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 2001-NM-306-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. 2001-NM-306-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

On August 15, 2001, the FAA issued AD 2001-16-10, amendment 39-12379 (66 FR 44032, August 22, 2001), applicable to all Aerospatiale Model ATR42-200, -300, -320, and -500 series airplanes; and all Model ATR72 series airplanes; to require revising the Airplane Flight Manual (AFM) to modify procedures for calculating takeoff performance when Type II or IV de-icing or anti-icing fluids have been used. That action was prompted by reports that use of these fluids may result in an increase in the pitch forces necessary to rotate the airplane during takeoff. This condition could result in a delayed takeoff or late aborted takeoff. The requirements of that AD are intended to ensure that the flightcrew is advised of the potential effects of Type II or IV de-icing or anti-icing fluids on the airplane's performance during takeoff, and to ensure that the flightcrew is advised of the revised performance calculations for takeoff to address these effects.

Since the issuance of AD 2001-16-10, the Direction Générale de l'Aviation Civile (DGAC), which is the airworthiness authority for France, advises that the existing AFM revision includes incorrect percentages for increasing takeoff run (TOR), takeoff distance (TOD), and accelerate-stop distance (ASD) on Model ATR72 series airplanes. The DGAC had required an increase in TOR, TOD, and ASD in French airworthiness directives 2000-449-082(B) and 2000-448-053(B), both dated October 31, 2000. (The identical requirements to revise the AFM were also specified in the FAA's AD 2001-16-10.)

Subsequently, the DGAC has reviewed flight simulations performed by the manufacturer of Model ATR42-200, -300, -320, and -500 series airplanes, and Model ATR72 series airplanes, and consequently approved an additional compliance method. The additional compliance method allows an “assisted rotation at takeoff.” This is a procedure executed by the captain and the non-flying pilot when the flightcrew encounters increased pitch control forces, leading to difficulties in rotating. However, this method can only be applied if the flightcrew has been properly trained. The DGAC has determined that the procedure for assisted rotation at takeoff provides a level of safety equivalent to the requirements to revise the AFM specified in previously issued French airworthiness directives 2000-449-082(B) and 2000-448-053(B).

The DGAC has issued airworthiness directives 2000-448-053(B) R2 and 2000-449-082(B) R2, both dated September 19, 2001, in order to assure the continued airworthiness of these airplanes in France. These French airworthiness directives correct the incorrect percentages for TOR, TOD, and ASD, and specify the additional compliance method described previously.

These airplane models are manufactured in France 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 supersede AD 2001-16-10 to continue to require revising the AFM to modify procedures for calculating takeoff performance when Type II or IV de-icing or anti-icing fluids have been used. The proposed AD also would require revising the existing AFM revision to correct the performance values (for Model ATR-72 series airplanes) and to provide an optional method of compliance (for all affected models).

There are approximately 159 airplanes of U.S. registry that would be affected by this proposed AD.

The AFM revision currently required by AD 2001-16-10 takes approximately 1 work hour per airplane to accomplish, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of the currently required revision of the AFM on U.S. operators is estimated to be $9,540, or $60 per airplane.

The new AFM revision that is proposed in this AD action would take approximately 1 work hour per airplane to accomplish, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of the new proposed requirements of this AD on U.S. operators is estimated to be $9,540, or $60 per airplane.

The cost impact figures discussed above are based on assumptions that no operator has yet accomplished any of the current or proposed requirements of this AD action, and that no operator would accomplish those actions in the future if this 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 2001-NM-245-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. 2001-NM-245-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The FAA has received a report indicating that Boeing Stress Engineering has found that the material thickness for longerons L-5L to L-5R, located in the upper center fuselage of Boeing Model 717-200 airplanes, is undersized. Investigation revealed that this could cause fatigue cracking of the longerons of the upper center fuselage after the accumulation of 30,000 total flight cycles on the airplane. Such fatigue cracking could result in reduced structural integrity of the fuselage.

The FAA has reviewed and approved Boeing Service Bulletin 717-53-0001, including Evaluation Form, dated March 20, 2001, which describes procedures for modification of the longeron-to-frame installation of the main frame of the upper center fuselage between stations Y=655.000 and Y=813.000, at longerons L-5L to L-5R. The modification includes fabricating the angles and installing support angles and doublers. Accomplishment of the actions specified in the service bulletin is intended to adequately address the identified unsafe condition.

Since an unsafe condition has been identified that is likely to exist or develop on other products of this same type design, the proposed AD would require accomplishment of the actions specified in the service bulletin described previously, except as discussed below.

Operators should note that, although the service bulletin recommends accomplishing the modification “at a scheduled heavy maintenance period when manpower, materials, and facilities are available,” the FAA has determined that such an imprecise compliance time would not address the identified unsafe condition in a timely manner. In developing an appropriate compliance time for this AD, the FAA considered not only the manufacturer's recommendation, but the degree of urgency associated with addressing the subject unsafe condition, the average utilization of the affected fleet, and the time necessary to perform the modification. In light of all of these factors, the FAA finds a compliance time of “Before the accumulation of 30,000 total flight cycles or within 10 years after the effective date of the AD, whichever is first,” for completing the required actions to be warranted, in that it represents an appropriate interval of time allowable for affected airplanes to continue to operate without compromising safety.

There are approximately 56 airplanes of the affected design in the worldwide fleet. The FAA estimates that 38 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 108 work hours per airplane to accomplish the proposed modification, and that the average labor rate is $60 per work hour. Required parts cost would be minimal. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $246,240, or $6,480 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 manufacturer may cover the cost of replacement parts associated with this proposed AD, subject to warranty conditions.

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:

Comments Invited

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 2002-NM-282-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. 2002-NM-282-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

On October 25, 1999, a Learjet Model 35 airplane operating under part 135 of the Federal Aviation Regulations (14 CFR part 135) departed Orlando International Airport en route to Dallas, Texas. Air traffic control lost communication with the airplane near Gainesville, Florida. Air Force and National Guard airplanes intercepted the airplane, but the flightcrews of the chase airplanes indicated that the windows of the Model 35 airplane were apparently frosted over, which prevented the flightcrews of the chase airplanes from observing the interior of the Model 35 airplane. The flightcrews of the chase airplanes reported that they did not observe any damage to the airplane. Subsequently, the Model 35 airplane ran out of fuel and crashed in South Dakota. To date, causal factors of the accident have not been determined. However, lack of the Learjet flightcrew's response to air traffic control poses the possibility of flightcrew incapacitation and raises concerns with the pressurization and oxygen systems.

Recognizing these concerns, the FAA initiated a special certification review (SCR) to determine if pressurization and oxygen systems on Model 35 airplanes were certificated properly, and to determine if any unsafe design features exist in the pressurization and oxygen systems.

The SCR team found that there have been several accidents and incidents that may have involved incapacitation of the flightcrews during flight. In one case, the airplane flightcrew did not activate the pressurization system or don their oxygen masks and the airplane flew in excess of 35,000 feet altitude. In another case, the airplane flightcrews did not don their oxygen masks when the cabin altitude aural warning was activated. Further review by the SCR team indicates that the Airplane Flight Manual (AFM) of Learjet Model 35 and 36 airplanes does not have an emergency procedure that requires donning the flightcrew oxygen masks when the cabin altitude aural warning is activated. Additional review has found that the AFMs of Learjet Model 35A and 36A airplanes also do not contain appropriate flightcrew actions when the cabin altitude aural warning is activated. However, the AFMs do contain an abnormal procedure that allows the flightcrew to troubleshoot the pressurization system prior to donning the oxygen masks after the cabin altitude aural warning sounds. Troubleshooting may delay donning of the oxygen masks to the point that flightcrews may become incapable of donning their oxygen masks.

The SCR findings indicated that the most likely cause for incapacitation was hypoxia (lack of oxygen). The only other plausible cause of incapacitation is exposure to toxic substances. However, no evidence was found to support the existence of toxic substances.

Delayed response of the flightcrew in donning oxygen masks as a first and immediate action upon the activation of the cabin altitude warning could lead to incapacitation of the flightcrew and loss of control of the airplane.

We have previously issued AD 2003-03-15, amendment 13039 (68 FR 4892, January 31, 2003). That AD revises the AFM for various Boeing and McDonnell Douglas transport category airplanes to advise the flightcrew to don oxygen masks as a first and immediate step when the cabin altitude aural warning sounds. Boeing Model 737-600, 737-700, 737-700C, 737-800, 737-900, 757, and 767 series airplanes were not included in the applicability of that AD because we determined that appropriate instructions for donning oxygen masks were included in the Airplane Operations Manual for those airplanes.

After the issuance of the NPRM for AD 2003-03-15, we repeated the review of the AFMs for Boeing Model 737-600, 737-700, 737-700C, 737-800, 737-900, 757, and 767 series airplanes. Based on the results of this second review, we have determined that further rulemaking is necessary to ensure that the AFMs for those airplanes contain appropriate instructions for the flightcrew to immediately don emergency oxygen masks when a cabin altitude aural warning occurs. This proposed AD follows from that determination.

We have previously issued AD 2000-23-10, amendment 39-11980 (65 FR 70294, November 22, 2000), which applies to all Lockheed Model 188A and 188C series airplanes. That AD requires a revision of the AFM to add procedures for donning the flightcrew oxygen masks when the cabin altitude aural warning sounds. The requirements of that AD are intended to prevent incapacitation of the flightcrew as a result of lack of oxygen and consequent loss of control of the airplane.

We have also previously issued AD 2001-22-10, amendment 39-12489 (66 FR 54425, October 29, 2001), which applies to all Dassault Model Mystere-Falcon 50, Mystere-Falcon 900, and Falcon 900EX series airplanes. That AD requires revising the Emergency Procedures and Abnormal Procedures sections of the AFM to advise the flightcrew to immediately don oxygen masks in the event of significant pressurization or oxygen level changes. The requirements of that AD are intended to prevent incapacitation of the flightcrew due to lack of oxygen, which could result in their inability to continue to control the airplane.

We are continuing to review emergency procedures in the AFMs for other airplane models to ensure that the AFMs contain appropriate instructions for donning the flightcrew oxygen masks. We may consider further rulemaking based on the results of these reviews.

Since an unsafe condition has been identified that is likely to exist or develop on other products of this same type design, the proposed AD would require revising the Emergency Procedures or Non-Normal Procedures section of the AFM, as applicable, to advise the flightcrew to don oxygen masks as a first and immediate step when the cabin altitude aural warning sounds.

There are approximately 3,107 airplanes of the affected design in the worldwide fleet. The FAA estimates that 1,599 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 1 work hour per airplane to accomplish the proposed AFM revision, and that the average labor rate is $60 per work hour. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $95,940, or $60 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.

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 2001-NM-335-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. 2001-NM-335-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The FAA has received a report indicating that, during production, damaged low-pressure oxygen tubing was found on eight Raytheon Model Beech 400A airplanes. The damage was created during tubing installation when a knife used to remove portions of the heat shrink protective sleeving scored the tubing. The sleeving was removed to provide adequate electrical bonding/grounding surfaces for the electrical bonding/grounding jumper assemblies. Leakage of oxygen from scored low-pressure oxygen tubing could result in lack of available oxygen for the flightcrew, or possible explosion or fire.

The FAA has reviewed and approved Raytheon Service Bulletin SB 35-3406, dated March 2001, which describes procedures for replacing low-pressure oxygen tubing with new low-pressure oxygen tubing. Accomplishment of the actions specified in the service bulletin is intended to adequately address the identified unsafe condition.

Since an unsafe condition has been identified that is likely to exist or develop on other products of this same type design, the proposed AD would require accomplishment of the actions specified in the service bulletin described previously, except as discussed below.

The proposed AD would differ from the Raytheon service bulletin in that, for Raytheon Model Beech 400T series airplanes, the proposed AD would specify a compliance time of within 200 flight hours or 1 year from the effective date of the AD, whichever occurs first. The Raytheon service bulletin states that compliance time information for Model Beech 400T airplanes should be obtained from “the appropriate headquarters.” The FAA conducted a durability evaluation of the tubing material and concluded that, although the calculated stress remained below the endurance limit of the material, the vibratory nature of the installation was unknown. The conclusion was that a compliance time of within 200 flight hours or 1 year from the effective date of this AD would be a conservative estimate for the proposed replacement. The compliance time coincided with the next scheduled inspection for the majority of affected operators, providing minimal impact to the operators. Operators should note that this compliance time for Model Beech 400T series airplanes is equivalent to the compliance time specified in the Raytheon service bulletin for the affected Raytheon Model Beech 400A series airplanes.

There are approximately 34 airplanes of the affected design in the worldwide fleet. The FAA estimates that 27 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 25 work hours per airplane to accomplish the proposed replacement, and that the average labor rate is $60 per work hour. Required parts would cost approximately $1,052 per airplane. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $68,904, or $2,552 per airplane.

The cost impact figures discussed above are 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 2001-NM-309-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. 2001-NM-309-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The FAA has received a report from the manufacturer indicating the detection of 22 holes in the rear spar of the left and right wings of a Boeing Model 717-200 airplane with bolts installed in uncoined, clearance fit holes. This installation was not in accordance with the manufacturer's design, which specified stress-coining of all 22 holes. The design was intended to eliminate the possibility of fatigue cracking such as that previously detected on a McDonnell Douglas DC-9 airplane, which is the predecessor to the Model 717-200 airplane. The manufacturer also has determined that 9 out of the 22 holes in the rear spar must be cold-worked, followed by the installation of Hi-Lok fasteners in all 22 holes. Such conditions, if not corrected, may be a potential source of fatigue cracking of the rear spar of the wings, which could result in reduced structural integrity of the airplane.

The FAA has reviewed and approved Boeing Service Bulletin 717-57-0001, Revision 01, including Evaluation Form, dated January 6, 2003, which describes procedures for modification of certain attachment holes in the rear spar of the left and right wings. The modification includes cold working 9 uncoined attachment holes and replacing 22 bolts with Hi-Lok fasteners. Accomplishment of the actions specified in the service bulletin is intended to adequately address the identified unsafe condition.

Since an unsafe condition has been identified that is likely to exist or develop on other products of this same type design, the proposed AD would require accomplishment of the actions specified in the service bulletin described previously, except as discussed below.

Operators should note that, although the service bulletin recommends accomplishing the modification “Within 30,000 landings after the issue date of this service bulletin,” the FAA has determined that such a compliance time would not address the identified unsafe condition in a timely manner. In developing an appropriate compliance time for this AD, the FAA considered not only the manufacturer's recommendation, but the degree of urgency associated with addressing the subject unsafe condition, the average utilization of the affected fleet, and the time necessary to perform the modification. In light of all of these factors, the FAA finds a compliance time of “Before the accumulation of 30,000 total flight cycles or within 10 years after the effective date of the AD, whichever is first,” for completing the required actions to be warranted, in that it represents an appropriate interval of time allowable for affected airplanes to continue to operate without compromising safety.

There are approximately 57 airplanes of the affected design in the worldwide fleet. The FAA estimates that 39 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 5 work hours per airplane to accomplish the proposed modification, and that the average labor rate is $60 per work hour. Required parts would cost approximately $955 per airplane. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $48,945, or $1,255 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 manufacturer may cover the cost of replacement parts associated with this proposed AD, subject to warranty conditions.

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 2002-NM-34-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. 2002-NM-34-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to add an airworthiness directive (AD), applicable to certain Boeing Model 767 series airplanes, was published as a notice of proposed rulemaking (NPRM) in the Federal Register on August 23, 2002 (67 FR 54591). That NPRM would have required replacement of the aileron control override quadrant with a modified unit. That NPRM was prompted by a report of the seizing of the input override mechanism bearings of the lateral central control actuator on affected airplanes. The seizing was discovered during an inspection and has been attributed to corrosion on the steel bearings in the override mechanism. A failed override system is a latent failure and does not affect normal operation. However, if the pilot's control system were to subsequently jam, the seizing of the override bearings could have prevented the aileron control override system from operating properly. That condition, if not corrected, could result in reduced lateral control of the airplane.

Certain comments received in response to the original NPRM have resulted in changes that expanded its scope and gave rise to this supplemental NPRM.

The manufacturer advises that the applicability was incorrectly identified in the original NPRM as Boeing Model 767 series airplanes, line numbers 1 through 811. The manufacturer reports that line numbers 812 through 836 are also subject to the identified unsafe condition; therefore, the affected inclusive line numbers should be 1 through 836. In addition, the manufacturer requests exclusion of Model 767-400ER series airplanes from the applicability because the installation of corrosion-resistant steel bearings during production on those airplanes adequately addresses the identified unsafe condition.

The FAA agrees and has revised the applicability accordingly in this supplemental NPRM. In addition, the Cost Impact section has been revised in this supplemental NPRM to reflect the increased number of affected airplanes.

One commenter, an operator, requests that the Cost Impact section of the original NPRM be revised to reflect additional work hours necessary to accomplish the proposed requirements. According to the commenter, it would also be necessary to replace the bearings and perform corrective rigging of certain control cables. The commenter notes the service bulletin's failure to consider these tasks in the total work hour estimate.

The FAA partially concurs with the request. Although the proposed AD would require that operators “replace the aileron control override quadrant with a modified unit,” the FAA recognizes that, to accomplish that task, operators must also incur the direct cost of replacing the bearings in the aileron override quadrant. Therefore, the Cost Impact section has been further revised in this supplemental NPRM to reflect an estimated 6 work hours necessary to replace the bearings and 4 work hours to replace the quadrant, for a total of approximately 10 work hours to accomplish the proposed requirements.

However, as stated in the original NPRM, the cost impact information is intended to provide only the “direct” costs of the proposed requirements; the total work hour figure represents the time necessary to perform only the AD's required actions. The cost analysis in AD rulemaking actions typically does not include incidental costs such as the time required for cable rigging and testing of the system, which would be necessary to ensure the functionality of the system after the required actions have been accomplished.

The heading for paragraph (b) (“Spare Parts” in the original NPRM) has been changed to “Part Installation” in this supplemental NPRM.

Since these changes expand the scope of the original NPRM, the FAA has determined that it is necessary to reopen the comment period to provide additional opportunity for public comment.

There are approximately 836 airplanes of the affected design in the worldwide fleet. The FAA estimates that 443 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 10 work hours per airplane to accomplish the proposed actions, and that the average labor rate is $60 per work hour. Required parts would cost approximately $146 per airplane. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $330,478, or $746 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 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:

I. Background

On October 26, 2001, the President signed into law the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001 (Public Law 107-56) (the Act). Title III of the Act makes a number of amendments to the anti-money laundering provisions of the Bank Secrecy Act (BSA), which are codified in subchapter II of chapter 53 of title 31, United States Code. These amendments are intended to promote the prevention, detection, and prosecution of international money laundering and the financing of terrorism. Section 352(a) of the Act, which became effective on April 24, 2002, amended section 5318(h) of the BSA. As amended, section 5318(h)(1) requires every financial institution to establish an anti-money laundering program that includes, at a minimum: (i) The development of internal policies, procedures, and controls; (ii) the designation of a compliance officer; (iii) an ongoing employee training program; and (iv) an independent audit function to test programs. When prescribing minimum standards for anti-money laundering programs, section 352 directs the Treasury to consider the extent to which such standards are commensurate with the size, location, and activities of the financial institutions to which such regulations apply.

As a “business engaged in vehicle sales” (vehicle seller) is defined as a financial institution under the BSA, 31 U.S.C. 5312(a)(2)(T), it is subject to the anti-money laundering program requirement. On April 29, 2002, and again on November 6, 2002, FinCEN temporarily exempted certain financial institutions, including vehicle sellers, from the requirement to establish an anti-money laundering compliance program. The purpose of the deferral was to enable FinCEN to study the affected industries and consider the extent to which anti-money laundering program requirements should be applied to them, taking into account the specific characteristics of the various entities defined as financial institutions by the BSA.1

In addition, section 326 of the Act added new subsection (l) to 31 U.S.C. 5318, which requires Treasury to prescribe regulations setting forth minimum standards for financial institutions to identify customers applying to open accounts. Section 326 applies to all BSA financial institutions that open accounts for their customers.

The business of vehicle sellers encompasses various segments, including sellers of: (1) New land-based vehicles, such as automobiles, trucks, RVs, and motorcycles; (2) new aircraft, including fixed wing airplanes and helicopters; (3) new boats and ships; and (4) used vehicles (as well as those who broker the sale of used vehicles).2

Businesses engaged in the selling of vehicles comprise a significant percentage of the total gross domestic product of the United States, and the vehicles that they collectively sell account for a major portion of U.S. consumption, exports, and other important economic indicia.3 As such, because of both the economic significance of this industry, and the important and pervasive role that vehicles, and therefore vehicles sales, play in the United States, this ANPRM is intended to assist FinCEN in striking a balance between the important statutory requirements of the Act, and the important benefits that vehicle sellers provide to our country.

Some vehicle sellers are tied to the manufacturing of the vehicles, while others may not be. While some vehicle sellers are publicly traded companies, most are privately held or family owned. Some may be characterized as wholesale sellers of vehicles, while others are engaged in retail sales of the vehicles. In each segment, there is often substantial variety in function and practice.

Vehicle sellers range in size from very large entities that sell vehicles with a total value that is measured in billions of dollars annually, to very small entities (such as a neighborhood used car dealer) that may only sell a few vehicles each year. Vehicle sellers may sell either new or used vehicles, and may sell to customers domestic or foreign, or both. Moreover, the characteristics of vehicle sellers often vary based on the type of vehicles sold. For example, retail sellers of large, multi-engine commercial aircraft are generally much larger businesses than sellers of small, general aviation aircraft, reflecting the capital and business risks needed to maintain inventory. In a like manner, sales of large marine ships in excess of 100,000 deadweight tons are conducted very differently than sales of pleasure watercraft, such as sail boats. Similarly, sellers of used vehicles often have different characteristics than sellers of new vehicles, reflecting the different relationships with vehicle manufacturers and the differences in these markets.

The threshold issue being addressed by this ANPRM is the extent to which vehicle sellers pose a significant risk of money laundering.4 For example, a money laundering risk is presented where a vehicle is purchased with cash.5 This is particularly true for the placement stage of money laundering; that is, where the money launderer seeks to cleanse illegal proceeds by introducing them into the financial system. A large cash purchase of an expensive vehicle could form the placement stage for a money laundering scheme.6 While the risk of money laundering is minimized, to some extent, by the existing obligation on all vehicle sellers to report, pursuant to 26 U.S.C. 6050I, 31 U.S.C. 5331, and 31 CFR 103.30, the receipt of cash or monetary instruments in excess of $10,000,7 a rule that requires an anti-money laundering compliance or customer identification program may alleviate further the money laundering risk associated with large cash purchases. In response to documented instances of abuse, industry associations representing new car dealers have already taken steps to guard against the laundering of illicit proceeds through the purchase of automobiles with cash, providing their members with educational materials concerning their legal obligations and cash-related money laundering red flags.

The next stage of money laundering, the layering stage, involves the distancing of illegal funds from their criminal source through the creation of complex layers of financial transactions. Examples of layering through the vehicle sellers industry might include trading in vehicles for other vehicles and engaging in successive transactions of buying and selling both new and used vehicles.

Vehicle sales businesses also could be used for integrating illicit income into assets that appear legitimate. Integration occurs when illegal funds appear to have been derived from a legitimate source. This could occur, for instance, when the funds or vehicles received from the vehicle seller in the aftermath of the layering transactions are held out as coming from a legitimate source.

Vehicle sellers may need to have an understanding of the identity of customers who participate in transactions with money laundering risk. For purchases of vehicles involving large sums of cash, knowing the customer's identity may be an essential part of an effective anti-money laundering program. Customers may request complex invoicing arrangements or payment arrangements or may structure their cash payments to avoid BSA reports. While vehicle sellers may scrutinize non-cash transactions to manage fraud risk, they are undoubtedly less aware of possible money laundering risk with both cash and non-cash transactions.

FinCEN has received reports indicating that some vehicle sellers have engaged in structuring 8 sequential deposits of cash near the reporting threshold of $10,000. FinCEN also has received reports of the purchase of automobiles with structured checks and money orders. Other instances of suspicious activity reported to FinCEN concerning this industry include consumer loan fraud and check fraud. These instances all involve the placement stage of money laundering.

Accordingly, FinCEN solicits comments on the existence of the above, and other, types of risks in the vehicle sellers business. Specifically, FinCEN is interested in identifying risks in the products that vehicle sellers provide that make them uniquely susceptible to money laundering, as opposed to the risks inherent in all businesses that sell products or services to the public that may be purchased with tainted funds. Such heightened risks include, for example, the payment of funds to the seller by third parties on behalf of customers, particularly from jurisdictions with lax money laundering controls, and the ability to pay funds to the vehicle seller and, in return, receive funds from the seller that have the appearance of legitimacy. FinCEN further seeks comment on whether differentiation should be made for lines of business that appear to have minimal money laundering risks, such as the sale of vehicles to federal, state, and local governments. Are there other functional distinctions that should be made?

Based on the determination of the extent of the risk of money laundering posed by vehicle sellers, the question arises as to whether the industry should be exempt under sections 352 and 326 of the Act. If the risk of money laundering in the vehicle sellers industry is determined to be minimal such that it does not justify the imposition of a regulatory burden, it might be reasonable to exempt the industry from coverage of these provisions. This judgment will be based on the existing risks of money laundering, the potential risks of money laundering, as well as the volume of possible illicit funds that may flow through vehicle sellers.

In light of these issues, FinCEN would like to solicit comments with regard to the issue of whether there should be an exemption from these provisions for vehicle sellers, or any category thereof. These comments should be designed to enable FinCEN to decide whether or not to propose an appropriate regulation designed to provide protection for the vehicle seller industry from the risks of money laundering.

In applying section 352 of the Act to vehicle sellers, FinCEN must take into account which requirements are “commensurate with the size, location, and activities” of this industry. In undertaking this review, FinCEN recognizes that vehicle sellers likely have some programs already in place to meet existing legal obligations. For example, as a nonfinancial trade or business, vehicle sellers are required to report on Form 8300 the receipt of over $10,000 in currency and certain monetary instruments. Vehicle sellers also may have procedures in place to protect themselves against fraud. Such procedures may be sufficient in themselves, given the money laundering risk in the industry, or they may serve as a foundation on which additional anti-money laundering program requirements could be based. FinCEN therefore seeks comment on the particular elements that should be included in any required anti-money laundering program, should it be determined that such a requirement should be imposed on this industry. In this regard, comment is requested regarding the types of programs vehicle sellers currently have in place to prevent fraud and illegal activities, and the applicability of such programs to the prevention of money laundering.

In the event FinCEN determines to propose requirements on vehicle sellers under sections 352 and 326 of the Act, it will be necessary to define the term vehicle seller. Although the BSA identifies a vehicle seller as a financial institution, the statute contains no definition of the term, other than to state that it includes sellers of automobiles, airplanes, and boats. The legislative history of the BSA provides no insight into how Congress intended the term to be defined, nor has FinCEN had an occasion to define the term in a regulation.

As discussed above, vehicle sellers form an extremely large and diverse industry, accounting for a major portion of American consumption as well as exports. Given this diversity in the vehicle sellers industry, the risks of money laundering and the costs of preventive programs can vary widely. Thus, FinCEN solicits comment on whether any proposed rule should limit the definition to sellers of particular types of vehicles, to retail or wholesale vehicle sellers, or sellers of new or used vehicles. In addition, FinCEN's regulations in the past have recognized that businesses that do not transact in sufficient dollar amounts or volume, or in cash or monetary instruments, may not present sufficient money laundering risk to require the imposition of federally mandated programs. For example, under the BSA, money services businesses other than money transmitters (currency exchangers, check cashers, and issuers, sellers, and redeemers of traveler's checks and money orders) are defined as financial institutions only if they transact over $1,000 in covered transactions for any one person in any one day.9 This threshold reflects the judgment that businesses that never engage in transactions above that level fail to present a money laundering risk sufficient to justify the regulatory burden. FinCEN solicits comment on whether, if vehicle sellers are required to implement anti-money laundering programs, there should be a monetary threshold of some kind in defining a vehicle seller for purposes of the BSA. Commenters should address whether any such threshold should be transaction based, as with the money services business rules, or on an annual gross income, or some other basis.

Section 326 requires the setting of minimum standards for identification of customers “in connection with the opening of an account at a financial institution.” Section 311 of the Patriot Act provides a definition of “account” for banks, but requires the Secretary to promulgate a regulation defining “account” for non-bank financial institutions. Although such a regulation has yet to be issued, the definition for banks (“a formal banking or business relationship established to provide regular services, dealings, and other financial transactions”) is a useful starting point. This definition incorporates two key concepts: (1) Formality of the business relationship, and (2) regularity of dealings. In light of these concepts, FinCEN solicits comments as to whether (and to what extent) vehicle sellers maintain accounts for their customers, in addition to fleet accounts. What kinds of services do vehicle sellers provide to any such account holders (including fleet accountholders)? Are these account relationships ongoing? Are accounts established to receive recurring payments from a customer, or are additional services provided to the accountholder?

With this ANPRM, FinCEN is seeking input to assist it in determining how to implement the requirements of sections 352 and 326 of the Act with respect to vehicle sellers. FinCEN welcomes comments on all aspects of this potential regulation and encourages all interested parties to provide their views.

Because this is an ANPRM, FinCEN does not know whether or in what form it may issue a regulation pursuant to sections 352 and 326 of the Act affecting vehicle sellers. Accordingly, FinCEN does not know whether potential regulations will constitute a significant regulatory action under the Executive Order. This ANPRM neither establishes nor proposes any regulatory requirements. FinCEN has submitted a notice of planned regulatory action to OMB for review. Because this ANPRM does not contain a specific proposal, information is not available with which to prepare an economic analysis. FinCEN will prepare a preliminary analysis if it proceeds with a proposed rule that constitutes a significant regulatory action.

Accordingly, FinCEN solicits comments, information, and data on the potential effects of any potential regulation. FinCEN will carefully consider the costs and benefits associated with this rulemaking.

I. Background

On October 26, 2001, the President signed into law the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001 (Public Law 107-56) (the Act). Title III of the Act makes a number of amendments to the anti-money laundering provisions of the Bank Secrecy Act (BSA), which are codified in subchapter II of chapter 53 of title 31, United States Code. These amendments are intended to make it easier to prevent, detect, and prosecute international money laundering and the financing of terrorism. Section 352(a) of the Act, which became effective on April 24, 2002, amended section 5318(h) of the BSA. As amended, section 5318(h)(1) requires every financial institution to establish an anti-money laundering program that includes, at a minimum: (i) The development of internal policies, procedures, and controls; (ii) the designation of a compliance officer; (iii) an ongoing employee training program; and (iv) an independent audit function to test programs. When prescribing minimum standards for anti-money laundering programs, section 352 directs the Treasury to consider the extent to which such standards are commensurate with the size, location, and activities of the financial institutions to which such regulations apply.

As a “travel agency” is defined as a financial institution under the BSA, 31 U.S.C. 5312(a)(2)(Q), it is subject to the anti-money laundering program requirement. On April 29, 2002, FinCEN temporarily exempted certain financial institutions, including travel agencies, from the requirement to establish an anti-money laundering compliance program. The purpose of the deferral was to enable FinCEN to study the affected industries and consider to what extent anti-money laundering program requirements could best be applied, taking into account the specific characteristics of the various entities defined as financial institutions by the BSA.1

In addition, section 326 of the Act added new subsection (l) to 31 U.S.C. 5318, which requires Treasury to prescribe regulations setting forth minimum standards for financial institutions to identify customers applying to open accounts. Section 326 applies to all BSA financial institutions that open accounts for their customers.

FinCEN is proceeding with this ANPRM because of questions about travel agencies and money laundering that make it difficult to assess the benefits and burdens associated with imposition of anti-money laundering regulations on this industry. Through this process, FinCEN hopes to solicit sufficient information to enable it to determine whether to go forward with a Notice of Proposed Rulemaking, as well as the scope of entities and procedures that any such Notice should encompass.

Although the BSA identifies a travel agency as a financial institution, the statute contains no definition of the term, nor has FinCEN had an occasion to define the term in a regulation. Thus, the first step in addressing the appropriateness of issuing anti-money laundering regulations is determining a functional definition of a travel agency. The legislative history of the BSA provides no insight into how Congress intended the term to be defined.

As the name implies, a travel agency offers its services in the capacity of an agent, and not as a principal. A travel agency offers travel and tourism related services to the public as a result of agency agreements with airlines, cruise lines, hotels, and other suppliers of travel-related services. It may contract directly with suppliers such as hotels, car rental companies, and tour operators, or may contract with a coordinating body such as the Airlines Reporting Corporation (ARC)2 and the International Airlines Travel Agency Network (IATAN). Travel agencies also may provide financial services such as traveler's checks to their customers, and may offer travel-related insurance. Travel agencies that offer such financial services in conjunction with travel services are considered financial institutions for the purpose of consumer privacy regulations.3

For purposes of this ANPRM, FinCEN is using the following functional definition of travel agency: “Any person who sells, as an agent and not as a principal, the following travel services: airline tickets, rail tickets, hotel and motel reservations, and cruise reservations, or some combination of those services.” This definition excludes direct sales by service providers such as hotels and tour buses. These principals are excluded because their inclusion appears to be at odds with the use of the term “agency” in the BSA definition (such entities are providers of travel-related services, rather than travel agents).

According to the Small Business Administration (SBA), most travel agencies are small businesses.4 Of the 22,687 travel agencies identified by the SBA operating out of 29,332 establishments, only 450 fall outside the SBA definition of a small business in this industry. These larger businesses generate 47% of all industry revenue.5 FinCEN's regulations in the past have recognized that businesses that do not transact in sufficient dollar amounts or volume may not present sufficient money laundering risk to require the imposition of federally mandated programs. For example, under the BSA, money services businesses other than money transmitters (currency exchangers and check cashers, as well as issuers, sellers, and redeemers of traveler's checks and money orders) are defined as financial institutions only if they transact over $1,000 in covered transactions for any one person in any one day.6 This threshold reflects the judgment that businesses that never engage in transactions above that level fail to present a money laundering risk sufficient to justify the regulatory burden. FinCEN solicits comment on whether, if travel agencies are required to implement anti-money laundering programs, there should be a monetary threshold of some kind in defining a travel agency for purposes of the BSA. Commenters should address whether any such threshold should be transaction based, as with the money services business rules, or on an annual gross income, or some other basis.

Although some travel agencies perform some of the functions of traditional financial institutions, such as selling traveler's checks, such agencies, to the extent they meet the regulatory threshold, would be considered money services businesses under 31 CFR part 103.11(uu)(4). The focus of this ANPRM is on the risks unique to travel agencies' provision of travel-related services. Within this focus, the industry does present some potential money laundering risks. For example, some travel agencies have a significant portion of their clients pay for the agencies' products and services in cash. While the risk of money laundering is minimized, to some extent, by the existing obligation on all travel agencies to report, pursuant to 26 U.S.C. 6050I, 31 U.S.C. 5331, and 31 CFR 103.30, the receipt of cash or monetary instruments in excess of $10,000,7 a rule that requires an anti-money laundering compliance or customer identification program may alleviate further the money laundering risk associated with the cash intensive nature of some travel agencies. Moreover, some travel agencies are associated with ancillary businesses, including money services businesses offering money transfer and check cashing, that pose additional money laundering risk. To the extent customers wish to avoid the recordkeeping and reporting requirements applicable to the money services side of the business, they may try to route their transactions through the unregulated travel agency side of the business. Instead of obtaining a money order or traveler's check to make an illicit payment (which would be subject to FinCEN's recordkeeping rules if over $3,000), a money launderer could buy an expensive airline ticket for another person, who could then exchange it for a legitimate-seeming refund.

FinCEN has received reports indicating that some travel agencies (or their customers) have engaged in structuring sequential deposits and withdrawals of cash near the reporting threshold of $10,000. There have also been reports of some travel agencies structuring outgoing wire transfers in small amounts to avoid BSA recordkeeping requirements. Some travel agents have been observed receiving unusual wire transfers from foreign countries or wire transfers of unusually large amounts.

In addition, travel agencies reportedly have been used to transfer value through the provision of in-kind services. A travel agent sending groups to a foreign country, for example, can make an offsetting payment in a foreign entity's U.S. or other account and instruct that entity to cover the costs of the group during their trip. This method is one way that businesses involved in informal value transfer systems, such as hawala,8 can transfer funds between entities in various countries.

Travel agencies may need to have an understanding of the identity of customers who participate in transactions with money laundering risk. For purchases of travel services involving large sums of cash, knowing the customer's identity may be an essential part of an effective anti-money laundering program. Customers may request complex invoicing arrangements or payment arrangements or may structure their cash payments to avoid BSA reports. While travel agencies may scrutinize non-cash transactions to manage fraud risk, they are undoubtedly less aware of possible money laundering risk with both cash and non-cash transactions.

Accordingly, FinCEN solicits comments on the existence of the above, and other, types of risks in the travel agency business. Specifically, FinCEN is interested in identifying risks in the products and services that travel agencies provide that make them uniquely susceptible to money laundering, as opposed to the risks inherent in all businesses that sell products or services to the public that may be purchased with tainted funds. Such heightened risks include, for example, the ability to transfer funds, even with a sizable penalty or cost, from one person to another; the ability to pay in funds and, in return, receive funds from the travel agency or related business that have the appearance of legitimacy and no ties to incoming funds. Furthermore, should regulatory distinctions based on money laundering risk be made between travel agencies that restrict their sales to domestic travel and those that handle international travel? Are there other functional distinctions that should be made?

Based on the determination of the extent of the risk of money laundering within the travel agency industry, the question arises as to whether the industry should be exempt under sections 352 and 326 of the Act. If the risk of money laundering in the travel agency industry is determined to be minimal such that it does not justify the imposition of a regulatory burden, it might be reasonable to exempt the industry from coverage of these provisions. This judgment will be based on the existing risks of money laundering, the potential risks of money laundering, as well as the volume of possible illicit funds that may flow through travel agencies.

In light of these issues, FinCEN would like to solicit comments with regard to the issue of whether there should be an exemption from these provisions for travel agencies. These comments should be designed to enable FinCEN to decide whether or not to propose the promulgation of an appropriate regulation designed to provide protection for the travel agency industry with regard to the risk of money laundering.

In applying section 352 to travel agencies, FinCEN must take into account which requirements are “commensurate with the size, location, and activities” of this industry. In undertaking this review, FinCEN recognizes that travel agencies likely have some programs already in place to meet existing legal obligations. For example, as a nonfinancial trade or business, travel agencies are required to report on Form 8300 the receipt of over $10,000 in currency and certain monetary instruments. Travel agencies also may have procedures in place to protect themselves against fraud. Such procedures may be sufficient in themselves given the money laundering risk in the industry, or they may serve as a foundation on which additional anti-money laundering program requirements could be built. FinCEN therefore seeks comment on what types of programs travel agencies have in place to prevent fraud and illegal activities, and the applicability of such programs to the prevention of money laundering.

Section 326 requires the setting of minimum standards for identification of customers “in connection with the opening of an account at a financial institution.” Section 311 of the Patriot Act provides a definition of “account” for banks, but requires the Secretary to promulgate a regulation defining “account” for non-bank financial institutions. Although such a regulation has yet to be issued, the definition for banks (“a formal banking or business relationship established to provide regular services, dealings, and other financial transactions”) is a useful starting point. This definition incorporates two key concepts: (1) Formality of the business relationship, and (2) regularity of dealings. In light of these concepts, FinCEN solicits comments as to whether (and to what extent) travel agencies maintain accounts for their customers. If so, what kinds of services do travel agencies provide to account holders? Are these account relationships ongoing? Are accounts established to receive recurring payments from a customer, or are additional services provided to the accountholder?

With this ANPRM, FinCEN is seeking input to assist it in determining how to implement the requirements of sections 352 and 326 of the Act with respect to travel agencies. FinCEN welcomes comments on all aspects of potential regulation and encourages all interested parties to provide their views.

Because this is an ANPRM, FinCEN does not know whether or in what form it may issue a regulation pursuant to sections 352 and 326 of the Act affecting travel agencies. Accordingly, FinCEN does not know whether potential regulations will constitute a significant regulatory action under the Executive Order. This ANPRM neither establishes nor proposes any regulatory requirements. FinCEN has submitted a notice of planned regulatory action to OMB for review. Because this ANPRM does not contain a specific proposal, information is not available with which to prepare an economic analysis. FinCEN will prepare a preliminary analysis if it proceeds with a proposed rule that constitutes a significant regulatory action.

Accordingly, FinCEN solicits comments, information, and data on the potential effects of any potential regulation. FinCEN will carefully consider the costs and benefits associated with this rulemaking.

Regulated Entities. The regulated category and entities affected by this action include:

This table is not intended to be exhaustive, but rather provides a guide for readers likely to be interested in the revisions to the regulation affected by this action. To determine whether your facility, company, business, organization, etc., is regulated by this action, you should carefully examine all of the applicability criteria in § 60.110b of the standards, as well as in the proposed amendments to the applicability sections contained in this proposal. If you have questions regarding the applicability of these amendments to a particular entity, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

Docket. The EPA has established an official public docket for this action under Docket ID No. OAR-2002-0046. The official public docket consists of the documents specifically referenced in this action, any public comments received, and other information related to this action. Although a part of the official docket, the public docket does not include Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. The official public docket is the collection of materials that is available for public viewing at the Air and Radiation Docket in the EPA Docket Center, (EPA/DC) EPA West, Room B102, 1301 Constitution Ave., NW, Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is (202) 566-1744, and the telephone number for the Air and Radiation Docket is (202) 566-1742.

Electronic Access. You may access this Federal Register document electronically through the EPA Internet under the “Federal Register” listings at http://www.epa.gov/fedrgstr/. An electronic version of the public docket is available through the EPA's electronic public docket and comment system, EPA Dockets. You may use EPA Dockets at http://www.epa.gov/edocket/ to submit or view public comments, access the index listing of the contents of the official public docket, and to access those documents in the public docket that are available electronically. Once in the system, select “search,” then key in the appropriate docket identification number.

Certain types of information will not be placed in EPA Dockets. Information claimed as CBI and other information whose disclosure is restricted by statute, which is not included in the official public docket, will not be available for public viewing in the EPA's electronic public docket. The EPA's policy is that copyrighted material will not be placed in the EPA's electronic public docket but will be available only in printed, paper form in the official public docket. To the extent feasible, publicly available docket materials will be made available in the EPA's electronic public docket. When a document is selected from the index list in EPA Dockets, the system will identify whether the document is available for viewing in the EPA's electronic public docket. Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facility. The EPA intends to work toward providing electronic access to all of the publicly available docket materials through the EPA's electronic public docket.

For public commenters, it is important to note that the EPA's policy is that public comments, whether submitted electronically or in paper, will be made available for public viewing in the EPA's electronic public docket as the EPA receives them and without change, unless the comment contains copyrighted material, CBI, or other information whose disclosure is restricted by statute. When the EPA identifies a comment containing copyrighted material, the EPA will provide a reference to that material in the version of the comment that is placed in the EPA's electronic public docket. The entire printed comment, including the copyrighted material, will be available in the public docket.

Public comments submitted on computer disks that are mailed or delivered to the docket will be transferred to the EPA's electronic public docket. Public comments that are mailed or delivered to the docket will be scanned and placed in the EPA's electronic public docket. Where practical, physical objects will be photographed, and the photograph will be placed in the EPA's electronic public docket along with a brief description written by the docket staff.

For additional information about the EPA's electronic public docket, visit EPA Dockets online or see 67 FR 38102, May 31, 2002.

Comments. You may submit comments electronically, by mail, by facsimile, or through hand delivery/courier. To ensure proper receipt by the EPA, include Docket ID No. OAR-2002-0046 in the subject line on the first page of your comment. Please ensure that your comments are submitted within the specified comment period. Comments received after the close of the comment period will be marked “late.” The EPA is not required to consider these late comments.

Electronically. If you submit an electronic comment as prescribed below, the EPA recommends that you include your name, mailing address, and an e-mail address or other contact information in the body of your comment. Also include this contact information on the outside of any disk or CD ROM you submit, and in any cover letter accompanying the disk or CD ROM. This ensures that you can be identified as the submitter of the comment and allows the EPA to contact you in case the EPA cannot read your comment due to technical difficulties or needs further information on the substance of your comment. The EPA's policy is that the EPA will not edit your comment, and any identifying or contact information provided in the body of a comment will be included as part of the comment that is placed in the official public docket, and made available in the EPA's electronic public docket. If the EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, the EPA may not be able to consider your comment.

EPA Dockets. Your use of the EPA's electronic public docket to submit comments to the EPA electronically is the EPA's preferred method for receiving comments. Go directly to EPA Dockets at http://www.epa.gov/edocket and follow the online instructions for submitting comments. To access the EPA's electronic public docket from the EPA Internet Home Page, select “Information Sources,” “Dockets,” and “EPA Dockets.” Once in the system, select “search,” and then key in Docket ID No. OAR-2002-0046. The system is an “anonymous access” system, which means the EPA will not know your identity, e-mail address, or other contact information unless you provide it in the body of your comment.

E-mail. Comments may be sent by electronic mail (e-mail) to a-and-r-docket@epa.gov, Attention Docket ID No. OAR-2002-0046. In contrast to the EPA's electronic public docket, the EPA's e-mail system is not an “anonymous access” system. If you send an e-mail comment directly to the docket without going through the EPA's electronic public docket, the EPA's e-mail system automatically captures your e-mail address. E-mail addresses that are automatically captured by the EPA's e-mail system are included as part of the comment that is placed in the official public docket, and made available in the EPA's electronic public docket.

Disk or CD ROM. You may submit comments on a disk or CD ROM to the mailing address in the ADDRESSES section. These electronic submissions will be accepted in WordPerfect or ASCII file format. Avoid the use of special characters and any form of encryption.

Facsimile. Fax your comments to: (202) 566-1741, Attention Docket ID No. OAR-2002-0046.

Confidential Business Information. Do not submit information that you consider to be CBI electronically through the EPA's electronic public docket or by e-mail. Send or deliver information identified as CBI only to the following address: Attention: Mr. Mark Morris, c/o OAQPS Document Control Officer (Mailcode C404-02), U.S. EPA, Research Triangle Park, NC, 27711, Attention Docket ID No. OAR-2002-0046. You may claim information that you submit to the EPA as CBI by marking any part or all of that information as CBI (if you submit CBI on disk or CD ROM, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is CBI). Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

In addition to one complete version of the comment that includes any information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket and the EPA's electronic public docket. If you submit the copy that does not contain CBI on disk or CD ROM, mark the outside of the disk or CD ROM clearly that it does not contain CBI. Information not marked as CBI will be included in the public docket and the EPA's electronic public docket without prior notice. If you have any questions about CBI or the procedures for claiming CBI, please consult the person identified in the FOR FURTHER INFORMATION CONTACT section.

Outline. The information presented in this preamble is organized as follows:

We are proposing to amend various provisions in 40 CFR part 60, subpart Kb, Standards of Performance for Volatile Organic Liquid Storage Vessels (Including Petroleum Liquid Storage Vessels) for Which Construction, Reconstruction, or Modification Commenced After July 23, 1984. In doing so, we are indicating by necessary implication that subpart Kb applies to all industries where volatile organic liquid (VOL) (as defined in § 60.111b(k)) is stored, and thus applies to industries in addition to the petroleum and synthetic organic chemical manufacturing industries.

The EPA proposed the subpart Kb rules on July 23, 1984 (49 FR 29698) and promulgated them on April 8, 1987 (52 FR 11420). The standards implement section 111 of the Clean Air Act (CAA) and are based on the Administrator's determination that VOL storage vessels cause or contribute significantly to air pollution which may reasonably be anticipated to endanger public health or welfare. Section 111 of the CAA requires that the EPA publish a list of major stationary sources of air pollution (priority list) and to establish standards reflecting the performance of the best system of emissions reductions (taking cost and non-air environmental impacts into account) which is adequately demonstrated for the new sources in that listed source category.

Subpart Kb indicates on its face that it applies to all industries where VOL storage vessels are located and is not limited to the petroleum industry and the synthetic organic chemical manufacturing industry (SOCMI). Thus, the applicability to affected sources is comprehensive (§ 60.110b(a)), except for enumerated exceptions, some of which are to non-SOCMI, non-petroleum sources (such as coke oven by-product plants). If the rule only applied to SOCMI and petroleum sources, of course, it would have been unnecessary for the EPA to have crafted the enumerated exceptions.

The history of the section 111 priority list with respect to VOL storage vessels likewise demonstrates that the scope of subpart Kb includes non-SOCMI, non-petroleum industries. The EPA listed the synthetic organic chemical manufacturing industry on August 21, 1979 (44 FR 49222), including a subcategory for SOCMI storage vessels and handling equipment. The EPA, however, formally amended the section 111 priority list at the same time (April 8, 1987) it promulgated subpart Kb to include storage vessels that are not in SOCMI service, renaming the subcategory Volatile Organic Liquid (VOL) Storage Vessels and Handling Equipment.

Regulatory history likewise confirms what is facially apparent: the subpart Kb rules apply to all storage vessels (subject to enumerated exceptions) storing VOL. For example, the preamble to the proposed subpart Kb stated that there are storage vessels emitting volatile organic compounds located at plants not in SOCMI, such as liquid bulk storage terminals, that store the same or similar liquids as those at SOCMI plants and that can be controlled with the same effectiveness, costs, and control technology as storage vessels located at SOCMI plants (49 FR 29700).

The EPA intended to achieve emissions reductions beyond those available from controlling emissions from SOCMI vessels by extending regulation to these non-SOCMI storage vessels (49 FR 29700). The EPA estimated that in 1977, volatile organic compound emissions from storage vessels not located at SOCMI plants were 13,230 megagrams per year (Mg/yr), compared to 24,570 Mg/yr from SOCMI storage vessels.

In sum, based on the text of the regulation, the history of the regulation, and the EPA's contemporaneous action to expand the priority list, the EPA interprets subpart Kb to apply to all storage vessels (subject to enumerated exceptions) including but not limited to those located at SOCMI plants and those not located at SOCMI plants.

Background. In subpart Kb, “storage vessel” is defined as “each tank, reservoir, or container used for the storage of volatile organic liquids,” excluding subsurface caverns and porous rock reservoirs, and components not directly involved in the containment of liquids or vapors, such as frames and auxiliary supports (40 CFR 60.111b). A specific issue presented for purposes of this proposal is whether the definition applies to process tanks, which are intermediate tanks within a process that are not used for the storage of raw materials or the product(s) of the process.

The EPA has issued two formal interpretations addressing this question. In an October 29, 1998 letter from the EPA's Office of Enforcement and Compliance Assurance (OECA) to the AF&PA, the EPA stated that the definition of “storage vessel” in subpart Kb does not include “flow-through process tanks,” defined in the Underground Storage Tank Program (40 CFR 280.12) as tanks that form an integral part of a production process through which there is a steady, variable, recurring, or intermittent flow of materials during the operation of the process, and that are not used for the storage of materials prior to their introduction into the production process or for the storage of finished products or by-products from the production process.

After further evaluation, however, the EPA determined (post-issuance) that the interpretation given in the letter to AF&PA was not the best reading of the rule and that the definition of “storage vessel” in subpart Kb does not exclude process tanks. This interpretation appears in a March 27, 2000 memorandum (2000 Memorandum) from OECA to EPA Region IV.

The EPA continues to believe, as a purely interpretive issue, that the 2000 Memorandum is the better reading of the current rule. For example, there is no mention of intermediate or process tanks in the regulatory text of subpart Kb. The definition of “storage vessel” in subpart Kb is broad and does not specify that only raw material and product tanks are included. Aside from the exclusions specifically mentioned in the definition of “storage vessel,” the only language that limits the applicability of subpart Kb is in § 60.110b(d), which lists vessels to which subpart Kb does not apply (for example, vessels at coke oven by-product plants and vessels located at gasoline service stations). The regulatory history also tends to support the 2000 Memorandum.

On May 26, 2000, the AF&PA filed a petition for judicial review of the 2000 Memorandum in the U.S. District Court of Appeals for the District of Columbia (AF&PA v. EPA, No. 00-1218). The petitioner felt that the EPA had inappropriately expanded the scope of “storage vessels” with the interpretation in the 2000 Memorandum.

On August 23, 2001 (66 FR 44342), AF&PA and the EPA signed a settlement agreement which provides that the EPA will propose to amend subpart Kb to exclude from its applicability storage vessels that have a capacity less than 75 cubic meters (m3) or that contain a liquid with a maximum true vapor pressure below 3.5 kilopascals (kPa), and take final action on that proposal within a reasonable time. Today's proposed amendments fulfill the agreement to propose these amendments to subpart Kb.

Today's proposed amendments also address concerns raised by parties other than the petitioner. One party commented that in addition to the proposed amendments required by the settlement agreement, the EPA should exempt process tanks from subpart Kb. Another party commented that the regulatory overlap between subpart Kb and the National Emission Standards for Hazardous Air Pollutants: Solvent Extraction for Vegetable Oil Production (40 CFR part 63, subpart GGGG) should be addressed.

Proposal to Exempt Certain Storage Vessels by Capacity and Vapor Pressure. The EPA believes that limiting the rule's applicability by vessel size and vapor pressure is reasonable and does not undermine the rule's fundamental basis as reflecting the best system of emissions reductions for volatile organics in storage vessels, taking cost, non-air impacts, and energy into consideration. Presently, subpart Kb does not apply to storage vessels with a capacity less than 40 m3. However, the only requirements that apply to storage vessels with a capacity less than 75 m3, to storage vessels with a capacity between 75 and 151 m3 storing liquid with vapor pressure less than 15 kPa, and to storage vessels with a capacity equal to or greater than 151 m3 storing liquid with vapor pressure less than 3.5 kPa, is minimal recordkeeping (40 CFR 60.110b(b) and (c)). The EPA in essence is proposing to eliminate these recordkeeping requirements in today's proposal. Put another way, the EPA is proposing to exempt from subpart Kb those storage vessels presently subject to recordkeeping requirements only.

Today's proposed amendments to increase the vessel capacity applicability cutoff and to include vapor pressure applicability cutoffs, thus, reduce the burden on sources without sacrificing emissions reductions. As explained above, increasing the vessel capacity applicability cutoff from 40 m3 to 75 m3 would decrease the number of sources affected by subpart Kb, but no emissions reductions would be lost because emission control is required only on vessels larger than 75 m3. The proposed vapor pressure applicability cutoffs of 3.5 kPa and 15.0 kPa would also decrease the number of affected sources, but, again, no emissions reductions would be lost because emission control is required only for liquids with vapor pressures of at least 5.2 kPa and 27.6 kPa, respectively (40 CFR 60.112b(a)).

Proposal to Exempt Process Tanks. The EPA is also proposing to exempt process tanks from subpart Kb. If the EPA were writing on a blank slate, the EPA would take the view that the better reading of subpart Kb is that process tanks are within the scope of the regulation, as explained earlier. However, the EPA is not writing on a blank slate. The 1998 interpretation of the rule was definitive (in the sense that it was intended to set out the EPA's view and was written by an entity within the EPA with authority to do so), and as such, can only be changed after notice-and-comment rulemaking (see Paralyzed Veterans of America v. D.C. Arena L.P., 117 F. 3d 579, 586-87 (D.C. Cir. 1997)). That interpretation thus sets out the current scope of the rule with respect to process tanks, the 2000 Memorandum notwithstanding. The question, therefore, becomes whether it is justified to amend subpart Kb to include process tanks within its scope. Moreover, such a rule would apply only to new sources, that is, only to those process tanks for which construction, reconstruction, or modification commenced after the date of proposal of the action (see CAA sections 111(a)(2) and (b)(1)(B)).

The data used in the initial development of subpart Kb indicate that if process tanks were exempted, then about 4 percent of new tanks may go uncontrolled that would otherwise have to be controlled. However, there are several reasons why the actual amount of potentially foregone emissions reductions is less and possibly even zero. First, because process tanks are small, and tank emissions generally are proportional to tank size, emissions from these tanks will be correspondingly small. Further, process tanks are, in many cases, required to be controlled under the national emission standards for hazardous air pollutants that affect the industries with most of the VOL tanks.

Considering all these factors, the EPA believes that it would not be worthwhile to now propose to include process tanks under subpart Kb. Although one would come to this same result based on the 1998 interpretation, in light of confusion due to the conflicting interpretations in the 1998 and 2000 Memoranda, the EPA is today proposing to amend subpart Kb to exempt process tanks to codify the 1998 position.

Proposal to Exempt Storage Vessels Subject to the Vegetable Oil National Emission Standards for Hazardous Air Pollutants (NESHAP). The EPA is also proposing to exempt from subpart Kb all storage vessels that are subject to the Vegetable Oil Production NESHAP. In most NESHAP, where there are existing standards that apply to the same emission points, the NESHAP usually include provisions which exempt the emission points from the existing standards and make the emission points subject only to the NESHAP. The Vegetable Oil Production NESHAP do not include any of these “overlap” provisions, and we are proposing here to rectify that omission.

The Vegetable Oil Production NESHAP contain a sourcewide emission limit in the form of the amount of hazardous air pollutant emissions per ton of oilseed processed. Since the limit is sourcewide, there are no requirements to control specific emission points. Consequently, a storage vessel that must be controlled under subpart Kb is not required to be controlled under the Vegetable Oil Production NESHAP.

According to information used in the development of the Vegetable Oil Production NESHAP, there are approximately 300 storage vessels in the source category. Sixty-four percent of these vessels have a capacity less than 75 m3 and, therefore, would not be subject to subpart Kb because of today's proposed amendment to exempt such vessels.

Thirty percent of the vessels in the Vegetable Oil Production source category have a capacity between 40 and 75 m3. The vapor pressure at which control is required for vessels in this size range under subpart Kb is 27.6 kPa. The main solvent used in vegetable oil production is n-hexane, which has a vapor pressure significantly below 27.6 kPa. Therefore, the EPA expects that no vessels in this size range would be subject to the control requirements of subpart Kb because the vessels do not store a liquid with a vapor pressure which exceeds 27.6 kPa. Moreover, many of these vessels are controlled by routing the emissions to a solvent recovery system.

The remaining 6 percent of vessels in the Vegetable Oil Production source category have a capacity larger than 75 m3 and would be required to be controlled under subpart Kb (assuming they are new sources for purposes of subpart Kb) because the vapor pressure of n-hexane exceeds the vapor pressure at which control is required for large vessels. Since these vessels are large, they are even more likely to be routed to a solvent recovery system, and the EPA has information indicating that all large tanks are either currently controlled in this manner or will be controlled in the near future to comply with the Vegetable Oil Production NESHAP.

The EPA, thus, contends that the overall emissions to the environment would not increase by exempting vessels from subpart Kb that are subject to the Vegetable Oil Production NESHAP, and that such exemption essentially amounts to avoiding duplicative regulation. The EPA is, therefore, proposing to exempt from subpart Kb all storage vessels that are subject to the Vegetable Oil Production NESHAP.

Under Executive Order 12866, (58 FR 51735, October 4, 1993) the Agency must determine whether the regulatory action is “significant” and therefore subject to Office of Management and Budget (OMB) review and the requirements of the Executive Order. The Executive Order defines “significant regulatory action” as one that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

It has been determined that the proposed rule amendments are not a “significant regulatory action” under the terms of Executive Order 12866 and are, therefore, not subject to OMB review.

This action does not impose any new information collection burden. This action exempts certain sources from 40 CFR part 60, subpart Kb. Therefore, it is likely that this action could only reduce the information collection burden. The OMB has previously approved the information collection requirements contained in the existing regulations under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., and has assigned OMB control number 2060-0074 (EPA ICR No. 1132.06).

Copies of the ICR document(s) may be obtained from Susan Auby, by mail at the Office of Environmental Information, Collection Strategies Division; U.S. EPA (2822T); 1200 Pennsylvania Ave., NW., Washington, DC 20460, by email at auby.susan@epa.gov, or by calling (202) 566-1672. A copy may also be downloaded off the internet at http://www.epa.gov/icr. Include the ICR or OMB number in any correspondence.

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

An Agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

The Regulatory Flexibility Act generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of today's proposed amendments on small entities, a small entity is defined as: (1) A small business in the North American Industrial Classification System (NAICS) code 324 or 325 that has up to 500 employees; (2) a small business in NAICS code 424710 that has up to 100 employees; (3) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (4) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's proposed amendments on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. The EPA has determined that none of the small entities will experience a significant impact because the proposed amendments impose no additional regulatory requirements on owners or operators of affected sources. In fact, the proposed amendments should decrease the impacts on small businesses because the proposed amendments exempt some sources from regulation.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, the EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any 1 year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires the EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least-costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows the EPA to adopt an alternative other than the least-costly, most cost effective, or least-burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before the EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.

The EPA has determined that the proposed rule amendments do not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any 1 year. The proposed rule amendments exempt certain sources from regulation. Thus, today's proposed rule amendments are not subject to the requirements of sections 202 and 205 of the UMRA.

Executive Order 13132 (64 FR 43255, August 10, 1999) requires the EPA 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.” “Policies that have federalism implications” is defined in the Executive Order 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.”

The proposed rule amendments do not have federalism implications. They 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. The proposed rule amendments exempt certain sources from regulation. The proposed rule amendments impose no additional burden on sources, and the emissions reductions lost because of the proposed exemptions are not significant. Thus, Executive Order 13132 does not apply to the proposed rule amendments.

In the spirit of Executive Order 13132 and consistent with EPA policy to promote communications between the EPA and State and local governments, the EPA specifically solicits comment on these proposed amendments from State and local officials.

Executive Order 13175 (65 FR 67249, November 9, 2000) requires the EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” The proposed rule amendments do not have tribal implications, as specified in Executive Order 13175. The proposed rule amendments exempt certain sources from regulation. The proposed rule amendments impose no additional burden on sources, and the emissions reductions lost because of the proposed exemptions are not significant. Thus, Executive Order 13175 does not apply to the proposed rule amendments.

The EPA specifically solicits additional comment on the proposed rule amendments from tribal officials.

Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that the EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the EPA must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the EPA.

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. Today's proposed amendments are not subject to Executive Order 13045 because they are based on technology performance, not health or safety risks. Furthermore, the proposed rule amendments have been determined not to be “economically significant” as defined under Executive Order 12866.

The proposed rule amendments are not subject to Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note), directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs the EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

The proposed rulemaking does not involve technical standards. Therefore, the EPA is not considering the use of any voluntary consensus standards.

For the reasons set out in the preamble, part 60 of title 40, chapter I of the Code of Federal Regulations is proposed to be amended as follows:

On November 29, 2002, the FMCSA published a notice that it is studying the feasibility of using the Reg Neg process to develop a rulemaking action concerning the maintenance of intermodal container chassis and trailers.

On January 13, 2003, counsel for the AAR filed a request for an extension of the comment period to allow additional time for filing comments after a planned January 22 meeting of the Intermodal Association of North America (IANA) and the Ocean Carrier Equipment Management Association (OCEMA).

The IANA/OCEMA working group has been engaged in developing a private-sector solution to the assignment of responsibility for maintaining intermodal chassis and trailers. The outcome of the IANA/OCEMA discussions could well influence the FMCSA's decision to proceed with a negotiated rulemaking activity. Although IANA and OCEMA do not invite the FMCSA to its meetings, the agency believes that its working group is making important progress, and that additional meetings taking place in early 2003 may produce a private-sector solution acceptable to IANA, OCEMA, AAR, and other parties involved in the provision and maintenance of intermodal equipment.

On January 30, 2003, the AAR requested the agency refrain from instituting a negotiated rulemaking proceeding until after April 1, 2003, to provide the working group additional time to determine if a private-sector solution can be developed.

Based on this information, the FMCSA grants the AAR's request to extend the comment period. The FMCSA is extending the comment period an additional 45 days, until April 10, 2003. This extension will also allow the agency's contracted convenor to gather additional information and provide a more comprehensive report to assist the agency in deciding whether it should institute a negotiated rulemaking proceeding.

The FMCSA will continue to provide any comments it receives in reaction to the November 29, 2002, notice to the convenor and will file the comments in docket FMCSA-98-3656. If you want to submit comments to this notice directly to the docket, use the addresses above under the heading ADDRESSES.

All comments received before the close of business on the comment closing date shown above will be considered and will be available for examination in the FMCSA Docket at the above address. Comments received after the comment closing date will be filed in the FMCSA Docket identified above and will be considered to the extent practicable, but the FMCSA may issue a convenor's report anytime after the close of the comment period. In addition to late comments, the FMCSA will also continue to file in the docket relevant information that becomes available after the comment closing date, and interested persons should continue to examine the docket for new material.

If you would like to file a request for an additional extension of time to comment in accordance with 49 CFR 389.19, please submit it to the address in § 389.31.