a), the January 27, 1997 notice States Housing Act of 1937 and other subtitle D of title IV of the Cranston- requested public comment on the related provisions of law to the Gonzalez National Affordable Housing transition requirements and invited provision of assistance in accordance Act (42 U.S.C. 12899 et seq.); nominations for membership on the with NAHASDA. The January 27, 1997 4. The Public Housing Youth Sports negotiated rulemaking committee. The notice also provided notice of the Program under section 520 of the January 27, 1997 notice described in negotiated rulemaking process for the Cranston-Gonzalez National Affordable detail the transition requirements and development of regulations necessary to Housing Act (42 U.S.C. 11903a); the establishment of the negotiated implement NAHASDA, and requested 5. The HOME Investment rulemaking committee. nominations for membership on the Partnerships Program under title II of The public comment period on the negotiated rulemaking committee. This the Cranston-Gonzalez National transition notice expired on February notice addresses the public comments Affordable Housing Act (42 U.S.C. 27, 1997. Twelve comments were received on the January 27, 1997 12721 et seq.); and submitted on the transition transition requirements, and provides 6. Housing assistance for the homeless requirements. Additionally, sixteen additional transition guidance and under title IV of the Stewart B. nominations for negotiated rulemaking requirements. McKinney Homeless Assistance Act (42 committee membership were received. DATES: The revised transition U.S.C. 11361 et seq.) and the Innovative In several cases, the public comments requirements are effective upon Homeless Demonstration Program under raised issues more appropriately publication. section 2(b) of the HUD Demonstration addressed in the proposed rule IHP submission date: No earlier than Act of 1993 (42 U.S.C. 11301 note). implementing NAHASDA, rather than the publication date of the final In addition to simplifying the process in the transition requirements. regulations implementing NAHASDA of providing housing assistance, the Accordingly, the proposed rule and no later than July 1, 1998. purpose of NAHASDA is to provide addresses many of the public comments Effective date of NAHASDA section Federal assistance for Indian tribes in a received on the January 27, 1997 701(c): November 3, 1998. manner that recognizes the right of transition notice. FOR FURTHER INFORMATION CONTACT: tribal self-governance. Section III. of this notice presents a Deborah Lalancette, National Office of Section 106 of NAHASDA sets out the summary of the significant issues raised Native American Programs, Department general procedure for the by the public commenters on the of Housing and Urban Development, implementation of the new Indian January 27, 1997 transition 1999 Broadway, Suite 3390, Denver, CO; housing block grant (IHBG) program. requirements and HUD’s responses to telephone (303) 675–1600 (this is not a The procedure described is a two-step these comments. Where appropriate, toll-free number). Hearing or speech- process. First, section 106(a) requires readers are referred to the provisions of impaired individuals may access this the publication of a notice in the the July 2, 1997 proposed rule that number via TTY by calling the toll-free Federal Register not later than 90 days address the issue raised by the Federal Information Relay Service at 1– from enactment of NAHASDA. The commenter. 800–877–8339. purpose of the notice is to establish any The July 2, 1997 rule contains a Indian tribes or tribally designated requirements necessary for the detailed description of the proposed housing entities with specific questions transition from the provision of regulatory requirements and the relating to the preparation of Indian assistance for Indian tribes and Indian negotiated rulemaking process. The Housing Plans as required by this notice housing authorities under the 1937 Act public comment deadline on the may call their Area Office of Native and other related provisions of law to proposed rule was August 18, 1997. All American Programs for assistance in the provision of assistance in comments will be considered in the resolving their questions. The telephone accordance with NAHASDA. development of the final rule. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4077

III. Discussion of Public Comments on October 1, 1997 Implementation Date is certification that the tribe or its TDHE the January 27, 1997 Transition Premature has entered into, or has begun Requirements Section 107 of NAHASDA states that negotiations to enter into, a local ‘‘[e]xcept as otherwise expressly cooperation agreement with the Indian Housing Plan Submission Date of governing body of the locality within June 1, 1997 Is Not Reasonable provided in this Act, this Act * * * shall take effect on October which any affordable housing to be Comment. Eight of the commenters 1, 1997.’’ Four of the commenters assisted with grant amounts will be situated (62 FR 3974). One commenter objected to the June 1, 1997 IHP expressed concern about the short expressed concern that this requirement submission deadline established by the statutory deadline for the may prevent a tribe or its TDHE from January 27, 1997 notice. The implementation of NAHASDA. The commenters believe that additional time receiving funding in situations where, commenters believed that this date through no fault of the housing entity or would not provide sufficient time for is necessary for the successful implementation of this new program. the affected tribal members, such an relevant tribal input in the development agreement cannot be negotiated before of the IHP. Specifically, it would not One of these commenters suggested that HUD use the waiver authority grant funds are needed to maintain have allowed housing authorities (HAs) existing housing. The commenter noted to adequately compile local and regional granted in section 101(b)(2) of NAHASDA to waive the requirement for that the cooperation agreement data and develop a quality, an IHP submission in FY 1998, in order requirement is set forth in NAHASDA comprehensive housing plan. to permit HUD and affected Indian section 101(b). The commenter Several of these commenters tribes adequate time to develop supported amendments to NAHASDA suggested alternate IHP submission comprehensive final regulations which would permit HUD to waive the dates. For example, five commenters implementing NAHASDA. This requirement for a cooperation objected to the submission of an IHP commenter also suggested that the agreement. prior to the development of regulations Negotiated Rulemaking Committee Response. The Negotiated Rulemaking implementing NAHASDA. Three of the develop interim regulations to put in Committee considered this public commenters suggested that HUD extend place for FY 1998 to guide tribes in the comment in the development of the the IHP submission deadline to August administration of block grants during proposed rule. Interested readers should 1, 1997. This date is based on section this interim period, rather than racing to consult the preamble to the July 2, 1997 103 of NAHASDA, which provides HUD complete regulations by October 1, proposed rule, which discusses the requirement for a local cooperation with a 60-day period to review an IHP 1997. agreement and highlights this issue for submitted by a tribe or its TDHE. Since Response. The Negotiated Rulemaking public comment (See 62 FR 35728). NAHASDA becomes effective on Committee has developed a work October 1, 1997, this alternate August schedule which it believes provides for Concerns Regarding Tax Exemption and date would provide HUD with a 60-day the effective implementation of Reimbursement Requirements NAHASDA in a timely manner. review period prior to the statute’s Comment. The January 27, 1997 effective date. IHP Should Be Format Driven Rather notice requires that the cooperation Response. HUD has addressed the Than Forms Driven agreement discussed above provide that concerns raised by these commenters. Comment. One commenter urged that the tribe or its TDHE is exempt from all On February 24, 1997 (62 FR 8258), HUD not implement the IHP real or personal property taxes. The HUD published a notice in the Federal requirement by prescribing a series of tribe or TDHE, however, must Register extending the IHP submission forms. The commenter believes that a compensate the relevant political deadline to November 3, 1997. With the forms driven approach will stifle subdivision for the costs of providing publication of the proposed rule, many innovation and increase administrative governmental services (such as police commenters indicated that the deadline burden. This commenter fears that and fire protection). Alternatively, if the did not provide sufficient time to beneficial information might be omitted tribe or its TDHE is not tax exempt, the prepare an IHP. Also, it is not expected from the IHP if the tribe or its TDHE is cooperation agreement must provide for the regulations implementing unable to make it fit into a prescribed the reimbursement of the tribe or TDHE. NAHASDA will be effective by HUD form. Further, each planning The reimbursement amount will be November 3, 1997. Therefore, it is innovation could potentially require an equal to the difference between the tax unreasonable to expect a recipient to updated or new form. Accordingly, the amount and the costs of providing governmental services. (62 FR 3974.) submit a plan prior to publication date commenter suggested that HUD One commenter expressed of the program regulations. maximize the flexibility available to tribes and their TDHEs by merely reservations about this requirement. The Based on the above, this transition requiring that the IHP follow a certain commenter noted that a tribe or its notice is establishing new IHP format. TDHE may initiate a program to provide submission dates for Fiscal Year 1998 Response. The Negotiated Rulemaking off-reservation housing within its area of only. An IHP can be submitted no Committee has considered this operation. In these cases, a city council earlier than the publication date of the comment in the development of the or board of supervisors may have to final regulations implementing proposed regulations. Interested readers approve a cooperation agreement. The NAHASDA and no later than July 1, should refer to the proposed commenter wrote that under State law 1998. The July 1, 1998, date is necessary requirements of 24 CFR part 1000, the council or board may lack the in order to provide for a 60-day review subpart C, which would govern IHP statutory authority to exempt a period by the Office of Native American submission requirements. particular housing unit from real or Program (ONAP) field staff and personal property taxes imposed by reservation of funds prior to September Cooperation Agreement Requirement state statute. If the combination of those 30, 1998. The final regulations will May Prevent the Receipt of Funding taxes exceed the cost of providing establish IHP submission dates for all Comment. The January 27, 1997 governmental services, the affected city future years. notice requires that the IHP include a or county may be unable or unwilling to 4078 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices remit the difference in cash or tax determines are burdensome or enactment, is the tribe’s [default] remission. unnecessary for’’ small tribes and small TDHE’’ (62 FR 3973). The commenter suggested that HUD TDHEs. One commenter questioned One of the commenters believes that address this concern by keeping the why the transition notice had not this provision violates the principle of requirement for a cooperation agreement established such streamlined IHP tribal self-governance. First, the separate from the tax exemption requirements for these tribes and provision would delegate to the HA the requirement. The commenter wrote that housing entities. authority to administer the block grant NAHASDA treats the local cooperation Response. The Negotiated Rulemaking even if the tribe has not taken any agreement requirement and the tax Committee considered this comment in affirmative step to designate the HA as exemption requirement in separate the development of the proposed rule. its TDHE. Secondly, the January 27, subsections (See NAHASDA sections The proposed rule provides that there 1997 notice fails to specify the 101(c) and (d).) The certification are no separate IHP requirements for timeframe in which a tribe would lose required in the January 27, 1997 notice small Indian tribes. The IHP the important right to designate the folds these requirements together, requirements set forth in proposed 24 TDHE. Further, the provision is unclear making the tax exemption requirements CFR part 1000, subpart C are minimal. as to whether the IHP developed by an the contents of the cooperation Further, HUD has general authority HA acting as the default TDHE must agreements. The commenter noted that under section 101 of NAHASDA to still be reviewed and approved by the a cooperation agreement could address waive IHP requirements when an Indian tribe. subjects other than tax exemptions and tribe cannot comply with IHP Response. HUD agrees with the a tribe could comply with the tax requirements due to circumstances commenter that the transition exemption requirements without beyond its control. The waiver authority requirements must reflect the right of necessarily having an agreement with a under section 101 provides flexibility to tribal self-governance and the unique local jurisdiction. address the needs of every Indian tribe, relationship between the government of Response. The Negotiated Rulemaking including small Indian tribes. the United States and the governments Committee considered this comment in of Indian tribes. This notice makes the the development of the July 2, 1997 Transition Requirements Should appropriate revisions to the January 27, proposed rule. Interested readers should Reference Statutory Review Criteria 1997 transition notice. The notice consult the preamble to the proposed Comment. Section 103 of NAHASDA clarifies that NAHASDA section 102(d) rule, which discusses the tax exemption provides that the Secretary of HUD shall requires that a tribe identify its TDHE, requirement and requests additional conduct a limited review of each Indian if any, in its IHP. Specifically, when an public comment on this issue (See 62 housing plan to ensure that the plan IHP is submitted on behalf of a tribe by FR 35728). complies with the NAHASDA its TDHE, the IHP must contain a Negotiated Rulemaking Committee submission requirements for IHPs. One certification by the recognized tribal Should Develop Budget Scenarios commenter believes that the January 27, government that either (1) the tribe has 1997 notice should have provided an had an opportunity to review the IHP Comment. Section 102 of NAHASDA and has authorized its submission by requires that the IHP include an interpretation of the phrase ‘‘limited review.’’ Section 103 of NAHASDA also the TDHE, or (2) the tribe has delegated operating budget. One commenter to the TDHE the authority to submit an questioned the ability of a tribe or its establishes a 60-day deadline for review of an IHP. Further, this section requires IHP without prior review by the tribe. TDHE to develop a budget prior to FY This certification must be included in 1998 appropriations. This commenter that the Secretary of HUD provide an explanation to the tribe or TDHE if the the IHP, even in those cases where the recommended that the Negotiated tribe’s HA under the United States Rulemaking Committee develop budget Secretary finds the IHP deficient. The commenter believes these statutory Housing Act of 1937 is serving as the information to assist tribes and their tribe’s default TDHE. TDHEs in the preparation of the IHPs. review requirements should also have The commenter noted that IHAs have an been referenced in the January 27, 1997 ‘‘Broad Discretion’’ of Section 204 of advantage in estimating probable notice. NAHASDA Should Be Referenced Response. The Negotiated Rulemaking allocation amounts based on historical Comment. Section 204(a) of NAHASDA allocations and awards. However, some Committee considered this comment in provides: tribes (especially those currently served the development of the proposed rule. (a) Subject to * * * [program by an umbrella housing authority) Interested readers should refer to requirements] and the Indian housing plan considering whether or not to submit an proposed 24 CFR part 1000, subpart C, for an Indian tribe, the recipient for that tribe IHP may have very little to work from. which would govern IHP submission shall have— Response. The Negotiated Rulemaking procedures (including the process for (1) the discretion to use grant amounts for affordable housing activities through equity Committee considered this issue in the HUD review of IHPs and IHP amendments). investments, interest-bearing loans or development of the proposed rule. advances, noninterest bearing loans or Interested readers should refer to the Concerns Regarding TDHE Designation advances, interest subsidies, leveraging of July 2, 1997 proposed regulatory private investments, or any other form of requirements. Further, section 302(d) of Comment. Section 102 of NAHASDA assistance that the Secretary has determined NAHASDA speaks to funding levels provides that an IHP may be submitted to be consistent with the purposes of this under the Act. by an Indian tribe or, if specifically Act; and empowered by the recognized tribal (2) the right to establish the terms of Transition Notice Should Establish government, by the TDHE. The January assistance. Streamlined IHP Requirements for 27, 1997 notice provided that if ‘‘a tribe One commenter interprets section Small Tribes and Small TDHEs does not specifically authorize an entity 204(a) very broadly and recommended Comment. Section 102(f)(1) of to act as its tribally designated housing that the January 27, 1997 notice be NAHASDA permits the Secretary to entity, the tribe’s * * * HA under the amended to reference the ample ‘‘waive any [IHP] United States Housing Act of 1937, if discretion it believes this statutory requirements * * * that the Secretary there is one on the date of NAHASDA’s provision grants to a tribe or its TDHE. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4079

Specifically, the commenter requested proposed regulatory requirements for format established in the January 27, that HUD clarify that grant recipients additional detail. 1997 notice and begin with Question 10 have the discretion to use grant amounts in this notice. If there are any IV. Revised Effective Date for Section for affordable housing activities using inconsistencies between the 701(c) of NAHASDA the alternatives expressly set out in requirements in this notice and any NAHASDA (e.g., equity investments, Section 701(c) of NAHASDA final rule issued under NAHASDA, the interest-bearing loans or advances, etc.). establishes a new requirement for the requirements of the rule shall govern. Indian Housing Loan Guarantee The commenter believes that only in the VII. Findings and Certifications case of ‘‘any other form of assistance’’ Program (also called the Section 184 not expressly enumerated in section 204 Program) under section 184 of the Paperwork Reduction Act Statement Housing and Community Development does NAHASDA authorize the Secretary The information collection Act of 1992 (12 U.S.C. 1515z–13a). to determine whether the assistance is requirements contained in this notice Specifically, section 701(c) provides consistent with the purposes of the Act. have been approved by the Office of that Indian tribes wishing to participate Response. The Negotiated Rulemaking Management and Budget under the in the Section 184 program must submit Committee considered this comment in Paperwork Reduction Act of 1995 and an IHP that provides for the use of the development of the July 2, 1997 assigned control number 2577–0218. An proposed rule. Interested readers should Section 184 loan guarantees. In order to prevent any interruption in agency may not conduct or sponsor, and refer to proposed 24 CFR part 1000, a person is not required to respond to, the processing of Section 184 loan subpart B, which would govern eligible a collection of information unless the guarantees, HUD must establish an affordable housing activities. collection displays a valid control effective date for section 701(c) that number. Exceptions to Low-Income Eligibility takes into account the timeframes for Requirements Should Be Identified submission and HUD review of IHPs. Regulatory Planning and Review The January 27, 1997 transition notice Comment. Section 201 of NAHASDA This notice has been reviewed in established an effective date of October provides that, except under certain accordance with Executive Order 12866, 1, 1997 for section 701(c), based on an specified circumstances, ‘‘eligible issued by the President on September IHP submission deadline of June 1, housing activities under this Act shall 30, 1993 (58 FR 51735, October 4, 1993). 1997. As described above, HUD is be limited to low-income Indian Any changes to the notice resulting from extending the IHP deadline date to no families on Indian reservations and this review are available for public earlier than the publication date of the other Indian areas.’’ One of the inspection between 7:30 a.m. and 5:30 final regulations implementing commenters suggested that the January p.m. weekdays in the Office of the Rules NAHASDA and no later than July 1, 27, 1997 notice should be amended to Docket Clerk, Office of General Counsel, 1998. This notice conforms the effective identify the exceptions to this general Room 10276, Department of Housing date for section 701(c) to the IHP rule. and Urban Development, 451 Seventh deadline extension. Specifically, this Response. The Negotiated Rulemaking Street, SW, Washington, DC 20410– notice amends the January 27, 1997 Committee considered this comment in 0500. notice by establishing an effective date the development of the proposed of November 3, 1998 for purposes of Executive Order 12612, Federalism regulations. Interested readers are NAHASDA section 701(c). The General Counsel has determined, referred to proposed 24 CFR part 1000, as the Designated Official for HUD V. Technical Correction to the January subpart B, which would govern eligible under section 6(a) of Executive Order 27, 1997 Notice affordable housing activities (including 12612, Federalism, that the policies the provision of assistance to non low- The January 27, 1997 notice contained in this notice will not have income families). incorrectly designated the paragraph substantial direct effects on states or Grant Agreement Process Should Be listing the certifications as paragraph (d) their political subdivisions, or the Identified of Question and Answer 3. The relationship between the federal paragraph should have been designated government and the states, or on the Comment. One commenter believes as paragraph (e). This notice makes the distribution of power and that the January 27, 1997 notice does necessary correction. responsibilities among the various not seem to anticipate or require the VI. Additional Transition Requirements levels of government. The notice only development of a grant agreement with establishes temporary transition the tribes. The commenter worried that The January 27, 1997 notice stated requirements for the initial participation the notice did not provide sufficient that HUD may also issue a supplemental by Indian tribes in a new statutory information regarding the grant notice with additional transition program agreements and the block grant process. guidance and requirements. For example, the IHP must contain goals Accordingly, additional guidance and Environmental Review and objectives to be accomplished requirements for the treatment of A Finding of No Significant Impact during 1998. The commenter wondered housing, activities and funding under with respect to the environment was whether these activities would be programs repealed by NAHASDA are made at the time of development of the binding on the tribe through the grant included in this notice. For the January 27, 1997 notice in accordance agreement. The commenter convenience of all parties involved with with HUD regulations at 24 CFR Part 50, recommended that HUD identify the NAHASDA, this notice presents the which implement section 102(2)(C) of grant agreement document or the requirements of the January 27, 1997 the National Environmental Policy Act process of developing the grant notice, amended as discussed in of 1969. That Finding of No Significant agreement as early as possible. sections IV. and V. of this notice, above, Impact remains applicable to this notice Response. The Negotiated Rulemaking and the additional transition and is available for public inspection Committee considered this comment in requirements in a single, consolidated between 7:30 a.m. and 5:30 p.m. the development of the proposed rule. document. The additional requirements weekdays in the Office of the Rules Interested readers should consult the follow the same Question and Answer Docket Clerk, Office of General Counsel, 4080 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Room 10276, Department of Housing each tribe covered by the IHP. This (2) A description of the estimated and Urban Development, 451 Seventh option provides additional flexibility by housing needs for all Indian families in Street, SW, Washington, DC 20410– permitting several tribes to agree to have the jurisdiction. 0500. their affordable housing activities (c) Financial Resources—An administered by a single TDHE for operating budget for the recipient that Transition Requirements for the Native reasons of greater economy or increased includes: American Housing Block Grant (1) An identification and a description Program efficiency, or for any other reason. Question 3. What information must be of the financial resources reasonably Question 1. How is funding made included in an IHP? available to the recipient to carry out the available under NAHASDA? Answer 3. Each IHP shall be in a form NAHASDA-eligible affordable housing Answer 1. Under NAHASDA, funding prescribed by HUD and every IHP activities described in the IHP, is made available for affordable housing consists of two parts, a 5-year plan and including an explanation of the manner activities on an annual basis, and is a 1-year plan, each of which is in which amounts made available will distributed each fiscal year according to discussed separately below. The leverage additional resources; and an allocation formula on behalf of NAHASDA final rule may also contain (2) The uses to which such resources Indian tribes who submit an Indian additional plan requirements. will be committed, including eligible Housing Plan (IHP) that is reviewed and The 5-year plan must contain the affordable housing activities and approved by HUD. Unlike other following information for the 5-year administrative expenses. (Section 101(h) programs, NAHASDA funds are not period beginning with the fiscal year of NAHASDA requires HUD, by awarded on a competitive basis in (FY) for which the plan is submitted (for regulation, to authorize each recipient to which applications are given scores and the first IHP submission under the use a percentage of any grant amounts are then funded in rank order so that transition requirements of this notice, received for any reasonable only the highest scoring applications are the five fiscal years covered are 1998, administrative and planning expenses of funded. Every tribe, or entity designated 1999, 2000, 2001 and 2002): the recipient relating to carrying out by a tribe, that submits an IHP which (a) Mission Statement—A general NAHASDA and activities assisted with complies with the necessary statement of the mission of the Indian such amounts, which may include costs requirements is awarded a block grant tribe to serve the housing needs of the for salaries of individuals engaged in which is a share of the available funds. low-income families in the jurisdiction administering and managing affordable The size of the share is determined by of the Indian tribe during the 5-year housing activities assisted with grant the allocation formula. The award is period. amounts and expenses of preparing an called a block grant because the (b) Goals and Objectives—A statement IHP. This regulation will be developed recipient receives a single ‘‘block’’ of of the goals and objectives of the Indian by the negotiated rulemaking committee funds that may be used for any eligible tribe to enable the tribe to serve the who will be proposing to HUD the affordable housing activities in needs identified in the Mission percentage of grant amounts to be used accordance with the tribe’s IHP. Statement during the 5-year period. for planning and administrative Question 2. Who may submit an IHP (c) Activities Plan—An overview of expenses. to apply for a block grant? the housing activities, including the (d) Affordable Housing Resources—A Answer 2. An IHP may be submitted NAHASDA-eligible affordable housing statement of the affordable housing by an Indian tribe or, if specifically activities, planned during the 5-year resources currently available and to be empowered by the recognized tribal period with an analysis of the manner made available during FY 1998, government, by the tribally designated in which the activities will enable the including: housing entity for the tribe. A tribally tribe to meet its mission, goals, and (1) A description of the significant designated housing entity (TDHE) is an objectives. characteristics of the housing market in entity other than the tribal government The 1-year plan must contain the the tribe’s jurisdiction, including the which is authorized by the Indian tribe following information relating to the availability of housing from other public to receive the block grant amounts and upcoming fiscal year (FY 1998 for sources, private market housing, and the provide assistance according to the purposes of the first IHP submission manner in which such characteristics requirements of NAHASDA. under the transition requirements of this influence the decision of the recipient to NAHASDA section 102(d) requires notice): use grant amounts for rental assistance, that a tribe identify its TDHE, if any, in (a) Goals and Objectives—A statement production of new units, acquisition of its IHP. Specifically, when an IHP is of the goals and objectives to be existing units, or rehabilitation of units; submitted on behalf of a tribe by its accomplished during FY 1998, (2) A description of the structure, TDHE, the IHP must contain a including the NAHASDA-eligible coordination, and means of cooperation certification by the recognized tribal affordable housing activities. between the recipient and any other government that either: (1) the tribe has (b) Statement of Needs—A statement governmental entities in the had an opportunity to review the IHP of the housing needs of the low-income development, submission, or and has authorized its submission by Indian families residing in the implementation of housing plans, the TDHE; or (2) the tribe has delegated jurisdiction of the Indian tribe and the including a description of the to the TDHE the authority to submit an means by which such needs will be involvement of private, public, and IHP without prior review by the tribe. addressed during FY 1998, including: nonprofit organizations and institutions, This certification must be included in (1) A description of the estimated and the use of loan guarantees under the IHP, even in those cases where the housing needs and the need for section 184 of the Housing and tribe’s HA under the United States assistance for the low-income Indian Community Development Act of 1992, Housing Act of 1937 is serving as the families in the jurisdiction, including a and other housing assistance provided tribe’s default TDHE. description of the manner in which the by the Federal Government for Indian An IHP submitted by a TDHE may geographical distribution of assistance is tribes, including loans, grants, and cover more than one Indian tribe, but consistent with the geographical needs mortgage insurance; only if the IHP contains the certification and needs for various categories of (3) A description of the manner in described in the paragraph above from housing assistance; and which the plan will address the needs Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4081 identified in the Statement of Needs in including Section 504 of the (A) Is prescribed by State, tribal, or the 1-year plan required by paragraph Rehabilitation Act of 1973; local law; (b), above; (2) A certification that the recipient (B) Is agreed to by the local governing (4) A description of the manner in will maintain adequate insurance body in the local cooperation which the recipient will protect and coverage for housing units that are agreement; or maintain the viability of housing owned owned and operated or assisted with (C) The recipient and the local and operated by the recipient that was grant amounts; governing body agree in the local developed under a contract between (3) A certification that policies are in cooperation agreement that such user HUD and an Indian housing authority effect and are available for review by fees or payments in lieu of taxes shall pursuant to the United States Housing HUD and the public governing: not be made; or Act of 1937; (i) The eligibility, admission, and (iii) If the affordable housing assisted (5) A description of any existing and occupancy of families for housing with grant amounts received by the anticipated homeownership programs assisted with grant amounts; recipient (exclusive of any portions not and rental programs to be carried out (ii) Rents charged, including the assisted with amounts provided under during FY 1998, and the requirements methods by which rents or homebuyer NAHASDA) is not exempt from all real and assistance available under such payments are determined, for housing and personal property taxes levied or programs; assisted with grant amounts; imposed by any State, tribe, city, (6) A description of any existing and (iii) The management and county, or other political subdivision, anticipated housing rehabilitation maintenance of housing assisted with that the tribe, State, city, county, or programs necessary to ensure the long- grant amounts provided under this Act; other political subdivision in which the (4) If an IHP is submitted on behalf of term viability of the housing to be affordable housing development is a tribe by its tribally designated housing carried out during FY 1998, and the located contributes, in the form of cash entity (TDHE), the IHP must contain a requirements and assistance available or tax remission, the amount by which certification by the recognized tribal under such programs; the taxes paid with respect to the government that either: (7) A description of all other existing (i) The tribe has had an opportunity development exceed the amounts or anticipated housing assistance to review the IHP and has authorized its prescribed in section (6)(ii) of the 1-year provided by the recipient during FY submission by the TDHE, or plan requirements, above. 1998, including transitional housing, (ii) The tribe has delegated to the Question 4. What are the affordable homeless housing, college housing, TDHE the authority to submit an IHP housing activities that are eligible for supportive services housing, and the without prior review by the tribe; funding under NAHASDA? requirements and assistance available (5) If an IHP that covers more than Answer 4. Affordable housing under such programs; one Indian tribe is submitted by a activities are activities to develop or to (8) A description of any housing to be TDHE, each tribe covered by the IHP support affordable housing for rental or demolished or disposed of, and a must submit as part of the IHP the homeownership, or to provide housing timetable for such demolition or certification described in paragraph (4), services with respect to affordable disposition; immediately above; housing, for the benefit of low-income (9) A description of the manner in (6) A certification that the governing Indian families on Indian reservations which the recipient will coordinate with body of the locality within which any and other Indian areas. In the case of a tribal and State welfare agencies to affordable housing to be assisted with low-income family residing in a ensure that residents of such housing the grant amounts will be situated has dwelling unit assisted with NAHASDA will be provided with access to entered into, or has begun negotiations, grant amounts, affordable housing is resources to assist in obtaining which must be completed before any housing for which the monthly rent or employment and achieving self- award of NAHASDA funds can be made, homebuyer payment (as applicable) sufficiency; to enter into, a local cooperation does not exceed 30 percent of the (10) A description of the requirements agreement with the recipient for the family’s monthly adjusted income. established by the recipient to promote tribe providing that: Eligible affordable housing activities are the safety of residents of such housing, (i) The affordable housing assisted described below in sections (a) through facilitate the undertaking of crime with grant amounts received by the (k) of this answer: prevention measures, allow resident recipient (exclusive of any portions not (a) Indian Housing Assistance—The input and involvement, including the assisted with amounts provided under provision of modernization or operating establishment of resident organizations, NAHASDA) is exempt from all real and assistance for housing previously and allow for the coordination of crime personal property taxes levied or developed or operated pursuant to a prevention activities between the imposed by any State, tribe, city, contract between HUD and an Indian recipient and tribal and local law county, or other political subdivision; housing authority. enforcement officials; and and (b) Development—The acquisition, (11) A description of the entity that (ii) The recipient makes annual new construction, reconstruction, or will carry out the activities under the payments of user fees to compensate moderate or substantial rehabilitation of IHP, including the organizational such governments for the costs of affordable housing, which may include capacity and key personnel of the entity. providing governmental services, real property acquisition, site (e) Certifications of compliance—The including police and fire protection, improvement, development of utilities IHP must include the following roads, water and sewerage systems, and utility services, conversion, certifications: utilities systems and related facilities, or demolition, financing, administration (1) A certification that the recipient payments in lieu of taxes to such taxing and planning, and other related will comply with title II of the Civil authority, in an amount equal to the activities. Affordable housing includes Rights Act of 1968 in carrying out greater of $150 per dwelling unit or 10 permanent housing for homeless activities funded by NAHASDA, to the percent of the difference between the persons who are persons with extent that such title is applicable, and shelter rent and the utility cost, or such disabilities, transitional housing, and other applicable Federal statutes, lesser amount as: single room occupancy housing. 4082 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

(c) Housing Services—The provision residents of affordable housing from investments, interest-bearing loans or of housing-related services for crime. advances, noninterest-bearing loans or affordable housing, such as housing (f) Rental Assistance—The provision advances, interest subsidies, leveraging counseling in connection with rental or of tenant-based rental assistance. of private investments, or any other homeownership assistance, (g) Model Activities—Housing form of assistance that HUD determines establishment and support of resident activities under model programs that are to be consistent with the purposes of organizations and resident management designed to carry out the purposes of NAHASDA. This answer is provided corporations, energy auditing, activities NAHASDA and are specifically from section 204—‘‘Types of related to the provision of self- approved by HUD as appropriate for Investments’’—of NAHASDA. Guidance sufficiency and other services, and other such purpose. on the types of investments permissible services related to assisting owners, (h) Administrative Expenses—A under section 204 of NAHASDA will be tenants, contractors, and other entities, percent of grant amounts, to be provided in the final regulations. participating or seeking to participate in determined in the final rule, may be Question 6. When must the IHP other housing activities assisted with used for any reasonable administrative required by these transition grant amounts. and planning expenses of a recipient requirements be submitted? relating to carrying out NAHASDA and Answer 6. An IHP must be received by (d) Housing Management Services— activities assisted with such amounts, HUD no earlier than the publication The provision of management services including costs for salaries of date of the final regulations for affordable housing, including individuals engaged in administering implementing NAHASDA and no later preparation of work specifications, loan and managing affordable housing than July 1, 1998 in order to be processing, inspections, tenant activities assisted with grant amounts considered for FY 1998 funding. selection, management of tenant-based and the expenses of preparing an IHP. Question 53, below, also addresses this rental assistance, and management of Question 5. How may grant amounts issue. affordable housing projects. be used to carry out eligible activities? Question 7. Where must an IHP be (e) Crime Prevention and Safety Answer 5. In addition to being used to submitted? Activities—The provision of safety, directly pay for eligible activities, grant Answer 7. All IHPs must be submitted security, and law enforcement measures amounts may be used for affordable to the local Area Office of Native and activities appropriate to protect housing activities through equity American Programs as follows:

Tribes and IHAs located ONAP address

East of the Mississippi River (including all of Eastern/Woodlands Office of Native American Programs, 5P, Metcalfe Federal Building, 77 Minnesota) and Iowa. West Jackson Boulevard, Chicago, Illinois 60604±3507, (312) 353±1282 or (800) 735±3239, TTY Numbers: 1±800±927±9275 or 312±886±3741. Louisiana, Missouri, Kansas, Oklahoma, and Southern Plains Office of Native American Programs, 6.IPI, 500 West Main Street, Suite 400, Texas except for Yseleta del Sur. Oklahoma City, Oklahoma 73012, (405) 553±7520, 553±7480. Colorado, Montana, Nebraska, North Dakota, Northern Plains Office of Native American Programs, 8P, First Interstate Tower North, 633 South Dakota, Utah and Wyoming. 17th Street, Denver, Colorado 80202±3607, (303) 672±5462, TTY Number: 303±844±6158. Arizona, California, New Mexico, Nevada, and Southwest Office of Native American Programs, 9EPI, Two Arizona Center, 400 North Fifth Yseleta del Sur in Texas. Street, Suite 1650, Phoenix, Arizona 85004±2361, (602) 379±4156, TTY Number: 602±379± 4461, or Albuquerque Division of Native American Programs, 9EPIQ, Albuquerque Plaza, 201 3rd Street, NW, Suite 1830, Albuquerque, New Mexico 87102±3368, (505) 766±1372, TTY Number: None. Idaho, Oregon, and Washington ...... Northwest Office of Native American Programs, 10PI, 909 First Avenue, Suite 300, Seattle, Washington 98104±1000, (206) 220±5270, TTY Number: (206) 220±5185. Alaska ...... Alaska Office of Native American Programs, 10.1PI, 949 East 36th Avenue, Suite 401, An- chorage, Alaska 99508±4399, (907) 271±4633, TTY Number: (907) 271±4328.

Question 8. May an IHA continue to 1997. Question 30, below, also and Self-Determination Act of 1996 remain subject to the 1937 Act, and addresses this issue. (NAHASDA) legislation becomes convert to a PHA? Question 9. What happens to grants effective. How does this impact the Answer 8. No, because the purpose already made under the homeless, provision of housing assistance to Youthbuild and Indian HOME and result of NAHASDA is the Native Americans? programs? exclusion of IHAs from the definition of Answer 9. These grants continue to be Answer 10. NAHASDA terminates a PHA as of September 30, 1997. After governed by the statutes authorizing the provision of housing assistance under September 30, 1997, there may be IHAs programs as those statutes read on the United States Housing Act of 1937, that want to remain subject to the 1937 September 30, 1997 and by the grant as amended, (1937 Act) and creates a Act, but the consequence of NAHASDA agreements. After completion of the new program of grants made directly to section 501 is to make it impossible, funded activities, the grants will be Indian tribes. The new Indian Housing after September 30, 1997, for an IHA to closed out in accordance with their Block Grant (IHBG) is intended to be considered a PHA. Further, section program requirements and grant provide greater flexibility to tribes in 502(b) provides that any IHA housing agreements. Questions 37 and 38, determining how to address their developed or operated under the 1937 below, also address this issue. housing needs for low-income Act must be considered and maintained individuals within their jurisdiction. as affordable housing for purposes of General Impact on Housing and NAHASDA, and precludes the Funding continued application of title I of the Question 10. On October 1, 1997, the 1937 Act to IHAs after September 30, Native American Housing Assistance Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4083

Tribes assume a responsibility to recipient. The notification should take provided under the 1937 Act for the maintain current housing stocks the same form as the current notification original purpose after October 1, 1997? developed under the 1937 Act. for Date of Full Availability under the Answer 19. No. Funds provided to an Question 11. Does the change in Indian Housing program. IHA under the 1937 Act can be used for governing legislation affect who owns Question 16. What process would a any activity eligible under NAHASDA. housing developed or assets and funds tribe or TDHE follow in order to admit An IHA (or its successor entity) must held by IHAs? over-income families to a vacant unit honor existing contracts the IHA has Answer 11. No. While IHA funds and developed under the 1937 Act or for entered into with others prior to assets become subject to the new units developed under the 1937 Act NAHASDA; however, an IHA may requirements of NAHASDA on October which will be counted as Current reprogram the use of funds for eligible 1, 1997, the ownership of the housing Assisted Stock under the IHBG activities subject to written notification funds and assets are not affected. Grants Formula? to HUD. made to IHAs and the assets of IHAs Answer 16. Since the 1937 Act no Question 20. Will Indian housing continue to belong to the IHA. IHAs that longer applies to these units and the authorities (IHA), tribes or tribally are created by tribal ordinance are NAHASDA final rule will only address designated housing entities (TDHE) be subject to the authority of the tribe. the procedures for admitting over- eligible to apply for assistance under Tribes must review their existing income families when using the any programs covered by the 1937 Act? ordinances and other documents recipient’s annual grant amount, there is Answer 20. No. Section 501 of affecting the organization and legal a need to develop procedures for these NAHASDA repealed Title II of the 1937 commitments of the tribe and its IHA to units. Act and made Titles I and III determine how to transfer funds and For units to be developed after inapplicable to Indian housing after assets of the IHA to the tribe or its September 30, 1997, with funds September 30, 1997. Therefore, as of newly established tribally designated provided under the 1937 Act, a October 1, 1997, IHAs and tribes are housing entity (TDHE). recipient may use up to 10% of its funds ineligible for funding for the following available from 1937 Act programs to Effect on 1937 Act Housing programs: admit families whose income fall within —New development Question 12. What happens to public 80 to 100% of median income without —Modernization (both the housing units owned and operated by HUD approval. HUD approval is Comprehensive Improvement IHAs? required if a recipient plans to use more Assistance Program and the Answer 12. All units owned by IHAs than 10% of its 1937 Act funds for such Comprehensive Grant Program become ineligible for assistance under assistance or to provide housing for including the disaster/emergency the 1937 Act as of October 1, 1997. families over 100% of median income. reserve) Public housing units owned and For vacancies in homeownership —Operating subsidy operated by IHAs are considered Indian programs where the units were under —HOPE for Public and Indian Housing housing units and become subject to management as of September 30, 1997, Homeownership NAHASDA on October 1, 1997. occupancy by families whose income —Indian Housing Childhood Question 13. What happens to falls within 80 to 100% of median Development existing 1937 Act units if tribes in those income may not exceed 10% of the —Section 8 jurisdictions do not or cannot submit an dwelling units in the project or 5 Question 21. Will any operating IHP? dwelling units, whichever is greater, subsidy be provided to IHAs after Answer 13. NAHASDA does not without HUD approval. HUD approval October 1, 1997? provide the statutory authority for HUD is required if a recipient plans to admit Answer 21. Yes. The Fiscal Year (FY) to grant NAHASDA grant funds to an more than this amount in a project or to 1997 appropriation for operating IHA, tribe or to a default TDHE which provide housing for families over 100% subsidy under Section 9 of the 1937 Act cannot obtain a tribal certification, if the of median income. requisite IHP is not submitted by a tribe Question 17. Can an IHA or recipient covers IHAs fiscal years beginning or is determined to be out of compliance develop additional units with funds (FYB) January 1, 1997 and ending by HUD. There may be circumstances provided through the 1937 Act and have December 31, 1997; FYB April 1, 1997 where this may happen, and in those the extra units included in the IHBG and ending March 31, 1998; FYB July 1, cases, other methods of tribal, federal or formula? 1997 and ending June 30, 1998; and private market support may have to be Answer 17. No. While developing the FYB October 1, 1997 and ending sought to maintain and operate those maximum number of affordable housing September 30, 1998. IHAs are eligible 1937 Act units. units is encouraged, housing units over for funds appropriated prior to FY 98, Question 14. Should the public the number specified in the original and therefore, operating subsidy will be housing stock owned by IHAs be grant approval will not be included in provided for the time periods stated in reflected in the current assisted stock the total number of units developed this paragraph. element of the IHBG formula under with 1937 Act funds. After September 30, 1997, financial NAHASDA? Question 18. Can an IHA be a assistance may not be provided under Answer 14. Yes. NAHASDA sub-grantee of the tribe or the 1937 Act unless such assistance is Question 15. Will the housing units in TDHE for the purpose of maintaining provided from amounts made available the current development pipeline be housing developed under the 1937 Act? for FY 97 and pursuant to a allowed to increase the 1937 Act count Answer 18. Yes. Additionally, an IHA commitment entered into before for NAHASDA formula purposes? could be a sub-grantee for the purpose September 30, 1997, therefore, all Answer 15. Yes. Upon completion of of developing and managing housing operating budgets for these periods must housing units currently in the with NAHASDA funds. have been approved prior to September development pipeline, HUD should be 30, 1997 in order to be eligible for notified to adjust the information Effect on 1937 Act Funding funding. Operating budget adjustments reflected in the formula for existing Question 19. Must an IHA (or its or revisions after October 1, 1997, 1937 Act units operated by the IHA or successor entity) use grant funds cannot be processed. 4084 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Question 22. If an IHA has • procurement requirements as listed close grants originally funded with 1937 unobligated or unexpended funds in under 24 CFR part 85 or as specified in Act monies? any of the programs listed in Answer 19, the grantee’s HUD approved Answer 29. Where grant activities are how are they handled? procurement policy; essentially completed and the IHA and Answer 22. Any unobligated/ • environmental requirements as HUD are in the process of closing the unexpended funds which were listed under 24 CFR part 58; grant, the procedures for establishing approved for new development, • labor requirements of Sec. 104(b) of actual grant costs in effect as of modernization, operations or HOPE can NAHASDA; September 30, 1997, for the grant now be used for any eligible NAHASDA • tenant or homebuyer selection program are to be followed. This activity. Section 8 contracts remain in requirements contained in the grantee’s includes the requirement for audit effect and the program is still governed HUD approved admissions policy or verification of expenditures and final by the 1937 Act and the existing which comply with Sections 203, 205 financial settlement between the IHA contract provisions. and 207(b) of NAHASDA; and HUD. Upon completion of the final Question 23. What is the definition of • financial controls requirements financial settlement, HUD will adjust its ‘‘obligated’’ as it relates to the specified at 24 CFR Part 85. financial records to reflect the actual development and modernization Question 26. Do the Federal cost of the grant. programs? requirements listed in Question 25 Where grant activities are not Answer 23. Obligated means the apply to IHAs if they are not designated completed, final settlement procedures cumulative amount of modernization or as a TDHE? are dependent upon whether the development commitments entered into Answer 26. Yes. NAHASDA recipient assumes control of by the housing authority; i.e., contract Question 27. Are there any reporting the grant funding. If the recipient does execution for contract labor, materials or requirements after September 30, 1997 not assume responsibility for funds services; start and continuation of for grant funds provided under the 1937 provided by the 1937 Act, procedures physical work by force account labor; Act? for closing grants are the same as stated and start and continuation of Answer 27. Yes. When a recipient in the above paragraph. Where the administrative expenses. Contract includes funds provided to an IHA in its NAHASDA recipient assumes control of execution means execution of the IHP, reporting is included in the Annual the grant funding, close-out procedures contract by both the housing authority Report and fiscal audit requirements established for NAHASDA grants are to and the contractor. For force account under NAHASDA. be followed even if a significant portion work, all funds for a group of When funds provided to an IHA are of the grant activities are completed sequentially-related physical work items not included in a recipient’s IHP, prior to October 1, 1997. are considered obligated when the first reporting requirements in effect on Question 30. If an IHA wants to work item is started, such as kitchen September 30, 1997, continue to apply remain subject to the 1937 Act after cabinet replacement followed by until the close-out of the grant activity October 1, 1997, can it be converted to kitchen floor replacement, but only or until the IHA notifies HUD and HUD a PHA? where funds continue to be expended at acknowledges that the grant funds have Answer 30. No. To be eligible for a reasonable rate. Where one force been reprogrammed for eligible Indian Housing under the 1937 Act, account physical work item is started activities which support the regular tribal and state enabling legislation and is not sequentially related to other operation of the IHA. This requirement allowed for the creation of housing physical work items, such as site applies only to categorical grants authorities for the express benefit of improvements and kitchen remodeling, provided for specific purposes such as Indians. IHAs that were created for the then only the funds for the one physical development or modernization grants benefit of Indians are ineligible for work item started are considered and not to regular operating activities of funding under the 1937 Act after obligated. the IHA. Please note that the October 1, 1997. They cannot choose to Question 24. Does an IHA need to modernization reporting requirements be converted to PHAs. enter into a new grant agreement with have been simplified and guidance has HUD covering the use of existing 1937 been provided to tribes, TDHEs, IHAs Effect on ACCs Act grant funds? and Area ONAPs. Question 31. Does the repeal of the Answer 24. In most instances, the Question 28. What audit requirements 1937 Act terminate existing Annual requirement limiting use of grant funds apply to grants funded under the 1937 Contributions Contracts (ACCs)? to eligible NAHASDA activities is self- Act? Answer 31. Section 502(b) of implementing and does not require a Answer 28. IHAs (or their successor NAHASDA states that Indian housing new grant agreement between HUD and entities) are responsible for providing developed pursuant to an ACC ‘‘shall the IHA. However, in instances where a HUD with audits of program activities not be subject to any provision of [the grant was never placed under annual in accordance with OMB Circulars A– 1937 Act] or any [ACC] or other contributions contract or where a tribe 128 and A–133 for any period prior to agreement pursuant to such Act.’’ Based or other organization becomes the October 1, 1997, the effective date of on this language, existing ACCs are successor entity to an IHA, a grant NAHASDA. Notice PIH 97–30 (HA) terminated with two exceptions (bond agreement is required to obligate funds provides the compliance supplement for financed projects and Section 8) which to the IHA or to establish the tribe or annual audits of Indian housing are explained below in Questions 32 other organization as the successor authorities. This requirement includes and 33. entity to access IHA funds held by HUD. any overdue audits. Additionally, any Question 32. Can HUD continue Question 25. What Federal grant not included by the recipient in its funding for bond-financed projects in requirements apply after September 30, IHP is subject to these audit which the bonds were secured by ACCs? 1997 to funds provided under the 1937 requirements for the grant activity until Answer 32. Section 507 of NAHASDA Act? all grant activities are completed and addresses bond-financed projects. Answer 25. Funds are subject to the grant is closed. Annual contributions can be made by applicable Federal requirements which Question 29. What process does an HUD, consistent with Section 507, to include but are not limited to: IHA (or its successor entity) follow to continue payments to trustees on behalf Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4085 of holders of bonds issued, and notified that after September 30, 1997, Housing Drug Elimination Act of 1990 outstanding, in connection with the HAP contracts will not be renewed to exclude IHAs as eligible applicants. development of Indian housing projects. upon the expiration of their current However, TDHEs are now eligible HAP contracts. Owners should be applicants. The language in NAHASDA Section 8 advised that they must provide written does not include tribes as eligible Question 33. Are Section 8 ACCs notice of the impending HAP contract applicants. terminated? expiration to each Section 8 family 180 Other Programs and Funds Answer 33. No. Section 503 of days before the contract expires. A copy NAHASDA governs the provision of of the written notice must also be sent Question 40. Will tribes be eligible for Section 8 rental assistance for units for to the appropriate housing authority in the Economic Development and which a contract was entered into before accordance with Section 8(c)(9) of the Supportive Services (EDSS) Program? October 1, 1997. This section states that 1937 Act, as amended. See PIH Notice Answer 40. The EDSS program is after September 30, 1997, financial 97–50, ‘‘Expiration of Section 8 Annual created by annual appropriations. The assistance for rental housing assistance Contributions Contracts between the appropriation language currently makes may not be provided to an IHA or Department of Housing and Urban IHAs and public housing agencies TDHE, unless such assistance is Development and Indian housing eligible for this program. Continued provided pursuant to a contract for such authorities’’ dated September 19, 1997, eligibility for IHAs will depend on assistance before October 1, 1997. Any for further guidance. future appropriation language. The such assistance shall be governed by the language will need to be changed to provisions of the 1937 Act and the Programs Under the Cranston-Gonzalez include tribes and TDHEs. For those provisions of such contract. National Affordable Housing Act or the with existing EDSS grants, the program In other words, if an existing Section Stewart B. McKinney Homeless should continue to be operated under 8 contract does not expire until after Assistance Act existing program provisions. October 1, 1997, funding will continue Question 37. Will IHAs or tribes be Question 41. Is the same true for the to be provided until the expiration date eligible for programs funded under the Tenant Opportunity Program (TOP) as of the contract. This may be as late as Cranston-Gonzalez National Affordable for the EDSS Program under Question fiscal year (FY) 2000. The program is to Housing Act or the Stewart B. McKinney 40? be operated in accordance with the Homeless Assistance Act? Answer 41. Yes. existing ACC and HAP contract. Answer 37. No. As of October 1, 1997, Question 42. What happens to rental Question 34. What will happen to any IHAs or tribes are no longer eligible for and homeownership operating reserves, remaining Section 8 operating reserves the following programs: mutual help equity accounts under the Mutual Help Homeownership after the Section 8 contracts expire? —Youth Sports Answer 34. Section 8 operating Opportunity Program, earned home —Youthbuild reserves will remain with the entity payment accounts under the Turnkey III —HOME (Although tribes or IHAs are administering the Section 8 program. programs and proceeds from the sale of not eligible as direct grantees for Once the contract expires, the reserves homeownership units? HOME funds, States may choose to shall be used for eligible activities under Answer 42. These funds can now be fund them if the needs of the tribes NAHASDA. used for any eligible NAHASDA activity Question 35. What will happen to any are reflected in the State’s subject to any conditions imposed by remaining Section 8 program or project Consolidated Plan.) the contract or agreement between the reserves? —Housing Assistance for the Homeless IHA and the homebuyer. Answer 35. Section 8 program or which includes: Comprehensive Question 43. Do tenant leases and project reserves are those funds held by Homeless Assistance Plan; Emergency homeownership agreements for the HUD to fund monthly housing Shelter Grants; Supportive Housing Mutual Help and Turnkey III Programs assistance payments. When the contract Programs; Safe Havens for Homeless remain in effect? expires, any remaining funds will Individuals Demonstration Program; Answer 43. Yes. For the rental remain with the Department. Shelter Plus Care; Rural Homeless program, leases remain in effect until Question 36. If a Tribe or TDHE Housing Assistance; and Innovative the lease term expires. At that time, the chooses not to continue a Section 8 Homeless Demonstration. tribe, TDHE, or IHA operate the units program after the current contract Question 38. If an IHA or tribe has under the regulations governing expires, is there a requirement to notify unobligated or unexpended funds in NAHASDA. For homeownership program participants of its intent to any of the programs listed in Question programs, the agreements remain in discontinue the program? 37, how are they handled? effect until the contract term expires or Answer 36. Yes, IHAs administering Answer 38. Youth Sports, Youthbuild, modifications may be made to the Section 8 rental certificates and rental HOME and the Housing Assistance for agreement if these changes are voucher programs for which the ACC the Homeless Programs continue to be acceptable to both parties. Modifications term will expire after September 30, governed by the provisions of the to the agreement must be in accordance 1997, must immediately notify Section statutes in effect at the time of funding. with NAHASDA. 8 participants (including families that The program shall continue to be Question 44. What happens to tenant have exercised the portability operated under existing program accounts receivables? provisions of the Section 8 program and provisions. After completion of the Answer 44. Since the terms of the have not been absorbed by the receiving funded activities, the grants will be rental leases and homeownership housing authority) that their Section 8 closed out in accordance with their agreements remain in effect, the tenant assistance will end upon expiration of program requirements and grant accounts receivable are still due based the ACC in accordance with the agreements. on current program requirements. New Housing Assistance Payment (HAP) Question 39. What will happen to the policies regarding payment contract, part B, Subpart 6, Paragraph iv. Drug Elimination Program? requirements for units developed under Owners of Section 8 moderate Answer 39. Section 704 of NAHASDA NAHASDA can be adopted by the tribe rehabilitation units must also be amends the Public and Assisted or TDHE. 4086 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

Other Pre-NAHASDA Requirements enter the entire grant amount under in order to provide for a 60-day review Question 45. What happens to the account 1500 when they establish a period by Office of Native American current regulations governing the Indian project in LOCCS. This will obviate the Program (ONAP) field staff and housing program, 24 CFR 950? need to provide budget information to reservation of funds prior to September Answer 45. As of October 1, 1997, the the Area ONAP. For grants already 30, 1998. The final regulations will regulations are cancelled. established in LOCCS, the grantee can establish IHP submission dates for all Question 46. What cash management request the Area ONAP to transfer funds future years. and investment policies and procedures to line 1500 to enable access to the Question 54. Will ONAP develop a are in effect as of October 1, 1997? funds. The request to transfer funds can model IHP as an example or guide for Answer 46. Current procedures be in writing or by telephone. tribes or TDHEs? Is so, will it be Question 51. If an IHA is declared outlined in PIH Notice 96–33 (HA), available in a diskette format? ‘‘high risk’’ under the provisions of 24 extended by Notice 97–41 (HA) dated Answer 54. A draft IHP format has CFR 950.135, will this designation July 21, 1997, titled ‘‘Required HA Cash been developed and submitted to the continue as of October 1, 1997? Office of Management and Budget Management and Investment Policies Answer 51. No. There is no basis or (OMB) for approval. This form was also and Procedures’’ will continue to apply authority for allowing the designation of mailed to all tribes and IHAs in August until the effective date of the ‘‘high risk’’ to continue because this 1997. NAHASDA final regulation. designation was based on failure to Question 47. Are IHAs responsible for comply with the 1937 Act, To assist with the submission of the resolving audit findings which were implementing regulations or the ACC. IHP, the Department is offering three issued pursuant to activities prior to Regulations are being developed under ways in which to submit the IHP. The October 1, 1997? NAHASDA which will outline first is via the Internet. It is anticipated Answer 47. Yes. Audit findings are corrective action under the new that this will be the easiest method and open until closed. Findings that are program. it will also provide you with on-line based on operating policies or Question 52. Are cooperation resources such as reviewing plan status. procedures can be resolved between an agreements transferable to a successor You may also develop your plan using IHA (or its successor entity) and HUD agency without requiring any action on a diskette which contains a template of by identifying such findings and the agreement by the local government the IHP in a Microsoft Word 6.0 format. agreeing that the correction of or the successor agency? Once completed, this diskette is deficiencies is no longer required by Answer 52. Cooperation agreements submitted to the Area ONAP. The statute or regulation. Findings that are may be transferable to a successor diskette and internet instructions were not based on operating policies or agency by their terms. However, it is sent to all eligible recipients on July 24, procedures such as instances of fraud, also possible that the agreement is not 1997. Of course, a hard copy of the plan criminal activities or ineligible program transferable in which case a new will also be accepted for the first several activities including repayment of any agreement would have to be negotiated. years of the program. outstanding amounts due the Generally, if the current IHA becomes Question 55. Are costs incurred prior Department, must be resolved between the TDHE, a new agreement is not to the receipt of a FY 1998 Indian the IHA (or its successor entity) and needed because the designation of the Housing Block Grant (IHBG) which are HUD before the audit finding can be IHA as a TDHE does not create a new related to the development and closed. legal entity. However, an IHA’s preparation of an IHP (including the Question 48. Will financial statements cooperation agreement does not challenge of data) eligible for be required when the IHA’s FY ends? automatically become the Tribe’s. reimbursement from an IHBG? Answer 48. The requirement to submit Answer 55. Yes. Under the provisions New Program Under NAHASDA financial statements ended on of paragraph 32 of OMB Circular A–87, September 30, 1997. Question 53. What is the IHP pre-award planning and administrative Question 49. Will the tribe or TDHE be submission deadline? costs incurred by a recipient which are required to submit the Multifamily Answer 53. On January 27, 1997, a directly related to the development and Tenant Characteristic Reports, HUD transition notice was published in the preparation of its IHP (including the 50058, as of 10–1–97? Federal Register which established the challenge of data) will be considered Answer 49. As of October 1, 1997, the original IHP deadline submission date eligible IHBG expenditures under the HUD 50058 does not need to be of June 1, 1997. Based on public following conditions: submitted for the rental and comment, this date was later amended (a) The costs would have been homeownership programs. The form is to extend the deadline to November 3, allowable if they had been incurred after still required for the Section 8 program 1997. With the publication of the the date of the award of the IHBG; and, until the contract term expires. proposed rule, many commenters (b) The costs do not exceed more than Question 50. Will LOCCS access to indicated that the deadline did not 20% of the recipient’s anticipated FY funds be changed for IHAs on October provide sufficient time to prepare an 1998 IHBG (or such other amounts 1, 1997? IHP. Therefore, it is unreasonable to approved in the IHP). Answer 50. No. LOCCS access to expect a recipient to submit a plan prior funds will be modified only if a to publication date of the program Question 56. Can an IHA which recipient assumes responsibility for a regulations. currently represents more than one tribe grant. At that time, HUD must be Based on the above, this transition be designated by more than one tribe as notified of the change in responsibility notice is establishing new IHP their TDHE? so that access to the grant funds can be submission dates for Fiscal Year 1998 Answer 56. Yes. provided to the recipient. only. An IHP can be submitted no Question 57. If a TDHE represents LOCCS provides for the disbursement earlier than the publication date of the more than one tribe, do individual IHPs of funds by certain line items contained final regulations implementing need to be submitted? in program budgets. Since budgets are NAHASDA and no later than July 1, Answer 57. If a TDHE has been no longer required, the Area ONAP will 1998. The July 1, 1998, date is necessary designated by more than one Indian Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4087 tribe, the TDHE can submit a separate shall affect the allocation of funds special programs and services provided IHP for each Indian tribe or it may otherwise due to a tribe under the by the United States to Indians because submit a single IHP that covers two or formula. of their status as Indians pursuant to the more tribes. However, the IHP must Question 59. Who is considered as a Indian Self-Determination and contain a separate certification in tribe in Alaska? Education Assistance Act of 1975.’’ Answer 59. The definition of accordance with Section 102(d) of Authority: Section 106 of the Native Federally recognized tribe in NAHASDA and the IHP Tables when American Housing Assistance and Self- requested by such tribes. NAHASDA reads: ‘‘The term ‘federally Determination Act of 1996 (NAHASDA) (Pub. Question 58. What happens if a tribe recognized tribe’ means any Indian L. 104–330, approved October 26, 1996). had two IHAs as of September 30, 1996? tribe, band, nation, or other organized Answer 58. Tribes which had group or community of Indians, Dated: January 15, 1998. established and were operating two including any Alaska Native village or Kevin Emanuel Marchman, IHAs as of September 30, 1996, under regional or village corporation as Assistant Secretary for Public and Indian the 1937 Act shall be allowed to form defined in or established pursuant the Housing. and operate two TDHEs under Alaska Native Claims Settlement Act, [FR Doc. 98–1939 Filed 1–26–98; 8:45 am] NAHASDA. Nothing in this section that is recognized as eligible for the BILLING CODE 4210±33±P federal register January 27,1998 Tuesday Rehabilitation Programs;Notice Rental CertificateandModerate Fees fortheSection8RentalVoucher, Public HousingAgencyAdministrative Notice ofAnnualFactorsforDetermining Development Housing andUrban Department of Part VI 4089 4090 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

DEPARTMENT OF HOUSING AND may not conduct or sponsor, and a October 1, 1997 through September 30, URBAN DEVELOPMENT person is not required to respond to, a 1998. The FY 98 administrative fee is collection of information unless the calculated by multiplying the [Docket No. FR±4290±N±01] collection displays a valid control administrative fee amounts published in Notice of Annual Factors for number. the Federal Register on March 12, 1997, by the percentage of change in the Determining Public Housing Agency I. Purpose and Substantive Description Administrative Fees for the Section 8 government wages using the most recent Rental Voucher, Rental Certificate and (a) The HUD-Independent Agencies BLS data. Moderate Rehabilitation Programs Appropriations Act for Fiscal Year 1997 (P.L. 104–204) changed the method to III. Monthly Fee Schedule AGENCY: Office of the Assistant be used in calculating HA (a) Column A: Fees for 600 Units or Less Secretary for Public and Indian administrative fees (see PIH Notice 97– Housing, HUD. 11 issued March 11, 1997). The HA The amount in column A is the monthly per unit fee amount to be ACTION: earns an administrative fee for the rental Notice of factors for determining applied to the first 7,200 unit months public housing agency administrative voucher, rental certificate, and moderate rehabilitation programs based on the (600 units) for the rental certificate and fees for operation of the Section 8 rental rental voucher programs combined and voucher, rental certificate and moderate total number of units under a housing assistance payments contract. This the first 7,200 unit months (600 units) rehabilitation (including moderate for housing assistance payment rehabilitation single room occupancy includes the moderate rehabilitation single room occupancy and shelter plus contracts a HA has executed for and shelter plus care single room moderate rehabilitation, including the occupancy) programs. care single room occupancy programs. The law also provides that HUD may moderate rehabilitation single room SUMMARY: This Notice transmits the approve preliminary fees of $500 per occupancy program and the shelter plus schedule of monthly per unit fee unit for the initial funding increment for care single room occupancy program, amounts for use in determining the on- the cost of expenses the HAs incur in during Federal FY 98 (October 1, 1997 going administrative fee for housing the first year an HA administers a to September 30, 1998). agencies (HAs) administering the rental tenant-based rental voucher or rental Based on the applicable fiscal year voucher, rental certificate and moderate certificate program. This provision end (FYE), a HA must use the following rehabilitation programs during Federal applies to HAs that did not administer number of unit months to calculate its Fiscal Year 1998. The procedures for a tenant-based rental voucher or ongoing administrative fee for FY 98: calculating the earned administrative certificate program before September 26, FYE December 31—1st quarter FY 98— fees will be issued in an ensuing Notice. 1996. The law does not provide for Up to 1,800 unit months EFFECTIVE DATE: Procedures in this preliminary fees for the regular FYE March 31—2nd quarter FY 98—Up Notice will be used to review and moderate rehabilitation program or the to 3,600 unit months approve the administrative fees stated in moderate rehabilitation single room FYE June 30—3rd quarter FY 98—Up to the HA’s year-end financial statements occupancy program or the moderate 5,400 unit months for appropriateness for HA fiscal years rehabilitation shelter plus care single FYE September 30—4th quarter FY 98— ending on December 31, 1997; March room occupancy program. Up to 7,200 unit months 31, 1998; June 30, 1998; and September Additional administrative fees may be 30, 1998. These procedures may also be approved by HUD Headquarters for (b) Column B: Fees for Units in Excess used to project earned administrative costs incurred in assisting families who of 600 Units fees in the annual HA budget. This experience difficulty in obtaining The amount in column B must be Notice applies to that portion of the HA appropriate housing and for used to determine the administrative fee fiscal year that falls within Federal extraordinary costs as determined by for FY 98 unit months in excess of the Fiscal Year (FY) 1998 (October 1, 1997 HUD Headquarters. administrative fees for the first 600 to September 30, 1998). II. Method to Determine Per Unit On- units, for which fees were calculated in FOR FURTHER INFORMATION CONTACT: Going Administrative Fee accordance with paragraph (a). The Gerald J. Benoit, Senior Program excess unit months, based on the HA’s Advisor, Office of Public and Assisted (a) Published Fee Amounts FYE and the number of rental voucher, Housing Program Delivery, Department The following is a schedule of rental certificate, and moderate of Housing and Urban Development, monthly per unit fee amounts to be used rehabilitation units under housing Room 4220, 451 Seventh Street, SW, by HAs in preparing annual operating assistance payment contracts during FY Washington, DC 20410–8000, telephone budgets and by HUD in approving fiscal 98, are multiplied by the monthly fee number (202) 708–0477. Hearing or year-end financial statements. The per unit in column B. Column A and speech impaired individuals may call tables are organized by the HUD column B are not used for HA-owned HUD’s TDD number (202) 708–4594. established fair market rent areas and units. (These numbers are not toll-free.) show the monthly fee amounts a HA (c) Column C: Fees for HA-Owned Units SUPPLEMENTARY INFORMATION: will earn for each unit under a housing assistance payments contract on the first The monthly per unit fee amount in Paperwork Reduction Act Statement day of the applicable month. column C will be multiplied by the The information collection HUD determined the per-unit number of unit months available for the requirements contained in this notice monthly fee amounts using Bureau of rental voucher, rental certificate, and have been approved by the Office of Labor Statistics (BLS) data on local moderate rehabilitation units owned by Management and Budget (OMB), under government wages (ES 202 Series). HUD the HA and that are under housing section 3204 (h) of the Paperwork adjusted the FY 97 monthly assistance payments contracts during Reduction Act of 1980 (44 U.S.C. 3501– administrative fee per unit to develop Federal FY 98. Column A and column 3520), and have been assigned OMB the FY 98 administrative fee, effective B fee amounts are not used for HA- control number 2577–0149. An agency for units assisted during the period from owned units. Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4091

(d) Future Year Publication Date 8 administrative fees. Furthermore, the Executive Order 12612, Federalism, has amounts shown do not include determined that the policies contained For subsequent fiscal years, HUD will preliminary fees. in this notice will not have substantial publish an annual Notice in the Federal Accordingly, the Department direct effects on States or their political Register establishing the monthly per publishes the monthly per unit fee subdivisions, or the relationship unit fee amounts for use in determining amounts to be used for determining HA between the Federal government and the on-going administrative fees for HAs administrative fees under the rental the States, or on the distribution of operating the rental voucher, rental voucher, rental certificate and moderate power and responsibilities among the certificate and moderate rehabilitation rehabilitation programs as set forth on various levels of government. As a programs in each metropolitan and each the following schedule: result, the notice is not subject to review non-metropolitan fair market rent area under the Order. The notice pertains to for that Federal fiscal year. The annual IV. Findings and Certifications the determination of administrative fees change in the per-unit-month fee Environmental Impact for HAs administering the rental amounts will be based on changes in voucher, rental certificate and moderate wage data or other objectively In accordance with 24 CFR 50.19(c)(6) rehabilitation programs during Federal measurable data, as determined by of the HUD regulations, the policies and FY 98, and does not alter the established HUD, that reflect the costs of procedures contained in this notice set roles of the Department, the States, and administering the program. forth rate determinations and related local governments. The amounts shown on the attached external administrative requirements schedule do not reflect the authority and procedures which do not constitute Catalog of Federal Domestic Assistance given to HUD to approve additional fees a development decision that affects the Number if necessary to reflect extraordinary physical condition of specific project The Catalog of Federal Domestic expenses such as the higher costs of areas or building sites, and therefore are Assistance Number for this program is administering small programs and categorically excluded from the 14.850. programs operating over large requirements of the National Dated: January 13, 1998. geographic areas or expenses incurred Environmental Policy Act. Kevin Emanuel Marchman, because of difficulties some categories Executive Order 12612, Federalism of families are having in finding Assistant Secretary for Public and Indian appropriate housing. HUD will consider The General Counsel, as the Housing. HA requests for such increased Section Designated Official under section 6(a) of BILLING CODE 4210±33±P 4092 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4093 4094 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4095 4096 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4097 4098 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4099 4100 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4101 4102 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4103 4104 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4105 4106 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4107 4108 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4109 4110 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4111 4112 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4113 4114 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4115 4116 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4117 4118 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4119 4120 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4121 4122 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4123 4124 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4125 4126 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4127 4128 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4129 4130 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4131 4132 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4133 4134 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4135 4136 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4137 4138 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4139 4140 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4141 4142 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4143 4144 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4145 4146 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

[FR Doc. 98–1941 Filed 1–26–98; 8:45 am] BILLING CODE 4210±33±C federal register January 27,1998 Tuesday Engineering ResearchCenter;Notice Years 1998±1999foraRehabilitation Proposed FundingPriorityforFiscal Rehabilitation Research;Noticeof National InstituteonDisabilityand Education Department of Part VII 4147 4148 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

DEPARTMENT OF EDUCATION private agencies and organizations, (c) Facilitating service delivery including institutions of higher systems change through (1) the National Institute on Disability and education, Indian tribes, and tribal development, evaluation, and Rehabilitation Research; Notice of organizations, to conduct research, dissemination of consumer-responsive Proposed Funding Priority for Fiscal demonstration, and training activities and individual and family centered Years 1998±1999 for a Rehabilitation regarding rehabilitation technology in innovative models for the delivery to Engineering Research Center order to enhance opportunities for both rural and urban areas of innovative meeting the needs of, and addressing cost-effective rehabilitation technology AGENCY: Department of Education. the barriers confronted by, individuals services, and (2) other scientific ACTION: Notice of Proposed Funding with disabilities in all aspects of their research to assist in meeting the Priority for Fiscal Years 1998–1999 for lives. An RERC must be operated by or employment and independent living a Rehabilitation Engineering Research in collaboration with an institution of needs of individuals with severe Center. higher education or a nonprofit disabilities. organization. NIDRR is authorized, SUMMARY: The Secretary proposes a Each RERC must provide training under Section 204(b)(6) of the funding priority for a Rehabilitation opportunities to individuals, including Rehabilitation Act, to provide support Engineering Research Center (RERC) individuals with disabilities, to become for a program of international under the National Institute on researchers of rehabilitation technology rehabilitation research, demonstration, Disability and Rehabilitation Research and practitioners of rehabilitation and training. technology in conjunction with (NIDRR) for fiscal years 1998–1999. The The authority for the Secretary to Secretary takes this action to focus institutions of higher education and establish research priorities by reserving nonprofit organization. research attention on problems that are funds to support particular research significant to disabled persons and to activities is contained in sections 202(g) Priority the research community. This priority is and 204 of the Rehabilitation Act of Under 34 CFR 75.105(c)(3), the intended to improve rehabilitation 1973, as amended (29 U.S.C. 761a(g) Secretary proposes to give an absolute services and outcomes for individuals and 762). preference to applications that meet the with disabilities. The Secretary will announce the final following priority. The Secretary DATES: Comments must be received on priority in a notice in the Federal proposes to fund under this competition or before February 26, 1998. Register. The final priority will be only applications that meet this absolute ADDRESSES: All comments concerning determined by responses to this notice, priority. this proposed priority should be available funds, and other addressed to Donna Nangle, U.S. considerations of the Department. Proposed Priority: Improved Technology Department of Education, 600 Maryland Funding of a particular project depends Access for Land Mine Survivors Avenue, SW., room 3418, Switzer on the final priority, the availability of Background Building, Washington, DC 20202–2645. funds, and the quality of the In the House Report accompanying Comments may also be sent through the applications received. The publication the appropriations for the Department of Internet: [email protected]. of this proposed priority does not Education: You must include the term preclude the Secretary from proposing ‘‘Engineering Research Centers’’ in the additional priorities, nor does it limit The Committee has included up to electronic message. the Secretary to funding only this $850,000 * * * for NIDRR to establish, through a competitive award, a rehabilitation FOR FURTHER INFORMATION CONTACT: priority, subject to meeting applicable rulemaking requirements. engineering research center dealing with the Donna Nangle. Telephone: (202) 205– unique needs of land mine survivors. The 5880. Individuals who use a Note: This notice of proposed priority does center is to operate in cooperation with an telecommunications device for the deaf not solicit applications. A notice inviting institution of higher education involved in (TDD) may call the TDD number at (202) applications under this competition will be both rehabilitation medicine and engineering 205–2742. Internet: published in the Federal Register concurrent research, training and service and is to focus [email protected]. with or following the notice of final priority. on the unique rehabilitation needs of the Individuals with disabilities may Description of the Rehabilitation victims of land mine injuries. Specifically, the center is to focus on the development of obtain this document in an alternate Engineering Research Center Program inexpensive replacement limbs; the format (e.g., Braille, large print, RERCs carry out research or development and dissemination of audiotape, or computer diskette) on demonstration activities by: educational materials on prosthetics, and request to the contact person listed in (a) Developing and disseminating other appropriate prosthetic, orthotic, or the preceding paragraph. innovative methods of applying assistive technology devices; and the training SUPPLEMENTARY INFORMATION: This advanced technology, scientific of health care providers in effective methods of assistance to this population. notice contains a proposed priority achievement, and psychological and under the Disability and Rehabilitation social knowledge to (1) solve In response to this report language, Research Projects and Centers program rehabilitation problems and remove the Secretary is proposing the following for an RERC focused on the environmental barriers, and (2) study priority. Both the Congress and NIDRR development of rehabilitation new or emerging technologies, products, are aware of the historic significance of technology devices, particularly low- or environments; periods of international conflict in cost prosthetic and orthotic devices, to (b) Demonstrating and disseminating stimulating the science of rehabilitation meet the rehabilitation needs of land (1) innovative models for the delivery of to develop solutions to the impairments mine survivors. cost-effective rehabilitation technology caused by sustained large-scale The authority for RERCs is contained services to rural and urban areas, and (2) violence. Most recently, survivors of in section 204(b)(3) of the Rehabilitation other scientific research to assist in landmine injuries in dozens of nations Act of 1973, as amended (29 U.S.C. meeting the employment and in Latin America, Europe, Africa, and 762(b)(3)). Under this program the independent living needs of individuals Asia are in need of innovative solutions Secretary makes awards to public and with severe disabilities; or to address the loss of limbs and other Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices 4149 conditions such as sensory appropriate in various cultures. New • Address the needs of land mine impairments, communication conditions of health care delivery survivors of all ages, with particular impairments, burns, and other portend limited resources for attention to systems for meeting the conditions caused by anti-personnel rehabilitation technologies and services changing needs of growing children. land mines. The Secretary is and durable medical equipment; thus • Conduct, in the third year of the particularly interested in receiving there will be a greater emphasis on award, a state-of-the-science conference comments about the feasibility of durability, endurance, cost containment, and provide NIDRR with a report on this addressing, to some extent, land mine and ease of maintenance. This Center’s conference by the end of the fourth year. injuries that do not involve missing activities will contribute to advancing • Conduct training of health care limbs, such as vision, hearing, and other science, broadening knowledge of providers in affected nations in effective types of impairments within the scope materials and methods, and increasing methods of providing rehabilitative of this RERC. our understanding of and sensitivity to assistance to this population. Because most of those with unmet cultural and economic concerns in • Collaborate with key international needs are located in countries that are provision of these rehabilitation organizations and Government agencies either not industrialized, lack technologies. in the affected nations, with consumer infrastructures for rehabilitative organizations of land mine survivors, services, or lack economic resources, the Priority and with rehabilitation researchers and approaches to meeting these needs must The Secretary proposes to establish an service providers, and other Federal be tailored to their particular RERC to address the unique agencies including the Department of circumstances. Solutions, which will rehabilitation needs of land mine Defense, Agency for International focus on, but not be limited to, limb survivors through developing and Development, Centers for Disease replacement, must be suitable for the testing appropriate innovative Control, and the Department of available materials, resources, and replacement limbs (particularly low-cost Veterans’ Affairs. expertise in the relevant countries, and limbs suitable for developing Electronic Access to This Document: must also concentrate on building economies), and other prosthetic and Anyone may view this document, as capacity in those nations for design and orthotic devices; training indigenous well as all other Department of fitting, manufacture, distribution, technicians, manufacturers, and health Education documents published in the maintenance, and provision of supports care providers in the fabrication and Federal Register, in text or portable and services. This RERC will have broad fitting of appropriate devices; and document format (pdf) on the World scope in the development of devices educating land mine survivors and their Wide Web at either of the following through scientific methods, training of families. sites: indigenous scientists, service providers, In carrying out the general purposes http://ocfo.ed.gov/fedreg.htm and advocates, and transferring of this priority, the RERC shall: http://www.ed.gov/news.html technology to the local economies. 1. Develop a sound scientific process To use the pdf you must have the Adobe There are many national and for evaluating the suitability of existing Acrobat Reader Program with Search, international organizations that play a devices, assessing user needs, which is available free at either of the role in addressing the problems of developing new and innovative designs, landmine survivors and the Center preceding sites. If you have questions and testing inexpensive replacement should involve relevant organizations in about using the pdf, call the U.S. limbs, prototypes of prostheses, appropriate roles in Center operations. Government Printing Office toll free at Included in this group are organizations orthoses, and other appropriate 1–888–293–6498. Anyone may also view these of survivors themselves; these consumer rehabilitation technology devices. organizations are important targets of 2. Identify and evaluate existing documents in text copy only on an education, information, and training, technologies and systems used for limb electronic bulletin board of the particularly in the areas of self-help, replacement and related rehabilitation Department. Telephone: (202) 219–1511 maintenance of devices, and the need technology in various nations where or, toll free, 1–800–222–4922. The for accommodations, supports, and there are extensive land mine injuries. documents are located under Option follow-up care. Because so many of the 3. Demonstrate the suitability of G—Files/Announcements, Bulletins and victims of land mines are children, proposed devices in terms of cost- Press Releases. special attention must be directed effectiveness and appropriateness to the Note: The official version of this document toward the special needs of children indigenous economies, including is the document published in the Federal who are growing and developing, and available materials, work force Register. capabilities, and infrastructure capacity for whom most prostheses or orthoses Invitation to Comment therefore will have a limited period of for timely production and delivery of utility. The Center may opt to address devices. Interested persons are invited to these problems through technological 4. Identify the needs of land mine submit comments and recommendations solutions where feasible, or through survivors for other types of regarding these proposed priorities. All partnerships that will provide ongoing rehabilitation technologies which may comments submitted in response to this care and support. include but need not be limited to notice will be available for public The work of this RERC will have vision, hearing and speech aids, and inspection, during and after the implications for the United States wheelchairs. comment period, in Room 3424, Switzer population as well. There is a 5. Develop and maintain a database to Building, 330 C Street S.W., continuing need for new and different track and correlate consumer needs and Washington, D.C., between the hours of types of prostheses and orthoses in the characteristics, device specification and 9:00 a.m. and 4:30 p.m., Monday United States and other developed performance, and outcomes and through Friday of each week except nations, with special need for prosthetic conduct a definitive evaluation of the Federal holidays. and orthotic devices and other products and procedures. Applicable Program Regulations: 34 rehabilitation technology that is suitable In addition to its research functions, CFR parts 350 and 353. for different climates, low-cost, and the RERC must: Program Authority: 29 U.S.C. 760–762. 4150 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Notices

(Catalog of Federal Domestic Assistance Number 84.133E, Rehabilitation Engineering Research Centers) Dated: January 22, 1998. Judith E. Heumann, Assistant Secretary for Special Education and Rehabilitative Services. [FR Doc. 98–1936 Filed 1–26–98; 8:45 am] BILLING CODE 4000±01±P i

Reader Aids Federal Register Vol. 63, No. 17 Tuesday, January 27, 1998

CUSTOMER SERVICE AND INFORMATION CFR PARTS AFFECTED DURING JANUARY

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±523±5227 publishes separately a List of CFR Sections Affected (LSA), which aids lists parts and sections affected by documents published since E-mail [email protected] the revision date of each title. 1046...... 3667 Laws 3 CFR 1049...... 3667 For additional information 523±5227 Proclamations: 1050...... 3667 7062...... 2871 Presidential Documents 1064...... 3667 7063...... 3243 1065...... 3667 Executive orders and proclamations 523±5227 7064...... 3245 1068...... 3667 The United States Government Manual 523±5227 Executive Orders: 1076...... 3667 12947 (See Notice of 1079...... 3667 January 21, 1998)...... 3445 Other Services 1106...... 3667 Administrative Orders: 1124...... 3667 Electronic and on-line services (voice) 523±4534 Notice of January 2, 1126...... 3667 Privacy Act Compilation 523±3187 1998 ...... 653 1131...... 3667 TDD for the hearing impaired 523±5229 Notice of January 21, 1134...... 3667 1998 ...... 3445 1135...... 3667 ELECTRONIC BULLETIN BOARD Presidential 1137...... 3667 Determinations: 1138...... 3667 Free Electronic Bulletin Board service for Public Law numbers, No. 98±9 of January 6, 1139...... 3667 Federal Register finding aids, and list of documents on public 1998 ...... 3635 1209...... 3848 inspection. 202±275±0920 No. 98±10 of January 1301...... 1396, 3267 FAX-ON-DEMAND 12, 1998 ...... 3447 3200...... 3481 You may access our Fax-On-Demand service with a fax machine. 5 CFR 8 CFR There is no charge for the service except for long distance 251...... 2305 103...... 1331 telephone charges the user may incur. The list of documents on 551...... 2304 207...... 3792 public inspection and the daily Federal Register’s table of Proposed Rules: 208...... 3792 contents are available. The document numbers are 7050-Public 890...... 446 299...... 3792 Inspection list and 7051-Table of Contents list. The public 212...... 1331 inspection list is updated immediately for documents filed on an 7 CFR 214...... 1331 emergency basis. 301...... 1, 1321 235...... 1331 783...... 3791 274a...... 1331 NOTE: YOU WILL ONLY GET A LISTING OF DOCUMENTS ON 905...... 3247 FILE. Documents on public inspection may be viewed and copied Proposed Rules: 925...... 655 3...... 2901 in our office located at 800 North Capitol Street, NW., Suite 700. 930...... 399 103...... 1775 The Fax-On-Demand telephone number is: 301±713±6905 944...... 3247 292...... 2901 966...... 139 FEDERAL REGISTER PAGES AND DATES, JANUARY 980...... 139 9 CFR 982...... 3251 1...... 3017 1±138...... 2 997...... 2846, 3254 2...... 3017 139±398...... 5 998...... 2846, 3254 3...... 1, 3017 399±654...... 6 1478...... 3791 78...... 3637 655±1050...... 7 1703...... 3637 92...... 1889 1051±1320...... 8 1730...... 3449 93...... 1889, 3638 1321±1734...... 9 1930...... 2135 94...... 406, 1889 1735±1888...... 12 2003...... 3256 95...... 1889 1889±2134...... 13 Proposed Rules: 96...... 406, 1889 2135±2304...... 14 319...... 3844 97...... 1889 98...... 1889 2305±2592...... 15 610...... 446 868...... 2353 130...... 1889 2593±2872...... 16 930...... 3048 145...... 2 2873±3016...... 20 1001...... 3667 147...... 2 3017±3246...... 21 1002...... 3667 310...... 1735 3247±3446...... 22 1004...... 3667 319...... 147 3447±3634...... 23 1005...... 3667 Proposed Rules: 3635±3790...... 26 1006...... 3667 54...... 3671 3791±4150...... 27 1007...... 3667 71...... 3849 1012...... 3667 79...... 3671 1013...... 3667 304...... 1797 1030...... 3667 305...... 1797 1032...... 3667 310...... 1800 1033...... 3667 327...... 1797 1036...... 3667 335...... 1797 1040...... 3667 381...... 1797 1044...... 3667 500...... 1797 ii Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Reader Aids

10 CFR 91...... 126 25 CFR 1153...... 1924 9...... 2873 121...... 126 Proposed Rules: 1155...... 1924 30...... 1890 125...... 126 291...... 3289 1191...... 2000, 2060 129...... 126 32...... 1890 37 CFR 40...... 1890 255...... 3491 26 CFR 203...... 1926 50...... 1335, 1890 1 ...... 6, 409, 411, 671, 1054, 15 CFR 253...... 2142 52...... 1890 1740, 1917, 2892, 3186, 60...... 1890 732...... 2452 3256, 3812 Proposed Rules: 61...... 1890 740...... 2452 40...... 24 201...... 3685 742...... 2452 70...... 1890 48...... 24 38 CFR 71...... 1890 743...... 2452 513...... 2723 3...... 412, 413 72...... 1890 744...... 2452 602 ...... 6, 1917, 2723, 2892 110...... 1890 746...... 2452 Proposed Rules: 39 CFR 762...... 2452 1.....35, 39, 42, 453, 707, 1803, 150...... 1890 20...... 3642, 3814 Proposed Rules: 774...... 2452 1932, 1933, 3057, 3296, 806...... 3459 111...... 153 50...... 3052, 3673 3677 255...... 2304 430...... 2186, 3053 902...... 290, 667 31...... 3680 54...... 708 708...... 374 16 CFR 40 CFR 301...... 1086, 3186 9 ...... 673, 926, 1059, 1318 Proposed Rules: 11 CFR 51...... 414, 1362 Ch. I ...... 1802 29 CFR Proposed Rules: 52 ...... 26, 414, 415, 674, 1060, Ch. II ...... 3280 114...... 3851 1610...... 1610 1362, 1369, 1927, 2146, 303...... 447, 449 1910...... 1152 2147, 3037, 3650 1210...... 1077 12 CFR 1926 ...... 1152, 1919, 3813 60...... 414, 1746 4044...... 2307 207...... 2806, 3804 17 CFR 61...... 414, 1746 220...... 2806, 3804 62...... 2154 Ch. II ...... 451 30 CFR 221...... 2806, 3804 63...... 1746, 2630 230...... 3032 203...... 2605 224...... 2806, 3804 68...... 640 232...... 3462 206...... 3618 226...... 2723 81...... 2726 240...... 1884, 2854 260...... 2626 85...... 926 265...... 2806 924...... 1342 560...... 1051 Proposed Rules: 86...... 926 900...... 3453 1 ...... 695, 2188, 3492 Proposed Rules: 140...... 1318 Ch. II ...... 185 932...... 3453 140...... 3285 180 .....156, 416, 417, 676, 679, 56...... 290, 2642 933...... 3453 1369, 1377, 1379, 2156, 19 CFR 57...... 290, 2642 2163 Proposed Rules: 62...... 290, 2642 10...... 2640 Proposed Rules: 185...... 2163 201...... 3505 70...... 290, 2642 220...... 2840 186...... 1379, 2163 207...... 3505 71...... 290, 2642 228...... 682 221...... 2840 904...... 1396 224...... 2840 244...... 683 20 CFR 913...... 2916 245...... 683 309...... 29 916...... 2916 271...... 683, 2167 563...... 563 200...... 2140 918...... 712 272...... 2896 563b...... 563 Proposed Rules: 200...... 34 920...... 2919 712...... 684 935...... 3507 14 CFR 209...... 2914 716...... 684 936...... 454, 1399 721 ...... 673, 685, 686, 3394 19...... 4 21 CFR 943...... 3508 Proposed Rules: 25...... 3023 944...... 2192 Ch. I ...... 3686 39 .....4, 658, 1335, 1337, 1735, 175...... 3463 52 ...... 456, 714, 1091, 1804, 1737, 1738, 1901, 1903, 178...... 3463 31 CFR 1935, 2194, 3687, 3693 1905, 1907, 1909, 1911, 510...... 408 103...... 1919, 3640 55...... 2642 1912, 1913, 2593, 2596, 520...... 148, 408 60...... 2194 3031, 3455, 3458, 3809 558...... 408, 2306 32 CFR 61...... 2194 61...... 660 820...... 3465 104...... 3465 Proposed Rules: 62...... 2195, 3509 71 ...... 924, 1884, 1915, 1916, 270...... 3472 63...... 2194 1997, 2136, 2137, 2138, 101...... 1078 Proposed Rules: 201...... 176 73...... 714 2598, 2599, 2600, 2601, 721...... 3860 81...... 2804 2884, 2885, 2887, 2888, 22 CFR 722...... 3860 90...... 3950 2889, 2890, 3618 122...... 1536 91...... 1917, 2304 40...... 669 33 CFR 41...... 669 123...... 1536 93...... 1917 100...... 3036 180...... 3057 97 ...... 666, 2139, 2601, 2603, Proposed Rules: 117 ...... 1746, 2141, 2308, 2894 185...... 3057 2604, 2891 228...... 3506 Proposed Rules: 186...... 3057 121 ...... 4, 1917, 2304 154...... 3861 23 CFR 194...... 3863 135...... 4, 1917 155...... 3861 300...... 3061 142...... 2304 1260...... 3811 165...... 1089 440...... 2646 Proposed Rules: 1327...... 149 25...... 2186 35 CFR 41 CFR 24 CFR 39 ...... 167, 169, 171, 172, 174, 115...... 2141 Proposed Rules: 1070, 1072, 1074, 1076, 207...... 1302 117...... 2141 51±5...... 3530 1930, 2911, 3054, 3056, 251...... 1302 119...... 2141 51±6...... 3530 3267, 3270, 3272, 3273, 252...... 1302 Proposed Rules: 51±8...... 3530 3275, 3276, 3278, 3483, 255...... 1302 133...... 186 51±9...... 3530 3852 266...... 1302 135...... 186 51±10...... 3530 71 ...... 2913, 3673, 3674, 3675, 3500...... 3214 3854, 3855, 3856, 3857, Proposed Rules: 36 CFR 42 CFR 3858, 3859 81...... 1997 1151...... 1924 Ch. IV...... 2920 Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Reader Aids iii

405...... 687 Proposed Rules: 90...... 770 49 CFR 302...... 187 411...... 1646 95...... 770 10...... 2171 303...... 187 413...... 292, 1379 101...... 3075+ 173...... 1884 304...... 187 424...... 2926 195...... 3653 440...... 292 46 CFR 48 CFR 382...... 2172 441...... 292 393...... 1383 382...... 3819 489...... 292 4...... 1532 571 ...... 27, 3654, 3662 Proposed Rules: Proposed Rules: 6...... 1532 653...... 418 411...... 1659 10...... 3070 8...... 1399 654...... 418 424...... 1659 15...... 2939, 3070 12...... 1532 1111...... 2638 435...... 1659 13...... 1532 47 CFR Proposed Rules: 455...... 1659 16...... 1532 232 ...... 195, 1418, 2631 0...... 990 1001...... 187 19...... 1532 571...... 46 1 ...... 990, 2170, 2315 32...... 1532 43 CFR 20...... 2631 33...... 1532 21...... 2315 50 CFR Proposed Rules: 41...... 1532 17 ...... 692, 1752, 3835 2360...... 3531 24...... 2170, 2315 42...... 1532 26...... 2315 32...... 2178 3100...... 1936 43...... 1532 27...... 2315 226...... 1388 3106...... 1936 49...... 1532 36...... 2094 285...... 667 3130...... 1936 52...... 1532 54 ...... 162, 2094, 3830 600...... 419 3160...... 1936 53...... 648, 1532 69...... 2094 622 ...... 290, 443, 1772 1505...... 690 44 CFR 73 ...... 164, 160, 2350, 2351, 648 ...... 444, 1773, 2182, 2184, 3832, 3833, 3834 1514...... 690 3478 11...... 1063 90...... 2315 1535...... 418 660...... 419 65...... 3039, 3041 95...... 2315 1537...... 690 Proposed Rules: 67...... 3044 Proposed Rules: 1548...... 690 14...... 3298 Proposed Rules: 1...... 460, 770 1552 ...... 418, 690, 691, 1532 17 ...... 1418, 1948, 3301, 3863, 67...... 3063 21...... 770 1842...... 3652 3877 24...... 770 Proposed Rules: 222...... 1807 45 CFR 26...... 770 Ch. XXVIII...... 1399 227...... 1807 1301...... 2312 27...... 770 44...... 649 300...... 1812, 3693 1304...... 2312 64...... 1943 52...... 4074 622...... 1813 1305...... 2312 73 ...... 193, 194, 2354, 2355 922...... 386 648...... 466, 2651 1306...... 2312 76...... 1943 952...... 386 660...... 2195, 3532 1630...... 1532 79...... 3070 970...... 386 679...... 2694 iv Federal Register / Vol. 63, No. 17 / Tuesday, January 27, 1998 / Reader Aids

REMINDERS National maximum speed Atlantic tuna; comments due Colorado; comments due by The items in this list were limit compliance program; by 1-30-98; published 1-7- 1-30-98; published 12-31- editorially compiled as an aid CFR part removed; 98 97 to Federal Register users. published 1-27-98 Magnuson Act provisionsÐ Hazardous waste program Inclusion or exclusion from TREASURY DEPARTMENT Nattional standards authorizations: this list has no legal Internal Revenue Service guidelines; comments Louisiana; comments due by significance. 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Texas; comments due by 1- INTERIOR DEPARTMENT Construcciones 26-98; published 12-16-97 National Park Service Aeronauticas, S.A.; HEALTH AND HUMAN National Park System: comments due by 1-30- LIST OF PUBLIC LAWS SERVICES DEPARTMENT Right-of-way permits; 98; published 12-31-97 issuance; comments due Empresa Brasileria de Food and Drug The List of Public Laws for Administration by 1-30-98; published 12- Aeronautica S.A.; comments due by 1-28- the 105th Congress, First Human drugs: 1-97 98; published 12-29-97 Session, has been completed. Labeling of drug products INTERIOR DEPARTMENT It will resume when bills are EXTRA Flugzeugbau; (OTC)Ð Surface Mining Reclamation enacted into Public Law comments due by 1-27- and Enforcement Office during the second session of Analgesic/antipyretic active 98; published 12-31-97 ingredients for internal Permanent program and the 105th Congress, which abandoned mine land SOCATA-Groupe convenes on January 27, use; required alcohol AEROSPATIALE; warning; comments due reclamation plan 1998. submissions: comments due by 1-26- by 1-28-98; published 98; published 12-24-97 11-14-97 Pennsylvania; comments Note: A Cumulative List of due by 1-28-98; published Class D and Class E HOUSING AND URBAN Public Laws was published in 12-29-97 airspace; comments due by the Federal Register on DEVELOPMENT 1-26-98; published 12-22-97 DEPARTMENT Texas; comments due by 1- December 31, 1997. 28-98; published 12-29-97 Class E airspace; comments Public and Indian housing: Utah; comments due by 1- due by 1-26-98; published Ceiling rents on total tenant 29-98; published 1-14-98 12-4-97 payments for public Colored Federal airways; housing projects; TRANSPORTATION Public Laws Electronic DEPARTMENT comments due by 1-30-98; comments due by 1-26- published 12-12-97 Notification Service Coast Guard 98; published 11-25-97 VOR Federal airways; (PENS) Anchorage regualtions: INTERIOR DEPARTMENT comments due by 1-28-98; California; comments due by published 12-15-97 Fish and Wildlife Service 1-26-98; published 11-25- Endangered and threatened 97 TREASURY DEPARTMENT PENS is a free electronic mail species: Vocational rehabilitation and Internal Revenue Service notification service for newly West Indian manatee; education: Income taxes, etc.: enacted public laws. To comments due by 1-26- Veterans educationÐ Elective entity classification; subscribe, send E-mail to 98; published 11-26-97 Election of education treatment of changes; [email protected] INTERIOR DEPARTMENT benefits; comments due comments due by 1-26- with the message: 98; published 10-28-97 Minerals Management by 1-26-98; published SUBSCRIBE PUBLAWS-L Service 11-25-97 VETERANS AFFAIRS FIRSTNAME LASTNAME Royalty management: TRANSPORTATION DEPARTMENT Administrative appeals DEPARTMENT Vocational rehabilitation and Note: This service is strictly process and alternative Federal Aviation education: for E-mail notification of new dispute resolution; release Administration Veterans educationÐ public laws only. The text of of third-party proprietary Airworthiness directives: Election of education laws is not available through information; comments Boeing; comments due by benefits; comments due this service. We cannot due by 1-27-98; published 1-26-98; published 12-11- by 1-26-98; published respond to specific inquiries 12-31-97 97 11-25-97 sent to this address.