The regulations in 7 CFR 319.56 through 319.56-8 (referred to below as the regulations) prohibit or restrict the importation of fruits and vegetables into the United States from certain parts of the world to prevent the introduction and dissemination of plant pests that are new to or not widely distributed within the United States.

Currently, the regulations do not allow the importation of mangoes from the Philippines. However, the Republic of the Philippines Department of Agriculture (RPDA) has requested that the Animal and Plant Health Inspection Service (APHIS) allow mangoes from the Philippine island of Guimaras to be imported into the United States.

Several plant pests, including the mango seed weevil (Sternochetus mangiferae) and fruit flies of the genus Bactrocera are known to attack mangoes in the Philippines. If introduced into the United States, these pests would present a serious threat to domestic fruit crops. We are proposing to allow mangoes to be imported from Guimaras Island in the Philippines under conditions designed to mitigate the risk of plant pest introduction. The provisions for the importation of mangoes from the Philippines would be set out in a new section, § 319.56-2ii, which is explained below.

As stated in paragraph (a) of the proposed regulations, we would allow only mangoes grown on the island of Guimaras, which is free of the mango seed weevil, to be imported into the United States. The regulations in § 319.56-2(e) contain provisions for the importation of a fruit or vegetable from a definite area or district of the country of origin that has been found free from certain injurious insects that attack the fruit or vegetable, provided that all other injurious insects that attack the fruit or vegetable in the area or district of the country of origin have been eliminated from the fruit or vegetable by treatment or any other procedures that may be prescribed by the Administrator. In the case of the Philippines, ongoing surveys conducted by the RPDA's Bureau of Plant Industry have established that the island of Guimaras is free from infestations of mango seed weevil. Additionally, the Government of the Philippines has adopted and is enforcing requirements that establish Guimaras as a quarantined area for mangoes in order to prevent the mango seed weevil and other injurious insects from being introduced onto the island from other areas of the Philippines or the world. APHIS has determined that those requirements are at least equivalent to those requirements imposed under the regulations to prevent the introduction into the United States and interstate spread of injurious insects. Finally, as required by § 319.56-2(f)(3), the RPDA has submitted to APHIS written detailed procedures for the conduct of surveys and the enforcement of requirements to prevent the introduction of injurious insects onto Guimaras. (Additional information regarding the establishment and maintenance of the mango seed weevil-free status of Guimaras Island may be obtained from the person listed under FOR FURTHER INFORMATION CONTACT.)

Because the island of Guimaras has not been found to be free of fruit flies of the genus Bactrocera, paragraph (b) of the proposed regulations would require that the mangoes be treated in accordance with the Plant Protection and Quarantine (PPQ) Treatment Manual, which is incorporated by reference into the Code of Federal Regulations at 7 CFR 300.1. Specifically, the mangoes would have to be subjected to vapor heat treatment to prevent the introduction of Bactrocera spp. fruit flies into the United States. The vapor heat treatment, which would have to be conducted in the Philippines under the supervision of an APHIS inspector, would be conducted as follows:

• Size the fruit before treatment. Place temperature probes in the centers of several fruits.

• Raise the fruit pulp temperature to 46 °C (115 °F) until the fruit reaches that temperature. Hold temperature at 46 °C (115 °F) for 10 minutes.

The vapor heat treatment described above has been determined by the U.S. Department of Agriculture's (USDA's) Agricultural Research Service to be adequate to provide quarantine security against the two fruit fly species of concern, Bactrocera occipitalis and B. philippensis. As part of this proposed rule, we would update the PPQ Treatment Manual to prescribe the vapor heat treatment described above for mangoes from the Philippines. Mangoes treated in this manner would present an insignificant risk of introducing fruit flies of the genus Bactrocera into the United States. Further, pest risk analyses 1 conducted by APHIS have determined that any other injurious insects that might be carried by mangoes from Guimaras would be readily detectable by an inspector. Therefore, paragraph (c) of the proposed regulations would state that the mangoes are also subject to inspection and disinfection at the port of first arrival in the United States, as provided in § 319.56-6 of the regulations.

In addition to the pest-free area and treatment requirements discussed above, paragraph (d) of the proposed regulations would also require that each box of mangoes imported into the United States from the Philippines be marked in accordance with § 319.56-2(g) of the regulations. Specifically, each box of mangoes would have to be clearly labeled with the following information:

• The name of the orchard or grove of origin, or the name of the grower;

• A statement that the mangoes were produced on the island of Guimaras, Republic of the Philippines; and

• The type and amount of fruit it contains.

Paragraph (g) of § 319.56-2 requires such box labeling for each box of fruit or vegetables that, like the mangoes that are the subject of this proposed rule, are imported into the United States in accordance with § 319.56-2(e)(3) or (e)(4).

Paragraph (e) of the proposed regulations would require each shipment of mangoes to be accompanied by a phytosanitary certificate issued by the RPDA that contains additional declarations stating that the mangoes were grown on the island of Guimaras and have been treated for fruit flies of the genus Bactrocera in accordance with the PPQ Treatment Manual. The phytosanitary certificate would serve as RPDA's official confirmation that the origin and treatment requirements of the regulations had been met.

We are proposing that APHIS' participation in the treatment and inspection activities in the Philippines that would be required for the importation of mangoes be contingent upon the RPDA entering into a trust fund agreement with APHIS. Under paragraph (f) of the proposed regulations, the trust fund agreement would require the RPDA to pay, in advance of each shipping season, all costs that APHIS estimates that it will incur in providing the necessary services in the Philippines during that shipping season. Such costs would include administrative expenses and all salaries (including overtime and the Federal share of employee benefits), travel expenses (including per diem expenses), and other incidental expenses incurred by the inspectors in performing the services.

The trust fund agreement would require the RPDA to deposit a certified or cashier's check with APHIS for the amount of those costs, as estimated by APHIS. If the deposit is not sufficient to meet all costs incurred by APHIS, the agreement would further require that the RPDA deposit with APHIS a certified or cashier's check for the amount of the remaining costs, as determined by APHIS, before any additional mangoes would be treated or inspected. After a final audit at the conclusion of each shipping season, any overpayment of funds would be returned to the RPDA or held on account until needed, at the RPDA's option.

Paragraph (g) of the proposed regulations would explain that, although the treatments for mangoes prescribed in the PPQ Treatment Manual are judged from experimental tests to be safe, the USDA is not responsible for any damage that might be sustained by the mangoes as a result of the prescribed treatment.

This proposed rule has been reviewed under Executive Order 12866. The rule has been determined to be not significant for purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

This proposed rule would amend the regulations governing the importation of fruits and vegetables by allowing, under certain conditions, the importation of mangoes from the Philippines into the United States.

Nearly all of the mangoes consumed in the United States are imported, and the quantity of imported mangoes has grown steadily and rapidly in recent years. Over the 5-year period 1995 through 1999, mango imports increased at an annual rate of about 9 percent (table 1). During this same period, the average value of imported mangoes fell from about $0.85 per kg to about $0.65 per kg. These data suggest a high level of market competition among those countries supplying mangoes to the U.S. market.

Mexico is the source of most U.S. mango imports, supplying between 75 percent and 85 percent in each of the 5 years between 1995 and 1999. Other major sources are Brazil, Ecuador, and Peru.

U.S. production of mangoes has primarily been in southern Florida, with a smaller quantity grown in Hawaii and a negligible amount produced in California. According to the 1997 Census of Agriculture, there were 218 mango farms in Florida, 171 in Hawaii, and 2 in California. The total domestic harvest that year was about 2,829 metric tons, of which about 97 percent was produced in Florida and about 3 percent produced in Hawaii. There are no U.S. mango exports.

Florida's mango producers suffered a severe setback in 1992, when Hurricane Andrew destroyed many of the trees. According to the Florida Agricultural Statistics Service, bearing acres fell from 2,500 in 1992 to 1,400 in 1993. Yields have also declined sharply, from 160 bushels per acre in 1992 to 71 bushels per acre in 1997, due in part to bloom and disease problems at fruit set. Consequently, the value of Florida's mango production in 1997, $1.45 million, was only one-third of the value of production in 1992, $4.28 million.

The Florida Agricultural Statistics Service has not reported on mango production since 1997, a reflection of the industry's decline. Little of the State's crop now enters the national market to compete with fresh fruit imports. Most of the production is either consumed fresh within Florida or is processed into chutney or other products.

The quantity of mangoes expected to be imported from Guimaras Island is not known. In 1993, about 3,000 metric tons were reportedly produced there. If all of the island's 1993 production were exported to the United States, it would represent an amount similar to what was harvested domestically in 1997 (the most recent year for which U.S. production data are available). However, given the large quantity of mangoes imported from Mexico and other countries, 3,000 metric tons represent only about 1.6 percent of what the U.S. supply was in 1997, and an even smaller proportion of today's supply; between 1997 and 1999, U.S. mango imports increased by more than 17 percent.

The Regulatory Flexibility Act requires that agencies consider the economic effects of their rules on small entities. Whether affected entities may be considered small depends on their annual gross receipts. Annual receipts of $500,000 or less is the small entity criterion set by the Small Business Administration for establishments primarily engaged in “other noncitrus fruit farming” (NAICS code 111339). Most, if not all, mango producers in the United States are small entities.

U.S. mango imports dwarf domestic production. Mango imports during the late 1990's expanded annually by amounts several times greater than the quantity likely to be imported from Guimaras Island. It is reasonable to assume that the growth in U.S. mango imports will continue, with Guimaras Island but one more foreign source. We do not expect that the economic effects of this proposed rule on U.S. entities, large or small, would be significant.

The proposed importation of mangoes from Guimaras Island is not expected to significantly affect U.S. mango producers. The amount imported will be very small compared to current import levels. Moreover, much of Florida's harvest (the source of 97 percent of domestic production in 1997) is consumed within that State or is processed into chutney and other products; these markets are unlikely to be affected by the availability of an additional source of imported fresh mangoes.

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action would not have a significant economic impact on a substantial number of small entities.

This proposed rule would allow mangoes to be imported into the United States from the Philippines. If this proposed rule is adopted, State and local laws and regulations regarding the importation of fruits and vegetables under this rule would be preempted while the mangoes are in foreign commerce. Mangoes are generally imported for immediate distribution and sale to the consuming public, and would remain in foreign commerce until sold to the ultimate consumer. The question of when foreign commerce ceases in other cases must be addressed on a case-by-case basis. If this proposed rule is adopted, no retroactive effect will be given to this rule, and this rule will not require administrative proceedings before parties may file suit in court challenging this rule.

In accordance with section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the information collection or recordkeeping requirements included in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB). Please send written comments to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for APHIS, Washington, DC 20503. Please state that your comments refer to Docket No. 93-131-1. Please send a copy of your comments to: (1) Docket No.93-131-1, Regulatory Analysis and Development, PPD, APHIS, suite 3C03, 4700 River Road Unit 118, Riverdale, MD 20737-1238, and (2) Clearance Officer, OCIO, USDA, room 404-W, 14th Street and Independence Avenue SW., Washington, DC 20250. A comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication of this proposed rule.

This proposed rule would amend the regulations governing the importation of fruits and vegetables to provide for the importation into the United States of mangoes grown on Guimaras Island in the Philippines under conditions designed to prevent the introduction into the United States of plant pests. The proposed program for the importation of mangoes from Guimaras Island would require the use of box marking to indicate the origin of the fruit, phytosanitary certificates to confirm that the fruit has been grown and treated in accordance with the conditions set forth in the regulations, and a trust fund agreement between the RPDA and APHIS to cover the Agency's participation in the treatment and inspection activities in the Philippines that would be required for the importation of mangoes.

We are soliciting comments from the public (as well as affected agencies) concerning our proposed information collection and recordkeeping requirements. These comments will help us:

(1) Evaluate whether the proposed information collection is necessary for the proper performance of our agency's functions, including whether the information will have practical utility;

(2) Evaluate the accuracy of our estimate of the burden of the proposed information collection, including the validity of the methodology and assumptions used;

(3) Enhance the quality, utility, and clarity of the information to be collected; and

(4) Minimize the burden of the information collection on those who are to respond (such as through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology; e.g., permitting electronic submission of responses).

Estimate of burden: Public reporting burden for this collection of information is estimated to average 1 hour per response.

Respondents: Philippine plant protection officials; mango producers and packinghouses on Guimaras Island, Philippines.

Estimated annual number of respondents: 20.

Estimated annual number of responses per respondent: 2.

Estimated annual number of responses: 40.

Estimated total annual burden on respondents: 40 hours.

Copies of this information collection can be obtained from Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at (301) 734-7477.

Accordingly, we propose to amend title 7, chapter III, of the Code of Federal Regulations as follows:

On December 4, 2000, we published in the Federal Register (65 FR 75635-75637, Docket No. 99-087-1) a proposal to amend the Animal Welfare regulations to require that only wholesale dealers of hunting, breeding, and security dogs be licensed and inspected. This change would be reflected in the definition for “dealer” in 9 CFR 1.1. This action would bring our regulations into accord with our policy to regulate wholesale dealers of hunting, breeding, and security dogs.

Comments on the proposed rule were required to be received on or before February 2, 2000. We are extending the comment period on Docket No. 99-087-1 for an additional 60 days. This action will allow interested persons additional time to prepare and submit comments.

Interested persons are invited to participate in the making of these proposed special conditions by submitting such written data, views, or arguments as they may desire. Communications should identify the regulatory docket or notice number and be submitted in duplicate to the address specified above. All communications received on or before the closing date for comments will be considered by the Administrator. The proposals described in this notice may be changed in light of the comments received. All comments received will be available in the Rules Docket for examination by interested persons, both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerning this rulemaking will be filed in the docket. Persons wishing the FAA to acknowledge receipt of their comments submitted in response to this notice must include with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to CE164.” The postcard will be date stamped and returned to the commenter.

On April 16, 1996, Ayres Corporation, P.O. Box 3090, Albany, Georgia 31708-3090, applied for a commuter category, all-cargo type certificate for their new Model LM 200. In May 1997, they reapplied for passenger and COMBI interior configurations. The Model LM 200 airplane is a nine-passenger, twin-engine airplane. The LM 200 will have all-cargo and COMBI versions.

The Model LM 200 all-cargo and COMBI airplanes are considered a novel design and were not considered when those airworthiness standards were promulgated. The FAA has determined that the existing regulations do not provide adequate or appropriate safety standards for cargo and baggage compartment fire protection in these versions of the LM 200. In order to provide a level of safety that is equivalent to that afforded to occupants of the passenger version, additional airworthiness standards, in the form of additional special conditions, are necessary.

Under the provisions of 14 CFR § 21.17, Ayres Corporation must show that the Model LM 200 meets the applicable provisions of 14 CFR part 23 as amended by Amendments 23-1 through 23-53, effective April 30, 1998, and any exemptions, equivalent level of safety findings and special conditions.

If the Administrator finds that the applicable airworthiness regulations (i.e., part 23) do not contain adequate or appropriate safety standards for the Ayres Corporation Model LM 200 because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

In addition to the applicable airworthiness regulations and special conditions, the Model LM 200 must comply with the part 23 fuel vent and exhaust emission requirements of 14 CFR part 34, the noise certification requirements of 14 CFR part 36, and the FAA must issue a finding of regulatory adequacy pursuant to Section 611 of Public Law 92-574, the “Noise Control Act of 1972.”

Special conditions, as appropriate, as defined in § 11.19, are issued in accordance with § 11.38, and become part of the type certification basis in accordance with § 21.17(a)(2).

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, the special conditions would also apply to the other model under the provisions of § 21.101(a)(1).

The Model LM 200 will incorporate the following novel or unusual design features: an all-cargo and a COMBI interior configuration.

As discussed above, these special conditions are applicable to the Ayres Corporation, Model LM 200. Should Ayres Corporation apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special conditions would apply to that model as well under the provisions of § 21.101(a)(1).

It is FAA's understanding that Ayres Corporation accepts the special conditions in the FAA position as noted in Ayres letter dated February 9, 1999. Compliance will be shown through design, test and analyses by Ayres Corporation.

This action affects only certain novel or unusual design features on one model of airplane. It is not a rule of general applicability, and it affects only the applicant who applied to the FAA for approval of these features on the airplane.

The authority citation for these special conditions is as follows:

Accordingly, the Federal Aviation Administration (FAA) proposes the following special conditions as part of the type certification basis for the Ayres Corporation Model LM 200 airplane applicable to the all-cargo and COMBI interior configurations.

In addition to the Part 23 regulations required by the certification basis of the airplane, the following are also required for cargo or baggage compartments:

(a) Flight tests must demonstrate means to exclude hazardous quantities of smoke, flames, or extinguishing agent from any compartment occupied by crew or passengers.

(b) Cargo compartments shall have either fire or smoke detection provisions, or both, unless the compartment location is such that a fire can be easily detected by the pilots while seated at their duty stations. The cargo and baggage fire protection must be in accordance with § 23.855 as well as the following:

(c) The flight crew must have means to shut off the ventilating airflow to or within the compartment, from the pilot's station, on an all-cargo configuration.

(d) Passenger and COMBI configurations where the cargo or baggage compartment are not accessible to the flightcrew, must have an approved, built-in fire extinguishing system. The built-in fire extinguishing system shall be controllable from the pilot's station. There must be means to control ventilation and drafts within an inaccessible cargo or baggage compartment so the extinguishing agent can control any fire that may start in the compartment. The built-in fire extinguishing system must be installed so that no extinguishing agent likely to enter the personnel compartments will be hazardous to the occupants. The discharge of the fire extinguishing system must not cause structural damage. The capacity of the extinguishing system must be adequate for any fire likely to occur in the compartment where used. Consideration must be given to the volume of the compartment and the ventilation rate.

(e) In addition to the fire extinguishers required by § 23.851, a hand fire extinguisher must be readily accessible for use in each cargo and baggage compartment that is accessible to crewmembers in flight. Hazardous quantities of smoke, flames or extinguishing agent must not enter any compartment occupied by crew or passengers, when the access to that compartment is used.

(f) Protective breathing equipment must be installed for crewmembers in each crewmember compartment. Protective breathing equipment must:

Interested persons are invited to participate in the maksing of the proposed rule by submitting such written data, views, or arguments as they may desire. Communications should identify the Rules Docket number and be submitted in triplicate to the address specified above. All communications received on or before the closing date for comments, specified above, will be considered before taking action on the proposed rule. The proposals contained in this document may be changed in light of the comments received.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the proposed rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report summarizing each FAA-public contact concerned with the substance of this proposal will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their mailed comments submitted in response to this proposal must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. 99-SW-27-AD.” The postcard will be date stamped and returned to the commenter.

Any person may obtain a copy of this NPRM by submitting a request to the FAA, Office of the Regional Counsel, Southwest Region, Attention: Rules Docket No. 99-SW-27-AD, 2601 Meacham Blvd., Room 663, Fort Worth, Texas 76137.

On March 16, 1998, the FAA issued AD 98-07-03, Amendment 39-10421, Docket No. 97-SW-58-AD (63 FR 14026, March 24, 1998), applicable to Bell Model 412 helicopters, serial numbers (S/N) 33001 through 33213, 34001 through 34024, 36001 through 36121, 46400 through 46434, and 46437; and Agusta Model AB412 helicopters, S/N prior to and including S/N 25806 and S/N 25901, to require a temporary reduction of the Vne limitation until an inspection of the yoke assembly for fatigue damage and installation of a redesigned yoke flapping stop are accomplished. Recurring periodic and special inspections to detect occurrences of yoke overload are also required. That action was prompted by laboratory tests and engineering analyses which indicated that the yoke assembly is susceptible to fatigue damage due to unforeseen static and dynamic loading of the tail rotor against the original flapping stop. The requirements of that AD are intended to prevent fatigue failure of the yoke that could result in loss of control of the tail rotor and subsequent loss of control of the helicopter. A correction to a technical bulletin date referenced in that AD was issued on July 10, 1998 (63 FR 38742, July 20, 1998).

Since the issuance of AD 98-07-03, the FAA has determined that the unsafe condition exists on all Bell Model 412, 412CF, and 412 EP and Agusta Model AB412 helicopters and that the applicability of AD 98-07-03 should have included all serial numbers of these helicopters. The proposed AD would also correct the unsafe condition, which was listed as fatigue failure and correct the reference to Registro Aeronautico Italiano AD 97-223, which was dated incorrectly in AD 98-07-03.

Since an unsafe condition has been identified that is likely to exist or develop on all Bell Model 412 or Agusta Model AB412 helicopters of the same type designs, the proposed AD would supersede AD 98-07-03. The proposed AD would require a reduction of the Vne limitation until an inspection of the yoke assembly for static and dynamic overload damage and installation of a redesigned yoke flapping stop are accomplished and includes additional periodic and special inspections to detect a yoke overload.

The FAA estimates that 135 helicopters of U.S. registry would be affected by this proposed AD, that it would take approximately 6.5 work hours per helicopter to install the placard, inspect the yoke assembly, and install the yoke. Required parts would cost approximately $511 per helicopter. Based on these figures, the total cost impact of the proposed AD on U.S. operators is estimated to be $121,635.

The regulations proposed herein would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it is determined that this proposal would not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this proposed regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A copy of the draft regulatory evaluation prepared for this action is contained in the Rules Docket. A copy of it may be obtained by contacting the Rules Docket at the location provided under the caption ADDRESSES.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

Interested persons are invited to participate in the making of the proposed rule by submitting such written data, views, or arguments as they may desire. Communications shall identify the Rules Docket number and be submitted in triplicate to the address specified above. All communications received on or before the closing date for comments, specified above, will be considered before taking action on the proposed rule. The proposals contained in this action may be changed in light of the comments received.

Submit comments using the following format:

• Organize comments issue-by-issue. For example, discuss a request to change the compliance time and a request to change the service bulletin reference as two separate issues.

• For each issue, state what specific change to the proposed AD is being requested.

• Include justification (e.g., reasons or data) for each request.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the proposed rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report summarizing each FAA-public contact concerned with the substance of this proposal will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2000-NM-272-AD.” The postcard will be date stamped and returned to the commenter.

Any person may obtain a copy of this NPRM by submitting a request to the FAA, Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 2000-NM-272-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

Transport Canada Civil Aviation (TCCA), which is the airworthiness authority for Canada, notified the FAA that an unsafe condition may exist on certain Bombardier Model DHC-7 series airplanes. TCCA advises that an operator has reported that an uncommanded deployment of all ground spoilers occurred during an engine ground-run and that all attempts by the flight crew to retract the spoilers were unsuccessful. Investigation of the problem identified the cause as a failed piston seal in a pressure hose to the ground spoiler actuators. This condition, if not corrected, could result in the blockage of pressure hoses to the ground spoiler actuators, leading to uncommanded deployment of the ground spoilers, resulting in reduced controllability of the airplane.

Bombardier has issued Service Bulletin 7-27-90, dated September 3, 1999, which describes procedures for modification of the pressure hoses to the ground spoiler actuators. Accomplishment of the actions specified in the service bulletin is intended to adequately address the identified unsafe condition. TCCA classified this service bulletin as mandatory and issued Canadian airworthiness directive CF-99-29, dated November 3, 1999, in order to assure the continued airworthiness of these airplanes in Canada.

These airplane models are manufactured in Canada and are type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. Pursuant to this bilateral airworthiness agreement, TCCA has kept the FAA informed of the situation described above. The FAA has examined the findings of TCCA, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.

Since an unsafe condition has been identified that is likely to exist or develop on other airplanes of the same type design registered in the United States, the proposed AD would require accomplishment of the actions specified in the service bulletin described previously.

The FAA estimates that 30 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 4 work hours per airplane to accomplish the proposed modification, and that the average labor rate is $60 per work hour. There would be no charge for required parts. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $7,200, or $240 per airplane.

The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the proposed requirements of this AD action, and that no operator would accomplish those actions in the future if this proposed AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

The regulations proposed herein would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it is determined that this proposal would not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this proposed regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A copy of the draft regulatory evaluation prepared for this action is contained in the Rules Docket. A copy of it may be obtained by contacting the Rules Docket at the location provided under the caption ADDRESSES.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

Interested persons are invited to participate in the making of the proposed rule by submitting such written data, views, or arguments as they may desire. Communications shall identify the Rules Docket number and be submitted in triplicate to the address specified above. All communications received on or before the closing date for comments, specified above, will be considered before taking action on the proposed rule. The proposals contained in this action may be changed in light of the comments received.

Submit comments using the following format:

• Organize comments issue-by-issue. For example, discuss a request to change the compliance time and a request to change the service bulletin reference as two separate issues.

• For each issue, state what specific change to the proposed AD is being requested.

• Include justification (e.g., reasons or data) for each request.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the proposed rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report summarizing each FAA-public contact concerned with the substance of this proposal will be filed in the Rules Docket.

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2000-NM-263-AD.” The postcard will be date stamped and returned to the commenter.

Any person may obtain a copy of this NPRM by submitting a request to the FAA, Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 2000-NM-263-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The Direccion General de Aviacion Civil (DGAC), which is the airworthiness authority for Spain, notified the FAA that an unsafe condition may exist on all CASA Model CN-235 series airplanes. The DGAC advises that an incorrect assembly of the electrical connector of the Master Central Unit could lead to a disconnection of the connector. This condition, if not corrected, could result in the loss of electrical power, other than that provided by the emergency system, in the event of disconnection of the single electrical connector within the electrical Master Central Unit.

CASA has issued Service Bulletin SB-235-24-14, dated June 27, 2000, which describes procedures for installing a second connector in the Master Central Unit. This second connector would allow the electrical connections to the generator and the battery on each side of the electrical Master Central Unit to be independent. The accomplishment of the actions specified in the service bulletin is intended to adequately address the identified unsafe condition. The DGAC classified this service bulletin as mandatory and issued Spanish airworthiness directive 06/00, dated June 27, 2000, in order to assure the continued airworthiness of these airplanes in Spain.

These airplane models are manufactured in Spain and are type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. Pursuant to this bilateral airworthiness agreement, the DGAC has kept the FAA informed of the situation described above. The FAA has examined the findings of the DGAC, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.

Since an unsafe condition has been identified that is likely to exist or develop on other airplanes of the same type design registered in the United States, the proposed AD would require accomplishment of the actions specified in the service bulletin described previously.

The FAA estimates that 1 airplane of U.S. registry would be affected by this proposed AD, that it would take approximately 8 work hours to accomplish the proposed installation, and that the average labor rate is $60 per work hour. Required parts would cost approximately $877. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $1,357.

The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the proposed requirements of this AD action, and that no operator would accomplish those actions in the future if this proposed AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

The regulations proposed herein would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, it is determined that this proposal would not have federalism implications under Executive Order 13132.

For the reasons discussed above, I certify that this proposed regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A copy of the draft regulatory evaluation prepared for this action is contained in the Rules Docket. A copy of it may be obtained by contacting the Rules Docket at the location provided under the caption ADDRESSES.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

How do I comment on this proposed AD? We invite your comments on the proposed rule. You may send whatever written data, views, or arguments you choose. You need to include the rule's docket number and send your comments in triplicate to the address named under the caption ADDRESSES. We will consider all comments received by the closing date named above, before acting on the proposed rule. We may change the proposals contained in this notice because of the comments received.

Are there any specific portions of the proposed AD I should pay attention to? The FAA specifically invites comments on the overall regulatory, economic, environmental, and energy aspects of the proposed rule that might call for a need to change the proposed rule. You may look at all comments we receive. We will file a report in the Rules Docket that summarizes each FAA contact with the public that concerns the substantive parts of this proposal.

The FAA is reexamining the writing style we currently use in regulatory documents, in response to the Presidential memorandum of June 1, 1998. That memorandum requires federal agencies to communicate more clearly with the public. We are interested in your comments on the ease of understanding this document, and any other suggestions you might have to improve the clarity of FAA communications that affect you. You can get more information about the Presidential memorandum and the plain language initiative at http://www.faa.gov/language/.

How can I be sure FAA receives my comment? If you want us to acknowledge the receipt of your comments, you must include a self-addressed, stamped postcard. On the postcard, write “Comments to Docket No. 98-CE-57-AD.” We will date stamp and mail the postcard back to you.

What events have caused this proposed AD? The FAA has received reports of many incidents of control wheels cracking or breaking on Cessna 150, 172, 175, 180, 182, 185, 206, 210, and 336 series airplanes. The problem control wheels are 0513166 series plastic control wheels.

The cause of this problem is because of temperature variations in the molding process during manufacture of the control wheels and deterioration with age and temperature extremes.

This condition could result in the control wheels breaking while the airplane is in operation. A consequent loss of control of the airplane during takeoff, landing, or ground operations could occur.

We issued an NPRM that proposed to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an AD that would apply to certain Cessna Aircraft Company (Cessna) 150, 172, 175, 180, 182, 185, 206, 210, and 336 series airplanes. The NPRM would require you to:

What has happened to cause FAA to issue this document? We received comments on the NPRM indicating the need for more time to provide data on the proposed AD. Based on these comments and the interest in the rule expressed by various operators and other interested parties, FAA has decided to extend the comment period on this rule to seek additional data. Therefore, the comment period is extended approximately 60 days and will close April 4, 2001.

We are including additional preamble information and the actual AD for the reader's convenience.

What are the differences between the service bulletin and the proposed AD? The Cessna service letter specifies inspecting and testing the control wheels as soon as possible and positively by the next 100-hour inspection. We propose that you inspect and pull test the control wheels and replace (if necessary) the control wheels within 100 hours time-in-service (TIS) after the effective date of this proposed AD, and then at intervals not to exceed 12 months until the control wheels are replaced.

We believe that these compliance times will give the owners or operators of the affected airplanes enough time to have the proposed actions performed without compromising the safety of the airplanes.

How many airplanes would this proposed AD impact? We estimate the proposed AD would affect 12,592 airplanes in the U.S. registry.

What would be the cost impact of the proposed AD on owners/operators of the affected airplanes? We estimate the following costs to do the proposed inspection and pull test:

These figures only consider the cost of the first inspection and test and do not account for repetitive inspections and tests. We do not have any means of finding out the number of repetitive inspections and tests the owner/operator would incur over the life of an affected airplane.

How would this proposed AD impact various entities? The proposed regulations would not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have determined that this proposed rule would not have federalism implications under Executive Order 13132.

Does this proposed AD involve a significant rule or regulatory action? For the reasons discussed above, I certify that this proposed action (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if put into effect, will not have a significant economic impact, positive or negative, on a large number of small entities under the criteria of the Regulatory Flexibility Act. We have placed a copy of the draft regulatory evaluation prepared for this action in the Rules Docket. You may get a copy of it by contacting the Rules Docket at the location provided under the caption ADDRESSES.

Accordingly, under the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

Section 801 of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 381) authorizes FDA to examine foods, drugs, devices, and cosmetics imported or offered for import into the United States and to refuse admission to products under certain conditions. Imported products are subject to the same statutory and regulatory requirements as domestic products. For example, a domestic food product must not be adulterated or misbranded. Similarly, an imported food that is intended for sale in the United States must not be adulterated or misbranded.

FDA's examination of imports often begins with a review of records to determine whether additional scrutiny is warranted. FDA may, based on its review of the records, permit the goods to proceed, visually examine or take samples of the goods for laboratory analysis, or verify the registration, listing, declarations, and certifications for the product. For food products, visual examinations may be inadequate for detecting suspected microbiological contamination, pesticide residues, and other toxic elements, so FDA may take samples of an imported food product for further examination. If the examination shows that the food product appears to be in compliance with U.S. requirements, FDA releases the shipment to proceed into U.S. commerce. If the food product appears to be not in compliance, the importer has an opportunity to provide evidence or testimony that the food product complies with U.S. requirements or to submit a plan to recondition the food product to bring it into compliance if such reconditioning is possible. If, after the importer has had an opportunity to present its views or if reconditioning failed to bring the food into compliance, the food product is not in compliance, FDA may refuse admission to the food product. If refused products are not reexported within 90 days of refusal, the U.S. Customs Service (Customs Service) will have the products destroyed.

Additionally, under section 304 of the act (21 U.S.C. 334), FDA may initiate seizure and condemnation proceedings against any article of food that is adulterated or misbranded, or which may not be introduced into interstate commerce under section 404 of the act (21 U.S.C. 344). A court may, after seizure and condemnation of an imported article, order the article to be destroyed or permit the article to be reexported (see United States v. Food, 2,998 Cases, 64 F.3d 984 (5th Cir. 1995)). The Customs Service also has seizure procedures (see 19 U.S.C. 1595a).

In recent years, the demand on FDA's resources for reviewing food imports has increased significantly. For example, in 1985, approximately 950,000 line items of goods were offered for import into the United States. (A line item corresponds to a specific item on an invoice or shipping papers.) By 1998, the number of line items had increased to over 3 million (see statement by William B. Schultz, Deputy Commissioner for Policy, Food and Drug Administration, before the Permanent Subcommittee on Investigations, Senate Committee on Government Affairs, September 24, 1998). FDA's ability to inspect a sufficient proportion of imports has been severely hampered by this increase. Currently, FDA examines or samples less than 2 percent of imported foods for compliance with FDA requirements.

FDA is aware that some unscrupulous importers use various measures to subvert this process in order to introduce unsafe food products into the United States. In April 1998, the General Accounting Office (GAO) issued a report entitled “Food Safety: Federal Efforts to Ensure the Safety of Imported Foods are Inconsistent and Unreliable” (GAO/RCED-98-103). The GAO report stated that some importers evade import controls and are able to introduce contaminated, adulterated, or unsafe food into the United States even when FDA refused to admit the food and the Customs Service ordered the food to be reexported or destroyed. In particular, the GAO report noted that FDA does not require that refused foods be marked as “refused entry.”

Additionally, in 1998, the Senate Governmental Affairs Committee's Permanent Investigations Subcommittee held hearings on the safety of food imports. The Committee heard testimony about various methods used to avoid food safety inspections and to introduce adulterated food into the United States. These methods included reimporting refused goods through another U.S. port (“port shopping”) and substituting trash or other items for adulterated food products for which FDA has refused entry so that the trash and other items, rather than the adulterated food products, were destroyed or reexported (Ref. 2) (statement of “Former Customs Broker”). Placing a clearly identifiable mark on food imports that have been refused admission for safety reasons would help curtail the reintroduction of unsafe food products into the United States.

On July 3, 1999, the President issued a memorandum to the Secretary of Health and Human Services and the Secretary of the Treasury (the Secretaries) on the safety of imported foods. The memorandum identified food safety as a high priority and, among other things, directed the Secretaries to take all actions available to “prohibit the reimportation of food that has been previously refused admission and has not been brought into compliance with United States laws and regulations (so called ‘port shopping’), and require the marking of shipping containers and/or papers of imported food that is refused admission for safety reasons....”

FDA is proposing to amend its import regulations to create a new § 1.98 entitled “Marking Requirements for and Prohibitions on the Reimportation of Food Products That Have Been Refused Admission into the United States.” The proposal would require importers or consignees to mark food (including animal feed) that FDA refuses to admit, for safety reasons, into the United States. The mark should make it more difficult for imported food products that have been refused admission into the United States to evade import controls and would complement FDA's efforts to monitor food imports more effectively. The proposed rule would also prohibit importers from reimporting refused shipments.

FDA and the Customs Service held two public meetings to discuss imported food safety on February 10, 2000, in Los Angeles, CA, and on February 17, 2000, in Washington, DC. Several comments were made concerning marking refused food imports, and FDA addresses those comments as part of this description of the proposed rule.

If you are an importer or consignee of a shipment of imported food that FDA has refused to admit for safety reasons, you would be subject to the rule. (For purposes of this rule, the reference to “safety reasons” means that consuming the imported food could adversely affect a person's health.) Under proposed § 1.98(a), if FDA has refused to admit your imported food into the United States for safety reasons, you must mark the refused food as “UNITED STATES REFUSED ENTRY.” An FDA employee or FDA-designated official (such as an FDA-commissioned official) would supervise the marking process.

In contrast, if FDA refused admission of your imported food for other nonsafety reasons, you would not be subject to this rule. For example, if FDA refused to admit your imported food because it was labeled in a foreign language, you would not have to mark the refused food product. If, however, FDA refused to admit your imported food because it contained an unsafe ingredient, you would have to mark the refused product in accordance with the regulation.

Proposed § 1.98(b) would require you to make the mark in capital letters at least 2.5 centimeters (cm) or 1 inch high. The mark would state “UNITED STATES REFUSED ENTRY.” The mark's language and format are similar to those used by the U.S. Department of Agriculture on meat and meat food products that have been refused admission into the United States (9 CFR 327.26(c)).

Some comments during a public meeting suggested that the mark include some indication of why the food product was refused entry instead of stating simply that the food was refused entry. FDA has not included this suggestion in the proposed rule because the text of the proposed mark, “UNITED STATES REFUSED ENTRY,” is applicable to all products that are refused entry for safety reasons and is similar to a mark used by the U.S. Department of Agriculture. If FDA required the mark to explain the reasons for the refusal, importers and consignees would need multiple marks (to cover the various possible reasons for refusing entry) or would need to use “fill in the blank” marks which could then be illegible (if the reasons are handwritten) or difficult to use (if the reasons are machine-printed). Nevertheless, FDA welcomes additional comment on this point.

Proposed § 1.98(b)(1) would require the mark to be permanent, clear, and conspicuous. This will help ensure that the mark is noticeable. For example, if the mark is affixed to a bill of lading, you could place the mark diagonally across the center of the document and use colored ink. However, the proposal would not specify any particular method of marking. In other words, you can use adhesive labels, ink stamps, or any other marking tool or device so long as the mark is at least 2.5 cm or 1 inch high, uses the correct language, is clear and conspicuous, and is permanently affixed to the refused imported food's container (where possible) and to shipping documents accompanying the imported food before it leaves the port of entry.

Another comment at a public meeting suggested that the mark be in “invisible ink” that FDA would be able to see through the use of some scanning device. Some individuals expressed concern about how a visible mark would affect the refused product's ability to enter a foreign country or return to the exporting country. This proposed rule does not include the use of “invisible ink.” One important benefit of the mark is that it is supposed to be clear and conspicuous; this will make it easier for FDA and the Customs Service to detect attempts to bring refused food products back into the United States. If the mark could only be seen by using some unspecified device, FDA and the Customs Service might find it difficult to determine whether the mark was correctly applied, to see the mark on goods that are being reintroduced into the United States in spite of an earlier refusal, or to readily distinguish between foods that should be admitted into the United States from foods that have already been refused entry. FDA invites comment on this point.

FDA also invites comments on whether the rule should use or allow for different size requirements due to the variety of food packages and product sizes and whether the rule should require any particular form of marking.

Proposed § 1.98(b)(1) would require you to affix the mark permanently to the packing container holding the refused food and on invoices, bills of lading, and any other documents accompanying the food when it is exported from the United States. The proposal would explain that, for purposes of thois rule, a packing container is any container used to pack one or more immediate containers of the refused food and that an immediate container is any container which holds an imported food for sale to the ultimate consumer. For example, assume that you have a box that holds 24 cans of imported food. the box would be the packing container, and each can would be an immediate container. You would, under the proposal, mark the box rather than mark each can. FDA would not require you to mark every individual retail unit (unless the immediate container also happens to be the packing container, such as a large bag of rice or flour). If the mark cannot be permanently affixed to a packing container (as with bulk agricultural commodities, such as a railcar of wheat, a truckload of potatoes, or a tanker of corn syrup) you would only have to place the mark on documents accompanying the food when it leaves the United States.

Several comments at the public meeting said the mark should go on cargo containers used to transport large amounts of imported food products. Others suggested using seals on cargo containers instead of merely marking the containers. FDA interpreted these comments concerning cargo containers as applying the mark or seal on items such as rail cars, containers to be attached to trucks, and other large, reusable containers. FDA has not included the comments' suggestions in this proposed rule. By proposing to require the mark to be clear, conspicuous, and permanent, FDA intends to make it difficult for a person to “port shop” or to conceal refused food. If the mark were placed on a large, reusable cargo container (such as a tractor trailer or rail car), it would be easy to defeat the rule simply by moving the refused food from the marked cargo container to an unmarked container. For example, if the mark is on a container attached to a truck instead of the packing containers holding the refused food product, the intent behind the rule could be defeated by shifting the refused food product from the marked tractor trailer to an unmarked one. In contrast, if the mark is on the packing containers (such as boxes or wrapped shipping palettes) holding the refused food, it will be more difficult, both in terms of time and cost, to open and repackage the refused food, and thus evade the rule's purpose. FDA invites additional comment on this point.

Proposed § 1.98(b)(2) would require you to affix the mark, under the supervision of an FDA employee or person designated by FDA, before the food is exported. This is to ensure that you place the mark, as required, on the refused food before the food leaves the United States.

If this rule is finalized with a prohibition on the reimportation of refused food, reimportation of refused food in violation of this rule would constitute a violation of 19 U.S.C. 1595a which would then permit the Customs Service to seize, forfeit, and destroy the goods after following the appropriate procedures. Thus, proposed § 1.98(c) would prohibit you from: (1) Importing or offering to import any food that has been previously refused admission into the United States and marked as “UNITED STATES REFUSED ENTRY;” and (2) altering, removing, tampering with, or concealing a mark. If you refuse to affix a mark on a refused food import, FDA and the Customs Service might deny permission to re-export the refused food product, order the product to be destroyed, and take other regulatory action against you and the refused food. The Customs Service might also assess civil money penalties under 19 U.S.C. 1592 or 1595a(b) if you alter, remove, tamper with, or conceal a mark.

FDA is also proposing to amend the authority citation for 21 CFR part 1 to include references to sections 704 of the act (21 U.S.C. 374) and 801 of the act and section 361 of the Public Health Service Act (the PHS Act) (42 U.S.C. 264). These statutory provisions provide additional legal authority to issue the proposed rule (as explained in section III of this document).

Section 801(a) of the act states that FDA shall refuse to admit imported food into the United States if the imported food has been manufactured, processed, or packed under insanitary conditions, is forbidden or restricted in sale in the country in which it was produced or from which it was exported, or is adulterated or misbranded. Sections 402 and 403 of the act (21 U.S.C. 342 and 343) describe when a food is adulterated and misbranded respectively. Section 701(a) of the act (21 U.S.C. 371(a)) authorizes the agency to issue regulations for the efficient enforcement of the act, while section 701(b) of the act authorizes FDA and the Department of the Treasury to jointly prescribe regulations for the efficient enforcement of section 801 of the act.

The proposed rule is within FDA's authority at sections 402, 403, 701, and 801 of the act. Because marking refused goods would permit FDA to more efficiently enforce section 801 of the act, FDA is authorized to impose marking requirements on such food products. The mark would help ensure that food products that fail to meet the conditions for admission into the United States do not enter or reenter interstate commerce.

Section 704 of the act authorizes FDA to conduct inspections for the efficient enforcement of the act. Assuming that the proposed rule is later finalized, FDA may need to conduct inspections to help enforce the rule. Thus, while section 704 of the act does not provide independent authority to mark refused food imports, it is relevant to FDA's enforcement of the rule.

The proposed rule is also authorized by sections 301 of the PHS Act (42 U.S.C. 241) and 361 of the PHS Act. Section 301 of the PHS Act authorizes FDA to “render assistance” to appropriate public health authorities in the conduct of or to promote coordination of research, investigations, experiments, demonstrations, and studies relating to the causes, diagnosis, treatment, control, and prevention of disease. Section 361 of the PHS Act authorizes FDA to issue regulations to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the United States. Marking food products that have been refused entry into the United States would assist foreign public health officials to determine whether to take regulatory action against a particular product. The mark would alert foreign countries that the food product has already been refused admission into the United States. Marking such food products would also help prevent the introduction, transmission, or spread of communicable diseases into the United States by making it more difficult for such rejected food products to enter the United States through a different port or to escape detection.

FDA has determined under 21 CFR 25.30(a), 25.30(k), and 25.32(g) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

FDA tentatively concludes that the marking requirements proposed in this document are not subject to review by the Office of Management and Budget (OMB) because they do not constitute a “collection of information” under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Rather, the proposed statements are “public disclosure of information originally supplied by the Federal Government to the recipient for the purpose of disclosure to the public” (5 CFR 1320.3(c)(2)).

FDA has analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the agency has concluded that the proposed rule does not contain policies that have federalism implications as defined in the order and, consequently, a federalism summary impact statement is not required.

FDA has examined the impacts of the proposed rule under Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). Executive Order 12866 considers a rule to be a “significant regulatory action” if (among other things) it may have an annual effect on the economy of $100 million, adversely affecting a sector of the economy in a material way, adversely affecting competition, or adversely affecting jobs. A regulation is also considered a significant regulatory action if it raises novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. OMB has determined that this proposed rule is a significant regulatory action as defined by Executive Order 12866.

Under the Regulatory Flexibility Act, if a rule has a significant impact on a substantial number of small entities, an agency must analyze regulatory options that would minimize any significant impact of the rule on small entities. For reasons explained later in this section, FDA concludes that the proposed rule, if finalized, would not have a significant economic impact on a substantial number of small entities. Therefore, a regulatory flexibility analysis is not required.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 (Public Law 104-4) requires that agencies prepare a written assessment of anticipated costs and benefits before proposing any rule that may result in an expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million in any one year (adjusted annually for inflation).

The Unfunded Mandates Reform Act does not require FDA to prepare a statement of costs and benefits for the proposed rule because the proposed rule is not expected to result in any 1 year expenditure that would exceed $100 million adjusted for inflation. The current inflation-adjusted statutory threshold is $110 million.

The introduction to this proposed rule explains the reasons, such as “port shopping” and the President's July 3, 1999, memorandum on the safety of imported foods that prompted FDA, in conjunction with the Customs Service, to issue this regulation. FDA refers readers to that discussion if they seek details regarding the reasons for this proposal and the problems concerning the reimportation of previously refused imported food.

As described earlier, the proposed rule would require importers and consignees whose food products have been refused admission in to the United States for safety reasons to mark such products as “UNITED STATES REFUSED ENTRY.” This will make it easier for FDA and the Customs Service to detect attempts to re-introduce previously-refused imported food into the United States.

In drafting this rule, FDA considered and rejected several alternatives. For example, one option would be to order the destruction of all refused food imports. While this would deter “port shopping” and similar illegal practices, this alternative is not feasible because it would require Federal resources to be diverted to supervising or otherwise ensuring that the refused food imports are stored until they can be destroyed and that they are actually destroyed. Additionally, the standard of proof to support the destruction of violative products is greater than the standard of proof for refusing to admit imported products, so ordering the destruction of refused food imports would increase, rather than decrease, the demands on government field resources. This alternative would also be extremely costly to importers since many refused shipments can be exported and legally sold or reconditioned for sale in other countries.

Another alternative would be a “no action” option. This alternative was unacceptable because it would allow illegal practices, such as port shopping, to continue and would result in the reentry of previously refused food imports into the United States. Consumers who ingested those unsafe food imports would, in turn, be subject to foodborne illnesses. Consequently, a “no action” alternative would not further efforts to protect the public health.

Another alternative would be to mark some, but not all, food refused for safety reasons. This alternative would be less costly, but would also be less efficient and less practical. This alternative was unacceptable because it would create an opportunity for some refused food imports to reenter the United States through port shopping (and to harm consumers) and because an unmarked, but previously-refused, food import would be difficult to detect compared to a previously-refused and marked food import. Additionally, marking some, but not all, refused food would inevitably create arguments as to FDA's criteria for deciding which refused foods should or should not be marked and whether a specific food import met that criteria.

For example, if the alternative was to mark refused food depending on its geographic origin (under a theory that some foreign nations regulate exported food more rigorously than others so that the United States could relax its safeguards for foods from those countries), the result would be both inefficient and unfair. To illustrate this point, assume that country A has a food regulatory system while country B has a less demanding regulatory system. If an alternative would mark unsafe food from country B, but not mark a similar, unsafe food from country A, such an alternative would make it possible for unsafe food from country A to be port shopped, thereby defeating the intent of the rule. Marking would then depend on geographic origin rather than the safety of the food itself.

As another example, if the alternative were to mark refused food imports based on their potential risk, such as marking refused foods which, if consumed, would cause death or serious illness in humans, such an approach would be impractical and difficult to apply. To illustrate this point, assume that an imported food product appears to be contaminated because mold is visible on the product. If marking depended on whether the moldy food would cause death or serious illness, arguments would inevitably arise concerning the identification of the mold, its toxicological properties (if any), the methodology or references used to analyze the mold or to determine the seriousness of the health risk associated with the mold, etc.

Although the vast majority of importers and consignees comply with the act, some attempt to circumvent Federal law and introduce unsafe food into U.S. commerce through illegal means such as port shopping. For these importers and consignees, measures such as those contained in this proposed rule are necessary to deter illegal conduct.

An importer's or consignee's decision on how to dispose of its cargo is influenced by changes in the expected profits associated with each of its choices. Requiring importers and consignees to mark “UNITED STATES REFUSED ENTRY” on imported food which has been refused admission for safety reasons changes the expected profits associated with the initial decision to attempt to import unsafe food. A mark also affects the expected profits associated with the decision to recondition, re-export, or port shop after a shipment is found violative.

The decision process of an importer of potentially unsafe food can be represented visually by a decision tree (see figure 1). This illustrates how requiring “UNITED STATES REFUSED ENTRY” on refused imports will alter an importer's or consignee's incentives. The same tree shows the possible outcomes and decisions an importer or consignee can make at each stage of the importation process. At point A, an importer or consignee with violative food first decides whether to attempt to import the food into the United States. This decision will be influenced by the price the importer or consignee can get for the food if it is successfully imported, the probability the cargo will be inspected, and the cost to the importer or consignee if the food is inspected and found violative. At point B, whether the cargo is inspected is a function of factors such as the port of entry, FDA's inspection rate, and the type of product. If it is found violative, the importer may choose to recondition the food to correct the violations. At point C, FDA refuses admission of the food. If the food is not destroyed, at point D the importer or consignee may have the option of re-exporting to a foreign country or port shopping.

Labeling refused imported foods as“UNITED STATES REFUSED ENTRY” alters the incentive structure that importers and consignees face when deciding whether to introduce their product into United States commerce. In particular, there are four ways that the rule would increase the deterrence value of the FDA inspection system.

a. Port shopping will be reduced. One primary goal of this rule would be to reduce port shopping. Placing a mark on a refused food import will reduce the probability that the refused food import will be re-imported into the United States. The cost of port shopping will increase because resources would have to be expended to repackage a product that has been marked. Thus, port shopping will become relatively less attractive to importers and consignees.

b. Decrease in the value of re-exported items. The value of a product destined for reexport will decrease if it is marked “UNITED STATES REFUSED ENTRY.” After the product has been marked, the importer or consignee has two costly choices: (1) Relabel containers or repackage the product into containers that do not bear the mark after the product leaves the United States, or (2) sell the goods abroad with the mark intact. It is likely that such a mark would be viewed less than favorably by food safety inspectors and importers in international markets. Thus, the expected profit from selling goods that are marked would be lower than if the mark did not exist, so this loss is in addition to the loss of value from refusal alone. Either of the importer's or consignee's choices (repackage or sell with the mark intact) would lower the expected profit of reexporting.

c. Reconditioning will become a more favored alternative. The expected profit from reconditioning a refused food import is not likely to change with this rule. Consequently, since the expected profits from port shopping and re-exporting refused food imports are expected to fall, reconditioning the cargo becomes economically more attractive. FDA expects that more importers and consignees will choose to recondition their product.

d. Decrease in the introduction of unsafe food into the United States. As with reconditioning, the expected profit from initially sending a potentially unsafe product to a foreign port is not expected to change significantly with this rule. Therefore, as the expected profit from attempting to import unsafe food into the United States is lowered (because the cost of re-importing and re-exporting unsafe food is increased), the incentive to ship one's product directly to a foreign (non-United States) market is increased. The net result of such a dynamic is that more unsafe food products will either be directly shipped to foreign markets or reconditioned at the point of export.

a. Health benefits. As described earlier, the proposed rule, if finalized, would decrease the number of unsafe imported food products reaching the U.S. consumer. The rule should discourage attempts to introduce or reintroduce unsafe imported food into the United States and encourage the reconditioning of imported food that FDA has refused to admit for safety reasons. Consequently, U.S. consumers would benefit through a reduction in the number of foodborne illnesses due to unsafe imported foods. Because FDA cannot quantify the amount of illegal re-importation of refused foods, the agency cannot make a definitive prediction of the value of the reduced illnesses arising from this proposed rule. Although foods that represent a direct and serious danger to public health are, in most cases, destroyed,1 refused food eligible for re-exportation may also present a health hazard. Typical reasons for refusal include illegal food or color additives, pesticide contamination, foreign objects, poor sanitation, and unregistered manufacturers or processes not filed. Each of these reasons for refusal may represent a health risk. Illegal food or color additives can cause allergic reactions in sensitive individuals. These allergic reactions can range from mild contact dermatitis to a severe allergy attack. Also, long-term exposure to some illegal color additives has been linked to cancer. Sanitation problems indicate the food was held in unsanitary conditions, which may indicate more serious problems such as contamination with microbial pathogens. Pesticide contamination may represent a long-term cancer risk. A single exposure to a violative pesticide level is very unlikely to result in cancer, but prolonged exposure over years may lead to increased risk. “Process not filed” indicates that FDA has not approved the canning process the manufacturer uses. Without FDA approval, it is not known if the firm is using a canning process that may result in botulism contamination. Although the probability of contamination is low, botulism is a very severe illness that has a high mortality rate.

Table 1 of this document shows some possible illnesses and injuries that can result from unsafe foods and includes their symptoms and an average cost per case. The quality-adjusted life days (QALD) (Ref. 8) column represents the lost utility per day to a consumer from an illness, essentially the loss to the consumer due to symptoms and problems associated with the illness. The QALD's are valued in dollars by multiplying the number of lost days by the value of statistical day, $630 (see 64 FR 36516 at 36523, (July 6, 1999)). This value of a statistical life day is drawn from the economic literature (Ref. 10). The medical cost column is the direct, medical cost of illness, which includes hospitalization and doctor visits. Most illnesses arising from E. Scherichia coli O157:H7 or Salmonella are self-limiting and short in duration, but some illnesses due to Salmonella or E. coli O157:H7 can be quite serious. E. coli in some cases can result in kidney damage or death. Salmonella can sometimes trigger chronic arthritis and in a very small percentage of cases can result in death.

b. Other consumer benefits. While problems such as insects or filth in food may not always represent a direct health threat, they show that the food was not held in sanitary conditions. Moreover, consumers who purchase food expect it to be clean and sanitary. Consumer research shows cleanliness is important to consumers. For example, the Food Marketing Institute found 89 percent of consumers surveyed ranked a clean, neat store as a very important factor in selecting their primary supermarket. If consumers pay a premium believing their food is sanitary and the food is not, this payment represents a social loss. However, FDA cannot quantify this economic loss because FDA does not know what percentage of the price of food is a “cleanliness premium.”

Costs include both materials and time and would be incurred by both FDA and importers or consignees. The importers and consignees would bear the responsibility for marking; FDA would verify that the mark is affixed to the refused food. It is not clear which method importers and consignees will use to mark refused food imports, so FDA has, for purposes of this analysis, used labeling, an inexpensive and time efficient method, to estimate costs.

a. Materials. Placing labels on all the packages would require the use of a label gun and printed labels. Label guns cost approximately $100, and FDA assumes that three label guns would be needed at each of the 132 ports. Labels reading “UNITED STATES REFUSED ENTRY” would also have to be printed at an approximate cost of $0.025 per label.

b. Time—i. Importer's time. The number of hours spent applying labels is a function of the number of rejected shipments and their size. FDA assumes the average shipment consists of 500 cartons and will take approximately 3 hours to mark. FDA also assumes the importer or consignee will hire labor at the average hourly cost for transportation and moving occupations published by the Bureau of Labor Statistics (BLS), $17.64 (BLS, “Employer Costs for Employee Compensation Summary,” 1999). Under these assumptions, it will cost approximately $53 in labor (3 hours x $17.64 per hour) to mark each shipment. It is not clear how many shipments will need to be marked. As a baseline, FDA estimates that 7,338 shipments would be marked. However, FDA expects more importers and consignees will decide to recondition after rejection (percent correctable in table 2 of this document), or will not attempt to import previously refused or unsafe food (expected avoidance in table 2 of this document), due to the higher cost of shipments being rejected. The “static annual cost” is the cost assuming more of the shipments found violative are corrected at the port. The “dynamic annual cost” is the “static annual cost” reduced by the percentage decrease (expected avoidance) we expect in initial importation attempts. Based on FDA's experience, the agency can estimate the number of shipments that can be reconditioned rather than re-exported. The percentage of shipments that can be reconditioned is a function of the reason for refusal. Also, the reduction in the number of attempted imports of violative shipments, “expected avoidance,” is a function of the ease of correcting the violation before shipment. Again, FDA bases its estimates on the agency's experience. For example, in fiscal year 1999, FDA refused admission to 2,260 shipments because the manufacturer was not registered or the process was not filed. Approximately 80 percent of these shipments can be corrected before importation or at the port by filing for process approval or by registering the manufacturer. This would reduce the number of shipments that could be marked from 2,260 to 452. The cost of marking these shipments would then be $23,925 in labor costs and $5,651 for labels for importers. It would cost FDA $33,229 to confirm the marks had been made. The sum of these costs is $62,805. However, because FDA expects importers and consignees will be less likely to attempt to import unsafe food initially (expected avoidance), FDA then reduces this cost by 50 percent, which is then $31,402. Added to this cost is a fraction of the cost of the label guns. Label guns are durable goods and so the value of a label gun should not be added to the cost of marking each shipment.

ii. FDA inspector's time. The proposed rule would require FDA to confirm that the importer or consignee marks the refused food import. FDA estimates that this process would require approximately 60 minutes in travel time and 30 minutes to confirm marking per shipment. FDA estimates the value of a FDA inspector's time based on a GS-10, step 5 rate, plus 100 percent in overhead. At this hourly rate, FDA's labor costs for each shipment would be $74.

c. Diminished value of shipments. Cargo marked “UNITED STATES REFUSED ENTRY” will lose value due to diminished value in foreign ports, in addition to the loss of the U.S. market for the product. The importer or consignee suffers an initial loss of value due to rejection of its cargo, regardless of the mark. However, there is an additional loss of value attributable to the marking that is a cost of this rule. This loss of value is a cost of the rule that is borne directly by the importer or consignee, but may be passed on to consumers in the form of higher food prices. This loss ofvalue is difficult to quantify. How the mark decreases the value of the cargo would be a function of the initial value of the cargo, type of product, reason for refusal, and the reluctance of the new buyer to purchase previously refused merchandise.

The uncertain nature of the number of illnesses prevented and the difficulty in quantifying the benefits to consumer of having clean foods, regardless of the danger, prevents a definitive statement about benefits and costs. Because FDA expects the costs to be approximately $438,263, this sets a threshold value for the benefits. If the benefits due to reduced illness and consumer valuation of clean food exceed $438,263, the rule's benefits will exceed its costs.

FDA has examined the economic implication of these proposed rules as required by the Regulatory Flexibility Act (5 U.S.C. 601-612). If a rule would have a significant economic impact on a substantial number of small entities, the Regulatory Flexibility Act requires agencies to analyze regulatory options that would lessen the economic effect of the rule on small entities.

The proposed rule, if finalized, would affect many small entities, primarily food importers or consignees. More than 95 percent (1,690 of 1,725 importers identified through a search in Dialog Classic) of food importers are small (Ref. 3) as defined by the Small Business Administration (establishments with less than 100 employees). These small importers or consignees will face a cost of approximately $75 per unsafe food shipment in time and materials. In addition, the value of their unsafe food shipment will fall. This cost is difficult to quantify, but can be bounded by the cost of repackaging the merchandise. FDA does not expect this cost for any one small importer or consignee to be significant, so the agency concludes that this proposed rule does not place a disproportionate burden on small businesses. Furthermore, this cost is borne only by small businesses that attempt to re-import unsafe, and previously refused, foods.

Exempting small businesses from the proposed rule would lift the burden on small entities. However, since most entities affected by the rule are small, this would effectively negate the rule's purpose. For reasons already discussed in section VII.C of this document, other regulatory options, such as destroying all refused food imports, taking no action, marking some but not all refused food imports, and marking based on geographic origin, are not feasible in light of the proposed rule's purposes. FDA also notes that the proposal contains options (with respect to the method used to affix the mark) for importers and consignees, and importers and consignees whose shipments are refused admission for safety reasons may decide to re-condition, destroy, or re-export an unsafe food import. Given these options available to small entities, FDA did not consider additional options.

FDA is not aware of any relevant Federal rule which may duplicate or conflict with the proposed rule. The exportation of refused food products must also comply with Customs rules for exportation of refused imports at 19 CFR 12.4, 18.25, 18.26, and 158.45. In addition, Customs routinely orders redelivery of refused merchandise under to the conditions contained in the basic importation and entry bond. Therefore, importers of refused food imports must comply with the bond conditions contained in 19 CFR 113.62, as required by 19 CFR 12.3.

Interested persons may submit to the Dockets Management Branch (address above) written comments regarding this proposal by April 9, 2001. Two copies of any comments are to be submitted, except that individuals may submit one copy. Comments are to be identified with the docket number found in brackets in the heading of this document. Received comments may be seen in the office above between 9 a.m. and 4 p.m., Monday through Friday.

The following references have been placed on display in the Dockets Management Branch (address above) and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday.

1. Bureau of Labor Statistics, Employer Costs for Employee Compensation Summary, http://stats.bls.gov/news.release/ecec.nws.htm (1999).

2. Congressional Hearing, The Safety of Food Imports: Fraud and Deception in the Food Import Process; Hearing Before the Senate Committee on Governmental Affairs, Permanent Subcommittee on Investigations, September 10, 1998.

3. Dialog Classic. Search of wholesalers who import with SIC codes between 5141 to 5149 that are importers, February 29, 2000.

4. Food and Drug Administration, “Preliminary Regulatory Impact Analysis and Initial Regulatory Flexibility Analysis of the Proposed Rules to Ensure the Safety of Juice and Juice Products,” (63 FR 24254, May 1, 1998).

5. Food and Drug Administration, “Preliminary Regulatory Impact Analysis and Initial Regulatory Flexibility Analysis of the Proposed Rule to Require Refrigeration of Shell Eggs at Retail and Safe Handling Labels,” (64 FR 36516, July 6, 1999).

6. Food Marketing Institute, 1999. Consumer Attitudes and the Supermarket. Research International USA.

7. GAO Report, “Food Safety: Federal Efforts to Ensure the Safety of Imported Foods are Inconsistent and Unreliable” (GAO/RCED-98-103).

8. Kaplan, R. M., J. P. Anderson, and T. G. Ganiats, “The Quality of Well-Being Scale: Rationale for a Single Quality of Life Index,” edited by Walker, S. R. and Rosser, R. M., Quality of Life Assessment: Key Issues in the 1990s; The Netherlands: Kluwer Academic Publishers, 1993.

9. Mauskopf, J.A., Mt French, A. S. Ross, D. M. Maguire, R. W. Leukrith, Jr., and K. D. Fisher, “Estimating the Value of Consumers' Loss from Foods Violating the Federal Food, Drug, and Cosmetic Act,” Research Triangle Report to the Center for Food Safety and Applied Nutrition, U.S. Food and Drug Administration, September 1988.

10. Viscusi, W. K., “The Value of Risks to Life and Health.” Journal of Economic Literature, Volume 31, pp. 1912-1946, December 1993.

Therefore, under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, and under authority delegated to the Commissioner of Food and Drugs, it is proposed that 21 CFR part 1 be amended as follows:

On February 15, 2000 (65 FR 7706), we published a proposed rule which would revise our regulations to allow a coal operator (or the entity reporting for the operator) the option of filing the OSM-1 Form electronically. Because of the notary requirement in section 402(c) of the Surface Mining Control and Reclamation Act of 1977 (SMCRA), the proposed rule also required the operator to print out and maintain on file, a properly notarized paper copy of the OSM-1 Form for review by OSM's Fee Compliance auditors. In the proposed rule published on February 15, 2000, section 870.17(b) reads in part as follows: (b) Maintain a properly notarized paper copy of the identical OSM-1 Form for review and approval by OSM's Fee Compliance auditors.

In order to further simplify the process and to make it easier for the operator to store records electronically, we are considering an option which would eliminate the need for the operator to notarize the OSM-1 Form and maintain a paper copy on file. We are considering adopting a final rule which would allow the operator to electronically submit the OSM-1 Form and include a statement made under penalty of perjury that the information contained in the OSM-1 Form is true and correct. The statement would not have to be notarized but it would have to be electronically signed, dated, and transmitted to OSM as part of the OSM-1 Form. In the final rule, section 870.17(b) would read as follows: (b) Submit an electronically signed and dated statement made under penalty of perjury that the information contained in the OSM-1 Form is true and correct.

The authority for filing the form without notarization is found in 28 U.S.C. 1746. Section 1746 provides in part:

The option of using a signed a dated electronic statement made under penalty of perjury in lieu of a notarized statement will facilitate compliance with the requirements of the Government Paperwork Elimination Act (GPEA), Pub. L. 105-277, Title XVII. GPEA requires agencies, by October 21, 2003, to provide for (1) the option of electronic maintenance, submission, or disclosure of information, when practicable as a substitute for paper; and (2) the use and acceptance of electronic signatures, when practicable. GPEA specifically states that electronic records and their related electronic signatures are not to be denied legal effect, validity, or enforceability merely because they are in electronic form.

Comments are also requested on whether in addition to the option being proposed today, we should also retain the notary option published in the Federal Register on February 15, 2000. If both options are adopted, the final rule would provide the operator with two choices in addition to the existing process: Either sending the OSM-1 Form data electronically while maintaining a properly notarized paper copy of the OSM-1 Form, or sending the OSM-1 Form data electronically with an electronically signed and dated statement made under penalty of perjury.

As previously stated, the electronic submission of the OSM-1 Form would be an option that is available to the operator. Even if a final rule is adopted which allows the submission of the OSM-1 Form electronically, we would continue to accept the quarterly filing of the OSM-1 Form in paper format with the sworn, notarized statement that is currently in use.

Because 28 U.S.C. 1746 already allows the operator to use an unsworn statement made under penalty of perjury in lieu of a sworn, notarized statement, we are considering modifying the paper form to incorporate an appropriate signature block for this provision. The new paper form, if adopted, would allow the operator to submit either the sworn, notarized statement, or an unsworn statement made under penalty of perjury. We believe that this modification would further simplify reporting requirements for operators. Your comments on this matter are also requested.

We intend to develop a website where companies will be able to log in an complete the OSM-1 Form on-line. Access to the website will be controlled by ID and password which will be used as the method of electronic signature. When initially accessing the website, companies will be able to down-load encryption software which is free. The data which is encrypted can be read only by the company and OSM and the data submitted by the company cannot be changed by unauthorized persons. A file transfer protocol (FTP) version of the electronic OSM-1 Form will allow companies with a large number of reporting permits to automate their filing process by transferring their data report files directly from their computer to OSM. The FTP process will use a form of electronic signature called a Public Key Infrastructure (PKI). PKI is a system for encrypting, decrypting, signing and verifying the data transferred electronically. With PKI, the company (user) can obtain a free download of the software for a private signing key. With this key, the user creates a digital signature on an electronic file or encrypts the data. OSM, as the recipient of the file, employs the public key to validate the signature made with the private key or decrypts the data. The two keys are mathematically linked and form a unique pair. Only the public key can validate the signature made with the associated private key(s). This process also verifies that the file has not been altered since its encryption. The companies that use FTP will also need a user identification and password to enable them to print their OSM report from the website after their data is transferred.

Written Comments: If you submit written or electronic comment on the proposed rule during the 30-day extended comment period, they should be specific, should be confined to issues pertinent to the notice, and should explain the reason for any recommended change(s). Where practical, you should submit three copies of your comments. We may not be able to consider or include in the Administrative Record comments delivered to an address other than those listed above (see ADDRESSES).

Electronic Comment: Please submit Internet comments as an ASCII or WordPerfect file avoiding the use of special characters and any form of encryption. Please also include “Attn: RIN 1029-AB95” and your name and return address in your Internet message. If you do not receive a confirmation from the system that we have received your Internet message, contact us directly at 202-208-2847.

Availability of Comments: Our practice is to make comments, including names and home addresses of respondents, available for public review during regular business hours at the OSM Administrative Record Room (see ADDRESSES). Individual respondents may request that we withhold their home address from the rulemaking record, which we will honor to the extent allowable by law. There also may be circumstances in which we would withhold from the rulemaking record a respondent's identity, as allowable by law. If you wish us to withhold your name and/or address, you must state this prominently at the beginning of your comment. However, we will not consider anonymous comments. We will make all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, available for public inspection in their entity.

We encourage you to participate in this rulemaking by submitting comments and related material. If you do so, please include your name and address, identify the docket number for this rulemaking [CGD07-00-123], indicate the specific section of this document to which each comment applies, and give the reason for each comment. Please submit all comments and related material in an unbound format, no larger than 81/2 by 11 inches, suitable for copying. If you would like to know they reached us, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this proposed rule in view of them.

We do not now plan to hold a public meeting. But you may submit a request for a meeting by writing to Bridge Branch, Seventh Coast Guard District, 909 SE 1st Ave., Room 406, Miami, FL 33131, explaining why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the Federal Register.

The Siesta Drive bascule bridge is a two lane narrow undivided urban arterial roadway, which is already severely congested due to insufficient capacity. The proposed rule would extend the existing 20 minute weekday schedule to cover the morning commuter period. The bridge opens less than once per hour during this period so the effect on vessels is not considered unreasonable.

The proposed rule would allow the bridge to start its scheduled openings at 7 a.m. weekdays instead of the present 11 a.m. to 6 p.m. schedule. This should facilitate the movement of commuter traffic across the drawbridge while not unreasonably interfering with the movement of vessel traffic through the drawspans.

This proposed rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not significant under the regulatory policies and procedures of the Department of Transportation (DOT)(44 FR 11040, February 26, l979).

We expect the economic impact of this proposed rule to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary. The number of openings that occur during the proposed period of additional regulations is less than once per hour and the maximum waiting time would be 20 minutes

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we considered whether this proposed rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities. This proposed rule would affect the following entities, some of which might be small entities: the owners or operators of vessels intending to transit under the Siesta Key bridge during the hours of 7 a.m. to 11 a.m. on weekdays. This proposed rule would not have a significant economic impact on a substantial number of small entities because the number of openings that occur during the proposed period of additional regulations is less than once per hour and the maximum waiting time would be 20 minutes.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this proposed rule would have a significant economic impact on it, please submit a comment (see ADDRESSES) explaining why you think it qualifies and how and to what degree this proposed rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the Bridge Branch, Seventh Coast Guard District.

This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

We have analyzed this proposed rule under Executive Order 13132 and have determined that this rule does not have implications for federalism under that Order.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) governs the issuance of Federal regulations that require unfunded mandates. An unfunded mandate is a regulation that requires a State, local, or tribal government or the private sector to incur direct costs without the Federal Government's having first provided the funds to pay those costs. This proposed rule would not impose an unfunded mandate.

This proposed rule would not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this proposed rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not concern an environmental risk to health or risk to safety that may disproportionately affect children.

We considered the environmental impact of this proposed rule and concluded that, under figure 2-1, paragraph (32)(e) of Commandant Instruction M16475.lC, this proposed rule is categorically excluded from further environmental documentation.

For the reasons discussed in the preamble, the Coast

Guard proposes to amend 33 CFR part 117 as follows:

You may obtain a copy of the Port Access Route Study by contacting either person listed under FOR FURTHER INFORMATION CONTACT section. A copy is also available in the public docket at the address listed under the ADDRESSES section and electronically on the DMS Web Site at http://dms.dot.gov.

The following definitions should help you review this notice:

Area to be avoided (ATBA) means a routing measure comprising an area within defined limits in which either navigation is particularly hazardous or it is exceptionally important to avoid casualties and which should be avoided by all ships, or certain classes of ships.

Cooperative Vessel Traffic Service (CVTS) means the system of vessel traffic management established and jointly operated by the United States and Canada within adjoining waters. In addition, CVTS facilitates traffic movement and anchorages, avoids jurisdictional disputes, and renders assistance in emergencies in adjoining United States and Canadian waters.

Precautionary area means a routing measure comprising an area within defined limits where ships must navigate with particular caution and within which the direction of traffic flow may be recommended.

Recommended route means a route of undefined width, for the convenience of ships in transit, which is often marked by centerline buoys.

Regulated Navigation Area (RNA) is a water area within a defined boundary for which regulations for vessels navigating within the area have been established under 33 CFR part 165.

Traffic lane means an area of defined width in which one-way traffic is established. Natural obstacles, including those forming separation zones, may constitute a boundary.

Traffic Separation Scheme (TSS) means a routing measure aimed at the separation of opposing streams of traffic by appropriate means and by the establishment of traffic lanes.

When did the Coast Guard Conduct this Port Access Route Study (PARS)?

We announced the PARS in a notice published in the Federal Register on January 20, 1999 (64 FR 3145) and completed the PARS in November, 2000.

What is the study area?

The study area encompasses waters in and around the Strait of Juan de Fuca, approximately between longitudes 126°W and 122°40′W, including Admiralty Inlet, Rosario Strait and adjacent waterways, Haro Strait, Boundary Pass and the Strait of Georgia. The study area also includes both U.S. and Canadian TSS's and an ATBA. Portions of the study area are managed jointly by United States and Canadian Coast Guards pursuant to the CVTS agreement.

Why did the Coast Guard conduct this PARS?

The latest Waterways Analysis and Management System (WAMS) report for the Strait of Juan de Fuca, dated June 1995, identified potential measures to improve navigational safety and traffic management efficiency. In 1997, on behalf of the Coast Guard, the Volpe National Transportation Systems Center conducted a broad assessment of the probabilities and consequences of marine accidents in the Puget Sound-area, including Puget Sound, the Strait of Juan de Fuca, passages around and through the San Juan Islands, and the offshore waters of the Olympic Coast National Marine Sanctuary. This assessment, formally titled “Scoping Risk Assessment: Protection Against Oil Spills in the Marine Waters of Northwest Washington State”, also known as the “Puget Sound Additional Hazards Study” or “Volpe Study,” recommended several vessel routing measures for further study, including changes to the offshore approaches to the Strait of Juan de Fuca. Implementation of the changes recommended in these documents requires IMO approval. This is contingent on the completion of a port access route study.

How did the Coast Guard conduct this PARS?

First, we announced the start of the study through a Notice of Study published in the Federal Register (64 FR 3145, January 20, 1999). Second, we extended the comment period of the Notice of Study and announced that we would conduct a public meeting through a Notice of Meeting; Extension of Comment Period published in the Federal Register (64 FR 18651, April 15, 1999). The public meeting was held on May 12, 1999 as announced. Because of the lack of a substantive number of comments to the original notice and our strong desire to engage the public in the study process, we asked for comments on a number of issues and recommendations. These issues and recommendations were presented in a Notice of Preliminary Study Recommendations with Request for Comments. The notice was published in the Federal Register on February 23, 2000 (65 FR 8917). During the comment period we and our Canadian counterparts embarked on a vigorous outreach program that presented the recommendations and solicited comments from a variety of waterway users and other potentially affected/interested groups. We offered to meet with them to explain the PARS Study and solicit their input. Over 300 copies of this Federal Register notice (65 FR 8917), with chartlets, were distributed by mail and direct handout.

The recommendations of the PARS are based in large part on comments received to the docket, extensive public outreach meetings, and recent studies such as the Puget Sound Additional Hazards Study, and the North Puget Sound Long-Term Oil Spill Risk Management Study. Heavy reliance was also placed on the expert opinions of the U.S. and Canadian VTS operators and managers.

The PARS evaluated 13 separate issues resulting in 28 specific final recommendations intended to improve the safety of vessel traffic in the study area. For the purposes of this notice, we condensed the 28 recommendations into the following list. The actual PARS should be consulted for a detailed explanation of each recommendation. The PARS also contains chartlets of the proposed changes/additions to the TSS. It can be accessed as described in the ADDRESSES section of this notice. The PARS recommendations include:

• Mandate use of the TSS for certain classes of vessels.

• Expand the applicability of certain provisions of Rule 10 of the International Regulations for Prevention of Collision at Sea, 1972 (72 COLREGS) along with development of a CVTS reporting system for violations of Rule 10.

• Expand the use of VTS radio frequencies to facilitate passing arrangements.

• Expand the geographic boundaries and the applicability of the existing ATBA located in the vicinity of the Olympic Coast Marine Sanctuary. Retain the voluntary nature of the ATBA.

• Reconfigure and extend the TSS seaward at the entrance to the Strait of Juan de Fuca.

• Modify the location, orientation, and dimensions of the existing TSS in the Strait of Juan de Fuca.

• Create a recommended route south of the TSS in the Strait of Juan de Fuca for smaller, slower moving traffic.

• Relocate the Pilot Area and reconfigure the traffic lanes and precautionary area off Port Angeles to improve traffic flow and reduce risks.

• Establish new vessel operating procedures to improve safety in the U.S. waters off Port Angeles, WA, through an RNA or other appropriate method.

• Change the vessel traffic lanes and precautionary area east of Victoria, British Columbia.

• Establish precautionary areas off Discovery Island and around the Victoria Pilot Station; and reconfigure the TSS connecting the two precautionary areas.

• Create a new two-way traffic lane in Haro Strait and Boundary Pass and establish a precautionary area off Turn Point.

• Create new vessel operating procedures to improve safety in the vicinity of Turn Point through the creation of a Turn Point CVTS Special Operating Area and its rules and procedures.

• Expand Precautionary Area “RB” at the south end of Rosario Strait.

• Expand the geographic applicability of the existing Rosario Strait VTS Special Area regulations contained in 33 CFR 161.55 to include Bellingham Channel and other adjacent waters.

• Create a new TSS to link the existing TSS in Georgia Strait, with the exiting TSS north of Rosario Strait and to the east of Succia Island.

• Create new precautionary areas in Georgia Strait off East Point and west of Delta Port and the Tsawwassen Ferry Terminal.

• Expand the U.S. VMRS requirements to match those of Canada which include all vessels 20 meters or more in length.

The PARS contains a number of recommendations, which will be implemented in various ways by U.S. and Canadian Authorities. A brief synopsis of how the various proposals will proceed towards implementation follows:

1. Changes to the TSS, ATBA, and adding recommended routes will require approval by the International Maritime Organization (IMO). Any changes to the TSS will be accomplished through the rulemaking process.

2. Changes to the U.S. VTS Regulations, including the designation of a VTS Special Area with associated rules, will be accomplished through the rulemaking process.

3. The designation of an RNA with associated rules will be accomplished through the rulemaking process.

4. Changes to aids to navigation resulting from the above actions will be accomplished through standard established procedures, i.e., notification of proposed changes in the Local Notice to Mariners with an opportunity for comment and notification of the final changes.

5. Revisions to the operating procedures for the CVTS will be developed by the Joint Coordinating Group and published in the CVTS Users Manual.

6. Canadian authorities will follow their own, but similar implementation process.

We appreciate the comments we received concerning the PARS. We will provide ample opportunity for additional comments on any recommended changes to existing routing or operational measures that require codification through notices of proposed rulemakings (NPRM's) published in the Federal Register.

A subsection of NPS regulations, promulgated in 1983, prohibits “possessing, destroying, injuring, defacing, removing, digging, or disturbing from its natural state” living or dead wildlife or fish, plants, paleontological specimens, or mineral resources, or the parts or products of any of these items, except as otherwise provided. 36 CFR 2.1(a).

Another provision of these regulations authorizes NPS to issue permits allowing the collection of national park system resources for research upon certain conditions. 36 CFR 2.5(b). No such permit may be issued except to:

In addition, a permit may not be issued if “removal of the specimen would result in damage to other natural or cultural resources, affect adversely environmental or scenic values, or if the specimen is readily available outside of the park area.”

Subsection 2.5(c) prohibits issuing a permit to take a specimen that is listed as an endangered or threatened species under state or federal law unless the specimen “cannot be obtained outside of the park area and the primary purpose of the collection is to enhance the protection or management of the species.” Subsection 2.5(f) prohibits issuing a research collection permit in park areas where the enabling legislation prohibits the killing of wildlife.

NPS regulations allow a park superintendent to “designate certain fruits, berries, nuts or unoccupied seashells which may be gathered by hand for personal use or consumption” if “the gathering or consumption will not adversely affect park wildlife,” or otherwise adversely affect the plant species, or park resources. 36 CFR 2.1(c)(1). Another subsection addresses the ceremonial use of NPS resources, stating that the regulations “shall not be construed as authorizing the taking, use or possession of fish, wildlife or plants for ceremonial or religious purposes, except where specifically authorized by Federal statutory law, treaty rights, or in accordance with § 2.2 [wildlife protection] or § 2.3 [fishing].” 36 CFR § 2.1(d). The preamble to this rulemaking explained that the provision was added in response to comments that had “questioned the applicability” of the regulation in such circumstances, and went on to say:

In 1999, members of the Hopi Tribe requested permission from the NPS to take golden eaglets from Wupatki National Monument for religious purposes. Citing the National Park Service Organic Act and 36 CFR 2.1, 2.2, and 2.5, the NPS denied the Hopi request. The Assistant Secretary for Fish and Wildlife and Parks then withdrew the NPS denial in order to reconsider the issue. Upon advice of the Solicitor, as explained below, the proposal is being made to change the regulation to allow favorable action on the Hopi request.

The practice of eagle gathering is at the heart of the Hopi religious ceremonial cycle and the Hopi culture. The eagle serves as the link between the spiritual world and the physical world of the Hopi, a connection that embodies the very essence of Hopi spirituality and belief. Golden eaglets are gathered from nests soon after birth and are kept and raised to fledglings in Hopi villages. Later, during the Niman Kachina ceremony, the golden eagles are sacrificed and “sent” to their spiritual home. The eagles' feathers are subsequently used in all Hopi religious ceremonies such as the Kachina, Flute, and Snake ceremonies. The cyclical relationship between the eagle and the Hopi is renewed annually through the practice of eaglet gathering, sustaining the connection between the spiritual and physical worlds for the next generation of Hopi.

The importance that the Hopi attach to the ceremonial gathering of eagles is expressed in Article IV of the Tribal Constitution approved by Secretary of the Interior Ickes on December 19, 1936:

Only a few of the Hopi clan and religious societies bear the important ceremonial obligation of eagle gathering, and each of these has a traditional area from which it—and no other clan or society that is not related to it—may gather eagles. Hopi clan ownership of traditional eagle nests is well documented in the anthropological literature. “The nests of eagles near village ruins are owned by the descendants of clans which once lived in their neighborhood.” Jesse Walter Fewkes, Property Rights in Eagles Among the Hopi, 2 American Anthropologist (n.s.), 690-707, 693 (1900). “The territory around the Hopi villages where eagles may be found is, and has been from time immemorial, divided into portions or allotments, which are controlled by certain clans or families. These territories extend as far as 50 and 60 miles from the villages.” H.R. Voth, Notes on the Eagle Cult of the Hopi, collected in H.R. Voth, Brief Miscellaneous Hopi Papers, Field Columbian Museum, Publication 157, 107-109, Anthropological Series 11(2)(1912). Clan ownership of eagle nesting areas corresponds to the early settlement areas and migration routes of the clans before they arrived at their modern villages. The Hopi regard the eagles as embodying the spirits of their ancestors, and the clan areas often contain, or are very close to, Hopi clan ruins.

Anthropologists have described the “famous nest at Wupatki” as an important area for traditional eagle gathering by the Hopi. Florence H. Ellis, The Hopi: Their History and Use of Lands (n.d.) 149-154, collected in Hopi Indians (1974). Wupatki National Monument was set aside by President Coolidge in 1924 under the authority of the Antiquities Act, 16 U.S.C. §§ 431-33. The Proclamation is silent on eagle gathering. It identified the purpose of the monument in language common to the time; that is, to reserve and protect “prehistoric ruins built by the ancestors of a most picturesque tribe of Indians still surviving in the United States, the Hopi or People of Peace.” Proc. No. 1721 (43 Stat. 1977).

The National Park Organic Act created the NPS and defined its purpose in relevant part as follows:

The 1916 Act further authorizes the Secretary of the Interior to make “such rules and regulations as he may deem necessary or proper for the use and management of” the National Park System, and to “provide in his discretion for the destruction of such animals and of such plant life as may be detrimental to the use of” units of the National Park System. 16 U.S.C. 3.

In 1978, section 1 of the Organic Act was amended to include these provisions:

With some exceptions, the NPS has generally prohibited consumptive uses of National Park System resources except as specifically authorized by Congress. Applicable regulations generally prohibit hunting of wildlife, and prohibit removal of plants, paleontological, archeological, cultural or mineral resources, but allow recreational fishing and the collection of fruits, nuts, and berries for personal consumption. See 36 CFR 2.1(a); 2.1(c); 2.2 and 2.3.

The following discussion explains why we believe applicable laws and policies allow the NPS to accommodate the Hopi's religious ceremonial interest in collecting golden eaglets (Aquila chrysaeots) at Wupatki National Monument to the extent it will not result in impairment of the resources protected by the National Park Service Organic Act.

Constitutional considerations. The leading judicial guidance on the intersection between management of federal non-Indian lands and Indian religious practices is Lyng v. Northwest Indian Cemetery Protective Ass'n, 485 U.S. 439 (1988). The Supreme Court there made clear that the First Amendment's free exercise clause permits curtailing Indian religious practices on federal lands in appropriate circumstances. See also U.S. v. Hugs, 109 F.3d 1375 (9th Cir. 1997) (permit requirement of Bald and Golden Eagle Protection Act does not violate free exercise clause when applied to Native American religious practices, even though it imposed a substantial burden on the practice of Native American religions in which eagles and eagle parts “play a central role,” because it was the least restrictive means of serving the compelling governmental interest of protecting eagles, while permitting access to eagles and eagle parts for religious purposes); Regulation of Hardrock Mining (Solicitor's Opinion M #36999, Dec. 27, 1999) (Constitution does not compel rejection of the proposed mining plan on BLM-managed public land even though it would seriously and irreparably degrade a cultural resource of importance to a nearby Indian Tribe). The Constitution does not, in other words, require the National Park Service to accommodate uses, by Indians or others, of national park system resources for religious ceremonial purposes. The Supreme Court also said in Lyng, however, that “the Government's rights to the use of its own land * * * need not and should not discourage it from accommodating [Indian] religious practices * * *” 485 U.S. at 454. See also Solicitor's Opinion M #36999, at 5. Such accommodations may be undertaken in appropriate cases without raising questions under the establishment clause of the First Amendment. See Bear Lodge Multiple Use Assoc. v. Babbitt, 175 F.3d 814 (10th Cir. 1999), cert. denied, 2000 WL 305849 (March 27, 2000) (upholding Park Service's encouragement of a voluntary month-long “no-climb” period at Devil's Tower National Monument in order to accommodate Indian religious practices); Office of Legal Counsel, Department of Justice, Memorandum to the Secretary of the Interior—Permissible Accommodation of Sacred Sites, September 18, 1996, p. 1 (federal government “has broad latitude to accommodate the use of sacred sites by federally recognized Indian tribes” without violating the establishment clause).

Such accommodations may appropriately provide preferences for Indian tribes and their members. Such preferences have unique and deep roots in American law, and may be upheld when similar practices involving others might not pass muster. See, e.g., Morton v. Mancari, 417 U.S. 535 (1974) (Bureau of Indian Affairs hiring preference for Indians upheld because policy was based on political relationship between Tribes and Federal Government); Rupert v. Director, U.S. Fish & Wildlife Service, 857 F. 2d 32 (1st. Cir. 1992) (upholding exemption from criminal prosecution for possession of eagle feathers by members of federally recognized tribes); Peyote Way Church of God v. Thornburgh, 922 F.2d 1210, 1217 (5th Cir. 1991) (upholding statutory exemption from laws prohibiting peyote possession for Native American Church members, the court noting that the federal-tribal relationship “precludes the degree of separation between church and state ordinarily required by the First Amendment”); United States v. Gibson, 2000 WL 117987 (11th Cir. Aug. 21, 2000) (limitation of religious use exemption under Bald and Golden Eagle Protection Act to Indians who were members of federally recognized tribes did not violate non-tribal members” constitutional or statutory free exercise rights).

The Religious Freedom Restoration Act (RFRA). RFRA, enacted in 1993, 42 U.S.C. 2000bb et seq., provides that the government may substantially burden a person's exercise of religion only if the exercise is in furtherance of a compelling governmental interest and it is the least restrictive means of furthering that compelling governmental interest.1 There is a reasonable argument that the NPS regulations prohibiting collection of golden eaglets in Wupatki National Monument may substantially burden the Hopis' exercise of religion, to the extent that collection of these resources may be regarded as a necessary element in the Hopis' religious ceremony. Whether the prohibition could be sustained under RFRA would depend on whether there is a compelling governmental interest at stake, and whether the prohibition is the least restrictive means of furthering it. Since the NPS is charged with the conservation of wildlife under its Organic Act, 16 U.S.C. 1, it is understood that the NPS has a compelling governmental interest in the absolute bar on the take of wildlife for all purposes except scientific research. There is a question however if this prohibition is the least restrictive means to further that interest. The question becomes more difficult given the Hopi religion's necessity of taking a golden eaglet from a specific location of historical and religious importance, in this instance, Wupatki National Monument. Prohibiting this religious exercise may amount to a substantial burden on their religion. Cf. Callahan v. Woods, 736 F.2d 1269, 1272 (9th Cir. 1984) (“If the compelling state goal can be accomplished despite the exemption of a particular individual, then a regulation which denies an exemption is not the least restrictive means of furthering the state interest.”) We do not have to reach these questions here, however, if the NPS has the authority to, and has decided to accommodate, the Hopi Tribe's religious ceremonial collection of golden eaglets at Wupatki National Monument. Plainly the RFRA encourages, and does not prohibit, such accommodation.

The American Indian Religious Freedom Act (AIRFA). This Act, enacted in 1978, declares “the policy of the United States to protect and preserve for American Indians their inherent right of freedom to believe, express and exercise the[ir] traditional religions * * * including but not limited to access to sites, use and possession of sacred objects, and the freedom to worship through ceremonials and traditional rites.” 42 U.S.C. 1996. The second section of AIRFA, not codified in the U.S. Code, requires the President to direct the various federal agencies responsible for administering relevant laws to “evaluate their policies and procedures in consultation with native traditional religious leaders in order to determine appropriate changes necessary to protect and preserve Native American religious cultural rights and practices,” and directed the President to report to Congress with twelve months of enactment the results of the evaluation. 92 Stat. 469.

The Secretary of the Interior convened a task force of federal agencies, which issued the report called for by Congress. American Indian Religious Freedom Act Report (Federal Agencies Task Force, August 1979). The Task Force discussed, among other things, the problem of restricting the gathering of indigenous natural substances from federal lands for use in Indian religious ceremonies and practices, noting in particular that the “gathering of a specific plant or animal may be forbidden or limited by conservation statutes.” Id. at 51-53. It recommended that each agency “accommodate Native American religious practices to the fullest extent possible” under existing statutes, and also that agencies “revise existing regulations, policies and practices to provide for separate consideration of any Native American religious concerns * * *. Id. at 62-63. The report also recommended that agencies “provide exemptions from restrictions on access to and gathering, use and possession of federal property for Native American religious purposes similar to those provided for scientific purposes.” Id. at 63.

AIRFA does not create any judicially enforceable rights. Lyng v. Northwest Indian Cemetery Protective Ass'n, 485 U.S. 439, 455, 471 (1988). Courts have, however, construed AIRFA to require federal agencies to:

Wilson v. Block, 708 F.2d 735, 746 (D.C. Cir. 1983) cert. denied, 464 U.S. 956 (1983). Thus AIRFA requires federal agencies to consider, but not necessarily to defer to, Indian religious values. Id. at 747. See also Havasupai Tribe v. U.S., 752 F. Supp. 1471, 1488 (D. Ariz. 1990), aff'd 943 F.2d 32 (9th Cir. 1991), cert. denied, 503 U.S. 959 (1992); cf. Lyng, supra, 485 U.S. at 454.

Executive Orders and other Policy Statements. A 1994 policy statement, and Executive Orders issued in 1996 and 1998, have all promoted government accommodation of Indian religious practices within the limits of agency discretion. President Clinton's “Policy Concerning Distribution of Eagle Feathers for Native American Religious Purposes” (1994) recognizes the important place eagles occupy in many Native American religious and cultural practices and directs executive departments and agencies to “work cooperatively with tribal governments and to reexamine broadly their practices and procedures to seek opportunities to accommodate Native American religious practices to the fullest extent under the law.” 59 FR 22,953 (Apr. 29, 1994).

President Clinton's 1996 Executive Order on Sacred Sites directs that federal agencies:

Executive Order 13,007, section 1, 61 FR 26,771 (1996). The Order defines “sacred site” as a “specific, discrete, narrowly delineated location of Federal land” identified by tribal interests as “sacred by virtue of its established religious significance to, or ceremonial use by an Indian religion.” Id. § 1(b)(iii). While the Order does not reach directly to the collection of plants or wildlife on federal land for Indian religious purposes, it is suggestive of accommodation where possible. The Departmental Manual implementing the Sacred Sites Executive Order requires Interior agencies to establish procedures that accommodate “access to and ceremonial use by religious Indian practitioners of Indian sacred sites” and to “consult with tribal governments and give full consideration to tribal views in its decision making process.” 512 DM §§ 3.4(1)(b); 3.7 (1998).

President Clinton's 1998 Executive Order on Consultation and Coordination with Indian Tribal Governments states in pertinent part that “each agency shall, to the extent practicable and permitted by law, consider any application by an Indian tribal government for a waiver of statutory or regulatory requirements.” No. 13,084, 63 FR 27655 (May 14, 1998). Recently, President Clinton reaffirmed the United States' commitment to consultation with Indian tribal governments and issued Executive Order 13175 (November 6, 2000) which details the process agencies must follow to ensure meaningful and timely input from tribal officials in the development of regulations or policies that have tribal implications.

None of these executive directives purport to (nor could they) provide legal authority to override existing laws such as those that govern management of the national park system. To the extent permitted by law, however, they direct federal agencies to accommodate uniquely Indian needs.

General discussion and conclusion. In light of the statutes, court decisions, executive orders and other legal considerations discussed above, we believe the NPS has a reasonable legal basis for promulgating a regulation that allows the Hopi Tribe to collect golden eaglets at Wupatki National Monument for religious ceremonial purposes. The collection of golden eaglets from specific geographic areas is an important part of the Hopi religion, and there is an ancestral and historical connection between the Hopi Tribe and Wupatki National Monument. The proposed regulation would allow the NPS to include terms and conditions, including gathering times, take limits, and permit tenure, that are sufficient to protect the park resources against impairment, and would require compliance with the Bald and Golden Eagle Protection Act.

The proposed regulation, and the accompanying environmental assessment, applies only to this narrow situation. It is possible that the NPS will receive requests from other tribes for similar rule changes to address their religious practices. Such requests will be addressed on their merits. Any further rule change must follow notice and comment and other procedures required by applicable law. The current proposal is to deal strictly and exclusively with the Hopi Tribe's proposal to collect golden eaglets at Wupatki National Monument.

Public Participation: If you wish to comment, you may submit your comments by any one of several methods. You may mail comments to the National Park Service, Ranger Activities Division, Suite 7408, 1849 C St. NW., Room 7413, Washington, DC 20240. You may also comment via the Internet to WASO_Regulations@nps.gov. Please submit Internet comments as an ASCII file avoiding the use of special characters and any form of encryption. Please include “RIN 1024-AC86” in your subject line and your name and return address in the body of your message. Finally, you may hand-deliver comments to Kym Hall, National Park Service, 1849 C St. NW., Room 7413, Washington, DC 20240. Our practice is to make comments, including names and home addresses of respondents, available for public review during regular business hours. Individual respondents may request that we withhold their home address from the rulemaking record, which we will honor to the extent allowable by law. There also may be circumstances in which we would withhold from the rulemaking record a respondent's identity, as allowable by law. If you wish us to withhold your name and/or address, you must state this prominently at the beginning of your comment. However, we will not consider anonymous comments. We will make all submissions from organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, available for public inspection in their entirety.

Drafting Information: The principal author of this proposed interpretive rule is John Leshy, Solicitor, Department of the Interior.

In accordance with the criteria in Executive Order 12866, OMB has determined the rule not to be significant.

(1) This rule will not have an effect of $100 million or more on the economy. It will not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.

(2) This rule does not interfere with actions taken or planned by another agency. The Hopi must obtain a permit from the Fish and Wildlife Service before being allowed to collect golden eaglets. However, this rule does not at all affect the standards, times or necessary elements for obtaining that permit. This rule only addresses the ability of the Hopi to collect golden eaglets from Wupatki National Monument after they have received the necessary permit from FWS.

(3) This rule does not alter the budgetary effects of entitlements, grants, user fees, or monetary loan programs or the rights or obligations of their recipients.

(4) This proposed rule may be controversial because it proposes to allow a new collection of wildlife, but it proposes to do so only in very extremely limited circumstances, for a single or very few specimens of a single species of non-endangered wildlife in a single unit of the National Park System for a very narrowly defined purpose by a single entity, and only then when it is determined by the U.S. Fish & Wildlife Service and the National Park Service to be consistent with the laws protecting wildlife and with the laws preventing impairment of natural resources in the National Park System, respectively.

The Department of the Interior certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601, et seq.). The economic effects of this rule are local in nature and negligible in scope.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. The rule will have no effect on small or large businesses. It addresses only the Hopi Tribe's religious ceremonial collection of golden eaglets at Wupatki National Monument and involves no small businesses. This rule:

1. Does not have an annual effect on the economy of $100 million or more.

2. Does not represent a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions.

3. Does not have a significant adverse effect on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.

This rule does not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or tribal governments or the private sector. The Department has determined that this rule meets the applicable standards provided in section 3(a) and 3(b)(2) of Executive Order 12988.

In accordance with Executive Order 12630, the rule does not have significant takings implications. No property acquisition or impacts on private property owners are expected due to the administrative nature of the rule. The rule addresses only Hopi collection of golden eaglets from Wupatki National Monument, and no private property rights are involved or affected.

In accordance with Executive Order 13132, the rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. This regulation will not have a substantial direct effect on the states, or on the distribution of power and responsibilities among the various levels of government. The rule addresses only the collection of golden eaglets from Wupatki National Monument, a unit of the national park system, and such activity does not require state activity.

In accordance with Executive Order 12988, the Office of the Solicitor has determined that this rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order. The preamble clearly explains that the rule creates a special exception to 36 CFR 2.1(d) which allows the Hopi to collect golden eaglets from Wupatki National Monument for religious ceremonial purposes subject to conditions sufficient to prevent impairment.

This rule does not require an information collection from 10 or more parties. It does not require submissions under the Paperwork Reduction Act or OMB form 83-I.

This rule does not constitute a major federal action significantly affecting the quality of the human environment. A draft Environmental Assessment has been completed. Copies of that assessment may be obtained through one of several methods.

Public comments regarding the Environmental Assessment may be submitted to Kym Hall, National Park Service, 1849 C Street NW., Room 7413, Washington, DC 20240, by email to WASO_regulations@nps.gov, or by fax at (202) 208-6756. Public comments will be accepted through March 19, 2001.

In accordance with the Executive Order 13175 “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249) and 512 DM 2, we have identified potential effects on the Hopi Indian Tribe. The proposed regulation, and the accompanying environmental analysis, applies only to this narrow situation. It is possible that the NPS will receive requests from other tribes for similar rule changes to address their religious practices. Such requests will be addressed on their merits. Any further rule change must follow notice and comment and other procedures required by applicable law. The current proposal is to deal strictly and exclusively with the Hopi Tribe's proposal to collect golden eaglets at Wupatki National Monument. We have consulted with the Hopi Tribe regarding the proposed rule. We will further consider their comments, and the comments of all interested parties, that are received during the comment period.

Executive Order 12866 requires each agency to write regulations that are easy to understand. We invite your comments on how to make this rule easier to understand, including answers to questions such as the following: (1) Are the requirements in the rule clearly stated? (2) Does the rule contain technical language or jargon that interferes with its clarity? (3) Does the format of the rule (grouping and order of sections, use of headings, paragraphing, etc.) aid or reduce its clarity? (4) Would the rule be easier to understand if it were divided into more (but shorter) sections? (A “section” appears in body type and is preceded by the symbol “§” and a numbered heading; for example, § 7.101 Wupatki National Monument (5) Is the description of the rule in the Supplementary Information section of the preamble helpful in understanding the proposed rule? What else could we do to make the rule easier to understand?

Send a copy of any comments that concern how we could make this rule easier to understand to: Office of Regulatory Affairs, Department of the Interior, Room 7229, 1849 C Street NW, Washington, DC 20240. You may also email the comments to this address: Exsec@ios.doi.gov.

Accordingly, we propose to amend Part 7 of 36 CFR as set forth below:

A low-enhanced vehicle I/M program called the Texas Motorist Choice (TMC) Program is operating in the Dallas-Fort Worth, Houston, and El Paso ozone nonattainment areas. The program consists of a 2-speed idle test and gas cap test in Dallas, Tarrant, Harris, and El Paso counties, the core counties of the program. In addition, the program has a remote sensing component to identify gross polluters that commute into the core counties from Denton and Collin Counties in the Dallas-Fort Worth area, and from seven surrounding nonattainment counties in the Houston area. An interim conditional approval for this program was proposed on October 3, 1996 (61 FR 51651). An interim final conditional approval was published on July 11, 1997 (62 FR 37138). The conditions were removed from the interim approval on April 23, 1999 (64 FR 19910).

The State submitted an approvable 18-month demonstration on February 8, 1999, as required by the National Highway System Designation Act of 1995 (NHSDA), Public Law 104-59, section 348(c)(1). The program was not fully approved at that time because one provision of the interim approval required that the State provide evidence that the remote sensing program be effective in identifying the shortfall in number of vehicles needed to make up for the lack of a tailpipe testing program in all the nonattainment counties. The State began the remote sensing program in October 1998. Because the State submitted this I/M SIP revision in which it expands geographic coverage, the requirement to cover the shortfall with remote sensing (the final barrier to final full approval) is eliminated when the new I/M tests start in each county in the DFW area.

The DFW nonattainment area was bumped up from moderate to serious effective March 23, 1998 (63 FR 8128). An attainment demonstration submitted in March 1999 was found to be incomplete, which started a Federal sanction clock (64 FR 29570, June 2, 1999). This I/M SIP revision was submitted as part of the new DFW attainment demonstration. Modeling has shown that NOX reductions are essential to reaching attainment in the DFW area. As a result, the Texas Motorist Choice I/M program has been revised to include measurement for NOX emissions and to provide additional NOX emission reductions by expanding coverage of the program to all four counties within the nonattainment area (Dallas, Tarrant, Collin and Denton) and selected attainment counties in the DFW Consolidated Metropolitan Statistical Area (CMSA).

The I/M SIP revision was submitted under a Governor's letter dated April 25, 2000. The State plans to replace the 2-speed idle test in the DFW area with ASM-2, and expand the testing area to include all four nonattainment counties plus five additional counties contiguous to the nonattainment area (Ellis, Johnson, Kaufman, Parker, and Rockwall). The SIP revision contains a narrative, rules, modeling, and supporting documentation as outlined in the requirements of the Federal I/M rules.

Acceleration Simulation Mode, known as ASM, operates the vehicle at a steady load and steady speed on a treadmill-type device called a dynamometer. The test more accurately simulates real world driving conditions than the current two-speed idle test. ASM-2 means that the test is performed in both approved testing modes, i.e., operating the vehicle at 50% load at 15 MPH (ASM5015) and then operating the vehicle at 25% load at 25 MPH (ASM2525). The test measures exhaust concentrations for hydrocarbons, carbon monoxide, and NOX. Pass/fail standards are based on the chassis model year and engine displacement.

The EPA reviewed the State's proposal against the requirements contained in the Act and Federal I/M rules (40 CFR part 51, subpart S). The submittal was also reviewed for administrative completeness under criteria contained in Federal rules (40 CFR part 51, appendix V). The submittal was found complete in a letter dated June 23, 2000.

The following analysis addresses how the State intends to fulfill the requirements of the Act and the Federal I/M rules. Only the sections of the rule for which the State has made changes are discussed. All other sections of this I/M SIP submittal remain the same as previously approved on an interim basis.

Legal authority for the State to implement the I/M program continues to be granted by Chapter 382 of the Texas Health and Safety Code, and Transportation Code sections 502 and 548.

EPA's regulations establish the minimum geographic scope for nonattainment I/M programs based on nonattainment classification and area population. As stated previously, the Texas Motorist Choice program currently approved in the SIP does not include tailpipe testing throughout the urbanized nonattainment areas. The vehicle shortfall is covered through a remote sensing program.

Beginning January 1, 2001, On-Board Diagnostic (OBD) testing will be added to the low-enhanced, two-speed idle test currently implemented in Harris, Dallas, Tarrant, and El Paso Counties. The shortfall in vehicle coverage for the HGA nonattainment area will continue to be made up by remote sensing within Harris County to identify gross polluting vehicles commuting in from the seven surrounding nonattainment counties. The shortfall in vehicle coverage for the DFW nonattainment area will continue to be made up by remote sensing within Dallas and Tarrant Counties to identify gross polluting vehicles commuting in from Collin and Denton Counties only until tailpipe testing begins in those counties. In prior actions on the Texas I/M SIP, we said the remote sensing program must prove to be effective in identifying and obtaining repairs on the same number of vehicles that would be brought in if the program covered the entire urbanized area. Otherwise, the Texas I/M core program areas (Harris County, Dallas, and Tarrant Counties) must be expanded to include the entire urbanized area. (See, 61 FR 51659 and 62 FR 37141.) The DFW I/M core area is being expanded to include the entire nonattainment area plus five additional counties in the CMSA. An expansion to the entire nonattainment area is currently being proposed by the State for HGA but is not the subject of this notice.

Beginning May 1, 2002, the State commits to begin vehicle testing in Dallas, Tarrant, Collin and Denton Counties utilizing ASM-2 or a vehicle emissions testing program that meets SIP emissions reduction requirements and is approved by EPA. This will be in addition to OBD testing.

Beginning May 1, 2003, the State will expand the I/M program to include the attainment counties of Ellis, Johnson, Kaufman, Parker, and Rockwall. These additional counties will transition from performing just safety inspections plus gas cap pressure testing to also doing OBD and ASM-2 (or other EPA approved) testing as described above.

The State submittal meets the requirements of § 51.350 of the Federal I/M regulation for approval.

The State submitted a modeling demonstration using the EPA computer model MOBILE5a_h and localized parameters showing that the low enhanced performance standard can be met for Volatile Organic Compounds (VOCs) and Nitrogen Oxides ( NOX) in the DFW area with the ASM-2 test proposed by the State. The low enhanced performance standard is established in 40 CFR 51.351(g). The State modeled with a test and repair program that assumes a 100 percent credit for network effectiveness, although the compliance rate is estimated at 95 percent. The State submitted an approvable 18-month demonstration on February 8, 1999, as required by the NHSDA that validated the program credit claimed.

The State submittal meets the performance standard requirement of the Federal I/M regulation for approval.

Section 382.037(e) and (k), of the Texas Health and Safety Code, authorizes the program to charge an emission inspection fee. The SIP narrative also describes the budget, staffing support, and equipment that will be added to the existing personnel and budget needed to implement the program.

The State submittal meets the adequate tools and resources requirements of the Federal I/M regulations for approval.

Vehicles tested in all area programs are also subject to an antitampering check and a gas cap pressure test. Vehicles that are model year 1996 and newer will receive an OBD check. In the DFW I/M program area, vehicles that are model year 1995 and older will be subject to an ASM-2 loaded mode tailpipe test. The State already committed to implementing OBD testing on all 1996 and newer vehicles beginning January 1, 2001, in a SIP revision that was approved April 23, 1999 (64 FR 19910).

The State submittal meets this requirement for vehicle coverage of the Federal I/M rule.

The revised I/M SIP describes the ASM-2 test equipment that will be used in the DFW I/M program area. Specifications are included. OBD testing equipment will meet all Federal requirements contained in 40 CFR 85.2207-2231 and Society of Engineers practices in J2962, J1978, and J1979. The OBD equipment will be tethered to the emissions analyzer which will automatically record the data into a central data collection system.

The State submittal meets the requirement for vehicle coverage of the Federal I/M rule.

Vehicles commuting into Dallas and Tarrant Counties from Denton and Collin Counties will continue to be monitored via remote sensing through April 30, 2002. Starting May 1, 2002, all subject vehicles in Collin and Denton County will receive a tailpipe emissions test, as described in this proposal and the revised SIP.

In addition, the State will comply with the on-road testing requirements by continuing to use remote sensing to evaluate the on-road emissions performance of at least 20,000 vehicles (or 0.5 percent of the fleet) subject to emissions testing in all I/M program areas. All probable high-emitting vehicles which are registered within these counties are identified for compliance follow-up.

The State submittal meets the requirement for on-road testing of the Federal I/M rule.

The Texas Motorist Choice Program met the November 15, 1997, start date requirement of the NHSDA. The Texas Motorist Choice Program started in July 1996 in Dallas and Tarrant Counties and in January 1997 in Harris and El Paso Counties. It has been operating continuously since that time.

The revised I/M SIP commits to a schedule for start-up of ASM-2 testing activities and OBD testing. All other aspects of this regulation remain the same as previously approved on an interim basis.

The State submittal meets the compliance with implementation plan submission requirements of the Federal I/M regulations for approval.

Our review of this submittal indicates that the proposed SIP revision meets the minimum requirements of the Act and Federal I/M rules. Based upon the discussion contained in the previous analysis sections and in the Technical Support Document accompanying this notice, we find that the State's submittal represents an acceptable approach to the I/M requirements and meets the requirements for approval.

We propose to grant full approval of the Texas Motorist Choice I/M program in the DFW area. We also propose to approve the I/M SIP revision pertaining to the Houston-Galveston Area and El Paso nonattainment areas.

Nothing in this action should be construed as permitting, allowing, or establishing a precedent for any future request for revision to any State implementation plan. Each request for revision to the State implementation plan shall be considered separately in light of specific technical, economic, and environmental factors and in relation to relevant statutory and regulatory requirements.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this proposed action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. This proposed action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this rule proposes to approve pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). For the same reason, this proposed rule also does not significantly or uniquely affect the communities of tribal governments, as specified by Executive Order 13084 (63 FR 27655, May 10, 1998). This proposed rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely approves a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This proposed rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in issuing this proposed rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

In December 1975, Congress enacted the Energy Policy and Conservation Act (EPCA) in response to the energy crisis created by the oil embargo of 1973-74 and the level of oil imports, particularly from OPEC sources. Congress included a provision establishing an automotive fuel economy regulatory program. That provision added a new Title V, “Improving Automotive Efficiency,” to the Motor Vehicle Information and Cost Saving Act. Congress has made various amendments to the fuel economy provisions since 1975, and the fuel economy provisions are now codified in Chapter 329 of Title 49 of the United States Code.

Under Chapter 329, manufacturers are required to meet average fuel economy standards for passenger automobiles and light trucks. While separate fuel economy standards apply for each model year, manufacturers that fail to achieve the level of a standard within a particular model year do not necessarily violate the statute. Instead, under certain circumstances, a shortfall in one year (or years) can be offset if a manufacturer exceeds the standard in another year (or years). Under the Act, manufacturers earn credits for exceeding average fuel economy standards which may be carried back for three model years or carried forward for three model years.

Chapter 329 defines the term “manufacturer” as “a person engaged in the business of manufacturing automobiles, including a predecessor or successor of the person to the extent provided under regulations prescribed by the Secretary * * *” (The Secretary has delegated responsibility for the automotive fuel economy program to NHTSA. 49 CFR 1.50(f).) To date, we have not issued any regulations concerning predecessors and successors. We have also not issued any regulations concerning the rights and responsibilities of manufacturers in other situations where there have been changes in corporate relationships, e.g., changes in control.

Under general principles of corporate law, the term “successor” ordinarily refers to a corporation which, through amalgamation, consolidation, or other legal succession, becomes invested with the rights and assumes the burdens of another corporation. See Black's Law Dictionary, West Publishing Co.

The automotive fuel economy program contains provisions which raise special issues related to the rights and burdens of predecessors and successors. Of particular significance are the provisions related to credits.

Because credits may be carried backward three years and forward three years, compliance with a fuel economy standard for a particular model year may actually be determined over as much as a seven-year period. A variety of changes in corporate relationships may occur during such a long period, e.g., mergers, acquisitions, spin-offs, etc., and these provisions raise the issue of how credits and shortfalls should be allocated when such changes occur.

In a 1990 letter to Chrysler, we addressed how fuel economy values should be calculated for Chrysler and AMC during the model year in which Chrysler acquired AMC, model year (MY) 1987. We concluded that all of Chrysler's and AMC's vehicles should be treated as manufactured by the same manufacturer for that model year. In reaching this conclusion we stated the following: 1

We also addressed generally the issue of how credits may be applied between predecessors and successors, along with the legal and policy issues associated with applying credits between predecessors and successors. Among other things, we stated the following:

Section 502(l)(1)(B) states:

We note first that credits earned by a particular manufacturer are only “available to be taken into account with respect to the average fuel economy of that manufacturer,” for any of the three model years before, or after, the model year in which the credits are earned. (Emphasis added.) In the example set forth above, B is no longer a manufacturer under the Cost Savings Act. (Indeed, it is no longer a “person” under section 501(8).) Thus, in the absence of some provision concerning “successors,” any unused credits that B had earned prior to the consolidation would expire unused, since the only manufacturer to which they are available no longer exists. However, for some purposes B continues to exist as part of A, its “successor.”

Section 501(8)'s definition of “manufacturer” does not provide that the term “manufacturer” necessarily includes any predecessor or successor but instead provides that the term does so “to the extent provided under rules which the Secretary shall prescribe.” This provision was added by the Automobile Fuel Efficiency Act of 1980 as a conforming amendment to the section concerning modification of local content requirements to encourage domestic production of fuel efficient automobiles and not to the section concerning credits. The legislative history does not provide any indication as to why the provision was added, and, to date, NHTSA's administration of the statutory provisions concerning modification of the local content requirements has not turned up a situation for which such rules would be relevant. Should rules be issued under section 501(8), NHTSA would do so by notice-and-comment rulemaking, taking account of the purposes of that section and the statutory scheme as a whole.

Notwithstanding the absence of rules, we do not believe that Congress intended to require the forfeit of a manufacturer's unused credits in a situation where that manufacturer's substance continues to exist as part of a “successor.” Thus, taking account of section 501(8) and the statutory scheme as a whole, we conclude that, in the example set forth above, B can be deemed as continuing to exist as part of A, from the time of succession.

This conclusion does not, however, permit the general integration of A's and B's credits and shortfalls. Under section 502(l)(1)(B), credits earned by a particular manufacturer are only “available to be taken into account with respect to the average fuel economy of that manufacturer.” Since B's existence as part of A only dates from the time of succession, B is not the same manufacturer as A prior to the time of succession. Thus, any credits earned by B would only be available to offset A's shortfalls for the model years during which B exists as part of A, since it is only at that time that the credits earned by B and applied to A can be considered to be taken into account with respect to the average fuel economy of “that manufacturer.” Similarly, the only credits earned by A which would be available to B would be those credits earned during the time when B exists as part of A.

The general integration of A's and B's credits would be inconsistent with the basic structure of section 502(l)(1). Assume, for example, that A and B are separate manufacturers for model years 1 through 6, and A is the successor of B for model year 7. If general integration of credits were permitted, credits earned by B in model year 4 could be applied to A's CAFÉ for model years 1-6, as well as model year 7. However, the structure of section 502(l)(1) does not permit this result. Under paragraph (B)(i), any credits earned by B in model year 4 are available to be carried back with respect to B's CAFÉ for any of model years 1, 2 and 3. To the extent that such credits are not so used, paragraph (B)(ii) makes those credits available to be carried forward with respect to B's CAFÉ for any of model years 5, 6 and 7. In order for credits earned by B in model year 4 to be applied to A's CAFÉ for model years 1-6, B's credits would first have to be carried forward to model year 7 (the model year where A is B's successor) and then be carried back to model years 1-6 (for application to A's CAFÉ), a process which has no statutory basis.

We will now apply the general analysis discussed above to the particular facts cited in Chrysler's letter. Prior to MY 1987, Chrysler and AMC were two separate manufacturers. Chrysler acquired AMC during MY 1987, and became the “successor” to AMC at that time. Under section 502(l)(1)(B), credits earned by a particular manufacturer are only “available to be taken into account with respect to the average fuel economy of that manufacturer.” Since AMC's existence as part of Chrysler only dates from MY 1987, AMC was not the same manufacturer as Chrysler prior to MY 1987. Thus, any credits earned by AMC would only be available to Chrysler to offset CAFÉ shortfalls incurred in the model years during which AMC exists as part of Chrysler, i.e., MY 1987 and thereafter, since it is only at that time that the credits earned by AMC and applied to Chrysler can be considered to be taken into account with respect to the average fuel economy of “that manufacturer.” Similarly, the only credits earned by Chrysler which would be available to AMC would be those credits earned during the time when AMC exists as part of Chrysler, i.e., credits earned in MY 1987 and thereafter.

The issue of the extent to which Chrysler could use AMC's credits was subsequently raised in the context of an enforcement proceeding brought by NHTSA staff concerning Chrysler's apparent violation of the light truck CAFÉ standard for MY 1984. On January 8, 1992, DOT Chief Administrative Law Judge John J. Mathias issued an Initial Decision and Order (I.D.) in which he stated that he agreed with the substance of NHTSA Complaint Counsel's position but concluded that the Complaint should be dismissed because NHTSA had not prescribed rules pursuant to section 501(8) of the Act (since recodified at 49 U.S.C. 32901(a)(13)(A)) that define the extent to which the term “manufacturer” includes any predecessor or successor of a manufacturer of automobiles. CHRYSLER CORPORATION (NHTSA—Fuel Economy Standards Enforcement), U.S. Dep't. of Transportation, Office of Hearings, Washington, D.C., Docket 47414 (January 8, 1992). Later, NHTSA's Administrator set aside the I.D. and issued an order directing that the agency commence a proceeding to prescribe such rules. In re CHRYSLER CORPORATION; Corporate Average Fuel Economy Enforcement Proceeding, U.S. Dep't. of Transportation, National Highway Traffic Safety Administration, Docket No. 47414 (March 31, 1992).

Our initial purpose in developing this proposal was to define the extent to which predecessors and successors of manufacturers of automobiles should be included within the term “manufacturer.” However, during the development of the proposal, we decided to expand that purpose. We recognized that a number of the issues concerning how credits may be used between predecessors and successors also arise in the context of other changes in corporate relationships, e.g., changes in control. While we could handle issues related to changes in control by interpretation of the statute, we believe it would be helpful for both the industry and the agency to have a regulation in place which provides guidance in this area.

In developing this proposal, we have attempted to achieve two key goals. First, we would like the regulation to be as faithful as possible to the purpose of the statute and the overall statutory scheme. Second, we would like the regulation to be as simple as possible, while still providing the necessary guidance for the agency and the industry to use in determining how changes in corporate relationships are to be considered in determining compliance with fuel economy standards.

The purpose of Chapter 329 is, of course, energy conservation. As to the overall statutory scheme, we believe there are several aspects that are relevant to how we should treat changes in corporate relationships.

First, to promote flexibility, Congress decided to allow compliance with fuel economy standards to be determined over a multi-year period. In particular, a manufacturer may offset a shortfall for any given model year by using credits it has earned or will earn in the three prior model year or three succeeding model years.

Second, Congress limited the use of credits to the manufacturer which earned them; credits may not be bought or sold.

Third, average fuel economy is measured, and compliance with fuel economy standards determined, for groups of companies within a control relationship rather than for individual companies.

We believe that each of these aspects of the statutory scheme needs to be reflected in the regulation concerning the rights and responsibilities of manufacturers in the context of changes in corporate relationships.

As to our desire to keep the regulation as simple as possible, we are concerned that an effort to comprehensively address all of the various ways corporate relationships may change over time could get the agency bogged down in defining endless situations that it would probably never have to deal with in practice. At the same time, we believe there is a need for the regulation to provide the necessary guidance for the agency and the industry to use in determining how changes in corporate relationships are to be considered in determining compliance with fuel economy standards. We are proposing a regulation that we believe would accomplish this. A discussion of the proposed regulation follows.

The proposed regulation is relatively short. It begins by setting forth definitions of several key terms, including predecessor, successor and control relationship. It includes a section which specifically addresses several situations concerning predecessors and successors which have either already occurred or might reasonably be expected to occur. Examples, in the form of specific factual situations, are provided for purposes of clarity. It also includes a section which specifically addresses several potential situations regarding changes in control relationships. The details of the proposed regulation are discussed below. We specifically request comments on whether the regulation should specifically address any additional types of changes in corporate relationships, or provide additional examples in the form of factual situations and, if so, how. To the extent that a situation arose that was not directly addressed by the regulation, the agency would make necessary determinations based on interpretation of the statute and the principles reflected in the regulation.

We note that the proposed regulation would adopt the same positions concerning predecessors and successors as we did in our 1990 letter to Chrysler.

The proposed regulation includes four definitions.

Control relationship. “Control relationship” is defined to mean the relationship that exists between manufacturers that control, are controlled by, or are under common control with, one or more other manufacturers. This definition reflects the provision at 49 U.S.C. 32901(a)(4) which specifies that the automobiles manufactured by a manufacturer include automobiles manufactured by a person that controls, is controlled by, or is under common control with the manufacturer.

Successor. “Successor” is defined to mean “a manufacturer which has become vested with the rights and assumed the burdens of another manufacturer.” This definition reflects the ordinary corporate law meaning of the term “successor.”

Predecessor. “Predecessor” is defined to mean “a manufacturer whose rights have been vested in and whose burdens have been assumed by another manufacturer.” This definition reflects the ordinary corporate law meaning of the term and mirrors the proposed definition for “successor.”

Identity. Under the proposed regulation, “identity” is defined to mean “the relationship between a predecessor and a successor during the time in which the successor owns 50 percent or more of the assets, based on valuation, that had belonged to the predecessor.” This is the time when we believe it is reasonable to view the predecessor manufacturer as continuing to exist as part of the successor. The proposed limitation with respect to owning 50 percent or more of the assets is to address a possible situation where one company might purchase another, become the successor, but then quickly sell the assets to a third company. As discussed below, we use the concept of identity, in the context of predecessors and successors, as part of specifications to ensure that credits are only used by a manufacturer which can reasonably be considered to have earned them.

The proposed regulation has four specifications which define the extent to which predecessors and successors of manufacturers of automobiles are included within the definition of “manufacturer,” for purposes of the automotive fuel economy program. Examples, in the form of specific factual situations, are provided for purposes of clarity.

Specification (a). The first proposed specification provides that “(s)uccessors are responsible for any civil penalties that arise out of fuel economy shortfalls incurred by predecessors.” We recognize that this specification could be considered unnecessary in the sense that it simply states what follows directly from corporate law: the assumption of the burdens of a predecessor corporation, as well as the vesting of the rights of that corporation, is an inherent part of being a successor under corporate law. However, we believe that any regulation which specifies the extent to which predecessors and successors of manufacturers of automobiles are included within the definition of “manufacturer,” for purposes of the automotive fuel economy program, should make this clear at the outset.

Specification (b). The second specification provides that “(i)f one manufacturer becomes the successor of another manufacturer during a model year, all of the vehicles produced by those manufacturers during the model year are treated as though they were manufactured by the same manufacturer.” It also provides that “(a) manufacturer is considered to have become the successor of another manufacturer during a model year if it is the successor on September 30 of the corresponding calendar year and was not the successor for the preceding model year.”

As we discussed in our 1990 letter to Chrysler, fuel economy standards apply to passenger automobiles manufactured by a manufacturer, for a particular model year, and average fuel economy is calculated based on the total number of passenger automobiles manufactured in a given model year by a manufacturer. We recently reiterated that view in a January 13, 2000 letter to Volvo Cars of North America. Since fuel economy standards apply to particular model years as a whole and not to separate parts of a model year, we believe that if one manufacturer acquires another during a model year, they should be deemed the same manufacturer, with a single CAFE value, for that model year.

In a 1990 letter to Ford, we concluded that, for purposes of deciding the model year in which one manufacturer acquires another, the “traditional model year,” starting approximately October 1, is the appropriate frame of reference. The second sentence in specification (b) reflects this interpretation.

Specification (c). The third proposed specification provides that “(c)redits earned by a predecessor may be used by a successor for those model years in which there is an identity between the predecessor and successor, subject to availability of the credits and the general three-year restriction on carrying credits forward.”

As we discussed in our letter to Chrysler, the statute provides that credits are available only to the manufacturer which earned them. Therefore, in the absence of some regulatory provision concerning successors, any unused credits of a predecessor would simply expire unused.

However, we continue to believe that Congress did not intend to require the forfeit of a manufacturer's unused credits in a situation where that manufacturer's substance continues to exist as part of a “successor.” We are therefore proposing that credits earned by a predecessor may be used by a successor for those model years in which there is identity between the predecessor and successor.

Credits earned by a predecessor could not, however, be used by a successor for model years in which there was no identity between the predecessor and successor. We believe that, in such a situation, the credits could not reasonably be considered to be used by the manufacturer which had earned them.

The following example helps illustrate how this provision would work in practice:

A purchases B in model year x and becomes the successor of B. A's CAFE in model year x (which includes the combined production of what had been A and B) is less than the applicable CAFE standard for that model year. B had credits at the time of the acquisition because it exceeded the applicable fuel economy standard in the previous model year. The credits of B (the predecessor) could be used by A in model year x, model year x+1 and model year x+2, because there would be an identity between B and A in those model years. However, the credits of B could not be used to offset any shortfall incurred by A in model year x-1 or before, since there was no identity between B and A during those model years.

As indicated above, we believe that the use of B's credits (the predecessor's credits) by A (the successor) for model years x-1 or before (model years before the acquisition) could not reasonably be considered to be use by the manufacturer which had earned them. There was no relationship between A and B model year x-1 and before; they were two completely different manufacturers.

Moreover, as we discussed in our 1990 letter to Chrysler, the statute does not provide for the same credits being carried both forward and backward; e.g., forward to A from before the time it acquired B and then backward to A for the model years prior to the acquisition when A had shortfalls.

Finally, it would be inappropriate to allow A (the successor) to succeed to rights with respect to B's credits that are greater than B had at the time of the acquisition. As of the time of the acquisition, the only right B had with respect to carrying its existing credits backward was the right to apply them to its own fleet; it did not have the right to apply them to the fleets of other manufacturers or to sell them to be applied to such fleets.

Specification (d). The fourth proposed specification provides that “(c)redits earned by a successor during model years in which there is an identity between the successor and predecessor may be used to offset a predecessor's shortfall, subject to availability of the credits and the general three-year restriction on carrying credits backward.”

Under the statute, a manufacturer that experiences a shortfall which it cannot offset by using credits it has earned during the past three model years has three additional model years to earn offsetting credits. However, given that the statute provides that credits may only be used by the manufacturer that earned them, there would be no way of offsetting a predecessor's remaining shortfalls in the absence of a regulatory provision.

We do not believe that Congress intended to require the forfeiture of a manufacturer's ability to offset CAFE shortfalls by earning future credits simply because it was acquired by another manufacturer; i.e., in a situation where that manufacturer's substance continues to exist as part of a “successor.” We are therefore proposing that credits earned by a successor during model years in which there is an identity between the successor and predecessor may be applied to a predecessor's shortfall.

Specifications (c) and (d), taken together, give the successor all the rights the predecessor had with respect to credits, both as to the use of existing credits and the ability to earn future credits to offset existing shortfalls. We are aware that some manufacturers would like the successor to somehow have greater rights than those enjoyed by the predecessor. For example, while AMC's rights to its MY 1984 credits, as of the time of its acquisition in MY 1987, were to apply them to its own fleet in MY 1981-1983 and 1985-1986 (since it had no successor in that time period) and to apply them to itself (as part of Chrysler) in MY 1987, Chrysler, as successor to AMC, wanted to be able to apply AMC's 1984 credits to offset shortfalls incurred by its own (Chrysler's) pre-MY 1987 fleet. However, such use of AMC's credits could not reasonably be considered a use by the manufacturer which had earned them and therefore would be inconsistent with the statute.

We also note that permitting such use of credits would discourage energy conservation. For example, to the extent that a successor had been planning to exceed standards in the future to earn credits that could be carried back to cover pre-acquisition shortfalls, permitting the successor to use the predecessor's previously earned credits to cover those shortfalls would remove the incentive to exceed those standards.

The proposed regulation has eight specifications concerning the rights and responsibilities of manufacturers within control relationships. These specifications are generally based on the same principles we considered in developing the proposed specifications concerning predecessors and successors. A discussion of the eight specifications follows.

Specification (a). The first proposed specification provides that “(i)f a civil penalty arises out of a fuel economy shortfall incurred by a group of manufacturers within a control relationship, each manufacturer within that group is jointly and severally liable for the civil penalty.” This specification follows directly from the statutory provisions which provide that average fuel economy is measured, and compliance with fuel economy standards determined, for groups of companies within a control relationship rather than for individual companies. However, we believe that any regulation which specifies the rights and responsibilities of manufacturers within control relationships should make this clear at the outset. As a practical matter, we would initially seek payment of any civil penalties arising from the fuel economy performance of a group of manufacturers within a control relationship from whoever that group designated as being responsible.

Specification (b). The second proposed specification provides that “(a) manufacturer is considered to be within a control relationship for an entire model year if and only if it is within that relationship on September 30 of the calendar year in which the model year ends.” This specification corresponds directly to the proposed specification (b) for predecessors and successors, and reflects the same rationale.

Specification (c). The third proposed specification provides that “(t)o the extent that a manufacturer within a control relationship was outside that relationship for a previous model year and not within any other control relationship, credits earned by the manufacturer during such model year may be used by the group of manufacturers within the control relationship for those model years in which the manufacturer is within that relationship, subject to the agreement of the manufacturer, the availability of the credits, and the general three-year restriction on carrying credits forward.”

This specification is very similar to the proposed specification (c) for predecessors and successors. If a previously independent manufacturer has been purchased or otherwise brought within a control relationship, its credits do not expire but can continue to be used by it under the same conditions as before. For model years in which it is now part of a group of manufacturers, application of its credits to itself would mean application to the entire group of manufacturers since average fuel economy is measured, and compliance with fuel economy standards determined, for groups of companies within a control relationship rather than for individual companies.

We note that one difference between this proposed specification and the corresponding one we are proposing for predecessors and successors is the statement that use of the credits is subject to the agreement of the manufacturer which earned them. In the case of a predecessor/successor situation, the predecessor no longer exists and the successor has assumed all of its rights and duties. In this situation, however, the previously independent company continues to exist and could have different interests than the group of manufacturers. We therefore believe it is appropriate to make use of the credits subject to the agreement of that company. Similar provisions are included in several of the other proposed specifications for manufacturers within control relationships.

Specification (d). The fourth proposed specification provides that “(t)o the extent that a manufacturer within a control relationship was outside that relationship for a previous model year and not within any other control relationship, shortfalls incurred by the manufacturer for such model year may be offset by credits earned by the group of manufacturers within the control relationship for subsequent model years in which the manufacturer is within the relationship, subject to the agreement of the other manufacturers, the availability of the credits, and the general three-year restriction on carrying credits backward.”

This specification is very similar to the proposed specification (d) for predecessors and successors.

Specifications (e) through (h). The final four proposed specifications for manufacturers within control relationships address situations in which a manufacturer which is controlled by another manufacturer is sold or otherwise spun off. We note that, given the general trend toward consolidation in the auto industry, this situation appears less likely to arise than the ones discussed earlier. Nonetheless, we believe that there is sufficient possibility that spin-offs may occur that it is reasonable to address spin-offs in the proposed regulation.

The proposed specifications generally provide that a company which has been spun off may use credits that were earned while it was part of a group of manufacturers, subject to the agreement of the other manufacturer or manufacturers in the group. They also generally provide that credits which the spun-off company earns may be carried back to the group of manufacturers for model years in which it was part of the group, subject to the spun-off company's approval.

We recognize that in situations where a manufacturer which is controlled by another manufacturer is sold to a third manufacturer, there is a possibility that the manufacturers might wish to transfer a greater number of credits than can reasonably be considered to be related to the transaction at issue. The following example illustrates such a possibility:

In this situation, we believe it would be reasonable to permit B to take some credits with it. It was part of the group of manufacturers which earned the credits. Moreover, B might be able to argue that it did not improve its fuel economy in the past because it was part of a group of manufacturers that together exceeded the CAFE standard.

However, given that the statute does not permit the selling of credits, we do not believe it would be reasonable to permit B to take with it a greater number of credits than it could use if it had become independent. B has not produced any vehicles which exceed the fuel economy standard, and, if we permitted a large-scale transfer of credits, the sale of B might be nothing more than a disguised transaction to transfer credits. We have therefore included provisions in the proposed specifications to limit the transfer of credits in this and similar types of situations to numbers that can reasonably be considered to be directly related to the sale of the company at issue.

We believe the proposed regulation addresses the types of changes in corporate relationships that are most likely to occur. Moreover, we are requesting comments on whether the regulation should specifically address any additional types of changes in corporate relationships, or provide additional examples in the form of factual situations and, if so, how. Depending on the comments, we may include provisions in the final rule addressing additional types of changes in corporate relationships and/or additional examples in the form of factual situations. Since we do not believe it would be possible to comprehensively address every conceivable situation that could arise, the proposed regulation includes a provision stating that to the extent that the regulation does not directly address an issue concerning the rights and responsibilities of manufacturers in the context of a change in corporate relationships, the agency will make determinations based on interpretation of the statute and the principles reflected in the regulation.

One of our regulations, 49 CFR Part 537, Automotive Fuel Economy Reports, requires automobile manufacturers to submit to the agency reports concerning their plans to comply with fuel economy standards. While we are not proposing any changes to Part 537, we would note that successors must submit supplementary reports if required by section 537.8 of that regulation.

NHTSA has considered the impact of this rulemaking action under Executive Order 12866 and the Department of Transportation's regulatory policies and procedures. This rulemaking document is not economically significant. It was reviewed by the Office of Management and Budget under E.O. 12866, “Regulatory Planning and Review.” The rulemaking action has been determined to be significant under the Department's regulatory policies and procedures, given the public interest in the automotive fuel economy program.

The proposed regulation would not create any new obligations. It would adopt the same positions concerning predecessors and successors as we have previously taken in interpretation letters.

As discussed earlier in this notice, if we did not adopt regulations governing the use of CAFE credits by predecessors and successors, a predecessor's unused credits would simply expire, since the only manufacturer which could use them would no longer exist. Similarly, there would be no way of offsetting a predecessor's remaining CAFE shortfalls in the absence of some provision concerning successors. The successor would thus be required to pay the predecessor's penalties, a responsibility which it assumed with the rest of the predecessor's obligations, but would have no ability to earn future credits to offset the predecessor's shortfalls.

To address this inequity, the proposed rule, like our prior interpretation, would give the successor all the rights the predecessor had with respect to the use of preexisting credits and the ability to earn future credits.

The proposed provisions concerning the rights and responsibilities of manufacturers in other situations where there have been changes in corporate relationships, e.g., changes in control, are essentially a statement of our interpretation of the statute and reflect the same principles as the provisions relating to predecessors and successors.

We have considered the effects of this rulemaking action under the Regulatory Flexibility Act (5 U.S.C. § 601 et seq.) I hereby certify that the proposed rule would not have a significant economic impact on a substantial number of small entities. Therefore, a regulatory flexibility analysis is not required for this action. As discussed above, the proposed regulation would not create any new obligations but would simply adopt the same positions concerning predecessors and successors as we have previously taken in interpretation letters. Similarly, the proposed provisions concerning the rights and responsibilities of manufacturers in other situations where there have been changes in corporate relationships, e.g., changes in control, are essentially a statement of our interpretation of the statute and reflect the same principles as the provisions relating to predecessors and successors. Moreover, as a practical matter, the acquiring corporations most likely to be affected by this regulation are not small businesses.

NHTSA has analyzed this proposed amendment for the purposes of the National Environmental Policy Act and determined that it would not have any significant impact on the quality of the human environment.

The agency has analyzed this proposal in accordance with the principles and criteria set forth in Executive Order 13132 and has determined that it does not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism summary impact statement. The proposed rule would have no substantial effects on the States, or on the current Federalism-State relationship, or on the current distribution of power and responsibilities among the various local officials.

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

This proposed rule does not have any retroactive effect. However, we would, as a practical matter, consider the regulation in any enforcement action regarding predecessors and successors that involved conduct that occurred before the regulation became effective.

As discussed earlier, the proposed regulation would not create any new obligations but would adopt the same positions concerning predecessors and successors as we have previously taken in interpretation letters. If we did not adopt special provisions governing the use of CAFE credits by predecessors and successors, a predecessor's unused credits would simply expire, since the only manufacturer which could use them would no longer exist. Similarly, there would be no way of offsetting a predecessor's remaining CAFE shortfalls in the absence of some provision concerning successors.

The proposed rule, like our prior interpretation, would address this inequity and give the successor all the rights the predecessor had with respect to credits. Thus, to the extent we considered and followed the approach of the proposed rule in any enforcement action regarding predecessors and successors that involved conduct that occurred before the regulation became effective, any effect on the amount of penalties would be beneficial for the manufacturers.

We would similarly consider the regulation in any enforcement action regarding other situations where there have been changes in corporate relationships, e.g., changes in control, that involved conduct that occurred before the regulation became effective. However, the proposed provisions are essentially a statement of our interpretation of the statute.

States are preempted from promulgating laws and regulations contrary to the provisions of this rule. The rule does not require submission of a petition for reconsideration or other administrative proceedings before parties may file suit in court.

This rulemaking action does not include any collections of information.

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

Executive Order 12866 and the President's memorandum of June 1, 1998, require each agency to write all rules in plain language. Application of the principles of plain language includes consideration of the following questions:

If you have any responses to these questions, please include them in your comments on this NPRM.

Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any rule that: (1) is determined to be “economically significant” as defined under E.O. 12866, and (2) concerns an environmental, health or safety risk that NHTSA has reason to believe may have a disproportionate effect on children. This regulatory action does not meet either of those criteria.

Section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) requires NHTSA to evaluate and use existing voluntary consensus standards 2 in its regulatory activities unless doing so would be inconsistent with applicable law (e.g., the statutory provisions regarding NHTSA's vehicle safety authority) or otherwise impractical. This requirement is not relevant to this rulemaking action.

Your comments must be written and in English. To ensure that your comments are correctly filed in the Docket, please include the docket number of this document in your comments.

Your comments must not be more than 15 pages long. (49 CFR 553.21). We established this limit to encourage you to write your primary comments in a concise fashion. However, you may attach necessary additional documents to your comments. There is no limit on the length of the attachments.

Please submit two copies of your comments, including the attachments, to Docket Management at the address given above under ADDRESSES.

Comments may also be submitted to the docket electronically by logging onto the Dockets Management System website at http://dms.dot.gov. Click on “Help & Information” or “Help/Info” to obtain instructions for filing the document electronically.

If you wish Docket Management to notify you upon its receipt of your comments, enclose a self-addressed, stamped postcard in the envelope containing your comments. Upon receiving your comments, Docket Management will return the postcard by mail.

If you wish to submit any information under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Chief Counsel, NHTSA, at the address given above under FOR FURTHER INFORMATION CONTACT. In addition, you should submit two copies, from which you have deleted the claimed confidential business information, to Docket Management at the address given above under ADDRESSES. When you send a comment containing information claimed to be confidential business information, you should include a cover letter setting forth the information specified in our confidential business information regulation. (49 CFR Part 512.)

We will consider all comments that Docket Management receives before the close of business on the comment closing date indicated above under DATES. To the extent possible, we will also consider comments that Docket Management receives after that date. If Docket Management receives a comment too late for us to consider it in developing a final rule (assuming that one is issued), we will consider that comment as an informal suggestion for future rulemaking action.

You may read the comments received by Docket Management at the address given above under ADDRESSES. The hours of the Docket are indicated above in the same location.

You may also see the comments on the Internet. To read the comments on the Internet, take the following steps:

(1) Go to the Docket Management System (DMS) Web page of the Department of Transportation (http://dms.dot.gov/).

(2) On that page, click on “search.”

(3) On the next page (http://dms.dot.gov/search/), type in the four-digit docket number shown at the beginning of this document. Example: If the docket number were “NHTSA-1998-1234,” you would type “1234.” After typing the docket number, click on “search.”

(4) On the next page, which contains docket summary information for the docket you selected, click on the desired comments. You may download the comments.

Please note that even after the comment closing date, we will continue to file relevant information in the Docket as it becomes available. Further, some people may submit late comments. Accordingly, we recommend that you periodically check the Docket for new material.

In consideration of the foregoing, we propose to amend chapter V of title 49 of the Code of Federal Regulations by adding a new part 534 to read as follows:

On August 9, 2000, Bridgestone/Firestone, Inc. (Firestone) announced that it would recall certain ATX, ATXII, and Wilderness AT tires that contained a defect related to sudden tread separation (collectively referred to in this notice as “the recalled tires”). On August 16, Firestone filed its formal defect report with NHTSA pursuant to 49 CFR part 573. The recall covered P235/75R15 size tires including all ATX and ATX II tires of that size, and all Wilderness AT tires of that size produced at Firestone's Decatur, Illinois, manufacturing plant. At the time, Firestone estimated that approximately 6.5 million of the 14.4 million tires covered by the recall were still in use throughout the United States.

Between March 1990 and February 2000, NHTSA's consumer complaint database received approximately 46 complaints about Firestone ATX and Wilderness tires (we received additional limited information in July 1998 from State Farm Insurance Company related to insurance claims allegedly involving Firestone ATX tires). Beginning in February 2000, we began to receive additional complaints following a broadcast by a Houston, Texas, television station of a program on the failure of these tires on Ford Explorer vehicles. In March 2000, NHTSA's Office of Defects Investigation (ODI) opened an initial evaluation (IE) to consider whether to open a defect investigation. On May 2, 2000, we opened such an investigation (Investigation No. PE00-020) after having received an additional 44 reports since February 2000. Most of these complaints involved tires installed on Ford Explorer vehicles. None of the complaints covered tires in use outside the United States. The investigation covered over 47 million ATX and Wilderness tires, of various sizes, made in several plants.

At about the time of the Texas television program in February 2000, Firestone had recorded 193 personal injury claims, 2,288 property damage claims, and was a defendant in 66 law suits related to the tires covered by the investigation. It had also received a number of requests for financial adjustments from consumers who were unhappy with their tires. NHTSA was not aware of these data until after we opened our investigation because Firestone was not required to provide this information to us in the absence of a specific request, and it did not voluntarily provide it.

Ford Motor Company (Ford) had previously taken several actions overseas to address safety problems related to Wilderness tires on Ford Explorer vehicles. In August 1999, Ford offered to replace the P255/70R16 Firestone Wilderness AT tires installed as original equipment on certain Ford Explorer and Mercury Mountaineer models in use in the Persian Gulf region. Ford stated that this action was taken because the tires “may experience interior tire degradation and tread separation, due to unique Gulf Coast usage patterns and environmental conditions, resulting in a loss of vehicle control.” Late in February 2000, Ford made a similar offer for almost identical reasons to owners in Malaysia and Thailand of “certain 1997 Explorers equipped with P235/75R15 Firestone “All Terrain” Brand Tires.” A third offer was made, for the same reasons as the other two offers, in May 2000, to owners in Venezuela covering “certain 1996 through 1999 Explorers equipped with P235/75R15 or P255/70R16 Firestone ‘All Terrain’ brand tires.” Firestone was aware of each of these actions. In none of the three instances did Ford or Firestone notify NHTSA of these actions. Although 49 U.S.C. 30166(f) as implemented by 49 CFR 573.8 would have required Ford to notify us of these actions if they had occurred in the United States, there was no requirement for it to do so because they did not occur in the United States.

Title 49, United States Code, Chapter 301—Motor Vehicle Safety, is the basic motor vehicle safety statute administered by NHTSA (the “Vehicle Safety Act”). Under 49 U.S.C. 30118(c)(1), a manufacturer of a motor vehicle or replacement equipment must notify NHTSA if the manufacturer “learns the vehicle or equipment contains a defect and decides in good faith that the defect relates to motor vehicle safety.” 1 As noted in United States v. General Motors Corp. (X-Cars), “a manufacturer incurs its duties to notify [NHTSA] and remedy [the defect] whether it actually determined, or it should have determined, that its vehicles are defective and the defect is safety-related.” 656 F. 2d 1555, 1559 n. 5 (D.C. Cir. 1987). The X-Cars court held that a “manufacturer cannot evade its statutory obligations that exist when it determines that a defect is safety-related ‘by the expedient of declining * * * to reach its own conclusion as to the relationship between a defect in its vehicles and * * * safety.’ ” Id. (quoting United States v. General Motors Corp., 574 F. Supp. 1047, 1050 (D. D.C. 1983).

Prior to the TREAD Act, a manufacturer's automatic (i.e., not in response to NHTSA's information requests under which information is required as part of an investigation) reporting obligations under Section 30166 were established by 49 U.S.C. 30166(f), providing copies of communications about defects and noncompliance, as implemented by 49 CFR 573.8, Notices, bulletins, and other communications. Section 30166(f) provides that:

NHTSA issued a regulation thereunder, 49 CFR 573.8, which specifies that:

However, the statute and regulation did not require manufacturers to provide these documents with respect to actions occurring outside the United States.

In October 2000, H.R. 5164, the “Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act” was passed by the Congress. It was signed by the President on November 1, 2000, Pub. L. 106-414.

In H. R. Rep. 106-954, accompanying H.R. 5164, Congress noted that NHTSA did not have adequate, timely data about Firestone ATX and Wilderness tires:

The TREAD Act seeks to ensure that NHTSA receives appropriate data in a timely fashion, including that related to foreign recall actions and internal company data on claims and lawsuits related to defects. It does so in part by amending 49 U.S.C. 30166 to add a new subsection (m), Early warning reporting requirements. Subsection (m) requires NHTSA to initiate a rulemaking proceeding not later than 120 days after enactment of the TREAD Act to establish early warning reporting requirements for manufacturers of motor vehicles and motor vehicle equipment. NHTSA is further required to issue a final rule not later than June 30, 2002.

Sections 30166(m)(3), (4), and (5) specify requirements for, respectively, the reporting elements of early warning, the handling and utilization of reporting elements, and periodic review and update of the final rule.

The crux of the early warning provisions is Section 30166(m)(3), which states:

The TREAD Act thus provides for NHTSA to require manufacturers of motor vehicles and motor vehicle equipment to provide information related to claims for deaths and serious injuries, property damage, communications to customers, other data, and incidents causing fatalities or serious injuries in which a manufacturer's product was involved, caused by possible defects in vehicles or equipment in the United States, or in identical or substantially similar vehicles or equipment in a foreign country. Information provided under the TREAD Act will enhance the ability of NHTSA to be aware of potential safety-related defects as soon as possible. We also anticipate that the Act will provide an incentive to manufacturers to develop or refine internal systems more attuned to analysis of data and early detection of possible safety problems.

The purpose of this ANPRM is to initiate rulemaking on the early warning reporting requirements and to discuss the ways in which NHTSA may best use this information and data to fulfill the statutory goal.

Section 30166(m) uses some terms that were originally defined in the National Traffic and Motor Vehicle Safety Act of 1966 (now codified as 49 U.S.C. Chapter 301—Motor Vehicle Safety) and introduces some new ones that have not been defined. The terms defined in Section 30102 that are relevant to this document are:

The terms in Section 30166(m) that have not been defined by Section 30102 and for which we seek to develop a meaning are “claim,” “property damage,” “aggregate statistical data,” “serious injury,” and “substantially similar.” We shall discuss these terms and their possible meanings in the course of this document.

The TREAD Act requires information to be submitted by manufacturers of motor vehicles and motor vehicle equipment. We have identified the following categories of manufacturers of vehicles and equipment.

Motor vehicle manufacturers. Domestic vehicle manufacturers are manufacturers who produce motor vehicles in the United States, including corporations that are subsidiaries of, or otherwise controlled by, manufacturers incorporated in a country outside the United States. Foreign vehicle manufacturers are manufacturers who produce motor vehicles outside the United States, which are shipped to and sold in the United States. A foreign motor vehicle manufacturer may have a subsidiary in the United States. Multinational motor vehicle manufacturers are manufacturers that produce vehicles in one or more foreign countries and the United States. Some have acquired other motor vehicle manufacturers who continue to produce vehicles under their original nameplates. Some, like Ford Motor Company (which has acquired Volvo, Land Rover, Jaguar, Aston Martin, and Pivco of Norway), are headquartered in the U.S. Others, like DaimlerChrysler AG (which acquired Chrysler Corporation), are headquartered in a foreign country.

Many motor vehicles manufactured in the United States are produced by companies which are U.S. subsidiaries of corporations organized under the laws of other countries (e.g., the Dodge Stratus, manufactured by DaimlerChrysler Corporation which is a subsidiary of DaimlerChrysler AG). A number of other vehicles are produced outside the United States by foreign manufacturers and imported by their U.S. subsidiaries (e.g., Mercedes-Benz passenger cars produced in Germany by DaimlerChrysler AG and imported by Mercedes-Benz USA, Inc.). Where multinational manufacturers do business both in the United States and elsewhere, some vehicles certified for sale in the United States may have counterpart models sold outside the United States (e.g., Mercedes-Benz C Class, Toyota's right-hand drive Camry produced in Kentucky for export to Japan, and Toyota's Echo, sold in other countries as the Yaris). While these models may not be exactly identical to the models sold in the United States, they are similar enough such that in many or most cases, it is likely that defects occurring in counterpart models sold outside the United States will also exist in their U.S. model counterparts. Information about such problems in these foreign vehicles is also subject to the early warning requirements to be specified in our regulations. Thus, for example, if Toyota Motors Ltd. of Japan (the foreign parent) has information about a safety problem on the Yaris that caused a serious injury or that led to a recall or similar campaign in Japan or another foreign country, Toyota USA would be required to report it to us, since it could be an indication of possible problems with the Echo, sold in the United States.

The increasing globalization of the automotive industry in the past decade is likely to result, in the coming years, in various efficiencies and benefits from common platforms and common parts. When this occurs, new and more complex issues may arise about the relationship of defects in derivative vehicles, and whether vehicles and equipment are substantially similar to each other.

The TREAD Act specifically requires vehicle and equipment manufacturers to provide information on safety-related incidents and activities occurring outside the United States. Normally, we would expect this information to be provided through a designated entity in the United States (e.g., the importer or a U.S. manufacturing subsidiary). However, the information could be reported directly by the foreign manufacturer or the foreign portion of a multinational corporation.

Registered Importers. “Registered Importers (RI)” import motor vehicles that were not originally manufactured as conforming with the Federal motor vehicle safety standards. These are colloquially known as “gray market” vehicles. RIs bring gray market vehicles into conformity, certify their conformity, and sell them. Currently, 99% of the vehicles imported by RIs have been manufactured for the Canadian market. All have virtually identical counterparts in the United States. Such defects as may exist in these Canadian gray market vehicles are, in general, corrected by the manufacturer of the U.S. counterpart, which also honors warranty claims on these vehicles. The sole manufacturer that does not do so is Honda-Acura. Because RIs are not factory-authorized distributors and dealers, it appears unlikely that they will receive and possess warranty data and other information that would be meaningful under the early warning requirements. We seek comments on whether RIs should be included in the early warning reporting requirements.

Miscellaneous motor vehicle manufacturers. The scope of “manufacturer” also includes manufacturers of incomplete vehicles as defined by 49 CFR part 568, Vehicles Manufactured in Two or More Stages, who have contingent defect reporting responsibilities under 49 CFR 573.3(c). Because a person who alters a certified vehicle is required to affix its own certification under certain conditions, in the same manner as the vehicle's original manufacturer, the early warning reporting requirements could be viewed as applicable as well to alterers who certify.

Motor vehicle equipment manufacturers. There is a wide range of equipment manufacturers. We are considering whether periodic reporting by some manufacturers of motor vehicle equipment is necessary to fulfill the intent of the TREAD Act.

With respect to original equipment (see 49 U.S.C. 30102(a)(7)(A), 49 U.S.C. 30102(b)(1)(C)), there are approximately 14,000 individual items of original equipment in a contemporary passenger car. However, many of these items are not supplied directly to the vehicle manufacturer, but are incorporated into components assembled by a person other than the manufacturer of the part. There is a growing trend to packaging individual parts into a single unit, or module. For example, a steering wheel assembly may include an air bag, horn control, turn signal control, wiper control, ignition switch, cruise control, lighting controls, as well as associated wiring. These units are assembled by a supplier, often with components from various manufacturers. In many instances, a defect in a modular component installed as original equipment is far more likely to come to the direct attention of the vehicle manufacturer than the assembler of the component, or the manufacturers of the component's individual parts.

With respect to “replacement/accessory equipment” and “off-vehicle equipment” (see generally 49 U.S.C. 30102(a)(7)(B) and 30102(b)(1)(D)), the number of items cannot be estimated at this time. Some are very important from a safety perspective, such as tires and child seats, while others have less of a safety nexus. Although each manufacturer of each of these items of motor vehicle equipment is within the scope of the early warning reporting requirements, as defined by statute, we are considering whether it would be appropriate to have different requirements applicable to different types of equipment manufacturers.

Tires are motor vehicle equipment. With respect to the recall provisions of the Safety Act, 49 U.S.C. 30118-30121, tires are replacement equipment rather than original equipment (49 CFR 579.4(b)(2)). Therefore, tire manufacturers have the duty to conduct notification and remedy campaigns and to address defective or noncompliant tires, including tires installed on new vehicles. Tire brand name owners are also considered manufacturers (49 U.S.C. 30102(b)(1)(E)) and have the same defect and noncompliance reporting requirements as tire manufacturers under 49 CFR 573.3(d) .

Importers of motor vehicle equipment for resale are also “manufacturers of motor vehicle equipment.” A large number of these may not be U.S. subsidiaries of the foreign manufacturer of the product they import (e.g., importers of lighting equipment manufactured in Asia). A defect existing in the equipment they import could relate to safety. These importers could receive warranty or other claims. We see no reason not to apply the early warning reporting requirements to these importers. For example, we tentatively decided that importers of tires that are not affiliated with the actual tire manufacturers should be subject to the same early warning reporting requirements as domestic manufacturers of tires.

In some cases, the importer may be the most likely reporting entity. Although importers may lack engineering expertise, they may be most able to provide information related to returned parts, complaints, claims, and injuries.

Neither the TREAD Act nor its legislative history evidence a Congressional intent to exclude any manufacturer of motor vehicle equipment (or motor vehicles) from the early warning reporting requirements. Nevertheless, we recognize that some items of motor vehicle equipment rarely, if ever, develop a safety-related defect (e.g., exterior and some interior trim, motorcycle rider vests). We recognize that, with respect to such items, only limited reporting may be required. Even though there may not be a safety need to require reporting of a full range of information by such equipment manufacturers, we tentatively believe that a manufacturer of any item of motor vehicle equipment should be required to report to us any claim it receives alleging that a death or serious injury was caused by a defect in its product.

There is a variety of alternative approaches that we might adopt with respect to reporting related to equipment. On one side, we might require reporting of limited kinds of information such as deaths, but not others, such as property damage. On the other side, we might require reporting with regard to only some classes of equipment items. Possible approaches are addressed below.

i. Reporting initially limited to specific equipment items. Given the vast number of motor vehicle parts, the questions at present of the types and quantity of data that are pertinent to the early warning reporting requirements, and the data storage and processing systems that may be required within NHTSA, it may be more effective to adopt an incremental approach, and initially to require reports from manufacturers of only a relatively small number of original or replacement equipment items. On the basis of safety-related defects reported in the past five years, we would include tentatively in this category tires, child restraint systems, fuel tanks, air bags and related components, and axle/suspension/brake components on heavy trucks and trailers. We would also include original and replacement equipment manufacturers of seat belt assemblies and air bags and related components such as sensors. Comments are requested on whether we initially should limit our reporting requirements to a subset of equipment manufacturers, and, if so, how that subset should be defined.

ii. Reporting of equipment items directly covered by the FMVSS. Initially, or after a period of time in which both industry and NHTSA have had experience with the reporting requirements, these requirements could include or be extended to require all manufacturers of original or replacement equipment that is directly covered by a Federal motor vehicle safety standard (FMVSS) to report on the same basis as vehicle manufacturers as defined by Section 30102(a)(5)(A). This would include, for example, all manufacturers of brake hoses (FMVSS No. 106), lighting equipment (FMVSS No. 108), tires (FMVSS No. 109 and 119), brake fluids (FMVSS No. 116), retreaded tires (FMVSS No. 117), rims for vehicles other than passenger cars (FMVSS No. 120), warning devices (FMVSS No. 125), non-pneumatic temporary spare tires (FMVSS No. 129), glazing (FMVSS No. 205), seat belt assemblies (FMVSS No. 209), child restraint systems (FMVSS No. 213), motorcycle helmets (FMVSS No. 218), rear impact guards (FMVSS No. 223), and compressed natural gas fuel containers (FMVSS No. 304).

iii. Subsequent extension of reporting requirements to all manufacturers of components that a vehicle manufacturer uses in complying with Federal crash-avoidance and some crash-protection and post-crash standards. The next tier of equipment manufacturers that might be required to report on the same basis as vehicle manufacturers could be manufacturers of original or replacement equipment which are parts of systems covered by the FMVSS “100” series, the “crash-avoidance” standards. For example, motor vehicles are required to comply with the braking performance standards (FMVSS Nos. 105, 121, 122, and 135), but the individual components of brake systems (other than brake hoses and brake fluid) are not covered by the FMVSS. Thus, we could apply the early warning requirements to the manufacturer of any component in a motor vehicle brake system (e.g., discs, rotors, brake lining), or any other vehicle system that is covered by any of the Federal “crash avoidance” standards (FMVSS Nos. 101-135).

We have had a frequent number of recalls over the past five years because of safety problems with seats, seat backs, and their attachments. Therefore, we could include all components required to comply with FMVSS No. 207, Seating Systems. Given the national concern for child safety, we could also add manufacturers of components that a vehicle manufacturer uses to comply with FMVSS No. 225, Child Restraint Anchorage Systems.

This approach might also be extended to include components of fuel systems used in vehicles required to comply with FMVSS No. 301, Fuel System Integrity, and FMVSS No. 303, Fuel System Integrity of Compressed Natural Gas Vehicles, because fuel system parts, hoses, fuel lines, and connectors are frequently the subject of recall campaigns. Finally, it is important to post-crash safety that materials used in the interior of vehicles fully conform to FMVSS No. 302, Flammability of Interior Materials. We could apply the reporting requirements to manufacturers who provide interior materials to vehicle manufacturers, even though the vehicle manufacturers have the responsibility to certify compliance with FMVSS No. 302.

iv. Exclusions. There seems little safety need to require manufacturers of accessory equipment or articles of apparel (other than motorcycle helmets and jack stands) to report to us unless there is a death or serious injury allegedly involving a defect in their products. However, there may be accessories such as tire inflation pressure gauges or battery cables which, if not properly manufactured, could present a safety defect issue, and whose manufacturers should report.

Given the universe of motor vehicle equipment manufacturers, it may be that some will be excluded from the reporting requirements. For instance, the supplier of a part used in a subassembly, though a manufacturer of motor vehicle equipment by definition, might be excluded if there is a historically low recall rate on that subassembly. On the other hand, if the manufacturer of a relatively insignificant part such as a fastener or bolt becomes aware that it has produced a defective part, that information ought to be reported to us, so that we can decide whether to open a defect investigation with respect to the vehicles in which that part has been used.

Questions to be answered. We seek answers to the following questions relating to who should be covered by the early warning reporting requirements.

A. Which of the manufacturers listed above should be covered by the final rule and why?

B. Are there other entities that should be covered by the reporting requirements and why?

C. Should any of the above manufacturers or other entities be covered by only some reporting requirements and not others?

D. With respect to manufacturers' international feedback mechanisms, to what extent is information provided in the English language? Are there delays in transmitting information such as narrative field reports due to the need to translate it into English? If so, what is the length of delays?

E. What accessories could develop safety-related defects?

Because Section 30166(m) authorizes regulations that will require manufacturers to report to NHTSA information and data which relate to possible defects, the agency anticipates that these regulations will take the form of amendments to 49 CFR part 573, Defect and Noncompliance Reports. This could result in renumbering some existing provisions.

The purpose of the early warning reporting requirements is to provide information to NHTSA that will assist in the early detection of possible safety-related defects. We believe that the following information and data are relevant to this purpose:

Warranty claim data. We believe that information about warranty claims can often provide relevant information that indicates the possible existence of a safety defect. “Warranty data” appears in the heading of Section 30166(m)(3)(A) as one type of “reporting element.” Thus, although it does not explicitly appear in the text of subparagraphs (i) and (ii) of that paragraph, we believe that warranty information is included within its ambit. In any event, warranty data would be included within the scope of “other data” whose reporting we can require under Section 30166(m)(30(B).

Vehicle manufacturers have complex systems of warranty coverage, which involve codes that are revised from time to time. There are large numbers of warranty claims. We understand that vehicle manufacturers review warranty information for various reasons including cost control, needed product improvement, billing of suppliers, emissions-related reporting, and safety. We have limited familiarity with original equipment manufacturer warranty systems. We do know that vehicle manufacturers have required original equipment manufacturers to provide reimbursement to manufacturers for warranty costs and for various campaigns. We also have some familiarity with warranty systems used by manufacturers of some types of replacement equipment, such as child seats.

The threshold question is what information about warranty claims may assist in the identification of defects related to motor vehicle safety. We are considering listing in the final rule systems, parts, and components that are particularly safety related. We have reviewed safety-related recalls during the 1995-2000 period and have identified the following parts/components as the most frequent subjects of recall campaigns: fuel systems (15% of all campaigns), brakes (13%), and suspensions (11% ). We classify recalls related to restraint systems, seats, instrument panels, gauges, etc. as “interior systems;” these have accounted for 14% of the recall campaigns. Beyond this, there are miscellaneous other parts/components each of which comprises less than 10% of all campaigns but which together constitute the remaining 47% of recall campaigns. It seems to us that information on warranty data relating to parts/components that have been the subject of recall campaigns might be significant early warning indicators of possible safety-related defects. We appreciate that over the long run and in the future the current list may be underinclusive because it may not include new technologies. We may amend the final rule at some future time to accommodate new technologies because, historically, defects in newly-developed parts have given rise to a substantial number of safety recalls.

The agency does not want to require the submission of excessive warranty claim information. One mechanism may be to establish cumulative or periodic thresholds below which warranty information would not have to be reported. For example, a manufacturer might not be required to report warranty information on a passenger car component until the warranty claims rate reached x% of production.3 We might apply a lower threshold if that same component were used on a school bus, i.e., reporting would be required when warranty claims reached only y%. Similarly, there may be specific instances where we would employ much lower thresholds where critical safety components are involved, such as seat belt buckles.

The warranty information that we would find useful is that relating to make, model, model year, and the component or warranty code. The final rule would require each manufacturer to report to us a complete list of relevant warranty codes. However, in order for the agency to effectively use this information, it would be helpful for us to receive it in a standardized manner. Thus, we are considering whether to require some standardization of warranty codings among manufacturers.

Claims and Incidents Involving Serious Injury or Death: Section 30166(m)(3)(A)(i) requires manufacturers to provide information concerning data on claims submitted to a manufacturer for serious injury or death, to the extent that such information may assist in the identification of safety-related defects. Section 30166(m)(3)(C) also requires a manufacturer to report incidents of which it receives actual notice which involve deaths or serious injuries which are alleged or proven to have been caused by a defect, regardless of whether there is a “claim.” We believe that to achieve the goals of the TREAD Act, “claim” must be construed broadly. For example, we have tentatively concluded that it includes subrogation claims filed by an insurer against a manufacturer. It also includes lawsuits against a manufacturer, whether or not they are preceded by a separate “claim.” Some manufacturers may employ outside law firms to handle claims or lawsuits on a routine basis. Manufacturers would be required to report all covered claims against them whether they are being handled by house counsel or outside counsel.

While we do not have information related to foreign mechanisms paralleling domestic claims, we intend to obtain equivalent information from foreign sources. It is not necessary that the claim relate to a crash; the Vehicle Safety Act is concerned with non-operational safety as well.

We realize that claims and allegations may be presented against a manufacturer using a wide variety of terms. We also understand that claims may allege in various terms personal injury or death from alleged defects in various items. Sometimes the defect may not be clearly alleged. For example, assume that a person asserts that an air bag deployed in a low-speed parking lot fender bender and a vehicle occupant is seriously injured. Should this be viewed as including an implicit allegation that a safety defect contributed to the occupant's injury and constitute a claim?

At the outset, we are considering requiring that manufacturers only provide summary information, as opposed to a copy of the claim itself. We are considering requiring more information for a lawsuit than for a claim that has not become a suit. One approach would be to require a brief description of the alleged defect giving rise to the complaint, including an identification of the component or system at issue. Other identifying information would include: if a vehicle, the make, model, model year and VIN; if a child seat, the make, model, model number and date of manufacture; if other equipment, the date of manufacture, serial number, and a description of the product; and, if a tire, the brand name, model name, and size, the DOT identification number, and the make, model, and VIN of the vehicle on which it was installed. For lawsuits, we are considering also requiring the case name, case number, identification of court or tribunal where the action is pending (whether in the United States or elsewhere).

Claims for deaths. The statute requires manufacturers to provide data on claims “for serious injuries (including death).” Consistent with principles of common law, this would include all deaths that occur within one year of the incident in question.

Claims for serious injuries. The statute does not define “serious injury” nor is there any legislative history as to what Congress meant by this term. Injuries may be characterized in a variety of ways in claims. Some could allege simply that an “injury” has occurred. Others might allege that the injuries are “serious” or “substantial” with no further description. Some could specify a specific injury or injuries from which one might infer that an injury was serious.

We believe that it would be valuable to first identify what we believe is a serious injury and then deal with how to assess whether a claim presents a serious injury. A system of rating the severity of motor vehicle crash-related injuries has been developed which aids in establishing uniform data bases for crash injury statistics. This system is the Abbreviated Injury Scale (AIS), which has been in use in the United States for approximately 30 years. The first AIS was published in 1971 under the auspices of the joint Committee on Injury Scaling, comprised of representatives of the American Medical Association (AMA), American Association for Automotive Medicine (AAAM), and the Society of Automotive Engineers (SAE). Since 1976, the AIS has been accepted and used by crash researchers in many parts of the world. It ranks the severity of injuries numerically from 1 to 7: minor, moderate, serious, severe, critical, maximum, injured unknown severity. The injuries recorded are those that occur to the head (cranium and brain), face, neck, thorax, abdomen and pelvic contents, spine, upper extremity, lower extremity, external/skin, and burn injuries and other trauma. Each body area receives a separate report. One possible approach would be to define a “serious injury” as one with a level of AIS 3 or higher, which is consistent with the AIS scale. The AIS is explained more clearly in the 2000 NASS Injury Coding Manual, edited for us by Veridian Engineering of Buffalo, NY. We have placed a copy of the Manual in the docket.

Claims that are presented to manufacturers often will not have sufficient information to be classified using the AIS criteria. Some may allege only that the complainant was injured, without stating the nature of the injury or its severity. In these events, a manufacturer will not know initially whether the claim reflects a “serious injury.” There are a number of potential ways to address this. One is to require manufacturers to review claims as they are received and attempt to determine whether they involve serious injuries and, if there is insufficient information, to require reassessment after additional information is received (e.g., through follow-up communications or pre-trial discovery). Another is to require a manufacturer to report all claims of injury. Manufacturers may prefer this as relieving them of the need to make subjective determinations, even though the statute only requires them to submit data on claims for “serious” injuries.

We note that, notwithstanding this discussion of “serious injury” for purposes of the TREAD Act, motor vehicle safety encompasses all injuries, not just those which are above a specified AIS level. Therefore, even if the final rule limits the submission of injury-related information to that which is AIS 3 or above, this is not to be construed to mean that the agency will not conduct defect investigations or seek safety recalls when the AIS level of the injuries caused by a particular defect is likely to be only AIS 1 or 2.

Claims: property damages. Section 30166(m)(3)(A)(i) also requires manufacturers to provide us with “aggregate statistical data on property damage.” This provision appears to have been included to address situations similar to that which occurred with Firestone tires, when that company had extensive data on property damage incidents but did not share it with NHTSA. When a claim is submitted to a manufacturer solely for property damage, the manufacturer would not have to provide us with a copy of the claim or full summary information on each individual claim. Rather, we tentatively would require manufacturers to provide such information in an aggregate form at the end of each reporting period, clearly identifying the specific product, item, and/or components that allegedly cause the damage, and informing us of the number of additional property damage claims that were received since the last reporting period. This would be accompanied with a description of the condition leading to the property damage claims, using terms as they are commonly understood (for example, a manufacturer could not fail to report a fire to us if it characterized it as a “thermal event” in internal documents, in any instance where there is ignition resulting in an alleged flame). As with warranty claims, we could provide that such reports would only need to be submitted if the number of claims about a particular vehicle, equipment item, or component was above a specified threshold. We also could require these reports to include percentages. For example, a manufacturer might be required to report that “15% of the total claims in the aggregate alleged property damage are due to fire.”

Field Reports. Manufacturers also receive “field reports” from employees and dealers indicating the possible existence of problems. These are often particularly valuable because they provide insights into problems by persons with considerable vehicle expertise. We expect to require “field reports” under the “other data” provisions of Section 30166(m)(3)(B). The threshold substantive question is what field reports may assist in the identification of defects related to motor vehicle safety. The information management issues include identifying them and managing narrative field information.

Consumer complaints. Manufacturers often receive complaints from consumers where no injury has occurred. For purposes of this rulemaking proceeding, we intend to construe any communication requesting restitution for an injury or property damage as a “claim,” and not as a mere “consumer complaint.” Some consumer complaints may be related to safety and might help in an early detection of a possible safety-related defect. These may be particularly important after the expiration of warranties. We would appreciate comments on how they should be evaluated to identify those that are related to safety, and how and whether such complaints should be submitted to us under Section 301166(m)(3)(B).

Information on customer satisfaction campaigns, consumer advisories, recalls, or other activity involving the repair or replacement of motor vehicles or items of motor vehicle equipment. Section 30166(m)(3)(A)(ii) requires manufacturers to provide information which concerns “customer satisfaction campaigns, consumer advisories, recalls, or other activity involving the repair or replacement of motor vehicles or items of motor vehicle equipment” (In this case, we will use the term “campaign” to cover all these different types of actions). While the nexus requirement—“to the extent that such information may assist in the identification of defects related to motor vehicle safety”— must be met, Section 30166(m)(3)(A)(ii) applies regardless of whether a manufacturer has decided that a defect exists, whether or not the conditions or circumstances in question relate to motor vehicle safety. The new section is broader than the current regulation, 49 CFR 573.8 (based on Section 30166(f)), which requires a manufacturer to provide copies of communications regarding “any defect” including “any failure or malfunction beyond normal deterioration in use, or any flaw or unintended deviation from design specifications, whether or not such defect is safety related.”

In our view, this category of information includes any communication to, or made available to, a dealer, distributor, other manufacturer, or more than one owner, whether in writing or by electronic means, relating to replacement or modification of a component, or modification of the way that a vehicle or equipment item is to be operated.4 However, in addition to the communication itself, we tentatively plan to require the submission of information regarding the facts and analysis that led to the manufacturer's decision to issue the communication.

It should be relatively straightforward to identify whether a campaign has been conducted. With respect to the issue of whether the subject of a “campaign” may assist in the identification of defects, we do not believe that the description provided in the communication itself should be dispositive. Some communications may be phrased in a way to avoid any suggestion of a possible defect or a safety relationship. Thus, it may be in the interest of safety to err on the side of inclusiveness and to require a manufacturer to provide copies of all communications with its dealers or customers, written or electronic, when certain components or systems are involved. Of course, we are not interested in financial or marketing information provided to dealers or distributors.

We also note that, in lieu of providing notices in hard copies to their dealers, some manufacturers are posting information about “campaigns” and other service information on their internal websites. In order to keep appraised of these “notices,” we are considering proposing that manufacturers provide us periodically with a list (and possibly copies) of their electronic postings.

Internal investigations. After receiving field reports, consumer complaints, or other data indicating a potential problem in a vehicle component, manufacturers often initiate internal investigations into the issues which may or may not be concluded with the reporting to NHTSA that a safety-related defect has been determined to exist. In some instances, these investigations may parallel a related NHTSA investigation. We are considering whether to require manufacturers to provide us with information regarding such internal investigations pursuant to Section 30166(m)(3)(B). If we do so, we will need to identify precisely what sort of “investigations” are covered, what information we should require about these investigations, and when we would require the information to be submitted.

Changes to components and service parts. When a manufacturer decides to change a part (either as a running change or as a change to a service part), it could signal that the original was underdesigned or overloaded. An example would be an electrical switch that is made more robust or the inclusion of a new relay to reduce the electrical load to eliminate an overheating condition that could lead to a fire. Thus, we are considering requiring the submission of information regarding such changes. Manufacturer communications about changes in products and service procedures can also indicate potential defects. We are considering requiring manufacturers to provide NHTSA with a dealer password so that we can access their internal websites (This access would be limited so that we could not access financial or marketing information). However, some of these changes may bear little relevance to safety issues. If we require manufacturers to provide information regarding design and service parts changes, we will need to decide whether information about all such changes should be provided or only those relating to specified safety components of a vehicle, and the criteria that should be adopted to ensure that we receive the information mot likely to provide early warning of defects.

Remedy failures. We are also considering whether to require manufacturers to provide us with information regarding information concerning instances in which a vehicle or child seat has had to be remedied more than once in the course of a safety recall campaign.

Fuel leaks, fires, and rollovers. We are especially concerned with motor vehicle fuel leaks, fires, and rollovers. We may require manufacturers to provide information on fuel leaks, fires, and rollovers separate from other information.

B. Vehicles and equipment covered: substantially similar vehicles and equipment in foreign countries. Pursuant to Section 30166(m)(3)(C), manufacturers must report incidents involving fatalities or serious injuries that are alleged or proven to be caused by a product defect “in a foreign country when the possible defect is in a motor vehicle or motor vehicle equipment that is identical or substantially similar to a motor vehicle or motor vehicle equipment offered for sale in the United States.” (This is in addition to the duty to report claims and other information covered by Section 30166(m)(3)(A) that are “derived from foreign and domestic sources.”)

We interpret the word “identical” to mean “the same as.” As for “substantially similar,” we begin with a recognition that in recent years there has been an increasing amount of commonality among basic platforms, body structure and engines of motor vehicles. If a vehicle is a model that is manufactured in the United States by a domestic manufacturer and certified as conforming to the FMVSS, and the manufacturer produces the same model for sale outside the United States, we would regard the exported model as a “substantially similar” motor vehicle for the life of both models, even if there were minor changes to the vehicles shipped abroad (e.g., if Company A produces a model for export for one model year longer than a certified model, that exported model would nevertheless be “substantially similar” to the certified models of previous model years). If a motor vehicle is manufactured outside the United States and certified for sale in the United States, and the foreign manufacturer produces the same model (i.e., same exterior body shell and family of engines), for sale in other countries, we would also consider that to be a “substantially similar” motor vehicle for the life of both models whether or not there were minor differences. We recognize, however, that there may be issues as to whether differences are “minor,” and we seek comments on that subject .

The phrase “substantially similar” also appears in Section 30141(a)(1)(A), added by the Imported Vehicle Safety Compliance Act of 1988. This section provides that a RI may import a motor vehicle not originally manufactured to comply with the FMVSS if the NHTSA Administrator decides that the vehicle is “substantially similar” to a motor vehicle of the same model year that was certified for sale in the United States.5 Except for vehicles originally manufactured for sale in Canada, virtually all these decisions have been made pursuant to petitions by RIs. A list of eligible vehicles is published as an appendix following 49 CFR part 593, and periodically during the fiscal year as additional decisions are made. While the list contains a number of vehicles that would be “substantially similar” under both Sections 30141 and the early warning reporting requirements of Section 30166(m), it is not exclusive and does not constitute the entire universe of “substantially similar” motor vehicles subject to early warning requirements. ( The part 593 list also includes some vehicles that are not “substantially similar” to vehicles certified for sale in the United States, but that are eligible for importation on the alternative statutory basis that they have safety features that comply or are capable of being altered to comply with the FMVSS).

There may be instances in which vehicles may not be identical or substantially similar but may have components that are identical to those used in a vehicle sold in the United States.

The simpler an item of equipment is, the more likely it is to be identical or substantially similar in the United States and in foreign markets. The phrase “substantially similar” applied to motor vehicle equipment raises a question of magnitude given the generic nature of many parts. Most tires can be viewed as substantially similar in a literal sense. One windshield wiper may be viewed as “substantially similar” to another. For instance, a windshield wiper installed on a Mercedes A Class car which is not sold in the United States could be considered substantially similar to a wiper on the Mercedes M Class vehicle which is manufactured and sold in the United States. If DaimlerChrysler AG receives information in Germany indicating a potential safety problem with the A Class wiper blades, how relevant would that be to identifying a possible safety problem with wiper blades on a M Class vehicle? The potential for relevance grows if the wiping systems themselves on the two vehicles are identical or substantially similar, or if they are replaceable by the same part.

C. Cut off dates. Although a manufacturer is required to notify NHTSA, owners, and dealers if it or the agency determines that a vehicle contains a safety-related defect, it need not provide a remedy without charge if the determination is made more than 10 years after its first sale. See 49 U.S.C. 30120(g), as amended by Section 4 of the TREAD Act. There may be types of information otherwise covered by this rule that, due to the passage of time or other occurrence, need not be provided for safety purposes. If any commenter believes that there should be exclusions based on time, the commenter should provide a detailed rationale for such a belief.

D. Questions to be answered. We seek answers to the following questions on the type of information to be reported.

1. Which offices of manufacturers receive, classify, and evaluate warranty and claims data, and other data or information, related to deaths, serious injuries, and property damage involving a manufacturer's products that occur in the United States?

2. In what form is that data received and maintained? If it is maintained electronically, please describe the data base system in which it is kept.

3. Is the information referred to in question 1 otherwise classified (for example, warranty codes, lawsuits)? If so, how? By whom is such information evaluated?

4. Do manufacturers in the United States (defined to include importers of vehicles or equipment for resale), currently receive warranty and claims data, and other data or information, related to deaths, serious injuries, and property damage involving their products that occur outside the United States? If so, in what form are these data received?

5. If a manufacturer in the United States does not receive, maintain, and evaluate such data or information referred to in paragraph 3 above, what entity does (e.g., foreign affiliate, factory-authorized importer, outside counsel, other third-party entity)? Do manufacturers require that entity to make periodic reports to it?

6. In what form is foreign the data or information received (e.g., electronically, e-mail, inter-company memo)? Is it maintained separately or is it combined with data about events occurring in the United States?

7. What is the length of time that manufacturers maintain warranty data and claims data? is this period different for data related to events occurring outside the United States?

8. Are U.S. dealers currently collecting and/or maintaining information relevant to early warning reporting? If so, what is this information, and to what extent is it furnished to the manufacturer?

9. Should there be a cut off date for reporting (e.g., not require it regarding vehicles or equipment that are older than some specified age)? If so, what age or ages?

10. Is there additional information or data beyond that mentioned in this notice that manufacturers should report to NHTSA that would assist in the identification of defects related to motor vehicle safety? For example, assembly plant quality reports, dealer feedback summaries, test fleet summary reports, fleet experience, and rental car company reports.

1. What is the appropriate definition of “claim?'

2. What information should be submitted (e.g., just the number of claims by make, model year and component or system, or more information, including summaries and names of complainants)?

3. Should NHTSA only require the submission if claims are about problems with certain components? If so, which ones?

4. Should information about all claims involving serious injuries or deaths be submitted, or should there be some threshold?

1. Should warranty data be reported? If so, are there specific categories which should be included or excluded ?

2. How do manufacturers maintain warranty data? How long is it kept? For what purposes is it kept? How do manufacturers review warranty data to identify possible safety concerns?

3. What thresholds, if any, would be appropriate with respect to specific vehicle components, systems, and equipment items, below which warranty information would not have to be reported to NHTSA? Should there be different thresholds for different components or systems?

4. Should thresholds be based solely on claims rates, or should there be some absolute number of claims that would trigger a reporting requirement?

5. What sorts of warranty information should be reported (e.g., make, model, model year, component)?

6. Are there warranty codes common to the motor vehicle industry? Passenger car industry? Heavy truck industry? Motor home industry? Child seat industry? Etc.?

7. Should we require warranty data to be submitted using standardized codes? If so, what level of standardization would be appropriate?

8. In what form should we require warranty information to be submitted?

1. What information should be provided about lawsuits?

2. Should information be provided about each lawsuit involving an alleged defect?

3. If not, what threshold would be appropriate? Should there be different thresholds based on the component or system involved?

1. Should information about design changes be provided? If so, should all changes be covered or just or only those relating to specified components or systems important to vehicle safety? If so, which components or systems?

2. Should different considerations apply to prospective-only running changes than to changes to service parts?

1. What systems for characterizing the seriousness of injuries are used in countries other than the United States? How do they relate to the AIS system?

2. Are the AIS3 “serious” criteria appropriate as indicia of “serious injury”? If not, what criteria are appropriate?

3. How shall it be determined whether a claim pertaining to an injury pertains to a serious injury? What assumptions should be made? If an initial claim does not allege a “serious” injury, should the manufacturer be required to report the claim later if it learns that the injury was serious or alleged to be serious?

4. Would manufacturers find it less burdensome to report to NHTSA all allegations of injury caused by a product defect?

5. How and to which office of a manufacturer are deaths and serious injuries reported? Is the answer different with respect to incidents that occur in foreign countries?

1. What data should manufacturers include as “aggregate statistical data”?

2. What type of statistical data relating to property damage (including fire and corrosion) do manufacturers maintain? What corporate office is responsible for their maintenance? Is the answer different with respect to incidents and claims in foreign countries?

3. How is this data maintained by manufacturers? How is it used?

4. How should this data be submitted to NHTSA to best provide an early warning of potential safety defects?

1. Should a manufacturer be required to report information on active investigations that it has initiated with respect to potential defects in its vehicles or equipment? How, if at all, should it be determined that these are safety related? What is the extent to which this information should be reported?

2. What is an appropriate definition of an internal investigation that should be reported to NHTSA?

3. Should manufacturers be required to report such investigations as soon as they are commenced? If not, at what point should the investigation be reported to NHTSA?

1. Should “customer satisfaction campaigns,” “consumer advisories,” “recalls” or “other activities involving the repair of motor vehicles or motor vehicle equipment” be defined in NHTSA's regulation, and, if so, what would be an appropriate definition for each of these terms?

2. How many and what kind of customer satisfaction campaigns, consumer advisories, recalls, or other activity involving repairs have occurred since January 1, 1998, that were not required to be reported to NHTSA under 49 CFR 573.8? Indicate whether these occurred in the United States or foreign countries. Please submit a copy of all communications provided to consumers or dealers with respect to each such campaign, advisory, recall, or other activity.

1. Is the word “identical” understood internationally, or do we need to define it? If so, how?

2. How should a manufacturer determine if a vehicle sold in a foreign country is “substantially similar” to vehicles sold in the United States? Is it enough that the vehicles share the same platform and/or engine family? If not, why not?

3. How should “substantially similar” motor vehicle equipment be defined? Would the definition be different with respect to individual parts, component parts, assemblies and systems? Other than tires and off-vehicle equipment (such as child seats), should the definition be restricted to replacement equipment for substantially similar motor vehicles?

1. What is an appropriate definition for “field report'?

2. In the context of field reports for which information is to be provided, should there be a list of systems, parts, and components that are safety related? Should it be the same as the list for warranty claims and other claims?

3. Do manufacturers screen field reports for safety-related information? If so, what are their systems and how do they work?

4. How do manufacturers process and maintain field reports? Is all information entered into computers?

5. What information regarding field reports should be provided NHTSA? Should there be a numerical or rate threshold before field reports must be provided?

Section 30166(m)(3)(A) and (B) state that the information covered by those paragraphs shall be reported “periodically or upon request” by NHTSA. Section 30166(m)(3)(C) states that the information covered by that paragraph shall be reported “in such manner as [NHTSA] establishes by regulation.”

A. Periodically. The statute authorizes us to require periodic reporting by manufacturers of information related to the early warning of defects. Some types of information may be more significant than other (e.g., deaths allegedly caused by safety defects) and justify a more frequent period of reporting than other types.

1. Upon receipt of information—We are considering proposing that any manufacturer of motor vehicles or motor vehicle equipment report to us within two weeks of its receipt of information alleging or demonstrating that a fatality has occurred due to a defect in one of its products. This would be an episodic report providing certain information when the manufacturer receives it, rather than a report containing information that accumulates within a specific period of time.

2. Monthly. Problems arising in certain types of motor vehicles or equipment may require more frequent reporting than others, especially where an accumulation of claims or warranty data has reached whatever threshold for reporting that we eventually set. Defect-related information concerning school buses, emergency vehicles, child restraints, automatic restraint systems, seat belts, and fuel systems seems critical to us. We may require reporting of information in these categories on a monthly basis. This information would be due in our offices on a specified day (e.g., the 15th day) following the end of each calendar month.

We might also require manufacturers of vehicles and equipment to report to us monthly if they learn of an incident in which it was alleged that the vehicle or equipment of the manufacturer caused or contributed to an injury that required the hospitalization of any person for more than observation.

Although the consequences may vary, it is also important for us to be aware promptly of failures of remedies that have been implemented to address safety-related defects and noncompliances, since the components or systems involved have already been determined to create a safety problem. Therefore, reports of such problems might also be required on a monthly basis.

3. Quarterly. Reporting other types of safety-related data might be on a quarterly basis. These data might include aggregate statistical data, warranty claims related to other components, and claims/lawsuits alleging fires. These reports would cover the calendar quarters of a year and be submitted by a specified day following the end of the reporting quarter (i.e., a report for information received from January 1 through March 31 would be due sometime in April). This is the same schedule of reporting that we have established under 49 CFR 573.7 for the reporting of information about safety recalls.

B. Upon NHTSA's request. The TREAD Act requires all manufacturers to provide information and data relevant to early warning when NHTSA requests. Such a requirement complements NHTSA's pre-TREAD authorities to request safety-related information as part of our investigations.

C. Questions to be answered. We seek answers to the following questions relating to when information should be reported. In responding to each of the following questions, please provide specific recommendations, and the rationale for each recommendation.

1. Should reporting frequency vary depending on the type of information (e.g., deaths, injuries, warranty rates, complaints, etc.)? If so, what is an appropriate frequency for each type?

2. Should reporting frequency vary depending on the type of vehicle or equipment (e.g., passenger car, bus, child seats or other equipment)? If so, what is an appropriate frequency for each type?

3. Should reporting frequency vary depending upon the component or system involved (e.g., air bag, child restraint, seat belt assemblies, brakes)? If so, what is an appropriate frequency for each?

4. Should manufacturers of particular equipment, such as off-vehicle and accessory equipment, be required to report data on a periodic basis, or only if they receive certain information such as claims alleging deaths or serious injuries involving their products?

At the present time, we have limited knowledge about early warning information that manufacturers, particularly equipment manufacturers, receive, in what form it is received, and how, if at all, they route, code, maintain, and review the information. We believe that it is likely that the types of information to be reported under Section 30166(m)(3) are kept in a variety of manufacturer computer systems and formats. Some manufacturers probably use different computer systems for different types of information, and some may not be computerized at all. To be able to use this information efficiently, NHTSA will have to maintain it in computer systems that can read and incorporate the information into a standardized set of data fields, definitions, and codes. We seek comments on the best ways to assure that NHTSA can do this.

In our view, the early warning provisions contemplate that manufacturers must do more than merely provide raw information and data. Section 30166(m)(3) states that the information reportable to NHTSA is “information which is received by the manufacturer derived from foreign and domestic sources.” One meaning of “derive” is “to reach or obtain by reasoning; deduce; infer” (Random House Compact Unabridged Dictionary, Second Special Edition (1996), p. 536). The aspects of reasoning, deduction, and inference in the definition of “derive,” in our view, authorize a rule that requires a manufacturer to process, organize, and to some degree analyze the raw data and information it has, so that meaningful information is provided. Moreover, it is evident that we may specify the form in which information is reported in order to ensure that it can be efficiently used for its intended purpose of identifying defects related to motor vehicle safety.

NHTSA would expect manufacturers to provide collated and aggregated information by vehicle make, model, model year, and component system, broken down by failure or fault codes. Since it is absolutely essential that NHTSA be able to obtain information in a standardized form, we anticipate identifying relevant codes for reporting purposes.

A possible alternative on which we would appreciate comments would be to have each manufacturer of vehicles or equipment submit a spreadsheet in a specified format with the aggregate number of claims and other information (such as production volumes) by make, model, model year, and component (we would specify which components). The reports would be individually categorized according to the topics discussed above (e.g., injury claims, death claims, lawsuits, incidents). We would then be able to run a computer program to identify spikes or unusual trends in each of these categories.

To assure that manufacturers understand their reporting responsibilities, we are considering developing a matrix of information with the reporting periods specified from left to right across the top (on bi-weekly, monthly, quarterly) and the type of information to be provided listed in a left-hand column from top to bottom. Thus, under “Deaths,” we would place “X” in the column whose heading reads “On Receipt.” We could develop a separate matrix for each type of manufacturer so that it would know exactly what to submit and when.

Questions to be answered. We seek answers to the following questions relating to the manner in which information should be reported.

1. How would manufacturers prefer to report information to us (e.g., hard copy, electronically)? If both, what would be in hard copy? What would be in electronic format? Which electronic format(s) would be preferable?

2. Should information regarding deaths and serious injuries be submitted in the form in which it is received by the manufacturer, the form in which it is entered into a database by the manufacturer, or in some other way?

The following five questions relate to the possible use of a spreadsheet for reporting aggregate information.

1. What do manufacturers understand the term “aggregate statistical information” to mean?

2. Is aggregate statistical information regarding claims, deaths and injuries likely to be useful in identifying potential safety-related defects? Would it be too general to be useful?

3. Would this type of aggregate statistical information tend to result in a large number of investigations into issues that are not related to potential safety-related defects?

4. Would the submission of supplemental information beyond the aggregate statistical information be necessary or appropriate to provide NHTSA with sufficient information upon which to decide to open an investigation? What types of such information?

5. If NHTSA needs to submit requests for supplemental information, should the requests be made as part of an investigation? If not, why not? If not, how should NHTSA characterize these requests, and should the requests and responses be made available to the public?

A. Specifications for use of information. Section 30166(m)(4)(A)(i) and (ii) require that our early warning rule specify how the information reported to us will be used. Those paragraphs provide:

These provisions relate to internal NHTSA matters and are not ordinarily required by the Administrative Procedure Act to be adopted pursuant to notice and comment. Nevertheless, we are seeking public comment on ways to improve our collection, review, and analysis of information and data with the new reporting tools which Congress has given us.

At this point, in the immediate aftermath of the enactment of the TREAD Act, we have only just begun to consider how we might best implement the early warning information and data received, but have formulated no procedures. In part, these procedures will depend upon the form of the rule as we will propose it later this year. They will also depend on the result of the ongoing study of the “standards, criteria, procedures and methods” used by NHTSA in determining whether to open a defect or noncompliance investigation that is being conducted pursuant to Section 15 of the TREAD Act. In the NPRM, we will specifically address the matters covered by subparagraphs (i) and (ii) above, and indicate how we propose to amend 49 CFR part 554, Standards Enforcement and Defects Investigation (one purpose of which is to inform the public of the procedures we follow in investigating possible safety-related defects).

Questions to be answered.

1. How should NHTSA review and utilize the information to be submitted under the early warning rule?

2. What system or processes should NHTSA utilize in reviewing this information?

B. Information in possession of manufacturer. Section 30166(m)(4)(B), Information in possession of manufacturer, states that our early warning regulations “may not require a manufacturer of a motor vehicle or motor vehicle equipment to maintain or submit records respecting information not in the possession of the manufacturer.” There is nothing in the legislative history that amplifies the statutory language. We interpret “possession” as meaning not only information in the actual possession of a manufacturer, but also constructive possession and ultimate control of information, such as information in foreign countries, or information possessed by outside counsel or consultants. We interpret Section 30166(m)(4)(B) as prohibiting us from imposing a requirement that a manufacturer collect data that it does not possess.

A colloquy on the floor of the House does not explain the provision but addressed the need to preserve relevant records:

We regard this as encouraging, if not mandating, us to amend our record keeping regulations in 49 CFR part 576 to assure that records covered by the early warning regulation are kept for an appropriate length of time. We note that part 576 currently applies only to vehicle manufacturers. Consistent with the above colloquy, we intend to expand its applicability to manufacturers of at least certain types of equipment.

Further, we intend to adopt a requirement to assure that manufacturers that are currently collecting information that would be reportable under the early warning requirements do not cease collecting it.

C. Disclosure. Section 30166(m)(4)(C), Disclosure, states that:

We believe that section 30166(m)(4)(C) will have almost no impact. Historically, requests by the public for information that have submitted to us have been addressed under the Freedom of Information Act (FOIA), 5 U.S.C. 552. Section 30167(b), Defect and noncompliance information, provides for disclosure of information related to a defect or noncompliance that we decide will assist us in carrying out Sections 30117(b), Maintaining purchaser records and procedures; Section 30118, Notification of defects and noncompliance; Section 30119, Notification procedures; Section 30120, Remedies for defects and noncompliance; and Section 30121, Provisional notification and civil actions to enforce. Historically, NHTSA has not invoked Section 30167(b) in deciding to release information to the public.

In signing H.R. 5164 on November 1, 2000, the President stated that he was directing us “to implement the information disclosure requirements of the [TREAD] Act in a manner that assures maximum public availability of information.” As a practical matter, we do not interpret Section 30166(m)(4)(C) as affecting the current policies and practices applicable to the disclosure of information to the public.

The primary differences between pre-TREAD Act and post-TREAD Act reporting are likely to be in the mechanisms for reporting and amount of information reported. Before the TREAD Act, other than material submitted pursuant to 49 CFR 573.8, information in NHTSA's possession relating to a possible defect that was not the subject of an ongoing investigation was primarily in the form of consumer complaints. Under the TREAD Act, information will also be generated through periodic reports to NHTSA of information that a manufacturer might not otherwise have disclosed unless specifically asked by NHTSA to provide it. However, most of this information is likely to be similar to the types of information that NHTSA regularly obtained during its investigations pursuant to information requests or special orders.

The TREAD Act does not affect the right of a manufacturer to ask for a determination that information it may report to NHTSA is confidential.

D. Burdensome requirements.

Section 30166(m)(4)(D), Burdensome requirements, requires that the final rule:

On the basis of this ANPRM, manufacturers should have a general idea of the types of data and information that they may be required to submit under a final rule. This should allow them to make a tentative assessment of the burdens that compliance may entail and to provide comments.

Some burdens may be relatively infrequent, such as identifying and reviewing relevant warranty codes. Some burdens may be mostly one-time events, such as programming computer programs. Other burdens may be periodic, such as reporting warranty information, claims, deaths and serious injuries, and lawsuits.

In light of recent developments, some manufacturers may already be refining existing internal procedures, or developing new procedures, intended to provide them with an earlier warning of potential safety problems. To the extent that these procedures are being developed and implemented as part of a corporate policy and the procedures parallel those that are adopted in the final rule, the burden imposed by a final rule would appear to be lessened.

While we recognize that we have not proposed specific requirements, we would appreciate comments providing us with cost and burden estimates to the extent possible.

1. What are the estimated startup and ongoing costs (including financial as well as manpower costs) of complying with the early warning reporting requirements discussed in this notice? What is the basis for the estimate?

2. How should NHTSA decide whether particular requirements are “unduly” burdensome? Should we balance the burdens against the anticipated benefits of receiving the information in question? If so, how should we perform that balancing?

3. What is the most effective early warning information and least burdensome ways of providing it?

4. Have manufacturers developed or are manufacturers beginning to develop and implement their own early warning reporting procedures in advance of NHTSA's rulemaking? If so, what are these procedures. How do these procedures differ from those discussed in the ANPRM? How are they similar?

Under section 30166(m)(5), NHTSA must specify in the final rule “procedures for the periodic review and update of such rule.” Once a final rule amending Part 573 is developed and issued, we anticipate that experience will indicate areas where the regulation ought to be amended, to add or delete information required, and to modify our information-gathering procedures. We would then implement rulemaking to make these adjustments. Accordingly, we plan to amend Part 554 to state that we will review our defect information-gathering procedures at least once every four years. It is likely that the initial review will be sooner than that period.

Executive Order 12866 and DOT Regulatory Policies and Procedures; Unfunded Mandates Reform Act of 1995. This advance notice was not reviewed under Executive Order 12866 and the Department of Transportation's regulatory policies and procedures. Due to the preliminary nature of this document, NHTSA has identified few specific changes that it might propose to its regulations. Further, it has limited current cost information that might be relevant to any potential changes. Accordingly, NHTSA is unable now to evaluate the economic impacts that this rulemaking might ultimately have. At this time, it does not appear that the rule resulting from this rulemaking will be significant. However, NHTSA will reassess this rulemaking in relation to the Executive Order, the DOT Regulatory Policies and Procedures, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) and other requirements for analyzing rulemaking impacts after using the information received in response to this advance notice to select specific proposed changes. To that end, the agency solicits comments, information, and data useful in assessing the impacts of making changes as specified in Section 3(b) of the TREAD Act as discussed in this document.

Regulatory Flexibility Act. NHTSA has considered the impact of this rulemaking action in relation to the Regulatory Flexibility Act (5 U.S.C. Sec. 601 et seq.). Most manufacturers of motor vehicles and motor vehicle equipment are not small entities. We have asked manufacturers of motor vehicles and motor vehicle equipment to specifically comment on the burdens that might be imposed upon them by compliance with Section 3(b) of the TREAD Act. The final rule will not impose new substantive requirements, but will require new reporting. However, the requirements have not been delineated. Accordingly, no regulatory flexibility analysis has been prepared at this time.

Executive Order 13132 (Federalism). Executive Order 13132 on “Federalism” requires us to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of “regulatory policies that have federalism implications.” The E.O. defines this phrase to include regulations “that have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” A final rule based upon this ANPRM, would regulate the manufacturers of motor vehicles and motor vehicle equipment, would not have substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in E.O. 13132.

Civil Justice Reform. A rule based on this ANPRM would not have a retroactive or preemptive effect, and judicial review of it may be obtained pursuant to 5 U.S.C. 702. That section does not require that a petition for reconsideration be filed prior to seeking judicial review.

The final rule will require manufacturers of motor vehicles and motor vehicle equipment to report information and data to NHTSA periodically and upon request. We may also adopt a standardized form for reporting this information, so as to ensure consistency of responses. These provisions are considered to be information collection requirements, as that term is defined by the Office of Management and Budget (OMB) in 5 CFR part 1329. Accordingly, if requirements are proposed, they will be submitted to OMB for its approval, pursuant to the requirements of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).

Your comments must be written and in English. To ensure that your comments are correctly filed in the Docket, please include the docket number of this document in your comments.

Your comments must not be more than 15 pages long (49 CFR 553.21). We established this limit to encourage you to write your primary comments in a concise fashion. However, you may attach necessary additional documents to your comments. There is no limit on the length of the attachments.

Please submit two copies of your comments, including the attachments, to Docket Management at the beginning of this document, under ADDRESSES.

If you wish Docket Management to notify you upon its receipt of your comments, enclose a self-addressed, stamped postcard in the envelope containing your comments. Upon receiving your comments, Docket Management will return the postcard by mail.

If you wish to submit any information under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Chief Counsel, NHTSA (NCC-30), at the address given at the beginning of this document under FOR FURTHER INFORMATION CONTACT. In addition, you should submit two copies from which you have deleted the claimed confidential business information, to Docket Management at the address given at the beginning of this document under ADDRESSES. When you send a comment containing information claimed to be confidential business information, you should include a cover letter setting forth the information specified in our confidential business information regulation, 49 CFR Part 512.

We will consider all comments that Docket Management receives before the close of business on the comment closing date indicated at the beginning of this notice under DATES. Because we must issue a final rule not later than June 30, 2002, and a proposed rule in the interim, we are unlikely to extend the comment closing dates for this notice or for the proposed rule. However, in accordance with our policies, to the extent possible, we will also consider comments that Docket Management receives after the specified comment closing date. If Docket Management receives a comment too late for us to consider in developing the proposed rule, we will consider that comment as an informal suggestion for future rulemaking action.

You may read the comments received by Docket Management at the address and times given near the beginning of this document under ADDRESSES.

You may also see the comments on the internet. To read the comments on the internet, take the following steps:

(1) Go to the Docket Management System (DMS) Web page of the Department of Transportation (http://dms.dot.gov/).

(2) On that page, click on “search.”

(3) On the next page (http://dms.dot.gov/search/), type in the four-digit docket number shown at the heading of this document. Example: if the docket number were “NHTSA-2001-1234,” you would type “1234.”

(4) After typing the docket number, click on “search.”

(5) The next page contains docket summary information for the docket you selected. Click on the comments you wish to see.

You may download the comments. The comments are imaged documents, in either TIFF or pdf format. Please note that even after the comment closing date, we will continue to file relevant information in the Docket as it becomes available. Further, some people may submit late comments. Accordingly, we recommend that you periodically search the Docket for new material.

Under section 118 of the MMPA, NMFS must publish, at least annually, an LOF that places all U.S. commercial fisheries into one of three categories based on the level of incidental serious injury and mortality of marine mammals that occurs in each fishery. The categorization of a fishery in the LOF determines whether participants in that fishery may be required to comply with certain provisions of the MMPA, such as registration, observer coverage, and take reduction plan requirements.

The definitions for the fishery classification criteria can be found in the implementing regulations for section 118 of the MMPA (50 CFR part 229). In addition, these definitions are summarized in the preambles to the final rule implementing section 118 (60 FR 45086, August 30, 1995), the final LOF for 1996 (60 FR 67063, December 28, 1995), and the proposed LOF for 1999 (63 FR 42803, August 11, 1998). These criteria are also summarized here.

The fishery classification criteria consist of a two-tiered, stock-specific approach that first addresses the total impact of all fisheries on each marine mammal stock and then addresses the impact of individual fisheries on each stock. This approach is based on consideration of the rate, in numbers of animals per year, of incidental mortalities and serious injuries of marine mammals due to commercial fishing operations relative to the Potential Biological Removal (PBR) level for each marine mammal stock. The PBR level is defined in 50 CFR 229.2 to mean the maximum number of animals, not including natural mortalities, that may be removed from a marine mammal stock while allowing that stock to reach or maintain its optimum sustainable population. ÿ09

Tier 1: If the total annual mortality and serious injury across all fisheries that interact with a stock is less than or equal to 10 percent of the PBR level of this stock, all fisheries interacting with this stock would be placed in Category III. Otherwise, these fisheries are subject to the next tier of analysis to determine their classification.

Tier 2, Category II: Annual mortality and serious injury of a stock in a given fishery is greater than or equal to 50 percent of the PBR level. ÿ09

Tier 2, Category II: Annual mortality and serious injury of a stock in a given fishery is greater than 1 percent and less than 50 percent of the PBR level.ÿ09

Tier 2, Category III: Annual mortality and serious injury of a stock in a given fishery is less than or equal to 1 percent of the PBR level.

Tier 1, therefore, considers the cumulative fishery mortality and serious injury for a particular stock, while Tier 2 considers fishery-specific mortality for a particular stock. Additional details regarding how threshold percentages between the categories were determined are provided in the preamble to the final rule implementing section 118 of the MMPA (60 FR 45086, August 30, 1995).

This proposed rule includes two tables that list all U.S. commercial fisheries by LOF Category. Table 2 lists all of the fisheries in the Pacific Ocean (including Alaska). Table 3 lists all of the fisheries in the Atlantic Ocean, Gulf of Mexico, and Caribbean.

Owners of vessels or gear engaging in a Category I or II fishery, are required under 50 CFR 229.4 to obtain a marine mammal authorization. You must register through a NMFS Regional Offices (see ADDRESSES) unless you participate in a fishery that has an integrated registration program. Upon receipt of a completed registration, NMFS will issue vessel or gear owners a decal to display on their vessels and an authorization certificate that must be in the possession of the operator while fishing. The procedures and fees associated with registration differ between Regions. ÿ09

For some fisheries, NMFS has integrated the MMPA registration process with existing state and Federal fishery license, registration, or permit systems and related programs. Participants in these fisheries are automatically registered under the MMPA and are not required to pay the $25 registration fee.ÿ09

The following fisheries have integrated registration programs under the MMPA: All Alaska Category II fisheries; all Washington and Oregon Category II fisheries; and three Atlantic fisheries (the Gulf of Maine, U.S. mid-Atlantic lobster fishery, the Atlantic squid, mackerel, butterfish trawl fishery, and the Northeast sink gillnet fishery). Special procedures and instructions for registration in these integrated fisheries are described in the preamble to the final LOF for 1998 (63 FR 5748, February 4, 1998). ÿ09

The Regional Offices annually send renewal packets to participants in Category I or II fisheries that have previously registered; however, it is your responsibility to ensure that registration or renewal forms are submitted to NMFS at least 30 days in advance of fishing. If you have not received a renewal packet by January 1, or are registering for the first time, request a registration form from the appropriate Regional Office (see ADDRESSES). ÿ09