After considering the comments on the ANPR published on July 19, 2001 (66 FR 37602), the agencies are jointly proposing revisions to their regulations implementing the CRA (12 U.S.C. 2901 et seq. ). The proposed regulations would revise the definition of “small institution” and expand and clarify the provisions relating to the effect of evidence of discriminatory, other illegal, and abusive credit practices on the assignment of CRA ratings.

In 1977, Congress enacted the CRA to encourage insured banks and thrifts to help meet the credit needs of their entire communities, including low- and moderate-income communities, consistent with safe and sound lending practices. In the CRA, Congress found that regulated financial institutions are required to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business, and that the convenience and needs of communities include the need for credit as well as deposit services. The CRA has come to play an important role in improving access to credit among under-served rural and urban communities.

In 1995, when we adopted major amendments to regulations implementing the Community Reinvestment Act, the agencies committed to reviewing the amended regulations in 2002 for their effectiveness in placing performance over process, promoting consistency in evaluations, and eliminating unnecessary burden. 60 FR 22156, 22177 (May 4, 1995). The review was initiated in July 2001 with the publication in the Federal Register of an advance notice of proposed rulemaking (66 FR 37602 (July 19, 2001)). We indicated that we would determine whether and, if so, how the regulations should be amended to better evaluate financial institutions' performance under CRA, consistent with the Act's authority, mandate, and intent. We solicited comment on the fundamental issue of whether any change to the regulations would be beneficial or warranted, and on eight discrete aspects of the regulations. About 400 comment letters were received, most from banks and thrifts of varying sizes and their trade associations (“financial institutions”) and local and national nonprofit community advocacy and community development organizations (“community organizations”).

The comments reflected a general consensus that fundamental elements of the regulations are sound, but demonstrated a disagreement over the need and reasons for change. Community organizations advocated “updating” the regulations with expanded requirements to match developments in the industry and marketplace; financial institutions were concerned principally with reducing burden consistent with maintaining or improving the regulations' effectiveness. In reviewing these comments, the agencies were particularly mindful of the need to balance the desire to make changes that “fine tune” and improve the regulations, with the need to avoid unnecessary and costly disruption to reasonable CRA policies and procedures that the industry has had to put into place under the current rules.

We believe the regulations are essentially sound, but susceptible to improvement. Thus, we are proposing limited amendments. First, to reduce unwarranted burden, we propose to amend the definition of “small institution” to mean an institution with total assets of less than $500 million, regardless of the size of its holding company. This would take into account significant changes in the marketplace since 1995, including substantial asset growth and consolidation. As described below, this proposal will expand the number of institutions that are eligible for evaluation under the streamlined small institution test while only slightly reducing the portion of industry assets subject to the large retail institution test. Second, to better address abusive lending practices in CRA evaluations, we propose to amend the regulations specifically to provide that the agencies will take into account, in assessing an institution's overall rating, evidence that the institution, or any affiliate the loans of which have been included in the institution's performance evaluation, has engaged in illegal credit practices, including unfair or deceptive practices, or a pattern or practice of secured lending based predominantly on the liquidation or foreclosure value of the collateral, where the borrower cannot be expected to be able to make the payments required under the terms of the loan. Evidence of such practices adversely affects the agency's evaluation of the institution's CRA performance.

We commenced our review of the regulations in July 2001 with an ANPR soliciting comment on whether the regulations might more effectively place performance over process, promote consistency in evaluations, and avoid unnecessary burden. We solicited comment on the fundamental issue of whether any change to the regulations would be beneficial or warranted, and on eight discrete aspects of the regulations.

The comments we received suggest that financial institutions and community organizations agree that the 1995 amendments have succeeded, at least in part, in shifting the emphasis of CRA evaluations from process to performance. The comments also appear to suggest general agreement that:

• Lending is the most critical CRA-covered activity, although investments and services should be considered in some form and to some extent;

• Evaluation procedures and criteria should vary with an institution's size and type;

• An institution's performance should be evaluated in the area constituting its community;

• Quantitative performance measures are valuable, though they should be interpreted in light of qualitative considerations;

• Careful consideration of performance context is critical; and

• Activities that promote community development, however defined, should be evaluated as a distinct class.

The overall content of the comments reflects support for the general structure and features of the regulations, which we interpret as implying a general consensus that the regulations are essentially sound. To be sure, many comments recommended changes in the regulations. Community organization commenters uniformly contended that the regulations needed to be “updated” and “strengthened” to reflect intervening changes in the marketplace that affected financial institutions' relationships to their communities.

Specifically, community organizations sought to extend CRA performance measurement to include (1) evaluation of the appropriateness of credit terms and practices; (2) scrutiny of the performance of nondepository affiliates of depository institutions; and (3) assessment of institutions' performance everywhere they do business, including areas without deposit-taking facilities.

Financial institutions, however, opposed those recommendations, counseled generally against major change to the regulations, asked that reforms be accomplished largely through other means (for example, examiner training), and recommended that any change to the regulations take into account both process costs and benefits of change. One financial institution trade association expressed the opinion of most financial institution commenters that no major changes should be made: “There is general agreement among our members that we do not want to embark on another major CRA reform process. We do not believe this would be in the best interest of the communities or the financial institutions, as it would entail a major and protracted distraction from the business of serving community needs.”

Financial institutions generally favored only those amendments designed to reduce compliance burden, especially for large retail institutions, while maintaining or improving the effectiveness of the regulations. Institutions near in asset size to the small/large institution threshold of $250 million requested that we raise the threshold markedly to make them eligible for examination under the small institution performance standards, and to relieve them of burdens imposed only on large institutions, such as data reporting and the investment test. Large institutions consistently urged the agencies to be more flexible in the evaluation of community development investments (called “qualified investments” by the regulations), including by making qualified investments optional to one degree or another and by treating more types of investments as “qualified investments.” Community organizations, however, contended that reducing the burdens associated with the investment test and data collection and reporting would come at the expense of meeting community credit needs.

An institution is deemed “large” in a given year if, at the end of either of the previous two years, it had assets of $250 million or more or if it is affiliated with a holding company with total bank or thrift assets of $1 billion or more. An institution that meets that definition, unless it has been designated “limited purpose” or “wholesale,” or has opted to be evaluated under an approved strategic plan, is evaluated under a three-part large retail institution test. The large retail institution test is comprised of the lending, investment, and service tests. The most heavily weighted part of that test is the lending test, under which the agencies consider the number and amount of loans originated or purchased by the institution in its assessment area; the geographic distribution of its lending; characteristics, such as income level, of its borrowers; its community development lending; and its use of innovative or flexible lending practices to address the credit needs of low- or moderate-income individuals or geographies in a safe and sound manner. To facilitate the evaluation, institutions must collect and report data on small business loans, small farm loans, and community development loans, and may, on an optional basis, collect data on consumer loans.

Under the investment test, the agencies consider the dollar amount of qualified investments, their innovativeness or complexity, their responsiveness to credit and community development needs, and the degree to which they are not routinely provided by private investors.

Under the service test, the agencies consider an institution's branch distribution among geographies of different income levels; its record of opening and closing branches, particularly in low- and moderate-income geographies; the availability and effectiveness of alternative systems for delivering retail banking services in low- and moderate-income geographies and to low- and moderate-income individuals; and the range of services provided in geographies of different income levels, as well as the extent to which those services are tailored to meet the needs of those geographies. The agencies also consider the extent to which the institution provides community development services and the innovativeness and responsiveness of those services.

The lending, investment, and service tests each include an evaluation of community development activities. A community development loan, community development service, or “qualified investment” has a primary purpose of benefiting low- or moderate-income people with affordable housing or community services; promoting economic development by financing small businesses or small farms; or revitalizing or stabilizing low- or moderate-income areas.

The ANPR asked whether the three-part test as a whole, each of its component tests (lending, investment, services), and its community development component are effective in assessing large institutions' responsiveness to community credit needs; whether the test is appropriately balanced between lending, investments, and services; and whether it is appropriately balanced between quantitative and qualitative measures.

The three-part test places primary emphasis on lending performance, and secondary emphasis on investment and service performance. A majority of community organization commenters that addressed the question believed that lending should continue to receive more weight than investments or services. Of financial institutions that addressed the issue, more than half agreed. The remainder of industry commenters generally believed either that the components should be weighted equally or that their weights should vary with performance context. As discussed below, many financial institutions felt the investment test is weighted too heavily, while community organizations disagreed.

Based on our review and consideration of the matter, we are not proposing to alter the weights of the three tests, which we continue to believe are appropriate. We address specific concerns about each test below.

The component tests primarily employ quantitative measures (such as the number and dollar amount of loans and qualified investments) but also call for qualitative consideration of an institution's activities, including whether, and to what extent, they are responsive to community credit needs and demonstrate innovativeness, flexibility, or complexity. A large number of community organizations indicated that the weight given to quantitative factors is about right, though the same commenters often remarked that the character of activities (for example, the responsiveness of a loan to credit needs and the risk of an investment) should be given more weight. A few financial institutions agreed that quantitative factors receive appropriate weight, but more institutions indicated that too much weight is given to quantitative factors and not enough to contextual considerations such as an institution's business strategy and an activity's profitability. Some financial institutions and community organizations, contending that ratings are not sufficiently consistent and predictable, requested that they be tied to explicit quantitative performance benchmarks, while others disagreed with that suggestion.

Several community organizations and financial institutions expressed concern about some of the qualitative factors specified in the regulations, particularly the application of the terms “innovative” and “complex.” These commenters argued that an evaluation should focus on an activity's contribution to meeting community credit needs, and that its innovativeness or flexibility should be seen as a means to that end rather than an end in itself. They stated that financial institutions should not be downgraded for failure to demonstrate their activities are innovative or complex.

Based on our review and consideration of the matter, and as explained below in the context of the investment test, we may seek to clarify through interagency guidance how qualitative considerations should be employed.

The regulations weigh loan purchases and loan originations equally. The ANPR sought comment on whether loan purchases should be given less weight than loan originations. Community organizations generally favored giving more weight to loan originations than purchases, on the grounds that originations take more effort and that purchases can be generated solely to influence CRA ratings rather than for economic reasons. Financial institutions that addressed the issue generally stated that equal weighting of purchases and originations improves liquidity, making credit more widely available at lower prices. The agencies also sought comment on whether purchases of loans and purchases of asset-backed securities should be considered under the same test instead of separately under the lending test and the investment test, respectively. Some community organizations raised concerns about the treatment of some types of mortgage-backed securities as qualified investments.

To improve “transparency” in CRA evaluations, the agencies propose to distinguish loan purchases from loan originations in a public evaluation's display of loan data, where pertinent. We would not, however, weigh loan purchases less than loan originations. We seek comment on the proposed approach.

Although a small number of commenters objected to any consideration of investments under CRA, the comments reveal a general view that community development-oriented investments (“qualified investments,” under the regulations) should be considered to the extent they help meet community credit needs. Commenters, nonetheless, disagreed significantly about whether the current investment test effectively and appropriately assesses investments and about the extent to which assessment of investments should be mandatory or optional.

Financial institutions commented that the investment test is not sufficiently tailored to market reality, community needs, or institutions' capacities. Several financial institutions said there are insufficient equity investment opportunities, especially for smaller institutions and those serving rural areas. Some noted that intense competition for a limited supply of community development equity investments has depressed yields, effectively turning many of the investments into grants; some claimed that institutions had spent resources transforming would-be loans into equity investments merely to satisfy the investment test; and some expressed concern that institutions were forced to worry more about making a sufficient number and amount of investments than about the effectiveness of their investments for their communities.

To address these concerns, many financial institutions favored abolishing the stand-alone investment test and making investments optional to one degree or another. Only two financial institutions expressly supported retaining the separate investment test. Several financial institutions and most financial institution trade associations endorsed one or more of the following three alternatives: (1) Treat investments solely as “extra credit;” (2) make investments count towards the lending or service test; or (3) treat investments interchangeably with community development services and loans under a new community development test.

In contrast, the majority of community organization commenters urged the agencies to retain the investment test. Many of them claimed that the problem is more often a shortage of willing investors than an insufficient number of investment opportunities. Community organizations also contended that grants and equity investments are crucial to meeting the affordable housing and economic development needs of low- and moderate-income areas and individuals. They stated, for example, that investments support and expand the capacity of nonprofit community development organizations to meet credit needs. A few community organizations acknowledged a basis for some of the financial institutions' complaints concerning the investment test, but most of those community organizations argued that refining, rather than restructuring, the large retail institution test would address such complaints.

Commenters also split over the appropriateness of the definition of “community development,” which is incorporated in the definition of “qualified investment.” Financial institutions asked the agencies to remove from the definition of “community development” the requirement that community development activities target primarily low- or moderate-income individuals or areas, and expand the definition to include community-building activities that incidentally benefit low- or moderate-income individuals or areas. For instance, several financial institutions contended that any activity that helps “revitalize and stabilize” an area (such as after a natural disaster or a steady economic decline) should be considered community development, even if the activity is not located in, or targeted to, low- or moderate-income communities. Other examples of activities for which they sought consideration included municipal bonds and grants to cultural organizations and other charities. In contrast, community organizations that expressed a view favored retaining the current definition of “community development” or narrowing it. For example, many community organizations sought to limit the “economic development” component of the definition (which consists of financing small businesses or small farms) to financing minority-owned businesses or farms and businesses or farms in low- or moderate-income areas.

Apart from the larger debate about the proper role of an investment component in the three-part test and the proper definition of qualified investments, many commenters sought changes to the investment test. Several financial institutions and trade associations felt that examiners do not grant enough weight to investments on the books since the previous examination period. They contended that this practice creates pressure to make new investments more quickly than the market generated new investment opportunities, and undermined the supply of “patient capital.” A few commenters proposed full consideration for investments outside assessment areas to promote more efficient allocation of community development capital. Several financial institutions, trade associations, and community organizations contended that insufficient consideration is given to an investment's impact on the community, while too much weight is placed on its innovativeness or complexity. Some suggested that the criterion of “innovative or complex” be eliminated or made subservient to the criterion of “responsiveness * * * to credit and community development needs.” Some commenters complained of uncertainty about “how much is enough” and inconsistency among agencies and areas in evaluating investments. A few financial institutions and community organizations requested that the agencies adopt ratings benchmarks (for instance, ratios of qualified investments to Tier I capital or total assets). Other commenters opposed benchmarks as unnecessarily restrictive.

The comments reflect a general consensus that qualified investments should be considered in some fashion in CRA evaluations for their ability to meet community credit needs. The premise of the agencies' adoption of a separate investment test in 1995 was that, for consideration of investments to be meaningful, they must be treated as more than mere “extra credit” that assured an Outstanding rating for an institution otherwise rated Satisfactory. Therefore, the separate investment test embodies an expectation that an institution make such investments, or their equivalent, where feasible and appropriate.

The comments and other feedback suggest that the levels and kinds of expectations under the current investment test sometimes are unrealistic or unproductive, or at least appear that way. It is inevitable that the supply of, demand for, and quality of investment opportunities will vary by region and city; the performance evaluation is supposed to take those variations into account. We are concerned that some institutions nevertheless believe they are expected to make equity investments that are economically unsound. We considered whether this impression was an unavoidable result of the current structure of the investment test or an avoidable result of the implementation of that structure.

Some commenters suggested that the evaluation of community development activities under three separate component tests (lending, investment, service) risks causing institutions to concern themselves more with meeting perceived thresholds in each component test than with maximizing community impact. This possibility led us to study alternatives to the existing three-component structure of the large retail institution test.

One alternative we considered was a two-part large retail institution test consisting of (1) a community development test, which would integrate community development loans, investments, and services, and (2) a retail test, which would include retail loans and services. Under the community development test we considered, different community development activities (loans, investments, and services) would, at least in theory, be fungible and interchangeable so that an institution would have flexibility to allocate its community development resources among different types of community development activities; a rating on this test would be based, in part, on some measure of the total amount of the institution's community development activities.

A different two-part large retail institution test we considered would eliminate the separate investment test and consider investments within the lending test, where they would be treated similarly to community development loans.

Changing the structure of the large retail institution test, as entailed in those alternatives, would not necessarily yield a substantial net benefit. Adopting a new test structure might simply substitute one set of implementation challenges for another. The existing regulations have been criticized by financial institutions and community organizations alike for not being clear about “how much is enough” or how much weight an activity carries relative to another. A restructured large retail institution test would be no less vulnerable to those criticisms. For example, it would raise the question of how to compare investments, loans, and services.

Moreover, the freestanding investment test has become an integral part of CRA and the community development finance markets. We believe that evaluation of investment performance under that test has contributed substantially to the growth of the market for community development-oriented investments. That market has helped institutions to spread risk and maximize the impact of their community development capital. Institutional risk is spread and lowered by instruments such as securities backed by mortgages to low- and moderate-income borrowers. The impact of community development capital is maximized by channeling it through organizations with the knowledge and skills that optimize its use. Thus, we believe the investment test has encouraged community development.

Replacing the investment test might cloud market expectations and understandings, injecting a degree of uncertainty that could be costly, not just for financial institutions and community organizations, but also for local communities. Many commenters pointed out that it took several years for them to become comfortable with the current CRA regulations, and it could take several years again for affected parties to adjust to a new regulatory structure. During that adjustment period, institutions would likely incur substantial implementation costs, for instance, to retrain personnel and, possibly, to change data collection procedures. In weighing those factors, we are mindful of the repeated cautions from financial institution commenters about the costs of major changes.

Thus, we propose to address concerns about the burdens of the investment test by means other than replacing or restructuring it. As explained later in this notice, we are proposing to raise the asset-size threshold at which an institution becomes subject to the large retail institution test and, therefore, the investment test. This would respond to comments that smaller institutions at times have had difficulty competing for investments. As noted earlier, the change would not materially reduce the portion of the nation's bank and thrift assets covered by the large retail institution test, including the investment test.

The criticisms the commenters made of the investment test appear to have more to do with the implementation of the regulations than the regulations themselves. We anticipate developing additional interagency guidance to clarify that the investment test is not intended to be a source of pressure on institutions to make imprudent equity investments. Such guidance also may discuss (1) when community development activities outside of assessment areas can be weighted as heavily as activities inside of assessment areas; (2) that the criteria of “innovative” and “complex” are not ends in themselves, but means to the end of encouraging an institution to respond to community credit needs; (3) the weight to be given to investments from past examination periods, to commitments for future investments, and to grants; and (4) how an institution may demonstrate that an activity's “primary purpose” is to serve low- and moderate-income people. We seek comment on the possible content of such guidance.

Many commenters addressed the evaluation of service delivery methods under the service test. Many community organizations commented that the test should emphasize the placement of bricks-and-mortar branches in low- and moderate-income areas. A few financial institutions agreed, but most institutions that addressed the issue argued that putting less weight on branches and more on alternative service delivery methods was necessary to adequately measure the provision of services to low- and moderate-income individuals. Some community organizations stated that the weight given to alternative methods should depend on data showing their use by low- and moderate-income individuals, and a couple of financial institutions agreed that such data would be useful.

The comments highlight the fact that a service delivery method's appropriate weight will vary from examination to examination based on performance context. Critical factors such as an institution's business strategy naturally vary over time and from institution to institution. Examiners can address such variations through their analysis of performance context. To the extent guidance or examiner training needs to be improved to ensure that such factors are appropriately addressed through the performance context, we will do so.

Community organizations believed the service test should show special concern for the services available to and used by low- and moderate-income individuals. Many community organizations said that financial institutions should be required to report data on the distribution of their deposits by income and other criteria. Many organizations also said that the service test should give weight to providing low-cost services and accounts to low- and moderate-income individuals and areas; a few said that credit for such services and accounts should depend on data demonstrating that they are used. Many organizations recommended that “payday lending” or “check cashing” activities should hurt, or at least not help, an institution's service test rating, though a few organizations qualified that check cashing should not prejudice a rating where the fee for the service is reasonable. Few financial institutions addressed those specific issues, but many voiced general concerns about increasing data collection burdens or assessing the appropriateness of a product or service.

The service test takes into account the degree to which services are tailored to meet the needs of low- and moderate-income geographies, whether as “mainstream” retail banking services or community development services. Indeed, an Outstanding rating on the service test is not available unless an institution's services “are tailored to the convenience and needs of its assessment area(s), particularly low- or moderate-income geographies or * * * individuals” and the institution is “a leader in providing community development services.” We believe that those provisions properly encourage institutions to pay close attention to services for low- and moderate-income people and areas, and evaluations will continue to reflect the effectiveness of these services as appropriate.

We also received comment on the definition and weight of community development services. Some financial institutions asked that the service test rating depend more on community development services and less on other elements of the test. Community development services are limited by the regulations to services that are financial in nature. Some commenters contended that community development services should include non-financial services, such as employees' participation in volunteer home-renovation programs. Many community organizations, however, opposed broadening the definition. We believe that the regulations' linking of community development services to services that are financial in nature is consistent with the purposes of CRA. Therefore, we are not proposing to change the definition of community development services or the weight they receive in the service test.

An institution is evaluated primarily on its performance within one or more assessment areas. An institution's assessment area(s) is/are the Metropolitan Statistical Area(s) (MSA(s)) or contiguous political subdivision(s) (such as counties, cities, or towns) that include(s) the census tracts in which the institution has its main office, its branches, and its deposit-taking ATMs, as well as the surrounding census tracts in which it has originated or purchased a substantial portion of its loans. An institution may adjust the boundaries of an assessment area to include only those parts of a political subdivision that it can reasonably serve. But its assessment area(s) may not reflect illegal discrimination, arbitrarily exclude low- or moderate-income geographies, extend substantially beyond designated boundaries, or consist of partial census tracts. Special rules apply to wholesale and limited-purpose institutions and to institutions that serve military personnel.

The ANPR asked whether it was reasonable to continue to anchor the regulations' definition of “assessment area” in deposit-taking facilities. Community organizations contended that substantial portions of lending by institutions covered by CRA are nonetheless not subject to CRA evaluation because of institutions' increasing use of nonbranch channels (including agencies, the Internet, and telephone) to provide credit outside of their branch-based assessment areas. They further commented that an institution's assessment area must include all commercial channels, not just branches and deposit-taking ATMs. Thus, many commenters proposed that an institution's assessment areas include all areas in which the institution has more than a specified share (many suggested 0.5 percent) of the lending market or deposit market.

The majority of financial institutions and trade associations that expressed an opinion about assessment areas endorsed continuing to keep the assessment areas linked to deposit-taking facilities. Those commenters opposed mandatory evaluation outside of the communities served by deposit-taking facilities. Some questioned whether such an expansion would be consistent with the Act. Others argued that an institution needs a substantial local presence to understand a community's needs and to develop and exploit opportunities to serve those needs, but requested credit for activities they might willingly conduct outside their assessment areas.

Few financial institutions suggested that an expansion of the assessment area definition was necessary to accommodate their choice of business strategy. To address the challenge of nonbranch institutions, several commenters recommended subjecting them, like wholesale and limited-purpose institutions, to a community development test while continuing to draw assessment areas around their main offices. Several financial institutions suggested narrowing the current definition by removing the requirement that assessment areas be delineated around deposit-taking ATMs because banks do not originate deposit relationships through ATMs. Others argued that the requirement should be removed in special circumstances—for example, when ATMs are on the property of an organization closed to nonemployees.

No definition of “assessment area” will foresee every conceivable bank or thrift business model. We considered whether the current definition is suitable to most financial institutions. To a large extent, nontraditional channels in the market today seem to be used as complements to, rather than substitutes for, branches and deposit-taking ATMs. Even with widespread access to the Internet by bank and thrift customers, few banks or thrifts are Internet-only, without branches. In fact, it has been reported that some institutions created with an Internet-only strategy later added branches or deposit-taking ATMs. The number of branchless banks and thrifts that conduct business through other channels, such as independent agents, though growing, is also small. To be sure, traditional retail institutions increasingly rely on nontraditional channels to take deposits and make loans—including nonbranch or agency offices, mail, telephone, on-line computer networks, and agents or employees of affiliated nonbank companies. Many of those institutions still originate a substantial portion of their CRA-relevant loans (including the vast majority of their small business loans) in their branch-based assessment areas, whether through branches or other means. In short, the definition of “assessment area” appears adequate to delineate the relevant communities of the overwhelming majority of financial institutions.

Moreover, for institutions that do a substantial portion of their lending outside branch areas, the agencies have interpreted the regulations as giving examiners flexibility to address, on a case-by-case basis, institutions that conduct a substantial part of their business through nontraditional channels. For instance, an institution's loans to low- and moderate-income persons and small business and small farm loans outside of its assessment area(s) will be considered if it has adequately addressed the needs of borrowers within its assessment area(s), although such loans will not compensate for poor lending performance inside the assessment area(s). An institution with poor retail lending performance inside the assessment area may, however, compensate with exceptionally strong performance in community development lending in its assessment area or a broader statewide or regional area that includes the assessment area. The regulations also permit an institution to propose a strategic plan tailored to its unique circumstances.

Although limitations in the current definition of “assessment area” might grow in significance as the market evolves, we believe any limitations are not now so significant or pervasive that the current definition is fundamentally ineffective. Moreover, none of the alternatives we studied seemed to improve the existing definition sufficiently to justify the costs of regulatory change. Many of the alternative definitional changes to assessment area we reviewed were not feasible to implement, and some of them raised fundamental questions about the scope and purpose of CRA and entail political judgments that may be better left to elected officials in the first instance.

For example, we considered community organizations' proposal to expand an assessment area to include all areas where an institution does a significant level of business. The implementation questions raised by the proposal are many and complex, including the following: Is the relevant type of business deposit-taking, lending, investing, or two or all three of those types? What is the relevant measure of the amount of business? Is it the share of the market? If so, how is the market defined and where are data obtained? Is it the share of the institution's business? Would an institution, its examiners, and interested community organizations know sufficiently early where the institution's business would reach significant levels to adjust their CRA planning and resource commitments accordingly? How would institutions, examiners, and community organizations cope with the possibility that an institution's assessment areas could change substantially from one examination period to the next? Could institutions be expected to have enough knowledge, expertise, and ability in areas where they do not have branches to make informed decisions about meeting community credit needs and effectively execute them?

The agencies also considered comments advocating elimination of the requirement to delineate assessment areas around deposit-taking ATMs. ATMs can generate substantial deposits and provide a wide range of services, often substituting for branches with respect to many functions.

For these reasons, the agencies will continue to address nontraditional institutions flexibly, using such measures as strategic plans, existing agency interpretations mentioned above and new guidance as appropriate.

An institution is a limited-purpose institution if it offers only a narrow product line, such as credit card or motor vehicle loans, to a regional or broader market. An institution is a wholesale institution if it is not in the business of extending home mortgage, small business, small farm, or consumer loans to retail customers. Both limited purpose and wholesale institutions are evaluated under a community development test. Under this test, the agencies consider the number and amount of community development loans, qualified investments, or community development services; the extent to which such activities are innovative, complex, and, in the case of qualified investments, not routinely provided by private investors; and the institution's responsiveness to credit and community development needs.

Most financial institutions that addressed the appropriateness of the definitions of “wholesale” or “limited purpose” institution suggested that the definition of “limited purpose institution” should be expanded. Some said it should not be restricted to institutions with certain product lines, such as credit cards and auto loans, but should include any institution, regardless of its product line, that serves a narrow customer base. A couple of financial institution commenters also sought expansion of the category of wholesale institutions. Community organizations, in contrast, contended that these definitions are not sufficiently restrictive and that the agencies have incorrectly designated some large retail institutions as wholesale or limited purpose institutions.

Commenters also disagreed about extending the community development test now reserved for limited purpose and wholesale institutions to additional categories of institutions. Several financial institutions suggested that non-branch institutions and other nontraditional institutions be treated as limited purpose institutions eligible for evaluation under a community development test. Many, but not all, community organizations opposed extending the test to other types of institutions.

Based on our review and consideration of the matter, we are not proposing any changes to the regulations concerning the definitions of wholesale and limited purpose institutions or expansion of the community development test to additional types of institutions.

Every institution has the option to develop a strategic plan with measurable goals for meeting the credit needs of its assessment area(s). An institution must informally solicit suggestions from the public while developing its plan, solicit formal public comments on its plan, and submit the plan to its supervisory agency for approval with any written comments from the public and an explanation of how, if at all, those comments are reflected in the plan.

Relatively few comments addressed the strategic plan provision. Most of the financial institutions that addressed the issue said the option should be retained though modified; a few community organizations agreed, while a few others said the strategic plan option should be eliminated. A principal concern of financial institutions was a perceived lack of flexibility, for instance, to modify their goals as the economy or their business changes. Of equal concern to them were the requirements of the plan approval process to solicit public comment and disclose information they regard as proprietary.

Based on our review and consideration of the matter, we are not proposing any changes to the regulations concerning strategic plans.

Regardless of type, an institution is always evaluated in light of its performance context, including information about the institution, its community, its competitors, and its peers. Relevant information includes assessment area demographics; product offerings and business strategy; lending, investment, and service opportunities in the assessment area; institutional capacity and constraints; and information about the institution's past performance and that of similarly situated lenders.

Many commenters from various viewpoints emphasized the importance of considering performance context in CRA evaluations, but were critical of how the agencies have developed and used performance context. Some commented that examiners do not adequately solicit and incorporate input from community organizations and financial institutions in the development of performance context, participants do not have sufficient guidance about what information to present to examiners to aid in the development of the performance context, and the guidelines examiners use to determine performance context (such as selecting an institution's peers) are not transparent. Some commented that performance evaluations do not adequately tie performance context to evaluations and that examiners do not give sufficiently nuanced consideration to an institution's business strategy or local needs.

Based on our review and consideration of the matter, we believe that the current regulations provide sufficient flexibility to address the concerns that have been raised, and that performance context issues can be addressed adequately through examiner guidance and training.

Large institutions are required to collect and report data on small business, small farm and community development loans, and to supplement Home Mortgage Disclosure Act (HMDA) data with property locations for loans made outside MSAs. In the ANPR we asked whether these data reporting requirements are effective and efficient in assessing CRA performance while avoiding undue burden.

Most community organizations believed that the data collection and reporting requirements could be more effective in assessing an institution's CRA performance. Many of them stated that more detailed data should be collected on small business and small farm lending, including race, sex, loan cost, purpose of loan, action taken, and reasons for denial. Many organizations also asked that the agencies disaggregate small business and small farm loan data to the census tract level, and that we identify the census tract and purpose for each community development loan.

Many financial institutions commented that the regulations' data collection and reporting provisions are a significant burden. Some also said that the data are not useful and fails to accurately represent a financial institution's efforts to meet credit needs; a few questioned the agencies' authority to require data collection and reporting. They suggested that data collection and reporting be eliminated or made optional. However, other financial institutions commented that no changes to the regulations' data provisions are necessary.

We believe existing reporting requirements correctly balance burden and benefit for the institutions that would remain subject to those requirements were the definition of “small institution” to be amended as proposed and discussed in detail below.

The agencies intend to revise the regulations, however, to enhance the data disclosed to the public. The regulations do not now provide for disclosure of business and farm loans by geography (census tract) in the CRA Disclosure Statement the agencies prepare for every institution's public file. Rather, the regulations provide for aggregation of that data across tracts within tract-income categories. As we intend to revise the regulations, they will provide that the Disclosure Statement would contain the number and amount of the institution's small business and small farm loans by census tract. During the 1994-95 CRA rulemaking, we received comments expressing concern that disclosing loan data at the census tract level might reveal private information about small-business and small-farm borrowers. We believe that the risk of revealing such information is likely very small, and that the benefit to the public of having data at the census tract level is substantial.

We seek comment on whether the revision properly balances the benefits of public disclosure against any risk of unwarranted disclosure of otherwise private information. We also invite any specific suggestions for display of the data.

Most community organizations commenting on the public file requirements believed that the current regulations should be maintained. A few asked that public files be made available on the Internet.

Most financial institutions addressing the issue commented that the current public file requirement is burdensome and should be revised or eliminated, though some said no change in the regulations should be made. Commenters seeking change stated that requests for public files are rarely presented to branches but, rather, are usually presented to CRA officers; they suggested that a hard copy of the public files be maintained at the main office only, and be available elsewhere upon request. Others suggested streamlining the public file by removing all but the most essential information (such as an institution's assessment areas, primary delivery channels, products, services, and last performance evaluation).

Based on our review and consideration of the matter, we are not proposing any changes to the regulations concerning public file requirements.

In connection with the interagency rulemaking that culminated in the revised CRA regulations adopted in 1995, the agencies received a large number of comments from small institutions seeking regulatory relief. These commenters stated that they incurred significant regulatory burdens and costs from having to document CRA performance, and that these burdens and costs impeded their ability to improve their CRA performance. The regulations reflect the agencies' objectives that the CRA regulations provide for performance-based assessment standards that minimize compliance burden while stimulating improved performance.

An institution is considered small under the regulations if, at the end of either of the two previous years, it had less than $250 million in assets and was independent or affiliated with a holding company with total bank and thrift assets of less than $1 billion. Under the regulations, small institutions' CRA performance is evaluated under a streamlined test that focuses primarily on lending. The test considers the institution's loan-to-deposit ratio; the percentage of loans in its assessment areas; its record of lending to borrowers of different income levels and businesses and farms of different sizes; the geographic distribution of its loans; and its record of taking action, if warranted, in response to written complaints about its performance in helping to meet credit needs in its assessment areas.

Most small institutions commented that they were satisfied that the streamlined test adopted in 1995 substantially reduced their CRA compliance burden, though many stated that it was too difficult for a small institution to achieve an Outstanding rating. Some of those commenters sought a way to receive consideration for their service and investment activities without undergoing the evaluation of such activities imposed on large retail institutions. In contrast, community organizations generally believed the performance standards for small institutions did not effectively measure the institutions' contributions to meeting community credit needs.

Many other commenters stated that the small institution performance standards should be available to a larger number of institutions. Generally, these commenters raised many of the same concerns as those that had been raised in connection with the 1995 rulemaking, primarily that the regulatory burden of the CRA rules impedes smaller banks from improving their CRA performance. Many financial institutions suggested that, to reduce undue burden, the agencies raise significantly the small institution asset threshold and either raise significantly or eliminate the holding company limitation. These commenters supported these suggestions by citing burdens on retail institutions that are subject to the “large institution” CRA tests because they slightly exceed the asset threshold for small institutions. Financial institutions singled out two aspects of the large retail institution test as particularly burdensome for institutions just above the threshold. First, they asserted that those institutions have difficulty achieving a Low Satisfactory or better rating on the investment test, and, as a result, have difficulty achieving an Outstanding rating overall. Those institutions are said to encounter serious challenges competing with larger institutions for suitable investments and, as a result, to sometimes invest in activities inconsistent with their business strategy, their own best financial interests, or community needs.

Second, financial institutions asserted that data collection and reporting are proportionally more burdensome for institutions just above the threshold than for institutions far above the threshold. Some commenters asserted that institutions that exceed the $250 million threshold face a threefold increase in compliance costs for CRA due to the need for new personnel, data collection and reporting costs, and the particular burdens imposed by the investment test applicable to large retail institutions. They asserted that raising the asset threshold for small institutions would be consistent with the agencies' belief in 1995 that the CRA rules should not impose such regulatory burden. They also questioned the benefit of reporting small business and small farm loan data, especially by institutions that serve limited geographic areas. Some commenters suggested that banks be relieved of reporting such data and that examiners instead sample files or review only the data gathered and maintained by banks pursuant to other laws or procedures (for example, the Call Report or Thrift Financial Report).

Financial institutions also commented that changes in the industry had rendered the threshold out-of-date. They pointed to the consolidation in the banking and thrift industries through mergers and acquisitions, and the growing gap between “mega-institutions” and those under $1 billion in assets. They noted that the number of institutions considered small, and the percentage of overall bank and thrift assets held by those institutions, has decreased significantly since the 1995 revisions.

Financial institutions suggested raising the small institution asset-size threshold from $250 million to amounts ranging from $500 million to as much as $2 billion. They also generally suggested eliminating or raising the $1 billion holding company threshold. They contended that affiliation with a large holding company does not enable an otherwise small institution to perform any better under the large retail institution test than a small institution without such an affiliation.

Community organizations that commented on the issue opposed changing the definition of “small institution.” These commenters were primarily concerned that reducing the number of institutions subject to the large retail institution test—and, therefore, the investment test—would reduce the level of investment in low- and moderate-income urban and rural communities. Community organizations also expressed concerns about the reduction in publicly available small business and small farm loan data that would follow a reduction in the number of large retail institutions.

The regulations distinguish between small and large institutions for several important reasons. Institutions' capacities to undertake certain activities, and the burdens of those activities, vary by asset size, sometimes disproportionately. Examples of such activities include identifying, underwriting, and funding qualified equity investments, and collecting and reporting loan data. The case for imposing certain burdens is sometimes more compelling with larger institutions than with smaller ones. For instance, the number and volume of loans and services generally tend to increase with asset size, as do the number of people and areas served, although the amount and quality of an institution's service to its community certainly is not always directly related to its size. Furthermore, evaluation methods appropriately differ depending on institution size. For example, the volume of originations of loans other than home mortgage loans in the smallest institutions will generally be small enough that an examiner can view a substantial sampling of loans without advance collection and reporting of data by the institution. Commenters from various viewpoints tended to agree that the regulations should draw a line between small and large institutions for at least some purposes. They differed, however, on where the line should be drawn.

The agencies considered the institution asset-size and holding company asset-size thresholds in light of these comments. When we adopted the definition in 1995, we indicated that we included a holding company limitation to reflect the ability of a holding company of a certain size (over $1 billion) to support a bank or thrift subsidiary's compliance activities. Anecdotal evidence, however, suggests that a relatively small institution with a sizable holding company often finds addressing its CRA responsibilities no less burdensome than does a similarly-sized institution without a sizable holding company. Thus, we are proposing to eliminate the holding company limitation on small institution eligibility.

Several factors led us to propose raising the asset threshold. First, with the increase in consolidation at the large end of the asset size spectrum, the gap in assets between the smallest and largest institutions has grown substantially since the line was drawn at $250 million in 1995. The compliance burden on institutions just above any threshold, measured as the cost of compliance relative to asset size, generally will be proportionally higher than the burden on institutions far above the same threshold, because some compliance costs are fixed. But, the growing asset gap between the smallest above-the-threshold institutions and the largest institutions has meant that the disproportion in compliance burden has grown on average. Second, the number of institutions defined as small has declined by over 2,000 since the threshold was set in 1995, and their percentage of industry assets has declined substantially. Third, some asset growth since 1995 has been due to inflation, not real growth. Fourth, the agencies are committed to reducing burden where feasible and appropriate.

For these reasons, we propose to raise the small institution asset threshold to $500 million, without reference to holding company assets. Raising the asset threshold to $500 million and eliminating the holding company limitation would approximately halve the number of institutions subject to the large retail institution test (to roughly 11% of all insured depository institutions), but the percentage of industry assets subject to the large retail institution test would decline only slightly, from a little more than 90% to a little less than 90%. That decline, though slight, would more closely align the current distribution of assets between small and large banks with the distribution that was anticipated when the agencies adopted the definition of “small institution.”

The proposed changes would not diminish in any way the obligation of all insured depository institutions subject to CRA to help meet the credit needs of their communities. Instead, the changes are meant only to address the regulatory burden associated with evaluating institutions under CRA. We seek comment on whether the proposal improves the effectiveness of CRA evaluations, while reducing unwarranted burden.

The regulations provide that “evidence of discriminatory or other illegal credit practices adversely affects” an agency's evaluation of an institution's CRA performance and may affect the rating, depending upon consideration of factors specified in the regulations. Interagency guidance explains that this provision applies when there is evidence of certain violations of laws including certain violations of the Equal Credit Opportunity Act (ECOA), Fair Housing Act, Home Ownership and Equity Protection Act (HOEPA), Real Estate Settlement Procedures Act (RESPA), Truth in Lending Act (TILA), and Federal Trade Commission Act (FTC Act). 2 The guidance further explains that violations of other provisions of consumer protection laws generally will not adversely affect an institution's CRA rating, although the violations may be noted in a CRA performance evaluation.

The ANPR noted that some parties have maintained that the CRA regulations should take more account of whether loans contain abusive terms or reflect abusive practices, prompting comments supporting and opposing that view.

Community organizations uniformly urged expanding CRA's role in detecting and penalizing credit practices deemed predatory or abusive. Commenters suggested that the agencies give “negative” credit for loans evidencing unlawful or otherwise abusive practices, exclude such loans from evaluation, or automatically rate an institution making such loans lower than Satisfactory.

Commenters recommended that the regulations themselves specify the practices that will adversely affect a CRA evaluation, using the list in the interagency guidance, to include, but not be limited to, evidence of particular violations of the Equal Credit Opportunity Act, Fair Housing Act, Home Ownership and Equity Protection Act, Real Estate Settlement Procedures Act, Truth in Lending Act, and Federal Trade Commission Act.

Commenters also recommended the regulations clarify that a number of particular loan terms or characteristics, whether or not specifically prohibited by law, that have been associated with predatory lending practices should adversely affect an institution's CRA evaluation. These include high fees, prepayment penalties, single-premium credit insurance, mandatory arbitration clauses, frequent refinancing (“flipping”), lending without regard to repayment ability, equity “stripping,” targeting low- or moderate-income neighborhoods for subprime loans, and failing to refer qualifying borrowers to prime financial products. Commenters also suggested that certain types of loans, such as payday loans, be categorically treated as inappropriate and lead to a rating reduction.

Financial institutions generally opposed determining under the CRA whether activities beyond those identified in the regulations are predatory or abusive. They noted that the regulations already expressly provide that violations of certain laws can adversely affect a rating. They contended that abusive credit terms and practices generally should not be regulated through CRA because Congress enacted other laws for that purpose, and expressed doubt that a workable regulatory definition of “predatory lending” could be developed. They also contended that the increased compliance costs caused by using CRA examinations to detect and deter abusive practices would not be justified because regulated financial institutions are not responsible for the bulk of abuses. They urged instead that the agencies continue to rely on fair lending and compliance examinations to detect and deter abuses.

As concern about lending practices has often focused on nondepository affiliates, the agencies also solicited and received comment on the role of affiliate loans in an institution's CRA evaluation. Nondepository institutions are not covered by the Act, but the regulations permit an institution to elect, at its option, to have loans of a nondepository affiliate considered as part of the institution's own record of performance. An institution must elect consideration of affiliate loans by assessment area and lending category. For example, if an institution elects for examiners to consider residential mortgage loans of a particular affiliate, examiners will evaluate all residential mortgage loans made in the same assessment area by any of its affiliates. There can be an “upside” to including an affiliate's activities in an institution's CRA lending evaluation because affiliate loans are considered favorably in an institution's lending evaluation, particularly if they increase the number and amount of lending in low- and moderate-income areas.

Many community organizations contended that the problem of predatory lending lies as much or more in nondepository affiliates as in institutions subject to CRA. They generally urged mandating the inclusion of affiliate loans in an institution's CRA evaluation, instead of letting the institution decide whether to include them. Finally, a few commenters recommended directly subjecting nonbank affiliates to CRA evaluations and ratings. Financial institutions opposed those suggestions.

The agencies believe that predatory and abusive lending practices are inconsistent with important national objectives, including the goals of fair access to credit, community development, and stable home ownership by the broadest spectrum of Americans, and are inconsistent with the purposes of the CRA. We have acted to attack abusive practices through rulemakings under various statutes, supervisory policies, financial literacy education, and community development support.

The CRA regulations can play a role in promoting responsible lending practices and discouraging abusive practices, where feasible. The regulations give the agencies considerable discretion to determine whether lending activities help to meet the credit needs of the community consistent with safe and sound practices. The regulations reward with special consideration efforts to insulate borrowers from abusive practices. 3 And, as noted above, evidence of certain illegal credit practices adversely affects the agency's evaluation of an institution's CRA performance.

The agencies believe that it is appropriate to enhance how the CRA regulations address credit practices that may be discriminatory, illegal, or otherwise predatory and abusive, and that are inconsistent with helping to meet community credit needs in a safe and sound manner. Therefore, in response to commenters' recommendations that the agencies' CRA regulations address predatory lending, whether by regulated financial institutions or an affiliate, the agencies are proposing to revise and clarify the regulations in several respects.

First, the agencies plan to specify in the regulations examples of certain violations of law that will adversely affect an agency's evaluation of an institution's CRA performance. The regulations would specify, in an illustrative list, that evidence of the following practices adversely affects an agency's evaluation of an institution's CRA performance: discrimination against applicants on a prohibited basis in violation of, for example, the Equal Credit Opportunity or Fair Housing Acts; evidence of illegal referral practices in violation of section 8 of the Real Estate Settlement Procedures Act; evidence of violations of the Truth in Lending Act concerning a consumer's right to rescind a credit transaction secured by a principal residence; evidence of violations of the Home Ownership and Equity Protection Act; and evidence of unfair or deceptive credit practices in violation of section 5 of the Federal Trade Commission Act. These laws are listed to give an indication of the types of illegal and discriminatory credit practices that the agency may consider. Evidence of violations of other applicable consumer protection laws affecting credit practices, including State laws if applicable, may also adversely affect the institution's CRA evaluation. While no substantive change will result from listing these examples, specifying in the regulation examples of violations that give rise to adverse CRA consequences should improve the usefulness of the regulations by providing critical information in primary compliance source material.

The agencies also propose to clarify that an institution's evaluation will be adversely affected by practices described above in connection with any type of lending activity described in __.22(a) (home mortgage, small business, small farm, consumer, and community development loans). This would also clarify that the agencies may consider such practices in connection with consumer loans, even if the institution did not elect to have such loans included in its evaluation.

Second, the agencies propose to explicitly address equity stripping by revising the regulations to provide that evidence of a pattern or practice of extending home mortgage or consumer loans based predominantly on the foreclosure or liquidation value of the collateral by the institution, where the borrower cannot be expected to be able to make the payments required under the terms of the loan, 4 also adversely affects an institution's overall rating. An institution may determine that a borrower can be expected to be able to make the payments required under the terms of the loan based, for example, on information about the borrower's credit history, current or expected income, other resources, and debts; preexisting customer relationships (such as accommodation lending); or other information ordinarily considered by the institution (or affiliate, as applicable) and as documented and verified, stated, or otherwise ordinarily determined by the institution (or affiliate, as applicable).

This element of the agencies' proposal addresses one of the central characteristics of predatory lending, and describes a practice clearly not consistent with helping to meet the credit needs of the community. For example, home-secured loans made without regard to borrowers' ability to repay can lead to unwarranted foreclosures, which, in turn, undermine the entire community. To be sure, equity stripping is not the only potential lending abuse in home mortgage and consumer loans, but it is more readily susceptible to clear definition in a regulation than many other abuses. The agencies believe that other abuses not expressly prohibited by HOEPA, TILA, RESPA, or ECOA, may be better addressed on a case-by-case basis under the unfair-or-deceptive standard of the FTC Act, rather than by regulatory definitions. The FTC Act is particularly well suited to addressing evidence of predatory lending practices that are not otherwise prohibited by Federal law. For example, many practices that have been criticized as predatory and abusive, such as loan flipping, the refinancing of special subsidized mortgage loans, other forms of equity stripping, and fee packing, can entail unfair or deceptive practices that violate the FTC Act. 5

As noted above, this aspect of the proposal is limited to home mortgage loans and consumer loans. It does not cover loans to businesses. Further, the proposal is not intended to cover loans such as reverse mortgages that, by their terms, will be paid from liquidation of the collateral.

In addition, under the proposed standard, an institution would determine that a borrower may be expected to be able to make the payments required under the terms of the loan by considering information it ordinarily considers in connection with the type of loan. Depending upon the institution's normal procedures in the circumstances and consistent with safe and sound underwriting, such information may or may not be documented and verified. For example, many institutions ordinarily do not verify or even consider income of people with high net worth or exemplary records of paying credit obligations. Note, however, that HOEPA requires lenders to document the borrower's ability to repay a loan subject to HOEPA, and that HOEPA violations adversely affect an institution's CRA evaluation.

The agencies seek comment on whether the inclusion in the regulations of a provision to address the pattern or practice of making home mortgage and consumer loans based predominantly on the foreclosure or liquidation value of the collateral by the institution, where the borrower cannot be expected to be able to make the payments required under the terms of the loan, is sufficient or whether a different formulation of that provision would better discourage abusive lending practices without risking curtailment of consumers' access to credit. We also seek comment on whether it is feasible to define any other specific abuses by regulation in a way that both shields consumers from the costs of the abuse and avoids inadvertently curtailing the availability of credit to consumers.

Third, the agencies propose to clarify that an institution's evaluation will be adversely affected by discriminatory, other illegal, or abusive credit practices described in the regulations regardless of whether the practices involve loans in the institution's assessment area(s) or in any other location or geography. The regulations currently provide that evidence of discriminatory or other illegal credit practices by an institution can adversely affect the institution's rating, and they do not limit the agencies' consideration of such evidence to lending within an assessment area.

Fourth, the proposed revisions would clarify that an institution's CRA evaluation also can be adversely affected by evidence of discriminatory, other illegal, and abusive credit practices by any affiliate, 6 if any loans of that affiliate have been considered in the CRA evaluation pursuant to __.22(c)(1) and (2). Loans by an affiliate currently are permitted to be included in an institution's evaluation of an assessment area only, and the proposal would be similarly limited to affiliate lending practices within any assessment area. We seek comment on whether the agencies should provide in the regulation that evidence of discriminatory, other illegal, or abusive credit practices by an affiliate whose loans have been considered in an institution's evaluation will adversely affect the institution's rating whether or not the activities were inside any of the institution's assessment areas.

The agencies will consider all credible evidence of discriminatory, other illegal, or abusive credit practices that comes to their attention. Such information could be obtained from supervisory examinations (including safety and soundness examinations and compliance examinations), CRA comments in connection with applications for deposit facilities, and public sources. However, CRA examinations themselves generally will not entail specific evaluation of individual complaints or specific evaluation of individual loans for illegal credit practices or otherwise abusive lending practices.

With these proposed changes to the CRA regulations, the agencies seek to ensure that evidence of predatory and abusive lending practices are appropriately considered in an institution's CRA evaluation. We considered suggestions for adopting a more categorical response to evidence of an illegal credit practice, such as rating the institution no higher than Needs to Improve. We continue to believe an institution should be evaluated based on all relevant ratings factors without mandating a particular rating result. Further, it may be impractical for the agencies to try to exclude from CRA consideration all loans originated in connection with an illegal or abusive credit practice because it could require examiners to identify and segregate each such loan, and we invite comment on this issue.

We invite comment on all aspects of the proposed revisions to section __28.(c), including the extent to which the proposed revisions would make CRA evaluations more effective in measuring an institution's contribution to community credit needs without imposing undue burden.

A public performance evaluation is a written description of an institution's record of helping to meet community credit needs, and includes a rating of that record. An evaluation is prepared at the conclusion of every CRA examination and made available to the public. The agencies intend to use publicly available HMDA and CRA data to disclose the following information in CRA performance evaluations by assessment area:

(1) The number, type, and amount of purchased loans;

(2) The number, type, and amount of loans of HOEPA loans and of loans for which rate spread information is reported under HMDA (data that will be available in mid-2005); and

(3) The number, type, and amount of loans that were originated or purchased by an affiliate and included in the institution's evaluation, and the identity of such affiliate.

These changes should make it easier for the public to evaluate the lending by individual institutions according to particular factors that many commenters suggested. They should not impose any burden on institutions, as it does not call for any change to data collection or reporting procedures. The agencies seek comment on the extent to which the enhancements of public CRA performance evaluations described above will make the evaluations more effective in communicating to the public an institution's contribution to meeting community credit needs.

In accordance with the requirements of the Paperwork Reduction Act of 1995, the Agencies may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number (OCC, 1557-0160; Board, 7100-0197; FDIC, 3064-0092; and OTS, 1550-0012). The Agencies also give notice that, at the end of the comment period, the proposed collections of information, along with an analysis of the comments, and recommendations received, will be submitted to OMB for review and approval.

Comments are invited on:

(a) Whether the collection of information is necessary for the proper performance of the Agencys' functions, including whether the information has practical utility;

(b) The accuracy of the estimates of the burden of the information collection, including the validity of the methodology and assumptions used;

(c) Ways to enhance the quality, utility, and clarity of the information to be collected;

(d) Ways to minimize the burden of the information collection on respondents, including through the use of automated collection techniques or other forms of information technology; and

(e) Estimates of capital or start up costs and costs of operation, maintenance, and purchase of services to provide information.

At the end of the comment period, the comments and recommendations received will be analyzed to determine the extent to which the information collections should be modified prior to submission to OMB for review and approval. The comments will also be summarized or included in the Agencies' requests to OMB for approval of the collections. All comments will become a matter of public record.

Comments should be addressed to:

OCC: Public Information Room, Office of the Comptroller of the Currency, 250 E Street, SW., Mail stop 1-5, Attention: Docket 04-06, Washington, DC 20219; fax number (202) 874-4448; Internet address: regs.comments@occ.treas.gov. Due to delays in paper mail delivery in the Washington area, commenters are encouraged to submit their comments by fax or e-mail. You can make an appointment to inspect the comments at the Public Information Room by calling (202) 874-5043.

Board: Comments should refer to Docket No. R-1181 and may be mailed to Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, NW., Washington, DC 20551. Please consider submitting your comments through the Board's Web site at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm, by e-mail to regs.comments@federalreserve.gov, or by fax to the Office of the Secretary at (202) 452-3819 or (202) 452-3102. Rules proposed by the Board and other Federal agencies may also be viewed and commented on at http://www.regulations.gov.

All public comments are available from the Board's Web site at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, except as necessary for technical reasons. Accordingly, your comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper in Room MP-500 of the Board's Martin Building (C and 20th Streets, NW.) between 9 a.m. and 5 p.m. on weekdays.

FDIC: Leneta G. Gregorie, Legal Division, Room MB-3082, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429. All comments should refer to the title of the proposed collection. Comments may be hand-delivered to the guard station at the rear of the 17th Street Building (located on F Street), on business days between 7 a.m. and 5 p.m., Attention: Comments/Executive Secretary, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429.

OTS: Information Collection Comments, Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552; send a facsimile transmission to (202) 906-6518; or send an e-mail to informationcollection.comments@ots.treas.gov. OTS will post comments and the related index on the OTS Internet site at http://www.ots.treas.gov. In addition, interested persons may inspect the comments at the Public Reading Room, 1700 G Street, NW., by appointment. To make an appointment, call (202) 906-5922, send an e-mail to publicinfo@ots.treas.gov, or send a facsimile transmission to (202) 906-7755.

Title of Information Collection:

OCC: Community Reinvestment Act Regulation—12 CFR 25.

Board: Recordkeeping, Reporting, and Disclosure Requirements in Connection with Regulation BB (Community Reinvestment Act).

FDIC: Community Reinvestment—12 CFR 345.

OTS: Community Reinvestment—12 CFR 563e.

Frequency of Response: Annual.

Affected Public:

OCC: National banks.

Board: State member banks.

FDIC: Insured nonmember banks.

OTS: Savings associations.

Abstract: This Paperwork Reduction Act section estimates the burden that would be associated with the regulations were the agencies to change the definition of “small institution” as proposed, that is, increase the asset threshold from $250 million to $500 million and eliminate any consideration of holding-company size. The two proposed changes, if adopted, would make “small” approximately 1,350 insured depository institutions that do not now have that status. That estimate is based on data for all FDIC-insured institutions that filed Call or Thrift Financial Reports on March 31, 2003. Those data also underlie the estimated paperwork burden that would be associated with the regulations if the proposals were adopted by the agencies.

Estimated Paperwork Burden under the Proposal:

Number of Respondents: 2,066.

Estimated Time Per Response: Small business and small farm loan register, 219 hours; Consumer loan data, 326 hours; Other loan data, 25 hours; Assessment area delineation, 2 hours; Small business and small farm loan data, 8 hours; Community development loan data, 13 hours; HMDA out-of-MSA loan data, 253 hours; Data on lending by a consortium or third party, 17 hours; Affiliated lending data, 38 hours; Request for designation as a wholesale or limited purpose bank, 4 hours; Strategic Plan, 275 hours; and Public file, 10 hours.

Total Estimated Annual Burden: 223,062 hours.

Number of Respondents: 950.

Estimated Time Per Response: Small business and small farm loan register, 219 hours; Consumer loan data, 326 hours; Other loan data, 25 hours; Assessment area delineation, 2 hours; Small business and small farm loan data, 8 hours; Community development loan data, 13 hours; HMDA out-of-MSA loan data, 253 hours; Data on lending by a consortium or third party, 17 hours; Affiliated lending data, 38 hours; Request for designation as a wholesale or limited purpose bank, 4 hours; and Public file, 10 hours.

Total Estimated Annual Burden: 114,350 hours.

Number of Respondents: 5,341.

Estimated Time Per Response: Small business and small farm loan register, 219 hours; Consumer loan data, 326 hours; Other loan data, 25 hours; Assessment area delineation, 2 hours; Small business and small farm loan data, 8 hours; Community development loan data, 13 hours; HMDA out-of-MSA loan data, 253 hours; Data on lending by a consortium or third party, 17 hours; Affiliated lending data, 38 hours; Request for designation as a wholesale or limited purpose bank, 4 hours; and Public file, 10 hours.

Total Estimated Annual Burden: 331,358 hours.

Number of Respondents: 958.

Estimated Time Per Response: Small business and small farm loan register, 219 hours; Consumer loan data, 326 hours; Other loan data, 25 hours; Assessment area delineation, 2 hours; Small business and small farm loan data, 8 hours; Community development loan data, 13 hours; HMDA out-of-MSA loan data, 253 hours; Data on lending by a consortium or third party, 17 hours; Affiliated lending data, 38 hours; Request for designation as a wholesale or limited purpose bank, 4 hours; and Public file, 10 hours.

Estimated Total Annual Burden: 116,493 hours.

OCC: Pursuant to section 605(b) of the Regulatory Flexibility Act, the OCC certifies that since the proposal would reduce burden and would not raise costs for small institutions, this proposal will not have a significant economic impact on a substantial number of small entities. This proposal does not impose any additional paperwork or regulatory reporting requirements. The proposal would increase the overall number of small banks that are permitted to avoid data collection requirements in 12 CFR part 25. Accordingly, a regulatory flexibility analysis is not required.

Board: Pursuant to section 605(b) of the Regulatory Flexibility Act, the Board certifies that since the proposal would reduce burden and would not raise costs for small institutions, this proposal will not have a significant economic impact on a substantial number of small entities. This proposal does not impose any additional paperwork or regulatory reporting requirements. The proposal would increase the overall number of small banks that are permitted to avoid data collection requirements in 12 CFR part 228. Accordingly, a regulatory flexibility analysis is not required.

FDIC: Pursuant to section 605(b) of the Regulatory Flexibility Act, the FDIC certifies that since the proposal would reduce burden and would not raise costs for small institutions, this proposal will not have a significant economic impact on a substantial number of small entities. This proposal does not impose any additional paperwork or regulatory reporting requirements. The proposal would increase the overall number of small banks that are permitted to avoid data collection requirements in 12 CFR part 345. Accordingly, a regulatory flexibility analysis is not required.

OTS: Pursuant to section 605(b) of the Regulatory Flexibility Act, the OTS certifies that since the proposal would reduce burden and would not raise costs for small institutions, this proposal will not have a significant economic impact on a substantial number of small entities. This proposal does not impose any additional paperwork or regulatory reporting requirements. The proposal would increase the overall number of small savings associations that are permitted to avoid data collection requirements in 12 CFR part 563e. Accordingly, a regulatory flexibility analysis is not required.

The OCC and OTS have determined that their portion of the proposed rulemaking is not a significant regulatory action under Executive Order 12866.

Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 104-4 (Unfunded Mandates Act) requires that an agency prepare a budgetary impact statement before promulgating a rule that includes a Federal mandate that may result in expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 205 of the Unfunded Mandates Act also requires an agency to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. The OCC and OTS have determined that this final rule will not result in expenditures by State, local, and tribal governments, or by the private sector, of $100 million or more. Accordingly, neither agency has prepared a budgetary impact statement or specifically addressed the regulatory alternatives considered.

The FDIC has determined that this proposed rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105-277, 112 Stat. 2681.

Section 722 of the Gramm-Leach-Bliley Act of 1999 requires the Board, the FDIC, and the OTS to use “plain language” in all proposed and final rules published after January 1, 2000. The Board, the FDIC, and the OTS invite comments on whether the proposed rules are clearly stated and effectively organized, and how the Board, the FDIC, and the OTS might make the proposed text easier to understand.

Section 722 of the Gramm-Leach-Bliley Act, Public Law 106-102, sec. 722, 113 Stat. 1338, 1471 (Nov. 12, 1999), requires the Federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. The OCC invites your comments on how to make this proposal easier to understand. For example:

• Have we organized the material to suit your needs? If not, how could this material be better organized?

• Are the requirements in the proposed regulation clearly stated? If not, how could the regulation be more clearly stated?

• Does the proposed regulation contain language or jargon that is not clear? If so, which language requires clarification?

• Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes to the format would make the regulation easier to understand?

• What else could we do to make the regulation easier to understand?

The Comptroller of the Currency has determined that this final rule does not have any Federalism implications, as required by Executive Order 13132.

The OCC invites your comments on the impact of this proposal on community banks. The OCC recognizes that community banks operate with more limited resources than larger institutions and may present a different risk profile. Thus, the OCC specifically requests comments on the impact of this proposal on community banks' current resources and available personnel with the requisite expertise, and whether the goals of the proposed regulation could be achieved, for community banks, through an alternative approach.

For the reasons set forth in the joint preamble, the Office of the Comptroller of the Currency proposes to amend part 25 of chapter I of title 12 of the Code of Federal Regulations as follows:

For the reasons set forth in the joint preamble, the Board of Governors of the Federal Reserve System proposes to amend part 228 of chapter II of title 12 of the Code of Federal Regulations as follows:

For the reasons set forth in the joint preamble, the Board of Directors of the Federal Deposit Insurance Corporation proposes to amend part 345 of chapter III of title 12 of the Code of Federal Regulations to read as follows:

For the reasons outlined in the joint preamble, the Office of Thrift Supervision proposes to amend part 563e of chapter V of title 12 of the Code of Federal Regulations as set forth below:

The FAA invites interested persons to participate in this rulemaking by submitting written comments. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments.

We will file in the docket all comments we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning these special conditions. The docket is available for public inspection before and after the comment closing date. If you wish to review the docket in person, go to the address in the ADDRESSES section of this preamble between 7:30 a.m. and 4 p.m., Monday through Friday, except Federal holidays.

If you want the FAA to acknowledge receipt of your comments on this proposal, include with your comments a pre-addressed, stamped postcard on which the docket number appears. We will stamp the date on the postcard and mail it back to you.

On June 25, 2002, the Boeing Commercial Airplane Group (BCAG), P.O. Box 3707, Seattle, Washington, 98124, applied for a change to Type Certificate No. T00001SE for a design change to install an OHCR, which is proposed to be occupiable during TT&L, in Boeing Model 777 series airplanes. The Boeing Model 777 series airplanes are large twin-engine airplanes with various passenger capacities and ranges depending upon airplane configuration.

The OHCR compartment is located in the overhead space above the main passenger cabin immediately aft of the first pair of main deck emergency exits (Door 1) and will include a maximum of two private berths and two seats. Occupancy of the OHCR compartment will be limited to a maximum of four crewmembers during flight and two flightcrew members, one in each seat, during TT&L.

The OHCR compartment will be accessed from the main deck by stairs through a vestibule. In addition, an emergency hatch, which opens directly into the main passenger seating area, will be provided for the OHCR compartment as an alternate route for evacuating occupants of the OHCR compartment in an emergency. A smoke detection system and an oxygen system will be provided in the compartment. Other optional features, such as a kitchenette and lavatory, may be provided as well.

While the installation of an OHCR compartment is not a new concept for large transport category airplanes, each OHCR compartment has unique features based on design, location, and use on the airplane. Previously, OHCR compartments have been installed and certified in Boeing 777 series airplanes in the main passenger seating area, in the overhead compartment above the main passenger seating area, and below the passenger seating area within the cargo compartment. On April 9, 2003, the FAA issued Special Conditions No. 25-230-SC for an OHCR compartment immediately aft of the Door 1 exits and an overhead flight attendant rest compartment adjacent to Door 3 in Boeing 777 series airplanes. These new special conditions address an OHCR compartment at the same location aft of Door 1 as in the April 2003 special conditions, except that they address occupancy of trained flightcrew during TT&L.

Under the provisions of § 21.101, Amendment 21-69, effective September 16, 1991, Boeing Commercial Airplane Group must show that Model 777 series airplanes, as changed, continue to meet the applicable provisions of the regulations incorporated by reference in Type Certificate Data Sheet No. T00001SE or the applicable regulations in effect on the date of application for the change. Subsequent changes have been made to § 21.101 as part of Amendment 21-77, but those changes did not become effective until June 10, 2003, which is after the application date for this type design change. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The U.S. type certification basis for Boeing Model 777 series airplanes is established in accordance with 14 CFR 21.17 and 21.29 and the type certificate application date. The type certification basis is listed in Type Certificate Data Sheet No. T00001SE.

If the Administrator finds that the applicable airworthiness regulations ( i.e. , 14 CFR part 25) do not contain adequate or appropriate safety standards for Boeing Model 777 series airplanes because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

In addition to the applicable airworthiness regulations and special conditions, Boeing Model 777 series airplanes must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36.

Special conditions, as defined in § 11.19, are issued in accordance with § 11.38 and become part of the type certification basis in accordance with § 21.101(b)(2) Amendment 21-69, effective September 16, 1991.

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design features, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design features, the special conditions would also apply to the other model under the provisions of § 21.101(a)(1) Amendment 21-69, effective September 16, 1991.

Compliance with these proposed special conditions does not relieve the applicant from the existing airplane certification basis requirements. One particular area of concern is that installation of the OHCR compartment creates a small compartment volume within the large overhead volume of the airplane. The applicant must comply with the requirements of §§ 25.365(e), (f), and (g) (regarding the effects of sudden decompression) for the OHCR compartment, as well as any other airplane compartment whose decompression characteristics are affected by the installation of an OHCR compartment. Compliance with § 25.831 (regarding ventilation) must be demonstrated for all phases of flight where occupants will be present.

This OHCR compartment is unique to part 25 due to its design, location and use on the airplane. This OHCR compartment is particularly unique in that it is in the overhead area of the passenger compartment and is proposed to be occupied by trained flight crew during TT&L.

Due to the novel or unusual features associated with the installation of this OHCR compartment, special conditions are considered necessary to provide a level of safety equal to that established by the airworthiness regulations incorporated by reference in the type certificate. These special conditions do not negate the need to address other applicable part 25 regulations.

These special conditions outline requirements for OHCR compartment design approvals (type design changes) administered by the FAA's Aircraft Certification Service. Prior to operational use of an OHCR compartment, the FAA's Flight Standards Service must evaluate and approve the “basic suitability” of the OHCR compartment for crew occupation. Additionally, if an operator wishes to utilize an OHCR compartment as “sleeping quarters,” the OHCR compartment must undergo an additional evaluation and approval (Reference §§ 121.485(a), 121.523(b) and 135.269(b)(5)). Compliance with these special conditions does not ensure that the applicant has demonstrated compliance with the requirements of parts 121 or 135.

In order to obtain an operational evaluation, the type certificate holder must contact the appropriate aircraft evaluation group (AEG) in the Flight Standards Service and request a “basic suitability” evaluation or a “sleeping quarters” evaluation of their crew rest. The results of these evaluations should be documented in a 777 flight standardization board (FSB) report appendix. Individual operators may reference these standardized evaluations in discussions with their FAA principal operating inspector (POI) as the basis for an operational approval, in lieu of an on-site operational evaluation.

Any changes to the approved OHCR compartment configuration that affect crewmember emergency egress or any other procedures affecting the safety of the occupying crewmembers and/or related emergency evacuation training will require a re-evaluation and approval. The applicant for a crew rest design change that affects egress, safety procedures, or training is responsible for notifying the FAA's AEG that a new crew rest evaluation is required. The results of a re-evaluation should also be documented in a 777 FSB report appendix.

Procedures must be developed to ensure that a crewmember entering the OHCR compartment through the vestibule to fight a fire will examine the vestibule and the lavatory areas (if installed) for the source of the fire prior to entering the remaining areas of the OHCR compartment. These procedures are intended to ensure that the source of the fire is not between the crewmember and the entrance to the OHCR compartment. In the event a fire source is not immediately evident to the firefighter, the firefighter should check for potential fire sources at areas closest to the OHCR compartment entrance first, then proceed to check areas in such a manner that the fire source, when found, would not be between the firefighter and the OHCR compartment entrance. Procedures describing methods to search the OHCR compartment for fire source(s) must be transmitted to operators for incorporation into their training programs and appropriate operational manuals.

These proposed special conditions establish seating, communication equipment, lighting, personal safety, and evacuation requirements for the OHCR compartment. In addition, passenger information signs and supplemental oxygen would be required. Where applicable, the proposed requirements parallel the existing requirements for a lower deck service compartment in § 25.819 and for an OHCR compartment not occupiable during TT&L in Special Conditions No. 25-230-SC, issued on April 9, 2003. These proposed special conditions provide a level of safety equivalent to that provided for main deck occupants.

The FAA has considered whether or not a special condition should require that the OHCR compartment have an external exit leading directly outside the airplane. In accordance with § 21.16, special conditions must provide flightcrew members who occupy the OHCR compartment during TT&L with a level of safety equivalent to that established by part 25 for main deck occupants. The FAA considers that the following, in addition to the other proposed special conditions, provides this level of safety:

1. The distances along the evacuation routes from seats in the OHCR compartment to the Door 1 exits on the main deck are significantly shorter than the maximum distance a seated passenger on the main deck would need to travel to reach an exit.

2. Occupancy during TT&L would be limited to two flightcrew members who are trained in the evacuation procedures of the OHCR compartment. An airplane flight manual limitation would be established to restrict occupancy to only persons the pilot in command has determined are able to use both evacuation routes rapidly. The ability of such persons to fit through the escape hatch must be considered in this determination.

The Air Line Pilots Association, International (ALPA), and International Federation of Air Line Pilots (IFALPA) reviewed the Boeing OHCR compartment design and informed the FAA that in their opinion an external exit is not needed, because two independent, internal evacuation routes will be provided. ALPA and IFALPA provided this position to the FAA and Boeing in a meeting on January 7, 2003, and again to the FAA in letters dated February 20, 2003, and February 21, 2003. Since flightcrew members will be the only occupants of the OHCR compartment during TT&L, this input provided further support in determining the acceptability of these proposed special conditions, which do not include a requirement for an external exit.

As discussed in the background section, these proposed special conditions address the same OHCR compartment as that addressed by Special Conditions No. 25-230-SC, except that these proposed special conditions address occupancy of trained flightcrew during TT&L. Special Conditions No. 25-230-SC were developed based on occupancy during flight only for crewmembers in general (flightcrew members and flight attendants). The proposed special conditions also allow occupancy of flightcrew members and flight attendants during flight. However, the applicant has requested that new special conditions be developed that would allow flightcrew members to occupy the OHCR compartment during TT&L. The FAA has not considered the acceptability of any other occupants in the OHCR compartment during TT&L. The proposed special conditions limit occupancy to crewmembers during flight and to flightcrew members during TT&L.

Due to the location and configuration of the OHCR compartment, it is proposed that occupancy be limited to a maximum of four crewmembers during flight and two flightcrew members during TT&L. One factor which limits occupancy is the number of approved seats and berths provided in the OHCR compartment. During TT&L, occupancy would be restricted to flightcrew members who the pilot in command has determined are able to use the evacuation routes rapidly and who are trained in the evacuation procedures for the OHCR compartment. The FAA considers this requirement necessary to support a finding that the OHCR compartment will provide an equivalent level of safety to that provided by main deck seating. Requirements are also proposed for the installation of ashtrays and to prohibit smoking and the stowage of cargo or passenger baggage in the OHCR compartment.

This special condition has the requirements for door access and locking. It provides requirements similar to those in Special Conditions No. 25-230-SC for the OHCR compartment that is not occupiable during TT&L, but also provides requirements to prevent doors from obstructing an evacuation after an emergency landing.

Section 25.562 was established in recognition that some standard beyond the static conditions of § 25.561 was necessary to provide more crash-resistant seats, with the new standard being one that traditional main deck floor-type structure could withstand. Numerous tests were conducted to establish this standard. The results were the 16G forward and 14G combined down and forward dynamic tests, as documented in § 25.562. Since § 25.562 was developed based on the inherent capability of traditional main deck floor structure, certification testing of main deck floor-type structure was not required by § 25.562.

The OHCR compartment structure bears little similarity in physical characteristics to main deck floor structure. In keeping with the intent of § 25.562, this different structure must be analyzed or tested to demonstrate that it will function with capability similar to traditional main deck floor structure in a crash event, retaining the seats and maintaining their attachments to the airplane. Therefore, it is proposed that the OHCR compartment structure must be demonstrated to be compatible with dynamic loads introduced by the seats, providing the same level of protection during a crash event as that provided to those seated on traditional main deck floor structure. The applicant must propose, for FAA approval, means to analyze or test the OHCR compartment structure to demonstrate this capability.

This special condition refers to emergency evacuation routes and crew rest outlets. A crew rest outlet is an opening (for example, a door or hatch) between the OHCR compartment and the main passenger deck. An emergency evacuation route, as used in the context of this special condition, is an egress path which leads OHCR compartment occupants to crew rest outlets and out of the compartment.

It is proposed that, to preclude occupants from being trapped in the OHCR compartment in the event of an emergency, there must be at least two emergency evacuation routes that could be used by each occupant of the OHCR compartment to rapidly evacuate to the main cabin. These two routes must be sufficiently separated to minimize the possibility of an event rendering both routes inoperative. The main entry route meeting the appropriate requirements may be utilized as one of the emergency evacuation routes or, alternatively, two other emergency routes must be provided.

The following clarifies the intent of Special Condition No. 4(b) concerning the utility of the egress routes. First, occupied passenger seats are not considered an impediment to the use of an egress route (if, for example, the egress route drops into one row of main deck seats by means of a hatch), provided that the seated occupants do not inhibit the opening of the egress route (the hatch in this example). Second, an egress route may utilize areas where normal movement or evacuation of passengers occurs if it is demonstrated that the passengers would not impede egress to the main deck. If the egress means opens into a main aisle, cross aisle, or galley complex, ninety-fifth percentile male passengers on the main deck must be considered. Third, the escape hatch should be provided with a means to prevent it from being inadvertently closed by a passenger on the main deck. This will ensure main deck passengers cannot prevent occupants of the OHCR compartment from using the escape route.

Training requirements for the occupants of the OHCR compartment are included in this proposal. Requirements to prevent passengers on the main deck from entering the OHCR compartment and requirements regarding door and hatch usability are also provided.

Special Conditions No. 25-230-SC has qualitative and quantitative criteria for determining that the evacuation routes have sufficient separation within the OHCR compartment. Those criteria have been incorporated into these special conditions to clarify how compliance can be shown to Special Condition No. 4(a).

This proposal would require a means of removing an incapacitated person from the OHCR compartment to the main deck. The design and procedures for such an evacuation must be demonstrated to be adequate for all evacuation routes. Limits would be imposed on the assistance that may be provided in evacuating an incapacitated person in these demonstrations.

It is proposed that exit signs, placards for evacuation routes, and illumination for signs, placards, and door handles be required for the OHCR compartment. This proposed special condition allows for exit signs with a reduced background area to be used. If a reduced background is used, the material surrounding the sign must be light in color to more closely match and enhance the illuminated background of the sign that has been reduced in area (letter size stays the same). These reduced background area signs have been allowed under previous equivalent level of safety findings for small transport executive jets.

An emergency lighting system is proposed to prevent the occupants from being isolated in a dark area due to loss of lighting in the OHCR compartment. The emergency lighting must be activated under the same conditions as is the main deck emergency lighting system.

It is proposed that two-way voice communications and public address speaker(s) be required, and that provisions be made to prevent occupants of the OHCR compartment from being disturbed with normal, non-emergency announcements made to the passenger cabin.

It is proposed that occupants of the OHCR compartment be advised of an emergency situation via emergency alarm means, use of the public address system, or crew interphone system. A requirement for maintaining power to the emergency alarm system for a specific duration after certain failures is also proposed.

This proposal requires a means of indicating when seat belts should be fastened that is readily detectable by occupants of the OHCR compartment whether they are seated or standing. The requirement for visibility of the sign by standing occupants may be met by a general area sign that is visible to occupants standing in the main floor area or corridor of the OHCR compartment. It would not be essential that the sign be visible from every possible location in the OHCR compartment. However, the sign should not be remotely located or located where it may be easily obscured.

This proposal requires that the OHCR compartment, which is remotely located from the passenger cabin, be equipped with the following:

• A hand-held fire extinguisher.

• Protective breathing equipment (PBE).

• A flashlight.

The following clarifies how this proposed special condition should be understood relative to the requirements of § 25.1439(a). Amendment 25-38 modified the requirements of § 25.1439(a) by adding, “In addition, protective breathing equipment must be installed in each isolated separate compartment in the airplane, including upper and lower lobe galleys, in which crewmember occupancy is permitted during flight for the maximum number of crewmembers expected to be in the area during any operation.” But the PBE requirements of § 25.1439(a) are not appropriate in this case, because the OHCR compartment is novel and unusual in terms of the number of occupants. In 1976, when Amendment 25-38 was adopted, underfloor galleys were the only isolated compartments that had been certificated, with a maximum of two crewmembers expected to occupy those galleys. No. 11 of these special conditions addresses PBE requirements for OHCR compartments, which can accommodate up to 4 crewmembers. This number of occupants in an isolated compartment was not envisioned at the time Amendment 25-38 was adopted. In the event of a fire, the occupant's first action should be to leave the confined space, unless the occupant(s) is fighting the fire. It is not appropriate for all occupants of the OHCR compartment to don PBE. Taking the time to don the PBE would prolong the time for the occupant's emergency evacuation and possibly interfere with efforts to extinguish the fire. Therefore, No. 11 proposes to require two PBE units, or one PBE for each handheld fire extinguisher, whichever is greater, for this OHCR compartment.

Because the OHCR compartment is remotely located from the main passenger cabin and will not always be occupied, a requirement for a smoke detection system and appropriate warnings is proposed. The smoke detection system must be capable of detecting a fire within the OHCR compartment, including each area of the compartment created by the installation of a curtain or door.

This proposed special condition originated from a concern that a fire in an unoccupied OHCR compartment could spread into the passenger compartment or affect other vital systems before it could be extinguished. This proposal would require either installation of a manually activated fire suppression system accessible from outside the OHCR compartment or a demonstration that the crew could satisfactorily perform the function of extinguishing a fire under the prescribed conditions. A manually activated built-in fire extinguishing system would be required only if a crewmember could not successfully locate and extinguish the fire during a demonstration in which the crewmember is responding to the alarm. (Ref. S.C. 13 and 13(a) in general)

This proposal also provides requirements for the use of a combination of the two methods of fighting a fire if the applicant so chose. (Ref. S.C. 13(a)(2))

It is proposed that the OHCR compartment be designed so that fires within the compartment can be controlled without having to enter the compartment; or, the design of the access provisions must allow crew equipped for firefighting to have unrestricted access to the compartment. (Ref. S.C. 13(b)(2)) It is also proposed that the time for a crewmember on the main deck to react to the fire alarm, don firefighting equipment, and gain access must not exceed the time it would take for the OHCR compartment to become smoke filled, when it would be difficult to locate the fire source. (Ref. S.C. 13(b)(3)) ( See additional information continued in the proposed Special Condition No. 14.)

The requirements for enabling crewmember(s) to quickly enter the OHCR compartment, locate a fire source (Ref. S.C. (13(b)), evacuate the compartment (Ref. S.C. (4)), or evacuate an incapacitated person from the compartment (Ref. S.C. (5)), inherently places limits on the size of the OHCR compartment and the amount of baggage that may be stowed there. The OHCR compartment is limited to stowage of crew personal luggage and it is not intended to be used for the stowage of cargo or passenger baggage. The design of such a system to include cargo or passenger baggage would require additional requirements to ensure safe operation.

The OHCR compartment smoke or fire detection and fire suppression systems (including airflow management features which prevent hazardous quantities of smoke or fire extinguishing agent from entering any other compartment occupied by crewmembers or passengers) is considered complex in terms of paragraph 6d of Advisory Circular (AC) 25.1309-1A, “System Design and Analysis.” In addition, the FAA considers failure of the OHCR compartment fire protection system ( i.e. , smoke or fire detection and fire suppression systems) in conjunction with an OHCR compartment fire to be a catastrophic event. Based on the “Depth of Analysis Flowchart” shown in Figure 2 of AC 25.1309-1A, the depth of analysis should include both qualitative and quantitative assessments (reference paragraphs 8d, 9, and 10 of AC 25.1309-1A).

This proposal would require that means be provided to exclude hazardous quantities of smoke or extinguishing agent originating in the OHCR compartment from entering any other compartment. The FAA accepts the fact that during the one-minute smoke detection time and during access to fight a fire, penetration of a small quantity of smoke from this OHCR compartment into an occupied area on this airplane configuration would be acceptable, based upon the limitations placed in this and other associated special conditions. (Ref. S.C. 12(a) and 14(b), (c), (d) and (e)).

It is proposed that the oxygen equipment and a supplemental oxygen deployment warning for the OHCR compartment must be equivalent to that provided for main deck passengers.

Requirements are proposed for a divided OHCR compartment to address supplemental oxygen equipment and deployment means, signs, placards, curtains, doors, emergency illumination, alarms, seat belt fasten signals, and evacuation routes.

It is proposed that if a waste disposal receptacle is fitted, it must be equipped with an automatic fire extinguisher.

This proposal requires that materials in the OHCR compartment meet the flammability requirements of § 25.853 at Amendment 25-83. It is also proposed that seat cushions and mattresses must meet the fire blocking requirements of § 25.853(c).

Section 25.853(e) indicates that crew rest quarters need not meet the standards of § 25.853(d) provided the interiors of these compartments are isolated from the main passenger cabin by doors or equivalent means that would normally be closed during an emergency landing. Since the OHCR compartment is occupiable during TT&L, the OHCR main entrance door must be latched open during TT&L, and hence, its interior must comply with § 25.853(d) in the manner consistent with the main passenger cabin.

This proposed requirement is a reiteration of existing main deck lavatory requirements to provide clear applicability. OHCR compartment lavatories, if installed, would be required to comply with the existing rules on lavatories in the absence of other specific requirements. In addition, any lavatory located in the OHCR compartment must also meet the requirements of Special Condition No. 12 for smoke detection due to placement within this remote area.

This proposal requires fire protection for stowage areas within an OHCR compartment as a function of size (compartment interior volume). The proposed fire protection requirements for stowage compartments in the OHCR compartment are more stringent than those for stowage in the main passenger cabin, because the OHCR compartment is a remote area that can remain unoccupied for long periods of time, in contrast to the main cabin that is under continuous monitoring by the cabin crew and passengers. For stowage compartments less than 25 ft 3 , the safety objective of these proposed requirements is to contain the fire. FAA research indicates that properly constructed compartments meeting the proposed material requirements will prevent burn-through. For stowage compartments greater than 25 ft 3 but less than 200 ft 3 , the safety objective of these proposed requirements is to detect and contain the fire for sufficient time to allow it to be extinguished by the crew. The requirements for these sizes of compartments are comparable to the requirements for Class B cargo compartments. The fire protection requirements proposed are intended to provide a level of safety for the OHCR compartment equivalent to the level of safety established by existing regulations for the main cabin.

Section 25.787(a) requires each stowage compartment in the passenger cabin, except for underseat and overhead compartments for passenger convenience, to be completely enclosed. This requirement is not applicable to the flight deck so that flightcrew members may quickly access items and better perform their duties. Occupants of the OHCR compartment will not be performing flight deck duties, and the FAA considers that stowage compartments in the OHCR compartment, except for under-seat compartments for occupant convenience, should be completely enclosed. This will provide occupants of the OHCR compartment a level of safety similar to that provided to main deck passengers. Note that typical literature pockets and magazine racks are not considered stowage compartments and, therefore, are not required to be completely enclosed by this special condition.

The addition of galley equipment or a kitchenette incorporating a heat source (cook tops, microwaves, coffee pots, etc.), other than a conventional lavatory or kitchenette hot water heater, within the OHCR compartment may require further special conditions to be considered. A hot water heater is acceptable without further special condition consideration.

These special conditions are applicable to Boeing Model 777 series airplanes. Should the Boeing Commercial Airplane Group apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design features, the special conditions would apply to that model as well under the provisions of § 21.101(a)(1) Amendment 21-69, effective September 16, 1991.

The authority citation for these special conditions is as follows:

Accordingly, the Federal Aviation Administration (FAA) proposes the following special conditions as part of the type certification basis for Boeing Model 777 series airplanes with an overhead crew rest (OHCR) compartment installed adjacent to or immediately aft of the first pair of exits (Door 1).

1. During flight, occupancy of the OHCR compartment is limited to the total number of bunks and seats installed in the compartment that are approved to the maximum flight loading conditions. During taxi, takeoff, and landing (TT&L), occupancy of the OHCR compartment is limited to the total number of installed seats approved to the flight and ground load conditions and emergency landing conditions. The OHCR compartment is limited to a maximum of four crewmembers during flight and two flightcrew members during TT&L.

(a) There must be appropriate placards, inside and outside each entrance to the OHCR compartment to indicate:

(1) The maximum number of crewmembers allowed during flight and flightcrew members allowed during TT&L.

(2) That occupancy is restricted to crewmembers who the pilot in command has determined are trained in the evacuation procedures for the OHCR compartment and able to rapidly use the evacuation routes.

(3) That smoking is prohibited in the OHCR compartment.

(4) That stowage in the crew rest area is limited to crew personal luggage. The stowage of cargo or passenger baggage is not allowed.

(b) There must be at least one ashtray on the inside and outside of any entrance to the OHCR compartment.

(c) A limitation in the Airplane Flight Manual must be established to restrict occupancy to crewmembers who the pilot in command has determined are able to rapidly use the evacuation routes.

2. The following requirements are applicable to crew rest door(s):

(a) There must be a means for any door installed between the OHCR compartment and passenger cabin to be quickly opened from inside the OHCR compartment, even when crowding from an emergency evacuation occurs at each side of the door.

(b) Doors installed across emergency egress routes must have a means to latch them in the open position. The latching means must be able to withstand the loads imposed upon it when the door is subjected to the ultimate inertia forces, relative to the surrounding structure, listed in § 25.561(b).

(c) A placard must be displayed in a conspicuous place on the outside of the entrance door of the OHCR compartment and any other door(s) installed across emergency egress routes of the OHCR compartment, that requires these doors to be latched open during TT&L when the OHCR compartment is occupied. This requirement does not apply to emergency escape hatches installed in the floor. A placard must be displayed in a conspicuous place on the entrance door to the OHCR compartment that requires it to be closed and locked when it is not occupied. Procedures for meeting these requirements must be transmitted to the operator for incorporation into their training programs and appropriate operational manuals.

(d) For all doors installed in the OHCR compartment, there must be a means to preclude anyone from being trapped inside the OHCR compartment. If a locking mechanism is installed, it must be capable of being unlocked from the outside without the aid of a key or other special tools. The lock must not prevent opening from the inside of the OHCR compartment at any time.

3. In addition to the requirements of § 25.562 for seats, which are occupiable during takeoff and landing, and restraint systems, the OHCR compartment structure must be compatible with the loads imposed by the seats as a result of the conditions specified in § 25.562(b).

4. There must be at least two emergency evacuation routes that could be used by each occupant of the OHCR compartment to rapidly evacuate to the main cabin. In addition—

(a) The routes must be located with sufficient separation within the OHCR compartment to minimize the possibility of an event either inside or outside of the crew rest compartment rendering both routes inoperative.

Compliance to the requirements of Special Condition No. 4(a) may be shown by inspection or by analysis. Regardless of which method is used, the maximum acceptable distance between crew rest outlets is 60 feet.

Inspection may be used to show compliance with Special Condition No. 4. An inspection finding that an OHCR compartment has evacuation routes located so that each occupant of the seats and berths has an unobstructed route to at least one of the crew rest outlets regardless of the location of a fire would be reason for a finding of compliance. A fire within a berth that only blocks the occupant of that berth from exiting the berth need not be considered. Therefore, crew rest outlets that are located at absolute opposite ends ( i.e., adjacent to opposite end walls) of the OHCR compartment would require no further review or analysis with regard to their separation.

Analysis must show that the OHCR compartment configuration and interior features allow all occupants of the OHCR compartment to escape the compartment in the event of a hazard inside or outside of the compartment. Elements to consider in this evaluation are as follows:

(1) Fire inside or outside the OHCR compartment, considered separately, and the design elements used to reduce the available fuel for the fire.

(2) Design elements to reduce the fire ignition sources in the OHCR compartment.

(3) Distribution and quantity of emergency equipment within the OHCR compartment.

(4) Structural failure or deformation of components that could block access to the available evacuation routes (for example seats, folding berths, contents of stowage compartments, etc).

(5) An incapacitated person blocking the evacuation routes.

(6) Any other foreseeable hazard not identified above that could cause the evacuation routes to be compromised.

Analysis must consider design features affecting access to the evacuation routes. Possibilities for design components affecting evacuation that should be considered include, but are not limited to, seat deformations in accordance with §§ 25.561(d) and 25.562(c)(8), seat back break-over, rigid structure that reduces access from one part of the compartment to another, and items known to be the cause of potential hazards. Factors that also should be considered are availability of emergency equipment to address fire hazards, availability of communications equipment, supplemental restraint devices to retain items of mass that, if broken loose, could hinder evacuation, and load path isolation between components containing evacuation routes.

Analysis of fire threats should be used in determining placement of required fire extinguishers and protective breathing equipment (PBE). This analysis should consider the possibility of fire in any location in the OHCR compartment. The location and quantity of PBE and fire extinguishers should allow occupants located in any approved seats or berths access to the equipment necessary to fight a fire in the OHCR compartment.

The intent of this special condition is to provide sufficient egress route separation. Therefore the separation analysis described above should not be used to approve crew rest outlets which have less physical separation (measured between the centroid of each outlet opening) than the minimums prescribed below, unless compensating features are identified and submitted to the FAA for evaluation and approval.

For an OHCR compartment with one outlet located near the forward or aft end of the compartment (as measured by having the centroid of the outlet opening within 20 percent of the total length of the compartment from the forward or aft end of the compartment) the outlet separation from one outlet to the other should not be less than 50 percent of the total OHCR compartment length.

For OHCR compartments with neither required crew rest outlet located near the forward or aft end of the OHCR compartment (as measured by not having the centroid of either outlet opening within 20 percent of the forward or aft end of the total OHCR compartment length), the outlet separation from one outlet to the other should not be less than 30 percent of the total OHCR compartment length.

(b) The routes must be designed to minimize the possibility of blockage, which might result from fire, mechanical or structural failure, or persons standing below or against crew rest outlets. One of the two crew rest outlets should not be located where normal movement or evacuation by passengers occurs (main aisle, cross aisle, or galley complex, for example) that would impede egress from the OHCR compartment. If an evacuation route is in an area where normal movement or evacuation of passengers occurs, it must be demonstrated that passengers would not impede egress to the main deck. If there is low headroom at or near the evacuation route, provisions must be made to prevent or to protect occupants (of the OHCR compartment) from head injury. The use of evacuation routes must not be dependent on any powered device. If a crew rest outlet is over an area where there are passenger seats, a maximum of five passengers may be displaced from their seats temporarily during the evacuation process of an incapacitated person(s). If the evacuation procedure involves the evacuee stepping on seats, the seats must not be damaged to the extent that they would not be acceptable for occupancy during an emergency landing.

(c) Emergency evacuation procedures, including the emergency evacuation of an incapacitated occupant from the OHCR compartment, must be established. The applicant for a change in type design must transmit all of these procedures to the operator for incorporation into their training programs and appropriate operational manuals.

(d) There must be a limitation in the Airplane Flight Manual or other suitable means requiring that crewmembers be trained in the use of the OHCR compartment evacuation routes. This training must instruct them to ensure that the OHCR compartment (including seats, doors, etc.) is in its proper TT&L configuration.

(e) There must be a means to prevent passengers on the main deck from entering the OHCR compartment when no flight attendant is present or in the event of an emergency, including an emergency evacuation.

(f) Doors or hatches that separate the OHCR compartment from the main deck must not adversely affect evacuation of occupants on the main deck (slowing evacuation by encroaching into aisles, for example) or cause injury to those occupants during opening or while opened.

(g) The means of opening doors and hatches to the OHCR compartment must be simple and obvious. In addition, the crew rest doors and hatches must be able to be closed from the main passenger cabin.

5. There must be a means for the evacuation of an incapacitated person (representative of a ninety-fifth percentile male) from the OHCR compartment to the passenger cabin floor.

Evacuation must be demonstrated for all evacuation routes. A crewmember may provide assistance in the evacuation (a total of one assistant within the OHCR compartment). Additional assistance may be provided by up to three persons in the main passenger compartment. These additional assistants must be standing on the floor while providing assistance. For evacuation routes having stairways, the additional assistants may ascend up to one half the elevation change from the main deck to the OHCR compartment, or to the first landing, whichever is lower.

6. The following signs and placards must be provided in the OHCR compartment:

(a) At least one exit sign, located near each crew rest outlet, meeting the requirements of § 25.812(b)(1)(i). An allowable exception would be a sign with reduced background area of no less than 5.3 square inches (excluding the letters), provided that it is installed so that the material surrounding the exit sign is light in color (white, cream, light beige, for example). If the material surrounding the exit sign is not light in color, a sign with a minimum of a one-inch wide background border around the letters would be acceptable.

(b) An appropriate placard must be located conspicuously on or near each OHCR compartment door or hatch that defines the location and the operating instructions for access to and operation of the outlet door or hatch.

(c) Placards must be readable from a distance of 30 inches under emergency lighting conditions.

(d) The door or hatch handles and operating instruction placards required by Special Condition No. 6(b) of these special conditions must be illuminated to at least 160 microlamberts under emergency lighting conditions.

7. There must be a means in the event of failure of the aircraft's main power system, or of the normal OHCR compartment lighting system, for emergency illumination to be automatically provided for the OHCR compartment.

(a) This emergency illumination must be independent of the main lighting system.

(b) The sources of general cabin illumination may be common to both the emergency and the main lighting systems if the power supply to the emergency lighting system is independent of the power supply to the main lighting system.

(c) The illumination level must be sufficient for the occupants of the OHCR compartment to locate and transfer to the main passenger cabin floor by means of each evacuation route.

(d) The illumination level must be sufficient, with the privacy curtains in the closed position, for each occupant of the crew rest to locate a deployed oxygen mask.

8. There must be means for two-way voice communications between crewmembers on the flight deck and occupants of the OHCR compartment. There must also be two-way communications between the occupants of the OHCR compartment and each flight attendant station required to have a public address system microphone per § 25.1423(g) in the passenger cabin. In addition, the public address system must include provisions to provide only the relevant information to the crewmembers in the OHCR compartment (for example fire in flight, aircraft depressurization, preparation of the compartment for landing, etc.). That is, provisions must be made so that occupants of the OHCR compartment will not be disturbed with normal, non-emergency announcements made to the passenger cabin.

9. There must be a means for manual activation of an aural emergency alarm system, audible during normal and emergency conditions, to enable crewmembers on the flight deck and at each pair of required floor level emergency exits to alert occupants of the OHCR compartment of an emergency situation. Use of a public address or crew interphone system will be acceptable, provided an adequate means of differentiating between normal and emergency communications is incorporated. The system must be powered in flight, after the shutdown or failure of all engines and auxiliary power units (APU), for a period of at least ten minutes.

10. There must be a means, readily detectable by seated or standing occupants of the OHCR compartment, to indicate when seat belts should be fastened. Seat belt type restraints must be provided for berths and must be compatible with the sleeping position during cruise conditions. There must be a placard on each berth requiring that these restraints be fastened when occupied. If compliance with any of the other requirements of these special conditions is predicated on specific head location, there must be a placard identifying the head position.

11. Protective breathing equipment (PBE) must be provided in accordance with § 25.1439, except that in lieu of a device for each crewmember, the following must be provided: Two PBE devices approved to Technical Standard Order (TSO)-C116 or equivalent, suitable for firefighting, or one PBE for each hand-held fire extinguisher, whichever is greater. The following equipment must also be provided in the OHCR compartment:

(a) At least one approved hand-held fire extinguisher appropriate for the kinds of fires likely to occur.

(b) One flashlight.

12. A smoke or fire detection system (or systems) must be provided that monitors each occupiable area within the OHCR compartment, including those areas partitioned by curtains. Flight tests must be conducted to show compliance with this requirement. Each system (or systems) must provide:

(a) A visual indication to the flight deck within one minute after the start of a fire.

(b) An aural warning in the OHCR compartment.

(c) A warning in the main passenger cabin. This warning must be readily detectable by a flight attendant, taking into consideration the positioning of flight attendants throughout the main passenger compartment during various phases of flight.

13. Means to fight a fire must be provided. The means can either be a built-in extinguishing system or manual hand-held bottle extinguishing system.

(a) For a built-in extinguishing system:

(1) The system must have adequate capacity to suppress a fire considering the fire threat, volume of the compartment, and the ventilation rate. The system must have sufficient extinguishing agent to provide an initial knockdown and suppression environment per the minimum performance standards (MPS) that have been established for the agent being used.

(2) If the capacity of the extinguishing system does not provide effective fire suppression that will last for the duration of flight from the farthest point in route to the nearest suitable landing site expected in service, an additional manual firefighting procedure must be established. For the built-in extinguishing system, the time duration for effective fire suppression must be established and documented in the firefighting procedures in the airplane flight manual. If the duration of time for demonstrated effective fire suppression provided by the built-in extinguishing agent will be exceeded, the firefighting procedures must instruct the crew to:

1. Enter the crew rest at the time that demonstrated fire suppression effectiveness will be exceeded.

2. Check for and extinguish any residual fire.

3. Confirm that the fire is out.

(b) For either a built-in extinguishing system of limited suppression duration or a manual hand held bottle-extinguishing system:

(1) There must be a limitation in the Airplane Flight Manual or other suitable means requiring that crewmembers be trained in the firefighting procedures.

(2) The compartment design must allow crewmembers equipped for firefighting to have unrestricted access to all parts of the compartment. The firefighting procedures must describe the methods for searching the crew rests for fire sources(s).

(3) The time for a crewmember on the main deck to react to the fire alarm, don the firefighting equipment, and gain access to the crew rest compartment must not exceed the time for the compartment to become smoke-filled, making it difficult to locate the fire source.

14. There must be a means provided to exclude hazardous quantities of smoke or extinguishing agent originating in the OHCR compartment from entering any other occupiable compartment.

(a) Small quantities of smoke may penetrate from the crew rest compartment into other occupied areas during the one-minute smoke detection time.

(b) There must be a provision in the firefighting procedures to ensure that all door(s) and hatch(es) at the crew rest compartment outlets are closed after evacuation of the crew rest and during firefighting to minimize smoke and extinguishing agent from entering other occupiable compartments.

(c) Smoke entering any occupiable compartment when access to the OHCR compartment is open for evacuation of the crew rest must dissipate within five minutes after the access to the OHCR compartment is closed.

(d) Hazardous quantities of smoke may not enter any occupied compartment during subsequent access to manually fight a fire in the crew rest compartment. The amount of smoke entrained by a firefighter exiting the crew rest compartment is not considered hazardous.

(e) Flight tests must be conducted to show compliance with this requirement.

15. There must be a supplemental oxygen system equivalent to that provided for main deck passengers for each seat and berth in the OHCR compartment. The system must provide an aural and visual warning to alert the occupants of the OHCR compartment to don oxygen masks in the event of decompression. The warning must activate before the cabin pressure altitude exceeds 15,000 feet. The aural warning must sound continuously for a minimum of five minutes or until a reset push button in the OHCR compartment is depressed. Procedures for crew rest occupants in the event of decompression must be established. These procedures must be transmitted to the operators for incorporation into their training programs and appropriate operational manuals.

16. The following requirements apply to OHCR compartments that are divided into several sections by the installation of curtains or partitions:

(a) To compensate for sleeping occupants, an aural alert that can be heard in each section of the OHCR compartment must accompany automatic presentation of supplemental oxygen masks. A visual indicator that occupants must don an oxygen mask is required in each section where seats or berths are not installed. A minimum of two supplemental oxygen masks are required for each seat or berth. There must also be a means by which the oxygen masks can be manually deployed from the flight deck.

(b) A placard is required adjacent to each curtain that visually divides or separates, for privacy purposes, the OHCR compartment into small sections. The placard must require that the curtain(s) remains open when the private section it creates is unoccupied. The vestibule section adjacent to the stairway is not considered a private area and, therefore, does not require a placard.

(c) For each section of the OHCR compartment created by the installation of a curtain, requirements for the following must be met with the curtain open or closed:

(1) No smoking placard (Special Condition No. 1).

(2) Emergency illumination (Special Condition No. 7).

(3) Emergency alarm system (Special Condition No. 9).

(4) Seat belt fasten signal or return to seat signal as applicable (Special Condition No. 10).

(5) The smoke or fire detection system (Special Condition No. 12).

(d) OHCR compartments visually divided to the extent that evacuation could be affected must have exit signs that direct occupants to the primary stairway outlet. The exit signs must be provided in each separate section of the OHCR compartment, except for curtained bunks, and must meet the requirements of § 25.812(b)(1)(i). An exit sign with reduced background area as described in Special Condition No. 6(a) may be used to meet this requirement.

(e) For sections within an OHCR compartment that are created by the installation of a partition with a door separating the sections, the following requirements of these special conditions must be met with the door open or closed:

(1) There must be a secondary evacuation route from each section to the main deck, or alternatively, it must be shown that any door between the sections has been designed to preclude anyone from being trapped inside a section of the compartment. Removal of an incapacitated occupant from within this area must be considered. A secondary evacuation route from a small room designed for only one occupant for short time duration, such as a changing area or lavatory, is not required. However, removal of an incapacitated occupant from within a small room, such as a changing area or lavatory, must be considered.

(2) Any door between the sections must be shown to be openable when crowded against, even when crowding occurs at each side of the door.

(3) There may be no more than one door between any seat or berth and the primary stairway door.

(4) There must be exit signs in each section meeting the requirements of § 25.812(b)(1)(i) that direct occupants to the primary stairway outlet. An exit sign with reduced background area as described in Special Condition No. 6(a) may be used to meet this requirement.

(5) Special Conditions No. 1 (no smoking placards), No. 7 (emergency illumination), No. 9 (emergency alarm system), No. 10 (fasten seat belt signal or return to seat signal as applicable) and No. 12 (smoke or fire detection system) must be met with the door open or closed.

(6) Special Conditions No. 8 (two-way voice communication) and No. 11 (emergency firefighting and protective equipment) must be met independently for each separate section except for lavatories or other small areas that are not intended to be occupied for extended periods of time.

17. Where a waste disposal receptacle is fitted, it must be equipped with an automatic fire extinguisher that meets the performance requirements of § 25.854(b).

18. Materials (including finishes or decorative surfaces applied to the materials) must comply with the requirements of § 25.853 as amended by Amendment 25-83. Seat cushions and mattresses must comply with the flammability requirements of § 25.853(c), as amended by Amendment 25-83, and the test requirements of part 25, appendix F, part II, or other equivalent methods.

19. The addition of a lavatory within the OHCR compartment would require the lavatory to meet the same requirements as those for a lavatory installed on the main deck except with regard to Special Condition No. 12 for smoke detection.

20. Each stowage compartment in the crew rest, except for underseat compartments for occupant convenience, must be completely enclosed. All enclosed stowage compartments within the OHCR compartment that are not limited to stowage of emergency equipment or airplane supplied equipment must meet the design criteria given in the table below. Enclosed stowage compartments greater than 200 ft 3 in interior volume are not addressed by this special condition. The in-flight accessibility of very large enclosed stowage compartments and the subsequent impact on the crewmembers' ability to effectively reach any part of the compartment with the contents of a hand fire extinguisher will require additional fire protection considerations similar to those required for inaccessible compartments such as Class C cargo compartments.

How do I comment on this proposed AD? We invite you to submit any written relevant data, views, or arguments regarding this proposal. Send your comments to an address listed under ADDRESSES . Include “AD Docket No. 2003-CE-54-AD” in the subject line of your comments. If you want us to acknowledge receipt of your mailed comments, send us a self-addressed, stamped postcard with the docket number written on it. We will date-stamp your postcard and mail it back to you.

Are there any specific portions of this proposed AD I should pay attention to? We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. If you contact us through a nonwritten communication and that contact relates to a substantive part of this proposed AD, we will summarize the contact and place the summary in the docket. We will consider all comments received by the closing date and may amend this proposed AD in light of those comments and contacts.

Has FAA taken any action to this point? A report of an accident involving a Cessna Model 525 airplane where the pilot reported a problem with the pitch trim system, and later Cessna and FAA analysis that revealed the potential for a single-wire shorting caused us to issue AD 2003-21-07, Amendment 39-13342 (68 FR 60028, October 21, 2003). AD 2003-21-07 currently requires you to do the following on Cessna Model 525 airplanes:

What has happened since AD 2003-21-07 to initiate this proposed action? AD 2003-21-07 is considered an interim action since compliance corrected the condition where the control wheel autopilot/trim disconnect switch did not stop the runaway condition. However, AD 2003-21-07 did not correct the issue of the single-point failure while still utilizing the desired equipment. Cessna has now developed and made changes in the design of the affected trim printed circuit board (PCB) assembly to eliminate the single-point failure while allowing the use of the equipment, and identified additional airplanes that have the same unsafe condition.

What is the potential impact if FAA took no action? Failure of the electric trim system would result in a large pitch mistrim and would cause excessive control forces that the pilot could not overcome.

Is there service information that applies to this subject? Cessna has issued Citation Service Bulletin No. SB525-27-17, dated December 9, 2003.

What are the provisions of this service information? The service bulletin includes procedures for:

What has FAA decided? We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other products of this same type design. Therefore, we are proposing AD action.

What would this proposed AD require? This proposed AD would supersede AD 2003-21-07 with a new AD that would require you to:

How does the revision to 14 CFR part 39 affect this proposed AD? On July 10, 2002, we published a new version of 14 CFR part 39 (67 FR 47997, July 22, 2002), which governs FAA's AD system. This regulation now includes material that relates to altered products, special flight permits, and alternative methods of compliance. This material previously was included in each individual AD. Since this material is included in 14 CFR part 39, we will not include it in future AD actions.

How many airplanes would this proposed AD impact? We estimate that this proposed AD affects 251 airplanes in the U.S. registry.

What would be the cost impact of this proposed AD on owners/operators of the affected airplanes? We estimate the following costs to accomplish this proposed modification of the 6518351-8 trim PCB assembly to a 6518351-10 trim PCB assembly. We have no way of determining the number of airplanes that may need this modification:

We estimate the following costs to accomplish this proposed replacement of any 6518351-3 or 6518351-5 trim PCB assembly with a 6518351-10 (EX) trim PCB assembly. We have no way of determining the number of airplanes that may need this replacement:

What is the difference between the cost impact of this proposed AD and the cost impact of AD 2003-21-07? The estimated cost impact of AD 2003-21-07 on each of 116 airplanes in the U.S. registry is $65. This is to disengage the pitch trim circuit breaker and AP servo circuit breaker and then tie strap each of them to prevent them from being engaged.

The estimated cost of this proposed AD is $3,125 or $3,255 on each of 251 airplanes in the U.S. registry to do the replacement or modification of the trim PCB assembly.

What would be the compliance time of this proposed AD? The compliance time of this proposed AD is within the next 24 calendar months after the effective date of this AD or within 300 hours time-in-service (TIS) after the effective date of this AD, whichever occurs first.

Why is the compliance time of this proposed AD presented in both hours TIS and calendar time? A single-wire shorting to 28 volts or a failure of a relay that results in the relay contacts remaining closed is a direct result of airplane operation. For example, either failure could occur on an affected airplane within a short period of airplane operation while you could operate another affected airplane for a considerable amount of time without experiencing either failure. Therefore, to assure that either failure is detected and corrected in a timely manner without inadvertently grounding any of the affected airplanes, we are using a compliance time based upon both hours TIS and calendar time.

Would this proposed AD impact various entities? We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD 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.

Would this proposed AD involve a significant rule or regulatory action? For the reasons discussed above, I certify that this proposed AD:

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. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a summary of the costs to comply with this proposed AD and placed it in the AD Docket. You may get a copy of this summary by sending a request to us at the address listed under ADDRESSES . Include “AD Docket No. 2003-CE-54-AD” in your request.

Accordingly, under the authority delegated to me by the Administrator, the Federal Aviation Administration proposes to amend 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 2003-NM-97-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. 2003-NM-97-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The Departmento de Aviacao Civil (DAC), which is the airworthiness authority for Brazil, notified the FAA that an unsafe condition may exist on certain EMBRAER Model EMB-135 and -145 series airplanes. The DAC advises that several operators have reported temporary loss of the pitch trim command during the climb after take-off caused by probable failure of various components of the pitch trim system. The pitch trim system consists of several components including the horizontal stabilizer control unit (HSCU), the horizontal stabilizer actuator (HSA), the aural warning unit (AWU), integrated computer (IC) units, engine indicating and crew alerting system/electronic flight information system (EICAS/EFIS) software, the control yoke pitch trim switch, and the data acquisition unit (DAU). Failure of the pitch trim system, if not corrected, could result in reduced controllability of the airplane and consequent injury to the flightcrew and passengers.

EMBRAER has issued the following service bulletins related to the modification of the pitch trim system.

• EMBRAER Service Bulletin 145LEG-27-0002, dated February 5, 2003 (for Model EMB-135BJ series airplanes); and EMBRAER Service Bulletin 145-27-0084, Revision 04, dated October 21, 2003 (for Model EMB-135ER, -135LR, -135KE, and -135KL series airplanes; and Model EMB-145, -145ER, -145MR, -145LR, -145XR, -145MP, and -145EP series airplanes); which describe procedures for replacing the HSCU with a new unit having improved features. EMBRAER Service Bulletin 145-27-0084 specifies that EMBRAER Service Bulletin 145- 27-0091, Change 02, dated November 27, 2002, must be accomplished either previously or concurrently with the replacement of the HSCU.

EMBRAER Service Bulletins 145LEG-27-0002 and 145-27-0084 also describe procedures for connecting the HSCU and the DAU (including the replacement of the pitch trim system circuit breakers with new circuit breakers sized for the new system load capacity, as applicable). EMBRAER Service Bulletin 145-27-0084 specifies that EMBRAER Service Bulletins 145-31-0028, Change 04, dated December 20, 2002; 145-31-0033, Revision 03, dated August 25, 2003; and 145-27-0083, Change 04, dated November 27, 2002 must be accomplished prior to the connection of the HSCU and the DAU.

• EMBRAER Service Bulletin 145-27-0083, Change 04, dated November 27, 2002 (for Model EMB-135ER, -135LR, -135KE, and -135KL series airplanes; and Model EMB-145, -145ER, -145MR, -145LR, -145XR, -145MP, and -145EP series airplanes), must be accomplished either previously or concurrently with Service Bulletin 145-27-0084. Service Bulletin 145-27-0083 contains procedures for installing electrical provisions for the new pitch trim system, which includes adding new cable harnesses in the front electronic compartment, the entire center fuselage, the cockpit, and the entire rear fuselage; to enable the connection of the HSCU through certain electrical connections, and to enable the connection of DAU #2 to the HSCU.

• EMBRAER Service Bulletin 145-27-0091, Change 02, dated November 27, 2002 (for all affected models); which describes procedures for replacing the HSA with a new HSA.

• EMBRAER Service Bulletin 145-31-0028, Change 04, dated December 20, 2002 (for all affected models); which describes procedures for replacing the AWU with an AWU having improved features. This service bulletin also references Grimes Aerospace Company Service Bulletin 80-0694-33-SB01, dated January 1, 2002, as an additional source of service information for accomplishment of the replacement. The Grimes Aerospace service bulletin is included in the EMBRAER service bulletin.

• EMBRAER Service Bulletin 145LEG-31-0001, dated August 19, 2002 (for Model EMB-135BJ series airplanes); and EMBRAER Service Bulletin 145-31-0033, Revision 03, dated August 25, 2003 (for Model EMB-135ER, -135LR, -135KE, and -135KL series airplanes; and Model EMB-145, -145ER, -145MR, -145LR, -145XR, -145MP, and -145EP series airplanes); which describe procedures for replacing any IC units having certain part numbers with new units having new modification letters and new part numbers. These service bulletins also describe procedures for installing an updated version of the software for the EICAS/EFIS. EMBRAER Service Bulletin 145-31-0033 specifies that EMBRAER Service Bulletins 145-31-0020, Change 03, dated July 30, 2002; and 145-27-0084, Revision 04, dated October 21, 2003 (described previously); must be accomplished previously. EMBRAER Service Bulletin 145LEG-31-0001 and 145-31-0033 reference Honeywell Service Bulletin 7017000-22-6089, Revision 003, dated October 16, 2003, as an additional source of service information for accomplishment of the replacement and installation.

• EMBRAER Service Bulletin 145-31-0020, Change 03, dated July 30, 2002 (for Model EMB-135ER, -135LR, -135KE, and -135KL series airplanes; and Model EMB-145, -145ER, -145MR, -145LR, -145XR, -145MP, and -145EP series airplanes), must be accomplished prior to accomplishment of Service Bulletin 145-31-0033. Service Bulletin 145-31-0020 contains procedures for replacing the IC-600#1 and IC-600#2, and the DAU; and for upgrading the EICAS to version 17.

• EMBRAER Service Bulletin 145LEG-27-0004, dated January 21, 2003 (for Model EMB-135BJ series airplanes); and EMBRAER Service Bulletin 145-27-0096, Revision 03, dated September 2, 2003 (for Model EMB-135ER, -135LR, -135KE, and -135KL series airplanes, and Model EMB-145, -145ER, -145MR, -145LR, -145XR, -145MP, and -145EP series airplanes); which describe procedures for replacing the control yoke pitch trim switch with a new switch; and procedures for replacing the placard around the switch knob, as applicable, with a new placard.

• EMBRAER Service Bulletin 145-27-0073, Change 02, dated February 26, 2002 (for all affected models); which describes procedures for replacing the pitch trim back-up control switch with a new switch (including reidentifying the trim control panel).

The DAC classified these service bulletins as mandatory and issued Brazilian airworthiness directive 2003-03-01, dated April 3, 2003, to ensure the continued airworthiness of these airplanes in Brazil.

These airplane models are manufactured in Brazil 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 DAC has kept the FAA informed of the situation described above. The FAA has examined the findings of the DAC, 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.

We consider this proposed AD interim action. The manufacturer is currently developing additional modifications that will address the unsafe condition identified in this proposed AD. Once these modifications are developed, approved, and available, we may consider additional rulemaking.

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

The FAA estimates that 365 airplanes of U.S. registry would be affected by this proposed AD.

For all affected airplanes, we estimate that it would take approximately 1 work hour per airplane to accomplish the proposed replacement of the HCSU, and that the average labor rate is $65 per work hour. The manufacturer will provide replacement parts at no cost. Based on these figures, the cost impact of this proposed replacement on U.S. operators is estimated to be $23,725, or $65 per airplane.

For airplanes subject to EMBRAER Service Bulletin 145-27-0091, we estimate that it would take approximately 6 work hours per airplane to accomplish the proposed replacement of the HSA, and that the average labor rate is $65 per work hour. The manufacturer will provide replacement parts at no cost. Based on these figures, the cost impact of this proposed replacement on U.S. operators is estimated to be $390 per airplane.

For airplanes subject to EMBRAER Service Bulletin 145-31-0028, we estimate that it would take approximately 2 work hours per airplane to accomplish the proposed replacement of the AWU, and that the average labor rate is $65 per work hour. Required parts would cost approximately $1,100 per airplane. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $1,230 per airplane.

For airplanes subject to EMBRAER Service Bulletins 145LEG-31-0001, or 145-31-0033, we estimate that it would take between 3 and 6 work hours per airplane to accomplish the proposed installation of the new EICAS/EFIS, and that the average labor rate is $65 per work hour. Required parts would cost approximately $10 per airplane. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be between $205 and $400 per airplane.

For airplanes subject to EMBRAER Service Bulletins 145LEG-27-0004, or 145-27-0096, we estimate that it would take between 4 and 5 work hours per airplane to accomplish the proposed replacement of the yoke pitch trim switch, and that the average labor rate is $65 per work hour. Required parts would cost approximately between $1,042 and $1,056 per airplane. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be between $1,302 and $1,381 per airplane.

For airplanes subject to EMBRAER Service Bulletin 145-27-0073, we estimate that it would take approximately 3 work hours per airplane to accomplish the proposed replacement of pitch trim back-up control switch, and that the average labor rate is $65 per work hour. Required parts would cost approximately $371 per airplane. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $566 per airplane.

For airplanes subject to the requirements in EMBRAER Service Bulletin 145-27-0083, Change 04, dated November 27, 2002, we estimate that it would take approximately 38 hours to accomplish the proposed modifications, and that the average labor rate is $65 per work hour. Required parts would cost approximately $448. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $2,918 per airplane.

For airplanes subject to the requirements in EMBRAER Service Bulletin 145-31-0020, Change 03, dated July 30, 2002, we estimate that it would take between 9 and 56 hours to accomplish the proposed upgrade, and that the average labor rate is $65 per work hour. Required parts would cost between $3 and $5,100. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be approximately between $588 and $8,740 per airplane.

For all affected airplanes, we estimate that it would take between 1 and 3 hours per airplane to accomplish the proposed connection between the HSCU and the DAU, and that the average labor rate is $65 per work hour. Required parts would cost between $3 and $52 per airplane. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be between $24,820 and $90,155, or between $68 and $247 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 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 2002-NM-262-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-262-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The Dirección General de Aviación Civil (DGAC), which is the airworthiness authority for Spain, notified the FAA that an unsafe condition may exist on all CASA Model C-212 series airplanes. The DGAC advises that failures of the auxiliary landing gear direction system have been reported, which produced abnormal vibrations during takeoff and landing runs. The failure was caused by a gradual loss of hydraulic oil pressure in the selector direction valve, and by a loss of tension in the cable for the nosewheel steering system. This condition, if not corrected, could result in the failure of the auxiliary landing gear direction system, which could cause abnormal vibrations during takeoff and landing runs, and consequent reduced controllability of the airplane.

CASA has issued CASA Service Bulletin 212-32-21, Revision 2, dated November 10, 1987, which describes procedures for reworking the nose landing gear (NLG). The rework of the NLG includes replacing bushings and washers with new parts, if necessary; installing a new helicoil; re-identifying and re-installing the lower attachment fitting; installing a new lockwasher and nut; installing a new nut on the shock absorber assembly; removing any gear crown assembly that has broken teeth, dirt, corrosion, or uneven wear, and replacing it with a new or serviceable gear crown assembly; re-identifying and re-installing the ring nut of the shock absorber assembly; and installing a new actuator.

CASA has also issued EADS CASA Service Bulletin SB-212-32-22, Revision 2, dated July 28, 1997, which describes procedures for modifying the hydraulic steering system of the NLG. The modification of hydraulic steering system involves modifying the hydraulic installation and the nose fuselage; modifying the electrical installation and the center instrument panel, as applicable; and modifying the electrical system and overhead panel, as applicable. This service bulletin also contains procedures for testing the cable tension of the nosewheel steering system, and adjusting the tension, if necessary.

CASA has also issued EADS CASA COM 212-172, Revision 04, dated December 9, 2002; and CASA COM 212-173, Revision 3, dated February 22, 1995. These communications contain information and procedures related to maintenance, troubleshooting, overhaul, tests, and tolerances for landing gear units of the affected airplanes. The information in these documents has been consolidated from several different documents including service bulletins, maintenance manuals, technical orders, and the structural repair manual.

Accomplishment of the actions specified in the service bulletins and the COMs is intended to adequately address the identified unsafe condition. The DGAC classified these service bulletins and COMs as mandatory and issued Spanish airworthiness directive 01/02, dated April 17, 2002, to ensure the continued airworthiness of these airplanes in Spain.

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

Since an unsafe condition has been identified that is likely to exist or develop on other airplanes of the same type design registered in the United States, the proposed AD would require accomplishment of the actions specified in the service bulletins described previously, except as discussed below. The proposed AD would also require revising the Limitations section of the airplane flight manual to include certain procedures to be performed during the takeoff run.

The FAA estimates that 27 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 6 work hours per airplane to accomplish the proposed rework of the NLG; and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of this proposed action on U.S. operators is estimated to be $10,530, or $390 per airplane.

We estimate that it would take approximately 92 work hours per airplane to accomplish the proposed modification of the hydraulic steering system. Based on these figures, the cost impact of this proposed action on U.S. operators is estimated to be $161,460, or $5,980 per airplane.

We estimate that it would take approximately 1 work hour per airplane to revise the Limitations section of the airplane flight manual. Based on these figures, the cost impact of this proposed action on U.S. operators is estimated to be $1,755, or $65 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 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 2003-NM-107-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. 2003-NM-107-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The FAA has received a report indicating that a 2.1-inch long crack in the web of the aft pressure bulkhead at the perimeter of an “oil can” was found on a Model 747SR series airplane. An “oil can” is an area on a pressure dome web that moves when pushed from the forward side. The cause of the crack is fatigue. This condition, if not detected and corrected, could result in the propagation of fatigue cracks in the vicinity of “oil cans” on the web of the aft pressure bulkhead, which could result in rapid decompression and overpressurization of the tail section, and consequent loss of control of the airplane.

The subject area on Model 747SR series airplanes is almost identical to that on Model 747-100, -200B, -200F, -200C, -100B, -300, -100B-SUD, -400, -400D, and -400F series airplanes; and Model 747SP series airplanes. Therefore, those airplanes may be subject to the unsafe condition revealed on the Model 747SR series airplanes.

The FAA has reviewed and approved Boeing Alert Service Bulletin 747-53A2482, dated October 3, 2002, which describes procedures for performing a repetitive detailed inspection of the aft pressure bulkhead for indications of “oil cans” and previous “oil can” repairs, and corrective actions, if necessary. The corrective actions include performing a repetitive eddy current inspection of the web around the periphery of the “oil can” for cracks, and repair if necessary; and performing a detailed inspection of the web around previous “oil can” repairs for cracks. Repair of all “oil cans” eliminates the need for the repetitive eddy current inspection of existing “oil cans.” 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 when a previous “oil can” repair is found, section 3.B.9.a. of the service bulletin states that if no cracking is found, no action on the repaired area is required at this time, and that the repetitive inspections of the aft pressure bulkhead for “oil cans” at 2,000 flight cycle intervals are to continue. The FAA has determined, however, that the actions specified in the service bulletin for “oil cans” found at previous “oil can” repairs are insufficient. It is possible that the “oil can” that was originally repaired within the allowable limits of the service bulletin has since grown to exceed the allowable limits. In accordance with Figure 4 or Figure 5 of the service bulletin, this proposed AD would require an eddy current inspection for cracks if “oil cans” are found at previous “oil can” repairs. In addition, if no cracking is found, this proposed AD would require verification that any “oil cans” at previous “oil can” repairs are within the allowable limits of the service bulletin. For any “oil can” that meets the allowable limits, this proposed AD would require repetitive eddy current inspections at intervals not to exceed 1,000 flight cycles until a repair that terminates the “oil can” is completed. For any “oil can” that does not meet the allowable limits, this proposed AD would require repair of the “oil can” and, if any “oil can” remains after the repair, this proposed AD would require repetitive eddy current inspections at intervals not to exceed 1,000 flight cycles.

Operators should also note that, although the service bulletin specifies that the manufacturer may be contacted for disposition of certain repair conditions, this proposed AD would require the repair of those conditions to be accomplished per a method approved by the FAA, or per data meeting the type certification basis of the airplane approved by a Boeing Company Designated Engineering Representative who has been authorized by the FAA to make such findings.

There are approximately 1,140 airplanes of the affected design in the worldwide fleet. The FAA estimates that 254 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 6 work hours per airplane to accomplish the proposed inspections, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $99,060, or $390 per airplane, per inspection cycle.

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

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

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

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

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

Submit comments using the following format:

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

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

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

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

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2002-NM-227-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-227-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The Direction Générale de l'Aviation Civile (DGAC), which is the airworthiness authority for France, notified the FAA that an unsafe condition may exist on certain Model Fan Jet Falcon series airplanes and Model Mystere-Falcon 20 series airplanes. The DGAC advises that cracking has been found in the vertical posts of window frames in the flight compartment that were not included in the maintenance program inspection area. The airplane manufacturer, Dassault Aviation, has revised certain work cards in the maintenance manual to include procedures for inspecting and testing these window frames. Cracking of the window frames could result in rapid depressurization of the fuselage and consequent reduced structural integrity of the airplane.

Dassault has issued revised Work Card 53-30-07, “Non-Destructive Ultrasonic Testing of Vertical Posts on Screw-Mounted Windows” of the Dassault Aviation Fan Jet Falcon Maintenance Manual, dated November 2001. The work card describes procedures for testing (including calibrating the equipment) the posts of the window frames in the flight compartment, including the right side window, left and right rear windows, front window, and pilot and co-pilot windows, for stress corrosion cracking.

Dassault has also issued revised Work Card 53-30-12, “Endoscopic Inspection of the Frames of Pilot, Co-Pilot, and Front Glass Panels (Aircraft Not Changed Per SB No. 701)” of the Dassault Aviation Fan Jet Falcon Maintenance Manual, dated November 2001. The work card describes procedures for using an endoscope and inspecting the window frames of the pilot, co-pilot, and front windows in the flight compartment for stress corrosion and subsequent cracking. Accomplishment of the actions specified in the service information is intended to adequately address the identified unsafe condition. The DGAC classified this service information as mandatory and issued French airworthiness directive 2001-600-028(B), dated December 12, 2001, to ensure the continued airworthiness of these airplanes in France.

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 require accomplishment of the actions specified in the service information described previously. This proposed AD also includes a reporting requirement.

The French airworthiness directive is applicable to “all Fan Jet Falcon and Mystere Falcon 20-(x)5 aircraft, all serial numbers.” The applicability of this proposed AD is “Model Fan Jet Falcon series airplanes and Model Mystere-Falcon 20 series airplanes; certificated in any category; except those which have incorporated Dassault Service Bulletin AMD-BA FJF-701, Revision 1, dated October 22, 1987.” This exception appears in Dassault Aviation Work Card 53-30-12, titled “Endoscopic Inspection of the Frames of Pilot, Co-Pilot, and Front Glass Panels (Aircraft Not Changed Per SB No. 701),” of the Dassault Aviation Fan Jet Falcon Maintenance Manual, dated November 2001. This difference has been coordinated with the DGAC.

The FAA estimates that 220 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 4 work hours per airplane to accomplish the proposed actions, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $57,200, or $260 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:

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 2003-NM-127-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. 2003-NM-127-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The Civil Aviation Authority (CAA), which is the airworthiness authority for the United Kingdom, notified the FAA that an unsafe condition may exist on all Short Brothers Model SD3-60 series airplanes. The CAA advises that operators have reported corrosion in the area of the main spar web fittings, which act as shear attachments for the vertical stabilizer. This condition, if not detected and corrected, could result in reduced structural integrity of the vertical stabilizer.

Shorts has issued Short Brothers Service Bulletin SD360-53-44, Revision 1, dated January 24, 2003, which describes procedures for performing an inspection of the shear attachment fitting for the fin-to-fuselage front spar, and of the shear cleat for the fin root rib at the aft spar location for corrosion, and submitting an inspection report. The CAA classified this service bulletin as mandatory and issued British airworthiness directive 004-11-2002, in order to assure the continued airworthiness of these airplanes in the United Kingdom.

This airplane model is manufactured in the United Kingdom and is 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 CAA has kept the FAA informed of the situation described above. The FAA has examined the findings of the CAA, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.

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

Although the service bulletin specifies that operators may contact the manufacturer for disposition of repairs, this proposal would require operators to repair those conditions per a method approved by either the FAA or the CAA (or its delegated agent). In light of the type of repair that would be required to address the unsafe condition, and consistent with existing bilateral airworthiness agreements, we have determined that, for this proposed AD, a repair approved by either the FAA or the CAA would be acceptable for compliance with this proposed AD.

This proposed AD is considered to be interim action. The inspection reports required by this proposed AD will enable the manufacturer to obtain better insight into the nature, cause, and extent of the corrosion, and eventually to develop final action to address the unsafe condition. Once final action has been identified, we may consider further rulemaking.

The FAA estimates that 46 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 3 work hours per airplane to accomplish the proposed inspection, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $8,970, or $195 per airplane.

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

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

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

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

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

Submit comments using the following format:

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

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

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

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

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2003-NM-109-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. 2003-NM-109-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The FAA has received a report indicating that a 2.1-inch crack in the web of the aft pressure bulkhead at the perimeter of an “oil can” was found on a Model 747 series airplane. An “oil can” is an area on a pressure dome web that moves when pushed from the forward side. The cause of the crack in the web is fatigue. This condition, if not detected and corrected, could lead to the propagation of fatigue cracks in the vicinity of “oil cans” on the web of the aft pressure bulkhead, which could result in rapid decompression of the passenger cabin, possible damage or interference with the airplane control systems that pass through the bulkhead, and consequent loss of control of the airplane.

The aft pressure bulkhead on Model 767 series airplanes is almost identical to that on the affected Model 747 series airplanes. Therefore, those Model 767 series airplanes may be subject to the unsafe condition revealed on the Model 747 series airplanes.

The FAA may consider further rulemaking to address the unsafe condition identified on Model 747 series airplanes.

The FAA has reviewed and approved Boeing Alert Service Bulletin 767-53A0105, dated April 10, 2003; and Boeing Alert Service Bulletin 767-53A0106, dated April 10, 2003; which describe procedures for performing repetitive detailed inspections of the aft pressure bulkhead for indications of “oil cans” and previous “oil can” repairs, and corrective actions, if necessary. The corrective actions include performing a detailed inspection of the web around any “oil can” repair for cracks and smaller “oil cans” and repairing cracks; and performing repetitive high frequency eddy current inspections of the web around the periphery of the “oil can” indication for cracks and repairing cracks. Repair of all “oil cans” eliminates the need for the repetitive high frequency eddy current inspections.

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 bulletins specify that the manufacturer may be contacted for disposition of certain repair conditions, this proposal would require the repair of those conditions to be accomplished per a method approved by the FAA, or per data meeting the type certification basis of the airplane approved by a Boeing Company Designated Engineering Representative who has been authorized by the FAA to make such findings.

Operators should note that paragraph 1.b. of “Part 3—Inspection of ‘Oil Cans,’ ” of the Accomplishment Instructions of Boeing Alert Service Bulletin 767-53A0106, dated April 10, 2003, states, “ * * * limits shown in 767-200, 767-300, or 767-300F Structural Repair Manual (SRM) 53-80-08, Figure 102.” However, the service bulletin applies to Model 767-400ER series airplanes, and thus the reference should be to 767-400 SRM 53-80-08, Figure 102, as specified in the previous paragraph 1.a. of the service bulletin.

Operators should note that “Part 2—Inspection of Previous ‘Oil Can’ Repairs” of the Accomplishment Instructions of both service bulletins states, “Do the inspections shown in Part 2 again at the time shown in Figure 1.” However, Figure 1 of the service bulletins specifies that the inspection in “Part 1—Access and Inspection” is to be repeated. We have determined that the correct reference is Part 1. Therefore this proposed AD would require repetitive inspection per Part 1.

This is considered to be interim action. The FAA may consider further rulemaking to reduce thresholds if cracks are reported earlier than the predicted fatigue life.

There are approximately 890 airplanes of the affected design in the worldwide fleet. The FAA estimates that 398 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 14 work hours per airplane to accomplish the proposed detailed inspection, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $362,180, or $910 per airplane, per inspection cycle.

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

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

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

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

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

Submit comments using the following format:

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

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

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

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

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2003-NM-51-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. 2003-NM-51-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The Direction Générale de l'Aviation Civile (DGAC), which is the airworthiness authority for France, notified the FAA that an unsafe condition may exist on Dassault Model Mystere-Falcon 50, Mystere-Falcon 900, and Falcon 900EX series airplanes. The DGAC advises that the Stormscope antenna connector could puncture the fuel tank located above the antenna, in the event of a belly landing. This condition, if not corrected, could result in a post-landing fire if fuel leaking from the tank makes contact with the sparks from the airplane sliding on the ground.

Dassault has issued Service Bulletins F50-404, dated November 6, 2002 (for Model Mystere-Falcon 50 series airplanes); F900-293, dated November 13, 2002 (for Model Mystere-Falcon 900 series airplanes); and F900EX-158, dated November 13, 2002 (for Model Falcon 900EX series airplanes); which describe procedures for installing a shield plate over the tank structure above the Stormscope antenna and replacing the Stormscope antenna plug connector with a new connector. Accomplishment of the actions specified in the service bulletins is intended to adequately address the identified unsafe condition. The DGAC classified these service bulletins as mandatory and issued French airworthiness directive 2002-569(B), dated November 13, 2002, in order to assure the continued airworthiness of these airplanes in France.

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 require accomplishment of the actions specified in the service bulletins described previously, except as discussed below.

Operators should note that, although the Accomplishment Instructions of the referenced service bulletins describe procedures for submitting a sheet recording compliance with the service bulletin, this proposed AD would not require that action. The FAA does not need this information from operators.

The FAA estimates that 394 Model Mystere-Falcon 50, Mystere-Falcon 900, and Falcon 900 EX series airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 8 work hours per airplane to accomplish the proposed actions, and that the average labor rate is $65 per work hour. Required parts are provided free of charge by the manufacturer. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $204,880, or $520 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:

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-260-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-260-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The Civil Aviation Authority (CAA), which is the airworthiness authority for the United Kingdom, notified the FAA that an unsafe condition may exist on all BAE Systems (Operations) Limited (Jetstream) Model 4101 airplanes. The CAA advises that a shortfall in engine performance, compared to the performance standards shown in the airplane flight manual (AFM), has been observed during climb-performance test flights. The shortfall has been attributed to a loss of propeller efficiency due to erosion or profile changes of the propeller blade's leading edge. The flightcrew may be unaware of the potential loss of airplane performance due to loss of propeller efficiency. This condition, if not corrected, could result in an increased risk of collision with terrain.

BAE Systems (Operations) Limited has issued Service Bulletin J41-A61-012, Revision 1, dated February 25, 2002. That service bulletin describes procedures for revising the BAE Jetstream Series 4100 Airplane Flight Manual by inserting AFM Supplement 8, and installing placards near the limitations placards in the flight compartment to advise the flightcrew to operate the airplane per the special operating limitations in AFM Supplement 8. AFM Supplement 8 revises the General, Performance, Supplements, and Appendices sections of the AFM to include information associated with a reduction in airplane performance due to loss of propeller efficiency.

BAE Systems (Operations) Limited also has issued Service Bulletin J41-61-013, Revision 1, dated February 25, 2002, which describes procedures for repetitive flight checks (which the service bulletin refers to as “flight tests”) to verify the adequacy of the airplane's climb performance. If the airplane's climb performance is adequate, the service bulletin provides for removal of placards installed per Service Bulletin J41-A61-012, Revision 1 (if such placards were installed previously), and operation of the airplane without limitation by AFM Supplement 8.

Accomplishment of the actions specified in the applicable service bulletins is intended to adequately address the identified unsafe condition. The CAA classified BAE Systems (Operations) Limited Service Bulletin J41-A61-012, Revision 1, as mandatory and issued British airworthiness directive 001-11-2001 to ensure the continued airworthiness of these airplanes in the United Kingdom.

This airplane model is manufactured in the United Kingdom and is 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 CAA has kept us informed of the situation described above. We have examined the findings of the CAA, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.

Since an unsafe condition has been identified that is likely to exist or develop on other airplanes of the same type design registered in the United States, the proposed AD would require revising the airplane flight manual (AFM) to advise the flightcrew of special operating limitations associated with a reduction in airplane performance due to loss of propeller efficiency. This proposed AD also would require installing placards in the flight compartment and operating the airplane per certain special operating limitations; or performing repetitive flight checks to verify the adequacy of the airplane's climb performance, and accomplishing follow-on actions if necessary. The actions would be required to be accomplished in accordance with the service information described previously, except as discussed below.

Although this proposed AD would provide for accomplishment of repetitive flight checks per BAE Systems (Operations) Limited Service Bulletin J41-61-013, Revision 1, as one alternative for compliance, British airworthiness directive 001-11-2001 does not reference the flight checks specified in that service bulletin. The CAA acknowledges the availability of flight checks as another alternative to address the unsafe condition associated with this proposed AD.

As explained previously, BAE Systems Service Bulletin J41-61-013, Revision 1, describes procedures for repetitive flight tests to determine the climb performance of both engines of the airplane. This proposed AD refers to those flight tests as flight checks to differentiate them from FAA certification flight tests. We have determined that the procedures in the service bulletin describe a post-maintenance flight and not an FAA certification flight test. The check must be performed by an appropriately rated flightcrew. Paragraph (c) of this proposed AD clarifies this issue.

Although BAE Systems (Operations) Limited Service Bulletin J41-A61-012, Revision 1, and J41-61-013, Revision 1, specify to submit information on the accomplishment of these service bulletins to the manufacturer, this proposed AD does not include such a requirement.

We estimate that 57 airplanes of U.S. registry would be affected by this proposed AD.

It would take approximately 1 work hour per airplane to accomplish the proposed AFM revision, at an average labor rate of $65 per work hour. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $3,705, or $65 per airplane.

This proposed AD also provides for either installation of placards or accomplishment of repetitive flight checks as acceptable necessary follow-on actions. Either action would take approximately 1 work hour per airplane to accomplish, at an average labor rate of $65 per work hour. Based on these figures, the cost impact of either of these proposed actions is estimated to be $65 per airplane, though for the repetitive flight checks, this cost impact would be per check cycle.

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 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 2003-NM-18-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. 2003-NM-18-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The Luftfartsverket (LFV), which is the airworthiness authority for Sweden, notified the FAA that an unsafe condition may exist on certain Saab Model SAAB SF340A and SAAB 340B series airplanes. The LFV advises that it has received reports of fatigue cracks in the outer flange of nacelle frame station 203 between water line (WL) 92 to WL96. This condition, if not detected and corrected in a timely manner, could lead to reduced structural integrity of the nacelle supporting structure.

Saab has issued Service Bulletin 340-54-043, dated December 18, 2002, which describes procedures for detailed and ultrasonic inspections of the internal structure of the nacelles for cracks, deformations and damage, and corrective actions if necessary. The corrective actions include replacement of the firedeck attachment angle with a new angle and repair of cracks, deformation, and damage. This service bulletin recommends compliance times for the inspections at the following approximate flight cycle levels:

1. For airplanes with less than 20,000 total flight cycles, accomplish before 24,000 total flight cycles; and

2. For airplanes with 20,000 total flight cycles or more, accomplish within 2,000 to 4,000 flight cycles after the service bulletin's release date, depending on the airplane's total flight cycles.

Accomplishment of the actions specified in the service bulletin is intended to adequately address the identified unsafe condition. The LFV classified this service bulletin as mandatory and issued Swedish airworthiness directive No 1-176, dated December 20, 2002, in order to assure the continued airworthiness of these airplanes in Sweden.

These airplane models are manufactured in Sweden 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 LFV has kept the FAA informed of the situation described above. The FAA has examined the findings of the LFV, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.

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

Although the service bulletin specifies that operators may contact the manufacturer for disposition of certain repairs, this proposal would require operators to repair per a method approved by either the FAA or LFV (or its delegated agent). In light of the type of repair that would be required to address the unsafe condition, and consistent with existing bilateral airworthiness agreements, we have determined that, for this proposed AD, a repair approved by either the FAA or LFV would be acceptable for compliance with this proposed AD.

For compliance times, the service bulletin specifies “accumulated flights” and “flights”. However, for these compliance times, paragraph (c) of this proposed AD specifies “total flight cycles” and “flight cycles”. This decision is based on our determination that “accumulated flights” and “flights” may be interpreted differently by different operators. We find that our proposed terminology is generally understood within the industry and records will always exist that establish these cycles with certainty.

The FAA estimates that 224 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 4 work hours per airplane to accomplish the proposed inspection, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $58,240, or $260 per airplane.

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

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

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

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

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

Submit comments using the following format:

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

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

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

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

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2002-NM-160-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-160-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The Dirección General de Aviación Civil (DGAC), which is the airworthiness authority for Spain, notified the FAA that an unsafe condition may exist on Construcciones Aeronauticas, S.A. (CASA), Model C-235 series airplanes. The DGAC advises that an operator did not have an aural warning that the landing gear was in the “up” position when the airplane was in a landing configuration (wing flaps extended) as required by paragraph (e)(4) of Section 25.729 (“Retracting Mechanism”) of the Federal Aviation Regulations (FAR) (14 CFR 25.729). Investigation revealed that the operator had inhibited the aural warning during the previous approach for landing. If the flight crew is able to inhibit the aural warning for the landing gear up, the flight crew of the next flight or possibly of the same flight could be unaware that the aural warning had been disabled and could inadvertently land the airplane with the landing gear not down and locked.

CASA has issued Service Bulletin SB-235-27-20, dated March 7, 2001, which describes procedures for modification of the electrical wiring of the rudder trim control unit. Accomplishment of the actions specified in the service bulletin is intended to adequately address the identified unsafe condition. The DGAC classified this service bulletin as mandatory and issued Spanish airworthiness directive 02/02, dated April 30, 2002, to ensure the continued airworthiness of these airplanes in Spain.

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

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

The FAA estimates that 1 airplane of U.S. registry would be affected by this proposed AD, that it would take approximately 7 work hours per airplane to accomplish the proposed actions, and that the average labor rate is $65 per work hour. Required parts would cost approximately $40 per airplane. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $495 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:

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-207-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-207-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 747-100, -100B, -100B SUD, -200B, -200C, -200F, -300, 747SR, and 747SP series airplanes equipped with Pratt & Whitney JT9D series engines, was published as a notice of proposed rulemaking (NPRM) (hereafter referred to as the “original NPRM”) in the Federal Register on July 9, 2003 (68 FR 40827). That original NPRM would have required drilling witness holes through the cowl skin at the cowl latch locations in the left-hand side of the cowl panel assembly of each engine. That original NPRM was prompted by a report of in-flight separation of the cowl panels on the left- and right-hand sides of a Model 747 series airplane. That condition, if not corrected, could result in damage to the airplane, consequent rapid depressurization, and hazards to persons or property on the ground.

Due consideration has been given to the comment received in response to the original NPRM. That comment, as discussed below, has resulted in changes to the supplemental NPRM.

One commenter requests that we remove Pratt & Whitney JT9D-70A engines from the applicability of the original NPRM. The commenter states that the side cowl panels for JT9D-70A engines have a different configuration than the other JT9D series engines.

We agree. Since Pratt & Whitney JT9D-70A engines have a different configuration, the corrective action as specified in paragraph (a) of this supplemental NPRM is not applicable to JT9D-70A engines. We have revised the applicability of this supplemental NPRM to identify only the affected engines.

The commenter also requests that we add Model 747 series airplanes, line numbers 670 to 814 inclusive, to the applicability of the original NPRM. The commenter states that since the side cowls are readily interchangeable among JT9D series engines equipped on Model 747 series airplanes, the applicability should include all delivered Model 747 series airplanes equipped with JT9D-3, -7, -7Q, and -7R4G2 series engines.

We agree. Since issuance of the original NPRM, we have reviewed and approved Revision 1 of Boeing Special Attention Service Bulletin 747-71-2301, dated August 21, 2003, which adds additional airplanes, line numbers 670 through 814 inclusive, to the applicability. We have revised this supplemental NPRM to specify the new applicability and to reference Revision 1 of the service bulletin as the appropriate source of service information for accomplishing the required actions. We have also added paragraph (b) of this supplemental NPRM to give credit for actions accomplished per the original issue of the service bulletin. Furthermore, we have revised the cost impact to include the additional cost of these airplanes to U.S. operators.

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

There are approximately 481 airplanes of the affected design in the worldwide fleet. The FAA estimates that 114 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 8 work hours per airplane (2 work hours per engine) to accomplish the proposed actions, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $59,280, or $520 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:

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-151-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-151-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The FAA has received a report indicating that an actuator for the off-wing slide compartment door did not fire during an off-wing escape slide test of a Boeing Model 767 series airplane. The actuator for the off-wing slide compartment door did not fire because of a manufacturing defect. This condition, if not corrected, could cause the door to open improperly and prevent the deployment of the off-wing escape slide, leading to the loss of an evacuation route.

The FAA has reviewed and approved Boeing Special Attention Service Bulletin 767-25-0299, dated January 18, 2001, which describes procedures for performing an inspection of the actuators for the off-wing slide compartment door to determine the actuator cartridge serial number, and corrective actions, if necessary. The corrective actions include removing the actuators for the off-wing slide compartment door; performing an inspection of the actuator cartridge for the presence of a clearance hole, replacing the actuator cartridge with a new actuator cartridge or a serviceable actuator cartridge from a recharge kit; and installing the actuators of the off-wing slide compartment door. Accomplishment of the actions specified in the Boeing service bulletin is intended to adequately address the identified unsafe condition.

Boeing Special Attention Service Bulletin 767-25-0299, dated January 18, 2001 references OEA Aersospace, Inc. Service Bulletin 5262 (02) SB (NC), dated October 2, 2000, as an additional source of service information for the inspection of the actuator cartridge, and corrective actions, if necessary.

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 Boeing service bulletin described previously, except as discussed below.

Operators should note that, although the Boeing service bulletin recommends accomplishing the actions “at the earliest time when parts and labor are available,” the FAA has determined that “the earliest time when parts and labor are available” 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 inspection (six hours). In light of all of these factors, the FAA finds a compliance time of within two years after the effective date of this AD 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.

Operators should also note that, although the Boeing service bulletin lists the effectivity as Model 767-200 and -300 series airplanes, line numbers 725 through 815 inclusive, the FAA has determined the applicability should be all Model 767-200 and -300 series airplanes. The increased number of affected airplanes is due to configuration control issues with the off-wing slide compartment door actuators. Since we cannot be sure the parts were limited to the airplanes listed in the service bulletin, we need to include all airplanes.

There are approximately 829 airplanes of the affected design in the worldwide fleet. The FAA estimates that 346 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 6 work hours per airplane to accomplish the proposed inspection, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $134,940, or $390 per airplane.

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

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

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

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

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

Submit comments using the following format:

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

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

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

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

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this action must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2003-NM-83-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. 2003-NM-83-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The FAA has received a report indicating that some ram air turbines (RAT) may have hydraulic pumps with cracked hanger arms on certain Boeing Model 757 and 767 series airplanes. The supplier of the RATs identified a departure from the defined manufacturing process as the cause for production of hanger arms with potential surface cracks, which affects approximately 154 hydraulic pumps with certain serial numbers. A cracked hanger arm of the hydraulic pump of the RAT, if not corrected, can fracture under load and lead to failure of the RAT to provide hydraulic power to the primary flight control system during an emergency when both engines have failed. Loss of hydraulic power to the primary flight controls could result in loss of control of the airplane.

The FAA has reviewed and approved Boeing Special Attention Service Bulletin 757-29-0060, dated September 12, 2002 (for Model 757-200, -200CB, and -200PF series airplanes); Boeing Special Attention Service Bulletin 757-29-0061, dated September 12, 2002 (for Model 757-300 series airplanes); Boeing Special Attention Service Bulletin 767-29-0103, dated September 12, 2002 (for Model 767-200, -300, and -300F series airplanes); and Boeing Special Attention Service Bulletin 767-29-0106, dated September 12, 2002 (for Model 767-400ER series airplanes).

These service bulletins describe procedures for inspection to determine the serial number of the hydraulic pump in the RAT, and corrective action, if necessary. The corrective action(s) includes either replacing the hydraulic pump with a serviceable hydraulic pump that is outside the range of the affected serial numbers, or reworking and reidentifying the existing hydraulic pump. Accomplishment of the actions specified in the service bulletins is intended to adequately address the identified unsafe condition.

These service bulletins also refer to Parker Service Bulletin 6513902-29-305, dated November 30, 2001, as an additional source of service information for the list of affected hydraulic pump serial numbers and for accomplishment of the reworking and reidentifying of the existing hydraulic pump for Model 757 and 767 series airplanes.

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 Boeing service bulletins described previously.

There are approximately 1,851 airplanes of the affected design in the worldwide fleet. The FAA estimates that 1,038 airplanes of U.S. registry would be affected by this proposed AD.

We estimate that it would take approximately 1 work hour per airplane to accomplish the proposed inspection, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the proposed inspection on U.S. operators is estimated to be $67,470, or $65 per airplane.

We also estimate that it would take approximately 4 work hours per airplane (affecting approximately 154 airplanes) to accomplish the proposed replacement of the hydraulic pump, if required, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the proposed replacement on U.S. operators is estimated to be $260 per airplane.

We also estimate that it would take approximately 5 work hours per airplane (affecting approximately 154 airplanes) to accomplish the proposed reworking and reidentification of the hydraulic pump, if required, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the proposed reworking and reidentification on U.S. operators is estimated to be $325 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 manufacturer may cover the cost of replacement parts associated with this proposed AD, subject to warranty conditions. As a result, the costs attributable to the proposed AD may be less than stated above.

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 2003-NM-19-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. 2003-NM-19-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The Direction Générale de l'Aviation Civile (DGAC), which is the airworthiness authority for France, notified the FAA that an unsafe condition may exist on certain Airbus Model A300 B4-600, A300 B4-600R, and A300 F4-600R (collectively called A300-600), A310, A319, A320, A321, A330, and A340 series airplanes. The DGAC advises that an operator reported airspeed discrepancy events due to obstruction of the pitot probes on a Model A320 series airplane. Investigation by the parts manufacturer revealed that the obstruction of the air intake of the pitot probes was due to a manufacturing defect at the drain hole. Such obstruction could result in misleading information being provided to the flightcrew.

The pitot probes installed on the affected Model A320 series airplane are also installed on the affected Airbus Model A300-600, A310, A319, A321, A330, and A340 series airplanes. Therefore, the pitot probes on all of these airplane models may be subject to the same unsafe condition.

Airbus has issued the following service bulletins, all including Appendix 01:

The service bulletins describe the following procedures:

A300-34-6149 (for Model A300-600 series airplanes) describes procedures for a one-time detailed visual inspection to determine if pitot probes 40DA, 41DA, and 42DA are installed, and a check of those pitot probes for part number (P/N) C16254AA and serial number (S/N) 660 or higher, and cleaning of the drain hole of any affected pitot probe.

A310-34-2181 (for Model A310 series airplanes) describes procedures for a one-time detailed visual inspection to determine if pitot probes 40DA, 41DA, and 42DA are installed, and a check of those pitot probes for P/N C16254AA and S/N 660 or higher, and cleaning of the drain hole of any affected pitot probe.

A320-34-1263 (for Model A319, A320, and A321 series airplanes) describes procedures for a one-time detailed visual inspection to determine if pitot probes 9DA1, 9DA2, and 9DA3 are installed, and a check of those pitot probes for P/N C16195AA and S/N lower than 4760, and cleaning of the drain hole of any affected pitot probe.

A330-34-3119 (for Model A330 series airplanes) describes procedures for a one-time detailed visual inspection to determine if pitot probes 4DA1, 4DA2, and 3DA are installed, and a check of those pitot probes for P/N C16195AA and S/N lower than 4760, and cleaning of the drain hole of any affected pitot probe.

A340-34-4130 (for Model A340 series airplanes) describes procedures for a one-time detailed visual inspection to determine if pitot probes 9DA1, 9DA2, and 9DA3 are installed, and a check of those pitot probes for P/N C16195AA and S/N lower than 4760, and cleaning of the drain hole of any affected pitot probe.

Thales Avionics Service Bulletin, C16195A-34-002, Revision 01 dated February 7, 2003, is referenced in the Airbus service bulletins as an additional source of service information for accomplishment of the cleaning of the drain holes of the pitot probes.

Accomplishment of the actions specified in the Airbus service information is intended to adequately address the identified unsafe condition. The DGAC classified this service information as mandatory and issued French airworthiness directives 2003-148(B), dated April 16, 2003; 2002-586(B) R1, dated April 2, 2002; and 2002-594(B), dated November 27, 2002; to ensure the continued airworthiness of these airplanes in France.

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 us informed of the situation described above. We have examined the findings of the DGAC, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.

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

The service bulletins recommend completing and submitting an inspection report, included as Appendix 01 of the service bulletins; however, this proposed AD would not require those actions; we do not need this information from operators.

We estimate that 758 airplanes of U.S. registry would be affected by this proposed AD, that it would take about 2 work hours per airplane to do the proposed inspection, and that the average labor rate is $65 per work hour. Based on these figures, the cost impact of the inspection proposed by this AD on U.S. operators is estimated to be $98,540, or $130 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.

Currently, there are no Airbus Model A340 series airplanes on the U.S. Register. However, should an affected airplane be imported and placed on the U.S. Register in the future, it would take about 2 work hours per airplane to do the proposed inspection, at an average labor rate of $65 per work hour. Based on these figures, the cost impact of the inspection proposed by this AD on U.S. operators is estimated to be $130 per airplane.

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-177-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-177-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

On August 19, 1998, the FAA issued AD 98-22-05, amendment 39-10851 (63 FR 56542, October 22, 1998), applicable to certain Airbus Model A320 series airplanes, to require repetitive inspections to detect fatigue cracking of the lower surface panel on the wing center box; and repair if necessary. That AD also requires modification of the lower surface panel on the wing center box, which constitutes terminating action for the repetitive inspections. That action was prompted by issuance of mandatory continuing airworthiness information by a foreign civil airworthiness authority. The requirements of that AD are intended to prevent fatigue cracking of the lower surface panel on the wing center box, which could result in reduced structural integrity of the airplane.

Since the issuance of AD 98-22-05, the Direction Générale de l'Aviation Civile (DGAC), which is the airworthiness authority for France, notified the FAA that an unsafe condition may exist on certain Airbus Model A320 series airplanes. The DGAC advises that a full-scale fatigue survey on the Model A320 fleet revealed that the weight of fuel at landing and the average flight duration are higher than those defined for the analysis of fatigue-related tasks. This has led to an adjustment of the fatigue mission for the A320 fleet, in that the DGAC has required compliance thresholds and repetitive intervals for accomplishment of the inspections for fatigue cracking shorter than those required by AD 98-22-05. Fatigue-related cracking of the lower surface panel on the wing center box could result in reduced structural integrity of the airplane.

Airbus has issued Service Bulletin A320-57-1082, Revision 03, dated April 30, 2002. The procedures specified in Revision 03 are essentially the same as those in Revision 01 of the service bulletin, which was referenced in the existing AD for accomplishment of the inspections and corrective action. However, Revision 03 has a change that recommends a reduction in the compliance thresholds and repetitive intervals specified in Revision 01.

Airbus also has issued Service Bulletin A320-57-1043, Revision 05, dated April 30, 2002. The procedures in Revision 05 are essentially the same as those in Revision 02 of the service bulletin, which was referenced in the existing AD for accomplishment of the modification. Revision 05 recommends a reduction in the compliance thresholds specified in Revision 03, and contains editorial changes.

The DGAC classified these service bulletins as mandatory and issued French airworthiness directive 2002-342(B), dated June 26, 2002, to ensure the continued airworthiness of these airplanes in France.

This airplane model is manufactured in France and is 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 us informed of the situation described above. We have 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 98-22-05 to continue to require repetitive inspections to detect fatigue cracking of the lower surface panel on the wing center box; and repair if necessary. The proposed AD also would continue to require modification of the lower surface panel on the wing center box, which constitutes terminating action for the repetitive inspections. This new action would reduce both the threshold and repetitive intervals for the inspections for fatigue cracking of the same area. The actions would be required to be accomplished in accordance with the service bulletins described previously, except as discussed below.

Although Airbus Service Bulletin A320-57-1082, Revision 03, specifies that the manufacturer may be contacted for disposition of certain repair conditions, this proposed AD would require the repair of those conditions to be accomplished in accordance with a method approved by either us or the DGAC (or its delegated agent). In light of the type of repair that would be required to address the identified unsafe condition, and in consonance with existing bilateral airworthiness agreements, we have determined that a repair approved by either us or the DGAC (or its delegated agent) would be acceptable for compliance with this proposed AD.

Unlike the procedures described in Service Bulletin A320-57-1082, this proposed AD would not permit further flight if fatigue cracks are detected on the lower surface panel of the wing center box. We have determined that, because of the safety implications and consequences associated with such fatigue cracking, any subject lower surface panel that is found to be cracked must be repaired prior to further flight in accordance with a method approved by either us or the DGAC (or its delegated agent).

Service Bulletin A320-57-1082 describes procedures for completing and submitting a sheet recording compliance with the service bulletin. This proposed AD would not require those actions; we do not need this information from operators.

We have reviewed the figures we have used over the past several years to calculate AD costs to operators. To account for various inflationary costs in the airline industry, we find it necessary to increase the labor rate used in these calculations from $60 per work hour to $65 per work hour. The cost impact information, below, reflects this increase in the specified hourly labor rate.

There are approximately 60 airplanes of U.S. registry that would be affected by this proposed AD. This proposed AD would reduce the compliance time for the inspections required by AD 98-22-05, and consequently adds no additional costs or work. The current costs associated with that AD are repeated as follows for the convenience of affected operators:

The inspections that are currently required by AD 98-22-05, and retained in this proposed AD, take approximately 2 work hours per airplane to accomplish, at an average labor rate of $65 per work hour. Based on these figures, the cost impact of the currently required inspections is estimated to be $130 per airplane, per inspection cycle.

The modification that is currently required by AD 98-22-05, and retained in this proposed AD, would take approximately 2 work hours per airplane to accomplish, at an average labor rate of $65 per work hours. There are no parts necessary to accomplish the modification. Based on these figures, the cost impact of the modification currently required is estimated to be $130 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 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:

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 2003-NM-25-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. 2003-NM-25-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

Luftfartsverket (LFV), which is the airworthiness authority for Sweden, notified the FAA that an unsafe condition may exist on certain Saab Model SAAB SF340A and SAAB 340B series airplanes. LFV advises that certain assistor springs of the main landing gear with the wire-formed end loop design have failed in service. Further, one known incident has been reported where the assistor spring cable (wire-rope) prevented the main landing gear from locking in fully down position. Such assistor spring failure, if not corrected, could result in collapse of a main landing gear upon landing and consequent reduced controllability of the airplane.

Saab has issued Service Bulletin 340-32-130, dated April 28, 2003, which describes procedures for replacement of assistor springs and bearings of the main landing gear with new assistor springs and bearings, respectively. Accomplishment of the actions specified in the service bulletin is intended to adequately address the identified unsafe condition. LFV classified this service bulletin as mandatory and issued Swedish airworthiness directive No 1-191, dated April 28, 2003 to ensure the continued airworthiness of these airplanes in Sweden.

LFV refers to Saab Service Bulletin 340-32-126, dated December 18, 2002, as a factor in determining the appropriate compliance time for accomplishment of the actions required by this AD.

These airplane models are manufactured in Sweden 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, LFV has kept the FAA informed of the situation described above. The FAA has examined the findings of LFV, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.

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

The FAA estimates that 288 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 2 work hours per airplane to accomplish the proposed actions, and that the average labor rate is $65 per work hour. Required parts would cost approximately $750 per airplane. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $253,440, or $880 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:

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-278-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-278-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The Direction Générale de l'Aviation Civile (DGAC), which is the airworthiness authority for France, notified the FAA that an unsafe condition may exist on certain Airbus Model A319 and A320 series airplanes. The DGAC advises that a review of the electrical bonding methods applied on various components in the fuel tank and fuel pipe couplings of these airplane models has revealed that electrical bonding of certain components must be improved. One of these subject components is the fuel return line in each wing between ribs 7 and 8. Insufficient electrical bonding may, in certain conditions such as a lightning strike or static charge accumulation, lead to electrical arcing inside the fuel tank. This condition, if not corrected, could result in a fire or explosion in the fuel tank.

Airbus has issued Service Bulletin A320-28-1103, Revision 01, dated April 1, 2003, which describes procedures for improving (modifying) the electrical bonding of the fuel return line in each wing between ribs 7 and 8. The procedures include installing a grounding tag to a certain check valve attachment bolt; installing bonding leads between the check valve, the fuel return line, and the adjacent rib 8; and performing an electrical bonding resistance test. Accomplishment of the actions specified in the service bulletin is intended to adequately address the identified unsafe condition. The DGAC classified this service bulletin as mandatory and issued French airworthiness directive 2002-476(B), dated September 18, 2002, to ensure the continued airworthiness of these airplanes in France.

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. We have examined the findings of the DGAC, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.

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

The service bulletin describes procedures for an electrical resistance test at each bonding lead but does not explicitly specify corrective actions if this test fails. For clarification, this proposed AD specifies that, if any electrical resistance test of any bonding lead fails, corrective actions involve disassembling the bonding lead, repeating the applicable cleaning procedures, reassembling the bonding lead, and repeating the electrical resistance test per the service bulletin.

We estimate that 534 airplanes of U.S. registry would be affected by this proposed AD, that it would take approximately 3 work hours per airplane to accomplish the proposed actions, and that the average labor rate is $65 per work hour. Required parts would cost approximately $100 per airplane. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $157,530, or $295 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:

On January 28, 2004 (69 FR 4212), HUD published a notice announcing its intent to establish a negotiated rulemaking advisory committee under the Federal Advisory Committee Act. The purpose of the Committee is to provide advice and recommendations on developing a rule for effectuating changes to the Public Housing Operating Fund Program in response to the Harvard University Graduate School of Design's “Public Housing Operating Cost Study.” Among other information, the January 28, 2004, notice contains a list of the proposed committee members, and solicits public comment on the proposed membership of the committee. The list of committee members contains a typographical error. Specifically, the January 28, 2004, notice incorrectly identifies the location of the Alameda County Housing Authority as Alameda, California. The housing authority is located in the city of Hayward, California. This document makes the necessary correction.

For the convenience of readers, HUD is republishing the complete list of committee members, including the corrected location of the Alameda County Housing Authority. The list of proposed committee members is as follows:

This notice of proposed rulemaking that is the subject of this correction is under sections 704(c) and 737 of the Internal Revenue Code.

As published REG-160330-02 contain errors which may prove to be misleading and are in need of clarification.

Accordingly, the publication of the notice of proposed rulemaking (REG-160330-02), which is the subject of FR Doc. 03-29323, is corrected as follows:

1. On page 65865, column 2, under the paragraph heading “Part 1—INCOME TAXES”, Par. 2 amendatory instruction 6a, line four, the language “paragraphs (a)(8)(ii), and (a)(8)(ii) and” is corrected to read “paragraphs (a)(8)(ii), and (a)(8)(iii) and”.

These proposed amendments to Selective Service regulations are published pursuant to section 13(b) of the Military Selective Service Act (MSSA), 50 U.S.C. App. 463(b), and Executive Order 11623. The regulations implement the MSSA (50 U.S.C. App. 451 et seq. ), which authorizes the President to create and establish within the Selective Service System civilian local boards, civilian appeal boards, and such other civilian agencies, including agencies of appeal, as may be necessary to carry out its functions [50 U.S.C. App. 460(b)(3)]. Executive Order 11623 delegates to the Director of Selective Service the authority to prescribe the necessary rules and regulations to carry out the provisions of the MSSA.

Under existing regulations, 48 Civilian Review Boards (CRB) have been established to decide appeals of denied requests for job reassignments made by conscientious objectors who have been placed in the Alternative Service Program as Alternative Service Workers (ASW). The sole function of CRBs is to decide such appeals during a military draft. A determination has been made that maintaining CRBs is unnecessary for the Selective Service to carry out its functions.

It is proposed that the 48 CRBs be abolished with their responsibilities transferred to the 96 DABs, which are currently solely responsible for deciding appeals of local board classification decisions during a military draft. This conversion would have three significant benefits. First, it would eliminate the unnecessary administrative costs of maintaining separate boards for ASW appeals of denied job reassignments. Second, it would result in more frequent pre-mobilization training of board members on the requirements for deciding ASW appeals. Finally, customer service to ASWs would be improved by doubling the number of locations for them to appeal denied job reassignments. It has been determined that the proposed rule changes would not result in a significant increase in the workload of DABs, and its primary responsibility of deciding appeals of local board decisions would be unimpeded. If necessary to accommodate an unexpectedly high workload during a draft, the number of members on a DAB could be increased to create separate panels thereof.

To implement the proposed conversion, the following parts and sections in 32 CFR Chapter XVI must be amended: § 1602 .11—To change the definition of “District Appeal Board” to include the ability to act on cases in accordance with part 1656 (Alternative Service); § 1605.24—To give DABs jurisdiction to decide appeals of denied job reassignments; § 1609.1—To remove members of “civilian review boards” as uncompensated positions within Selective Service; § 1656.1—To remove the definition of “Civilian Review Board” and renumber the section's definitions accordingly; § 1656.3—To remove the paragraph establishing CRBs, and renumber the paragraphs accordingly; § 1656.13—To remove paragraph “e”, which requires the establishment of CRBs, and to re-letter the section's paragraphs accordingly; § 1656.18—To amend paragraph “c” for conformity of citations therein to the re-lettering of paragraphs in § 1656.13; Finally, throughout part 1656 several sections must be amended to remove the words, “Civilian Review Board”, and add the words, “District Appeal Board” in their place.

In promulgating these proposed amendments to Selective Service regulations, I have adhered to the regulatory philosophy and the applicable principles of regulation set forth in section 1 of Executive Order 12866, Regulatory Planning and Review. The proposed amendments have not been reviewed by the Office of Management and Budget under that Executive Order, as they are not deemed “significant” thereunder.

Pursuant to the requirements of the Regulatory Flexibility Act (Pub. L. 96-354, 94 Stat. 1164, 5 U.S.C. 601-612), I have determined that the proposed amendments do not have a significant economic impact on a substantial number of small entities.

The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply because this rule does not contain an information collection requirement that requires approval of the Office of Management and Budget.

Interested persons are invited to submit written comments on the proposed rule changes. All written comments received in response to this notice of proposed rulemaking will be available for public inspection in the Office of the General Counsel from 8:30 a.m. to 3:30 a.m., Monday through Friday, excluding legal holidays.

For the reasons stated in the preamble, the Selective Service System proposes to amend 32 CFR parts 1602, 1605, 1609, and 1656 as follows:

Background Additional Alternatives

The information contained in this proposed rule supports implementation of portions of the preferred alternative in the Environmental Assessment published April 28, 2003. The public should be aware that two other alternatives were presented in the EA, including a no-PWC alternative, and those alternatives should also be reviewed and considered when making comments on this proposed rule.

On March 21, 2000, the National Park Service published a regulation (36 CFR 3.24) on the management of personal watercraft (PWC) use within all units of the national park system (65 FR 15077). This regulation prohibits PWC use in all national park units unless the NPS determines that this type of water-based recreational activity is appropriate for the specific park unit based on the legislation establishing that park, the park's resources and values, other visitor uses of the area, and overall management objectives. The regulation banned PWC use in all park units effective April 20, 2000. The regulation established a 2-year grace period for 21 park units with existing PWC use to consider whether PWC use should be permitted to continue.

Lake Roosevelt National Recreation Area was established in eastern Washington State in 1946 following the Secretary of the Interior's approval of a Tri-Party Agreement among the National Park Service, the Bureau of Reclamation, and the Bureau of Indian Affairs. The reservoir and related lands were administered as the recreation area under this agreement until 1974 when Interior Secretary Rogers C.B. Morton directed that the agreement for the management of the lake be expanded to include the Confederated Tribes of the Colville Reservation and the Spokane Tribe of Indians. Secretary Morton's directive was prompted by the Interior Solicitor's opinion that the tribes have exclusive rights to hunting, boating, and fishing within those areas of the reservoir that are within the boundaries of the two Indian reservations. An accord was reached on April 5, 1990, when the Secretary of the Interior approved the Lake Roosevelt Cooperative Management Agreement. The agreement confirmed and established management authority of the two Indian tribes over the portions of Lake Roosevelt and related lands within the boundaries of their respective reservations that were previously administered as part of the national recreation area. In 1997, the name of the park was changed from Coulee Dam National Recreation Area to Lake Roosevelt National Recreation Area.

With the approval of the Lake Roosevelt Cooperative Management Agreement, Lake Roosevelt National Recreation Area was defined as the waters and lands managed by the National Park Service. Lake Roosevelt National Recreation Area consists of 312 miles of shoreline along the Columbia River. The National Park Service administers 47,438 acres of the 81,389-acre water surface (at full pool), and 12,936 acres of adjacent land. The lands of Lake Roosevelt National Recreation Area consist primarily of a narrow band of shore above the maximum high water mark (1,290 feet), which was originally purchased by the Bureau of Reclamation for construction of the reservoir. The national recreation area also includes shoreline along about 29 miles of the Spokane River Arm of the lake and about 7 miles along the Kettle River Arm. Most of the remainder of the shoreline and surface area of Lake Roosevelt lies within the reservation boundaries of the Spokane Tribe and the Colville Confederated Tribes and is not part of the national recreation area. The Bureau of Reclamation retains the management of the dam, an area immediately around the dam, and a few other locations that are necessary for operating the reservoir.

The NPS at Lake Roosevelt preserves and protects a rich cultural history throughout the park. 9,000 years of human use of the area is evident throughout the park through a variety of archeological resources. Historical features such as St. Paul's Mission and Fort Spokane attest to a more recent history. The natural features around the lake tell the story of the Ice Age Floods that shaped this landscape about 13,000 years ago. The recreation area is home to many species of wildlife and fish, including bald eagles, peregrine falcons, black bear, kokanee salmon and walleye. Ponderosa Pine and Douglas Fir are plentiful. Popular types of recreation include fishing, swimming, boating, water skiing, picnicking, and camping from boats and vehicles.

The purpose and significance statements below are from Lake Roosevelt's Strategic Plan (NPS 2000) and General Management Plan (NPS 2000). Lake Roosevelt National Recreation Area was established for the following purposes:

(1) To provide opportunities for diverse, safe, quality, outdoor recreational experiences for the public.

(2) To preserve, conserve, and protect the integrity of natural, cultural, and scenic resources.

(3) To provide opportunities to enhance public appreciation and understanding about the area's significant resources.

The Recreation Area has no specific enabling legislation and was created under an act passed in 1946 authorizing the administration of the areas by the NPS pursuant to cooperative agreements. [Act of August 7, 1946, ch. 788, 60 Stat. 855; 16 U.S.C. 17j-2(b)].

The following statements summarize the significance of Lake Roosevelt National Recreation Area:

(1) It offers a wide variety of recreation opportunities in a diverse natural setting on a 154-mile-long lake that is bordered by 312 miles of publicly owned shoreline that is available for public use.

(2) It contains a large section of the upper Columbia River and a record of continuous human occupation dating back more than 9,000 years.

(3) It is contained within three distinct geologic provinces—the Okanogan Highlands, the Columbia Plateau, and the Kootenay Arc, which were sculpted by Ice Age floods.

The park's mission statement is as follows: As a unit of the national park system, Lake Roosevelt National Recreation Area is dedicated to conserving, unimpaired, the natural and cultural resources and recreational and scenic values of Lake Roosevelt for the enjoyment, education, and inspiration of this and future generations. The recreation area also shares responsibility for advancing a great variety of programs designed to help extend the benefits of natural and cultural resource conservation and outdoor recreation.

Under the National Park Service's Organic Act of 1916 (Organic Act) (16 U.S.C. 1 et seq. ) Congress granted the NPS broad authority to regulate the use of the Federal areas known as national parks. In addition, the Organic Act (16 U.S.C. 3) allows the NPS, through the Secretary of the Interior, to “make and publish such rules and regulations as he may deem necessary or proper for the use and management of the parks * * *”

16 U.S.C. 1a-1 states, “The authorization of activities shall be conducted in light of the high public value and integrity of the National Park System and shall not be exercised in derogation of the values and purposes for which these various areas have been established * * *”

As with the United States Coast Guard, the NPS's regulatory authority over waters subject to the jurisdiction of the United States, including navigable waters and areas within their ordinary reach, is based upon the Property and Commerce Clauses of the U.S. Constitution. In regard to the NPS, Congress in 1976 directed the NPS to “promulgate and enforce regulations concerning boating and other activities on or relating to waters within areas of the National Park System, including waters subject to the jurisdiction of the United States * * *” (16 U.S.C. 1a-2(h)). In 1996 the NPS published a final rule (61 FR 35136, July 5, 1996) amending 36 CFR 1.2(a)(3) to clarify its authority to regulate activities within the National Park System boundaries occurring on waters subject to the jurisdiction of the United States.

A variety of watercraft can be found on Lake Roosevelt during the summer season, e.g. , ski boats, PWC, runabouts, day cruisers, sailboats (some with auxiliary motors), houseboats, and, to a lesser degree, canoes, kayaks, and rowboats. Activities on the lake associated with boating include sightseeing, water skiing, fishing, swimming, camping, picnicking, and sailing. The park estimates that there were over 50,000 boat launches during the 2001 primary boating season based on the launch fees counted at the park. Most boaters reside within 100 miles of Lake Roosevelt but others come from cities and communities throughout Washington, as well as from Idaho, Oregon and Canada. PWC use is estimated at approximately 56 PWC users on a peak use summer day in 2002, increasing to an average of 62 PWC users per peak use day by 2012.

PWC use began on Lake Roosevelt during the 1980s but did not become fairly common until the mid-1990s. PWC are often used as a houseboat accessory. Activities undertaken by PWC on Lake Roosevelt include running up and down sections of the lake, towing skiers, jumping wakes, and general boating activities. Surveys of boat trailers conducted in 2001 and 2002 estimate the number of PWC to be approximately 4% of all boating use at Lake Roosevelt. PWC are allowed to launch, operate, and beach from dawn to dusk throughout the national recreation area. The primary PWC use season is June through September with some use from April through May and October through December, but no use in winter months because the weather and water is generally too cold.

In the past, PWC were regulated as vessels under the Superintendent's Compendium and, along with other vessels, were allowed in all areas of the lake. The Superintendent's Compendium is terminology the NPS uses to describe the authority provided to the Superintendent under 36 CFR 1.5 and 1.7. It allows for local, park-specific regulations for a variety of issues and under specific criteria. Before the closure, areas 100 feet around swim beaches, marinas, and narrow sections of the lake had speed or “flat-wake” restrictions applicable to all boats based on Washington State boating regulations. In addition, before the closure, flat-wake zones on the lake included Hawk Creek from the waterfall at the campground to an area called “the narrows” and on the Kettle River above the Napoleon Bridge. Crescent Bay Lake, located near Lake Roosevelt but not a connected waterway, was closed to all motorized craft. In flat-wake zones boats and PWC could not exceed flat-wake speed which is defined as a minimal disturbance of the water by a vessel in order to prevent damage or injury.

None of the concessioners at Lake Roosevelt currently rent PWC. Within 60 to 100 miles of the park, a total of five PWC dealerships were identified in Wenatchee, Spokane, and Okanogan. No PWC dealerships were identified closer to the park. A total of three rental shops were found within 30 miles of the park including Banks Lake, Sun Lake, and Blue Lake.

Within 100 miles of Lake Roosevelt National Recreation Area there are several major lakes and many smaller lakes that allow PWC. The larger lakes include Banks Lake and Lake Chelan in Washington and Lake Coeur d'Alene and Lake Pend Oreille in Idaho.

Some research suggests that PWC are viewed by some segments of the public as a “nuisance” due to their noise, speed, and overall effects on the environment while others view PWC as no different from other watercraft and that PWC users have a “right” to enjoy their sport. There has been some conflict between PWC and fishermen, canoeists, and swimmers at Lake Roosevelt.

Due to their ability to reach speeds in the 60 miles per hour range and their ability to access shallow-draft areas, PWC can create wakes that pose a conflict for both shore and boat fishermen and a safety hazard to other users such as canoeists, kayakers and windsurfers. At Lake Roosevelt National Recreation Area, some complaints by fisherman, canoeists or swimmers have been received concerning wakes created by PWC. Some complaints have also been received concerning the operating speed of PWC.

A total of only eight safety incidents involving PWC were reported on Lake Roosevelt during the years 1997 through 2002.

In addition to this proposed rule, NPS has issued the Personal Watercraft Use Environmental Assessment for Lake Roosevelt National Recreation Area. The Environmental Assessment (EA) was open for public review and comment from April 28, 2003 to May 28, 2003. Copies of the EA may be downloaded at http://www.nps.gov/laro or by calling 509-633-9441 ext. 110 or by writing to the Superintendent, Lake Roosevelt National Recreation Area, 1008 Crest Drive, Coulee Dam, WA 99116.

The purpose of the EA was to evaluate a range of alternatives and strategies for the management of PWC use at Lake Roosevelt to ensure the protection of park resources and values while offering recreational opportunities as provided for in the National Recreation Area's enabling legislation, purpose, mission, and goals. The analysis assumed alternatives would be implemented beginning in 2002 and considered a 10-year use period, from 2002 to 2012. In addition, the analysis assumes that PWC annual use will increase approximately 1% annually and due to the narrow and linear characteristics of the reservoir, each PWC that launches is assumed to recreate on waters managed by both NPS and tribal entities during an average trip, regardless of launch point. The NPS assumes no jurisdiction over tribal waters and generally does not enforce regulations in those areas, however, because of existing Memorandums of Understanding with the tribes the park may respond to law enforcement or emergency situations on tribal waters.

The EA evaluates three alternatives concerning the use of PWC at Lake Roosevelt National Recreation Area.

Alternative A would allow PWC use under a special NPS regulation in accordance with NPS Management Policies 2001, park practices, and state regulations. That is, after the effective date of a final rule, PWC use would be the same as it was before the closure on November 7, 2002. Therefore, under Alternative A, PWC use would be allowed throughout the recreation area, with limitations only in areas where restrictions existed before the closure. These areas include the following: Crescent Bay Lake (motorized watercraft restricted), Upper Kettle River, above the Napoleon Bridge (flat wake), and Upper Hawk Creek from the waterfall near the campground through the area known as the “narrows” (flat wake). Launch and retrieval of PWC would continue to be permitted only at designated boat launch ramps within Lake Roosevelt National Recreation Area. PWC users would be able to land anywhere along the shoreline, except in designated swimming areas. All non-conflicting State and Federal watercraft laws and regulations would continue to be enforced.

As with Alternative A, Alternative B would reinstate PWC use under a special regulation, but specific limits and use areas would be defined. However, based on comments received from the public during the EA scoping process and through the comment period, this proposed rule would implement Alternative B with one modification; the Kettle River would be closed to PWC above the Hedlund Bridge. The EA does not discuss this modification but impacts from this additional closure have been analyzed by the NPS and will be discussed in the decision document for this EA and we are soliciting additional comments on this closure in this proposed rule. Throughout this proposed rule, the preferred alternative will continue to be referred to as Alternative B however it differs slightly from the Alternative B referred to in the EA.

Under Alternative B, PWC use would be reinstated within Lake Roosevelt in most locations of the recreation area where it was allowed prior to November 7, 2002 with some new restrictions. Under this alternative, the current flat-wake zone in Hawk Creek and the restriction on motorized watercraft use on Crescent Bay Lake would remain. In addition, extra flat-wake speed zoning would be implemented. These flat-wake restrictions would apply to the following areas: Within 200 feet from launch ramps, marina facilities, campgrounds, beaches occupied by swimmers, water skiers and other persons in the water and the Spokane Arm from 100 feet west of the Two Rivers Marina on the downstream end, to 100 feet east of the Fort Spokane launch ramp on the upstream end, above the vehicle bridge. In addition to the extra flat-wake zones, PWC use would be prohibited on the Kettle River from Hedlund Bridge, north to the headwaters. Except for Napoleon Bridge launch on the Kettle River where PWC launching would be prohibited, launch and retrieval of PWC would be permitted only at designated boat launch ramps within Lake Roosevelt National Recreation Area. As with Alternative A, PWC users would be able to land anywhere along the shoreline, except in designated swimming areas and all state and federal watercraft laws and regulations would continue to be enforced.

The no-action alternative would continue the current closure on PWC use within this national park system unit.

Based on the environmental analysis prepared for PWC use at Lake Roosevelt National Recreation Area, Alternative B is the preferred alternative and is also considered the environmentally preferred alternative because it would best fulfill park responsibilities as trustee of this sensitive habitat; ensuring safe, healthful, productive, and aesthetically and culturally pleasing surroundings; and attaining a wider range of beneficial uses of the environment without degradation, risk of health or safety, or other undesirable and unintended consequences.

This document proposes regulations to implement Alternative B at Lake Roosevelt National Recreation Area.

The NPS will consider the comments received on this proposal, as well as the comments received on the EA. In the final rule, the NPS will implement Alternative B as proposed, or choose a different alternative or combination of alternatives. Therefore, the public should review and consider the other alternatives contained in the EA when making comments on this proposed rule.

The following summarizes the predominant resource protection and public use issues associated with reinstating PWC use at Lake Roosevelt National Recreation Area under the proposed rule which implements Alternative B. Each of these issues is analyzed in the Lake Roosevelt National Recreation Area, Personal Watercraft Use Environmental Assessment.

Most research on the effects of PWC on water quality focuses on the impacts of two-stroke engines, and it is assumed that any impacts caused by these engines also apply to the PWC powered by them. There is general agreement that two-stroke engines discharge a gas-oil mixture into the water. Fuel used in PWC engines contains many hydrocarbons, including BTEX. Polycyclic aromatic hydrocarbons (PAH) also are released from boat engines, including those in PWC. These compounds are not found appreciably in the unburned fuel mixture, but rather are products of combustion. Discharges of these compounds—BTEX and PAH—have potential adverse effects on water quality. A common gasoline additive, MTBE, is currently being used in the state of Washington; however, a ban on its use took effect on December 31, 2003. A small percentage of all types of boaters may come from surrounding states or Canada and could potentially be carrying fuel that contains MTBE but the numbers of these users would be low.

A typical conventional ( i.e. , carbureted) two-stroke PWC engine discharges as much as 30% of the unburned fuel mixture directly into the water. At common fuel consumption rates, an average two-hour ride on a PWC may discharge 3 gallons of fuel into the water. According to the California Air Resources Board, an average PWC can discharge between 1.2 and 3.3 gallons of fuel during one hour at full throttle. However, hydrocarbon (HC) discharges to water are expected to decrease substantially over the next 10 years due to mandated improvements in engine technology by the EPA.

Under this proposed rule, PWC use would be reinstated within Lake Roosevelt in all locations where it was allowed prior to November 7, 2002 except on the Kettle River. In addition to the current flat wake zone on Hawk Creek, and the restriction on motorized watercraft use on Crescent Bay Lake, additional flat wake speed zoning would be implemented. These flat wake restrictions would apply to the following areas: Within 200 feet of launch ramps, marina facilities, campgrounds, beaches occupied by swimmers, water skiers, and other persons in the water and on the Spokane Arm from 100 feet west of the Two Rivers Marina on the downstream end, to 100 feet east of the Fort Spokane launch ramp on the upstream end, above the vehicle bridge.

Since PWC are assumed to operate for only short periods of time in flat-wake zones, effects from low throttle operation in these areas would likely be insignificant. Therefore, calculations only address full throttle operation in the main body of the reservoir. However, it is acknowledged that emissions could potentially build up in areas where use is heavy such as around launch facilities and shallow water high activity areas where flat-wake zoning would be extended. Retention time for waters contained in the lake range from 28 to 52 days depending on the time of year and how much water the dam is releasing. This proposal would also establish a resource monitoring program addressing water quality sampling for watercraft emissions in areas of high PWC and motorized vessel use. These efforts would assist in the detection and future prevention of adverse impacts from PWC and other boating use in the above flat-wake zones.

Under this proposed rule, cumulative adverse impacts from PWC and other watercraft would be negligible and long-term for benzo(a)pyrene, benzene and MTBE. (For an explanation of terms such as “negligible” and “adverse” in regard to water quality, see page 93 of the EA.). The proposed additional flat-wake zone restrictions would not change the cumulative impacts on water quality in NPS or tribal managed waters. The impacts to water quality on the Kettle River would result in localized, long-term, minor, beneficial impacts due to the elimination of pollutant loads.

PWC use under this proposed rule would have negligible adverse effects on water quality based on ecotoxicological threshold volumes. Cumulative pollutant loads in 2002 and 2012 from PWC and other motorboats would be well below ecotoxicological benchmarks and criteria. Adverse water quality impacts from PWC from benzo(a)pyrene, benzene and MTBE based on human health (ingestion of water and fish) benchmarks would be negligible in both 2002 and 2012, based on Environmental Protection Agency (EPA) and state of Washington water quality criteria. Cumulative adverse impacts from PWC and other watercraft would be negligible for benzo(a)pyrene, benzene and MTBE. Cumulative impacts from PWC and other motorboats to water quality would also be applicable to tribal managed waters. Therefore the implementation of this proposed rule would not result in an impairment of the water quality resource at Lake Roosevelt.

PWC emit various compounds that pollute the air. In the two-stroke engines commonly used in PWC, the lubricating oil is used once and is expelled as part of the exhaust; and the combustion process results in emissions of air pollutants such as volatile organic compounds (VOC), nitrogen oxides (NO X ), particulate matter (PM), and carbon monoxide (CO). PWC also emit fuel components such as benzene that are known to cause adverse health effects. Even though PWC engine exhaust is usually routed below the waterline, a portion of the exhaust gases go into the air. These air pollutants may adversely impact park visitor and employee health, as well as sensitive park resources.

For example, in the presence of sunlight VOC and NO X emissions combine to form ozone. Ozone causes respiratory problems in humans, including cough, airway irritation, and chest pain during inhalations. Ozone is also toxic to sensitive species of vegetation. It causes visible foliar injury, decreases plant growth, and increases plant susceptibility to insects and disease. Carbon monoxide can affect humans as well. It interferes with the oxygen carrying capacity of blood, resulting in lack of oxygen to tissues. NO X and PM emissions associated with PWC use can also degrade visibility. NO X can also contribute to acid deposition effects on plants, water, and soil. However, because emission estimates show that NO X from PWC are minimal (less than 5 tons per year), acid deposition effects attributable to PWC use are expected to be minimal.

In this proposed rule, negligible adverse impacts for HC, PM 10 , and NO X , and minor impacts for CO would occur for 2002 and 2012. (For an explanation of terms such as “negligible” and “adverse” in regard to air quality, see page 105 of the EA.) The risk from PAH would also be negligible in 2002 and 2012. Cumulative adverse impacts from PWC and other boating emissions within the national recreation area would be moderate for CO and HC, and negligible for PM 10 and NO X in 2002. In 2012, NO X impact would increase to minor; impacts for the other pollutants would remain at 2002 levels. A beneficial impact to regional ozone emissions would occur due to a reduction in HC emissions.

This proposed rule would not interfere with, maintain or improve existing human health air quality conditions, with future reductions in PM 10 and HC emissions due to improved emission controls from EPA. The PWC contribution to emissions of HC is estimated to be 10% to 11% of the cumulative boating emissions in 2002 and 2012. Cumulative impacts from watercraft emissions would also be applicable to adjacent areas under tribal jurisdiction. All impacts would be long term. Therefore, the implementation of this proposed rule would not result in an impairment of air quality.

The primary soundscape issue relative to PWC use is that other visitors may perceive the sound made by PWC as an intrusion or nuisance, thereby disrupting their experiences. This disruption is generally short term because PWC travel along the shore to outlying areas. However, as PWC use increases and concentrates at beach areas, related noise becomes more of an issue, particularly during certain times of the day. Additionally, visitor sensitivity to PWC noise varies from fishermen (more sensitive) to swimmers at popular beaches (less sensitive).

The biggest difference between noise from PWC and noise from motorboats is that the PWC repeatedly leave the water during use, which magnifies noise in two ways. Without the muffling effect of water, the engine noise is typically 15 dBA louder and the smacking of the craft against the water surface results in a loud “whoop” or series of them. With the rapid maneuvering and frequent speed changes, the impeller has no constant “throughput” and no consistent load on the engine. Consequently, the engine speed rises and falls, resulting in a variable pitch. This constantly changing noise is often perceived as more disturbing than the constant noise from motorboats.

PWC users tend to operate close to shore, to operate in confined areas, and to travel in groups, making noise more noticeable to other recreationists. Motorboats traveling back and forth in one area at open throttle or spinning around in small inlets also generate complaints about noise levels; however, most motorboats tend to operate away from shore and to navigate in a straight line, thus being less noticeable to other recreationists.

Under this proposal, PWC use would be reinstated with new restrictions to enhance overall visitor experience. This proposal would result in a reduction in noise levels from PWC to park visitors, including fishermen and near shoreline users of the swimming, picnic, and camping areas, as flat-wake speed would be implemented in these areas, resulting in beneficial impacts.

Overall, minor to moderate adverse impacts would result from PWC use on the soundscape of the recreation area. Impacts would generally be short-term, although they could periodically be more consistent and bothersome at shoreline areas on the very high use days, where motorized watercraft noise may predominate off and on for most of the day. Most visitors to Lake Roosevelt National Recreation Area during those high use periods expect to hear motorized craft during the day, as the lake is known by the mostly local and regional users for providing this type of recreational opportunity, in addition to other activities.

Noise from PWC would have minor to moderate adverse impacts at most locations at Lake Roosevelt National Recreation Area and the immediate surrounding area. (For an explanation of impact terms such as “minor”, “moderate” and “adverse” in regard to soundscape, see page 118 of the EA.) Impact levels would relate to the number of PWC operating as well as the sensitivity of other visitors. The new proposed restrictions on PWC use and proposed flat-wake areas would have beneficial impacts to some park visitors from reduced noise levels. Cumulative adverse noise impacts from PWC and other watercraft, automobiles on SR 25, aircraft, lumber operations, and other visitor activities would be minor to moderate because these sounds would be heard occasionally throughout the day, and may predominate on busy days during the high use season. Cumulative impacts to the soundscape at adjacent tribal managed visitor use areas would be similar to impacts in NPS-managed areas. Therefore, implementation of this proposed rule would not result in an impairment of the park's soundscape.

Some research suggests that PWC use affects wildlife by causing interruption of normal activities, flight and alarm responses, avoidance or degradation of habitat, and effects on reproductive success. This is thought to be a result of a combination of PWC speed, noise and ability to access sensitive areas, especially in shallow-water depths. Waterfowl and nesting birds are the most vulnerable to PWC. Fleeing a disturbance created by PWC may force birds to abandon eggs during crucial embryo development stages, prevent nest defense from predators, and contribute to stress and associated behavior changes. Impacts to sensitive species, such as the bald eagle, are documented under “Threatened, Endangered, or Special Concern Species.”

Under the proposed rule, PWC use would occur in the recreation areas with additional limitations such as an extension of the previous 100′ zone to 200′ flat-wake restrictions around activity areas and along a small stretch of the Spokane Arm and a prohibition of PWC use on the Kettle River. The added flat-wake restrictions would be implemented in areas where visitor activities are currently high, precluding the existence of prime wildlife habitat. Therefore, these flat-wake restrictions would have beneficial impacts through a decrease in noise and disturbance by PWC.

Impacts to mammals would be negligible to minor because most species rarely use the shoreline. Most are either transient visitors from inland parts of the recreation area or are generally acclimated to human intrusion. Primary habitat areas for large mammals such as deer and elk are typically located further inland. Small mammals common to the area such as marmots, skunks, and chipmunks generally acclimate easily to human activity and have the ability to avoid use areas. Suitable breeding habitat for birds is located in the Hawk Creek and Kettle and Colville Rivers, but these locations are protected by flat-wake designations or are inaccessible to PWC. In addition, most PWC are not used in the spring due to low water and air temperatures, further minimizing the potential for disturbance to breeding individuals. Fish could potentially be affected through pollutant loads and/or physical disturbance but reinstated use of PWC would create pollutant loads that are well below ecotoxicological benchmarks. Adverse impacts from physical disturbance by PWC use to fish populations and spawning areas at Lake Roosevelt would be short-term, negligible to minor.

Under the proposal adverse impacts to fish and wildlife from PWC use at Lake Roosevelt National Recreation Area would be negligible to minor. (For an explanation of terms such as “negligible” and “adverse” in regard to wildlife and wildlife habitat see pages 123-124 of the EA.) All wildlife impacts would be temporary and short term. Cumulative impacts would also be adverse, and minor to moderate. Therefore, implementation of this proposed rule would not result in impairment to wildlife or wildlife habitat.

This proposed regulation aims to protect threatened or endangered species, or species of special concern, and their habitats from PWC disturbances. The same issues described for PWC use and general wildlife also pertain to special status species. Potential impacts from PWC include inducing flight and alarm responses, disrupting normal behaviors and causing stress, degrading habitat quality, and potentially affecting reproductive success. Special status species at the recreation area include federal or state listed threatened, endangered, or candidate species. Additionally, some species at Lake Roosevelt are designated by the state or other local governments as species of special concern.

The Endangered Species Act (16 U.S.C. 1531 et seq. ) mandates that all federal agencies consider the potential effects of their actions on species listed as threatened or endangered. If the National Park Service determines that an action may adversely affect a federally listed species, consultation with the U.S. Fish and Wildlife Service is required to ensure that the action will not jeopardize the species' continued existence or result in the destruction or adverse modification of critical habitat. No consultation with USFWS is required under this proposed rule.

PWC use at Lake Roosevelt may affect, but is not likely to adversely affect the following species with federal or state status: bald eagle, bull trout, California bighorn sheep, American peregrine falcon, American white pelican, black tern, moose, least bladdery milkvetch, Nuttal's pussytoes, or giant helleborine. The identified special status species are either not permanent residents that are present during times of PWC use, do not have preferred habitat in the areas used by PWC, are not usually accessible, or are generally acclimated to human activity. (For an explanation of terms such as “negligible” and “adverse” in regard to threatened, endangered, or special concern species see pages 129-130 of the EA.)

There would be no effect to all other federal or state listed species including the Canada lynx, gray wolf, grizzly bear, or woodland caribou. None of these species are believed to have resident populations within the recreation area, although habitat may exist in undeveloped forested areas near northern portions of the park.

For example, Lake Roosevelt provides opportunities for wintering activity for bald eagles. The over-wintering population is large while the resident population is low. The highest PWC use occurs in July and August, which does not coincide with wintering bald eagle activity. PWC use may affect, but is not likely to adversely affect bald eagles or their habitat.

Ute ladies'-tresses is not known to occur within the recreation area and potential habitat for the orchid is limited to side drainages where PWC use would not likely occur or would be restricted. Columbia crazyweed historically occurred along shoreline however, these populations were extirpated with the construction of the Grand Coulee Dam and no known populations occur in the recreation area now.

As outlined in the EA, and stated previously, several of the listed species that may occur in the Lake Roosevelt area are either not permanent residents that are present during times of PWC use, do not have preferred habitat in the areas used by PWC, are not usually accessible, or are generally acclimated to human activity. Reinstatement of PWC use within the national recreation area with additional management strategies may affect, but is not likely to adversely affect, any of the listed wildlife or plant species due to additional flat-wake restrictions and prohibited PWC use on the Kettle River. While some disturbance to special status species could occur from PWC use, other visitor activities on the lake and shoreline, or lake operations, these cumulative impacts would not be of sufficient duration or intensity to cause adverse impacts. Reduced impacts would occur in designated areas where PWC would be prohibited or where additional speed or flat-wake restrictions would be enforced.

PWC use would result in negligible adverse effects on shoreline vegetation because shoreline vegetation is generally lacking. (For an explanation of terms such as “negligible” and “adverse” in regard to shorelines see page 135 of the EA.) Sensitive wetland and riparian areas are located in inaccessible or protected areas with regulated PWC access such as in the Kettle River and Crescent Bay Lake. Watercraft activity could cause negligible adverse impacts to shorelines through watercraft-induced wave action or visitor access. Wind-caused wave action and lake level fluctuation could cause negligible impacts through erosion to the shoreline of the open areas of the reservoir. Lake level fluctuations could also have minor adverse impacts to sensitive vegetation in side drainages. Cumulative impacts to tribal managed shorelines at Lake Roosevelt from motorized boating and PWC use would be similar to impacts on NPS-managed areas. Therefore, implementation of this proposed rule would not result in an impairment of shoreline vegetation.

In proposing this regulation for Lake Roosevelt, NPS aims to minimize conflicts between PWC users, other park visitors, and other water recreationists.

Designation of the flat-wake zones and prohibited use on the Kettle River would have negligible to minor adverse impacts on most PWC users within the national recreation area since these areas would either not be accessible or would not be available for use. (For an explanation of terms such as “negligible” and “adverse” in regard to visitor experience see page 139-140 of the EA.) However, the majority of the lake surface would still be accessible and available to PWC users. PWC use was low on the Kettle River prior to the November 2002 closure; therefore, the restricted PWC use under the proposed rule would cause negligible adverse impacts to PWC users. Other visitors to the national recreation area would experience long-term benefits since conflicts between PWC users and other visitors, primarily fishermen using the Kettle River, would be reduced. PWC use on the Kettle River and use of the Napoleon Bridge boat launch has been very low. At times of low water in Lake Roosevelt, such as during the spring drawdown, the upper reaches of the Kettle River are unnavigable by boat because the river becomes too shallow to navigate. Impacts on alternative boat launches located on the main body of Lake Roosevelt within 10 river miles of the mouth of the Kettle River would be minimal. Visitors wanting to launch PWC in the area can use Snag Cove, approximately 6 river miles from the mouth of the Kettle River of the Marcus Island boat launch that is located approximately 2 river miles from the mouth of the Kettle River.

Impacts on Other Boaters. Other boaters at Lake Roosevelt National Recreation Area would interact with PWC operators on an increasing basis as overall boating numbers likely increase over the next ten years. PWC use is expected to increase at the same rate as other boat use; however, PWC would still only comprise approximately 4% of total boats on Lake Roosevelt by 2012. High-use areas for PWC users and boaters include Porcupine Bay, Fort Spokane, Kettle Falls, and Bradbury Beach.

Generally, few non-motorized watercraft (sea kayaks, canoes, and windsurfers) use Lake Roosevelt, so interactions with these user groups would be infrequent. In addition, prohibition of PWC use on Kettle River and the flat wake zone on upper Hawk Creek would provide calmer waters that lead to creeks favored by canoeists and kayakers. Motorized boats are more likely to interact with PWC. The most common area for PWC/boater interaction is near the boat launches, as the majority of motorized boats enter the water at the marinas and then motor into the main body of the lake.

Under this proposed rule, the 200-foot flat-wake zone around launch ramps, marina facilities, and the flat-wake zone on the stretch of the Spokane River at Two Rivers Marina would benefit other boaters (motorized and non-motorized). The prohibited use of PWC on the Kettle River would also benefit other motorized and non-motorized boaters since there would be less physical disturbance to other boaters. Boaters in other areas of the lake would see impacts similar to those previous to the closure to PWC use. Overall, long-term impacts on the experience of other boaters would be beneficial.

Impacts on Other Visitors. Campers, swimmers, water skiers, anglers, hikers, and other shoreline visitors to the lake would interact with PWC users and experience impacts similar to those previous to the closure on PWC use. Swimmers and other persons in the water at shoreline areas that are also popular with PWC would experience beneficial impacts as a result of the increased flat-wake zone designations and areas where PWC use is prohibited. Shoreline campers would experience a beneficial impact especially in areas along the Kettle River due to restrictions on PWC use. Shoreline hikers would experience impacts similar to before the closure or negligible to minor adverse. All visitors would experience negligible to minor beneficial impacts. Overall, implementation of this proposed rule would result in long-term negligible to minor beneficial impacts on other visitors.

Designation of the flat-wake zones, increasing the zone from 100′ to 200′, and prohibited PWC use on the Kettle River would have negligible to minor adverse impacts on most PWC users within the national recreation area since these areas would not be available for normal PWC use; however, the majority of the lake surface would still be accessible and available to PWC users. Other boaters and shoreline users would experience long-term, negligible to minor, beneficial impacts, especially at launch areas and high-use facilities. Swimmers, water skiers, and other persons in the water would experience beneficial impacts on their experience.

Cumulative effects of PWC use, other motorized boats, and other visitors would result in long-term, negligible to minor adverse impacts, while plans to improve or expand facilities would have long-term beneficial impacts on visitor experience within the national recreation area. Cumulative impacts from PWC use, motorized boats, and other visitors would also be applicable to adjacent tribal managed visitor use areas.

Of the 46 incidents on Lake Roosevelt reported to the National Park Service between 1997 and 2002, 17% (or eight incidents) involved a PWC. Further, 55% of the incidents that involved two vessels making contact with each other (five out of nine incidents) involved at least one PWC, and three of the five two-vessel incidents (or 33%) involved two PWC striking each other. One PWC accident resulted in the death of the operator.

PWC speeds, wakes, and operations near other users can pose hazards and conflicts. Proportionally, there have been more complaints received by park staff about unsafe behavior by PWC users than any other watercraft users. Complaints have also been received from anglers, swimmers, and canoeists concerning speed of, and wakes created by, PWC.

Under this proposed rule, PWC use would be reinstated but PWC operation would be prohibited on Kettle River from Hedlund Bridge north to the headwaters and in other areas PWC use would only be allowed to occur at flat-wake speed within 200 feet of launch ramps, marina facilities, campground areas, beaches occupied by swimmers, water skiers and other persons in the NPS designated waters, and on the stretch of the Spokane Arm from 100 feet west of the Two Rivers Marina to 100 feet east of the Fort Spokane launch ramp above the vehicle bridge. In addition, the National Park Service would establish a monitoring program to determine if and when additional regulations would be needed to protect visitor safety. PWC use could potentially be discontinued in certain areas depending on the results of monitoring.

PWC User/Swimmer Conflicts. The greatest potential for conflict between PWC users and swimmers is at the high-use areas near Spring Canyon, Porcupine Bay, Fort Spokane, Kettle Falls, and Bradbury Beach. The 200-foot flat-wake designation around beaches occupied by swimmers would double the flat-wake zone relative to state regulations and would result in a beneficial impact on swimmers at high-use areas. Increasing the flat wake zone around beaches occupied by swimmers is beneficial to swimmers because the water turbulance created by PWC will dissipate significantly before reaching the shore. The remaining park locations would experience little or no conflict between PWC users and swimmers. There are few swimmers in other areas of the park that are frequented by PWC users, including the Kettle River, which PWC use would be prohibited. Thus conflicts in these segments would constitute negligible adverse impacts. (For an explanation of terms such as “negligible” and “adverse” in regard to visitor conflict and safety see page 146-147 of the EA.) Overall, impacts to the safety of swimmers would be long-term, negligible to minor, and beneficial.

PWC Users/Other Boater Conflicts. Impacts on other boaters on the majority of the lake would be long term, negligible to minor adverse. However, flat-wake restrictions near marinas, launch ramps, and on the stretch of the Spokane Arm near the Two Rivers marina and the prohibition of PWC use on Kettle River from Hedlund Bridge north to the headwaters would reduce the potential for conflict with other boaters in these areas. Impact on other boaters in the launch areas and marinas under this proposed rule would be long-term, negligible to minor beneficial.

Overall, PWC use would have a negligible to minor adverse impact on conflicts and safety of boat users within the national recreation area. The restrictions in this proposed rule would have beneficial impact on conflict and safety on boaters concentrated at high use areas and boat launches.

PWC Users/Other Visitor Conflicts. PWC users and other visitors would interact under this proposed rule; however, the prohibited use on the Kettle River, in addition to the 200 foot flat-wake zone designations around waterskiers, beaches occupied by swimmers and persons in the water would result in a long term beneficial impact on other visitors. Shoreline campers would also experience a beneficial impact on safety and conflict issues under this propose rule. Overall, implementation of this proposed rule would have a beneficial impact on the safety of swimmers.

Reinstated PWC use with the additional restriction proposed in this rule would have short- and long-term, negligible to minor beneficial impacts on visitor conflicts and safety near the designated swim areas, boat launches, marinas, and campgrounds as well as on other visitors to Lake Roosevelt National Recreation Area. Cumulative impacts to visitor conflict and safety in tribal managed areas would be the same as before the closure on PWC use and the proposed restrictions would not affect tribal managed areas. Cumulative impacts related to visitor conflicts and safety would be negligible to minor adverse for all NPS user groups in the short and long term, particularly near the high use areas.

Under this proposed rule, Lake Roosevelt plans to manage PWC use and access to protect cultural resources including sacred sites important to Native Americans.

Reinstating PWC use within the national recreation area would have the potential to affect archeological resources by providing visitor access to resources or by causing wave action and erosion. However, potential impacts directly attributable to continued unrestricted PWC use are difficult to quantify. The most likely impact to archeological sites would result from PWC users landing in areas otherwise inaccessible to most other national recreation area visitors and illegally collecting or damaging artifacts. According to park staff, looting and vandalism of cultural resources is not a substantial problem. PWC-induced wave action is also not considered to be a large threat to archeological resources within the recreation area, as most PWC use does not occur during lake drawdowns when resources are most vulnerable.

Under the proposed rule, the creation or extension of flat-wake restrictions would reduce PWC-induced wave action. Project by project inventories and a monitoring program would determine if and when additional regulations would be necessary to protect cultural resources, resulting in minor to moderate beneficial impacts. Long-term impacts to archeological resources would continue to be minor. (For an explanation of terms such as “minor” and “moderate” in regard to cultural resources see pages 152-153 the EA.)

Although additional flat-wake restrictions and use prohibitions on the Kettle River within the national recreation area would reduce wave action in some areas and provide a minor beneficial impact, PWC use could have minor adverse impacts on listed or potentially listed archeological resources from possible illegal collection and vandalism. Continuing PWC use under a special regulation is not expected to negatively affect the overall condition of cultural resources due to resource monitoring that would be conducted. Archeological resources in areas managed by the Colville Confederated Tribes and Spokane Tribe of Indians could experience minor to moderate adverse impacts as a result of PWC and other visitor use. All impacts would occur over the short and long term. Therefore, implementation of this proposed rule would not result in an impairment of cultural resources.

This proposed rule would continue PWC use in a way that would minimize the socioeconomic effects to park visitors and local businesses. Lake Roosevelt National Recreation Area experiences relatively low rates of PWC visitation. PWC make up only approximately 4% of motorized watercraft that recreate on Lake Roosevelt. There are other destinations in the area that are more popular with PWC users such as Lake Chelan and other parks of the Columbia River. No PWC sales or rental shops are located on the banks of Lake Roosevelt, and the nearest rental facility is located on Banks Lake only three miles away.

If PWC use decreases as a result of the restrictions and the closure on the Kettle River, then the suppliers of PWC sales and rental services would be adversely affected. It is unlikely that the proposed restrictions would have substantial impacts on the sales shops because they are located 60 to 100 miles away from the national recreation area and nearby substitute areas are more popular locations for PWC use.

Under the proposed rule it is anticipated that decrease in PWC use as a result of the regulation would be essentially zero because the prohibited use on the Kettle River and implementation of the extension of the flat-wake zones would not affect the number of visitors to the lake that use PWC and the majority of the recreation area would still be open for PWC use. The economic analysis shows an average annual economic benefit of $147,000 to the local economy upon implementation of the final rule.

This proposed rule continues PWC use in a manner that would have no adverse effects related to environmental justice. PWC users at the national recreation area represent a cross-section of ethnic groups and income levels from the surrounding counties. Under the proposed rule all PWC user groups would continue to have access to the lake, except Crescent Bay Lake that is closed to all motorized watercraft use and the Kettle River from Hedlund Bridge north to the headwaters that is closed to PWC use.

There would be no adverse effects related to environmental justice since reinstating PWC use within the national recreation area would not disproportionately affect minority or low income populations. Recreational use facilities managed by the Indian Tribes would continue to be available to PWC users, providing long-term beneficial impacts to tribal managed facilities on both NPS and tribal lands from the reinstatement of PWC use. Reduced conflicts with other watercraft would result from the dispersion of PWC use from tribal waters to other areas of the lake, resulting in a long-term beneficial impact.

This proposed rule manages PWC use in a manner that minimizes the conflicts with state, tribal, and local requirements to the extent possible. PWC use under the proposed rule would be managed similar to state boating regulations with additional management prescriptions. These management strategies are more restrictive than state PWC regulations and include additional flat-wake speed zoning and areas of restricted use. The prescriptions are within the NPS legal mandate to regulate recreational activities under their jurisdiction, and there would be minimal conflict with state or other federal policies or regulations. Conflicts with regulations and policies of the Spokane Tribe of Indians and the Confederated Tribes of the Colville Reservation would exist due to differences in restrictions on the National Park Service versus tribal waters, which are contiguous.

Waters adjacent to the NPS-managed waters of Lake Roosevelt are under tribal jurisdiction and would not be included in the prescriptions implemented for PWC use on NPS-administered waters under this proposed rule. This could potentially cause some confusion to PWC users because of the difference in regulations within the same body of water. Adverse impacts related to differences in tribal requirements or policies would be negligible to minor. The tribes enforce Washington State boating laws and regulations so differences in management prescriptions for the NPS or tribal water areas would be minimal since NPS regulations are generally consistent with state laws and regulations. There would be no conflict with other federal, state, or local PWC regulations or policies, and adverse impacts would be negligible. The NPS will work with the tribes to try to develop regulations that are consistent among all jurisdictions on the waters of Lake Roosevelt to reduce the confusion to the public. In addition, the proposed rule would have negligible to minor adverse impacts on park operations. Staffing would continue at current levels, though increased enforcement efforts would likely be required to implement additional flat-wake zoning and prohibited PWC use on the Kettle River. Additional educational efforts would also be required to inform PWC users of new regulations.

Under the proposed rule, PWC use would be allowed throughout the recreation area, with certain restrictions. These restrictions are: Crescent Bay Lake, the Kettle River from Hedlund Bridge north to the headwaters (no PWC use), and Upper Hawk Creek from the waterfall near the campground through the area known as the “narrows” (flat-wake speed restriction). This proposed rule on PWC use on Lake Roosevelt would only apply to waters managed by the National Park Service and would not apply to waters that are managed by the Colville Confederated Tribes and Spokane Tribe of Indians.

As was the case prior to the November 2002 closure, Crescent Bay Lake continues to be closed to all motorized uses and Upper Hawk Creek continues to be flat wake for all motorized watercraft. The launch and retrieval of PWC would continue to be permitted only at designated boat launch ramps within Lake Roosevelt National Recreation Area. However, under the proposed rule, launching from Napoleon Bridge Launch would be prohibited because PWC use would not be allowed in the Kettle River. Previously, the NPS restricted PWCs to flat-wake speed within 100′ of launch ramps, marina facilities, campground areas, swim beaches, water skiers, or other persons in the water under Washington State regulations. The proposed rule increases the flat-wake distance in those same areas to 200′. PWC users would be able to land anywhere along the shoreline, except in designated swimming areas. Visitor education programs, such as boater safety education, that are designed to promote safe and environmentally friendly boating practices would continue. The programs would include personal contacts, newspaper articles, posting of information on boat launch bulletin boards and formal educational programs.

In addition to the above restrictions, operation of PWC would only be allowed to occur at flat-wake speeds in the stretch of the Spokane Arm from 100 feet west of the Two Rivers Marina on the downstream end, to 100 feet east of the Fort Spokane launch ramp on the upstream end, above the vehicle bridge.

In the future, PWC use could be discontinued in specific areas managed by National Park Service that experience cultural or natural resource degradation or public safety issues should monitoring of such areas reveal unacceptable impacts.

Finally, other NPS boating regulations and State and other federal watercraft laws and regulations would continue to be enforced, including regulations that address reckless or negligent operation, excessive speed, hazardous wakes or washes, hours of operation, age of driver and distance between vessels.

The preferred alternative (Alternative B) and another alternative (Alternative A) were analyzed to determine the economic impacts of allowing the use of personal watercraft (PWC) in Lake Roosevelt National Recreation Area (LARO). 1 Alternative C, which would maintain a ban on PWC in LARO, represents the baseline for this analysis. The economic impacts of Alternatives A and B are measured relative to that baseline. Alternative A would reinstate PWC use in LARO as previously managed prior to the ban subject to specific location, flat wake, launch and retrieval, and operating restrictions. Alternative B would also reinstate PWC use, but includes additional location and flat wake restrictions to mitigate watercraft safety and visitor health and safety concerns, and to enhance the overall visitor experience. Additionally, Alternative B would establish a monitoring program to determine any future impacts of allowing PWC use in LARO.

The primary beneficiaries of Alternatives A and B are the visitors who would use PWCs within the recreation area if permitted, PWC users in substitute areas outside LARO where individuals displaced from LARO ride because of the ban, and the businesses that serve PWC users. All visitors using PWCs in LARO prior to the ban are assumed to regain their full economic value for PWC use in LARO under both Alternatives A and B. PWC users who currently ride in substitute areas outside LARO are assumed to gain some economic value if these areas are less crowded than under baseline conditions due to reinstating PWC use in LARO. Finally, suppliers of PWC rentals, sales, and service, as well as local hotels, restaurants, gas stations, and other businesses that serve PWC users, will likely experience an increase in business under Alternatives A and B.

While beneficiaries may gain more economic value under Alternative A than Alternative B due to fewer restrictions, NPS was unable to quantify any differences, and considers the benefits of those two alternatives to be similar. For both Alternatives A and B, PWC users are expected to gain a total present value of benefits between $1,076,400 and $1,311,300 over the next ten years, depending on the discount rate used. 2 Businesses are expected to gain a total present value of benefits between $9,600 and $78,000, depending on the discount rate used. The total present values of these benefits are presented in Table 1, and their amortized values per year are given in Table 2.

All sea turtles that occur in U.S. waters are listed as either endangered or threatened under the ESA. Kemp's ridley ( Lepidochelys kempii ), leatherback ( Dermochelys coriacea ), and hawksbill ( Eretmochelys imbricata ) sea turtles are listed as endangered. Loggerhead ( Caretta caretta ) and green ( Chelonia mydas ) sea turtles are listed as threatened, except for populations of green turtles in Florida and on the Pacific coast of Mexico, which are listed as endangered. Under the ESA and its implementing regulations, taking listed sea turtles—even incidentally—is prohibited, with exceptions identified in 50 CFR 223.206 for threatened sea turtles. The incidental take of endangered species may only legally be authorized by an incidental take statement or an incidental take permit issued pursuant to section 7 or 10 of the ESA.

On June 17, 2002, based upon the best available information on sea turtle and pound net interactions at the time, NMFS issued an interim final rule that prohibited the use of all pound net leaders measuring 12 inches (30.5 cm) and greater stretched mesh and all pound net leaders with stringers in the Virginia waters of the mainstem Chesapeake Bay and portions of the Virginia tributaries from May 8 to June 30 each year (67 FR 41196). Included in this interim final rule was a year-round requirement for fishermen to report all interactions with sea turtles in their pound net gear to NMFS within 24 hours of returning from a trip, and a year-round requirement for pound net fishing operations to be observed by a NMFS-approved observer if requested by the Northeast Regional Administrator. The interim final rule also established a framework mechanism by which NMFS may make changes to the restrictions and/or their effective dates on an expedited basis in order to respond to new information and protect sea turtles. Under this framework mechanism, if NMFS believes that sea turtles may still be vulnerable to entanglement in pound net leaders after June 30 of any given year, the Assistant Administrator, NOAA, (AA) may extend the effective dates of the restrictions established by the regulations. Additionally, if monitoring of pound net leaders during the time frame of the gear restriction, May 8 through June 30 of each year, reveals that one sea turtle is entangled alive in a pound net leader less than 12 inches (30.5 cm) stretched mesh or that one sea turtle is entangled dead and NMFS determines that the entanglement contributed to its death, then NMFS may determine that additional restrictions are necessary to conserve sea turtles and prevent entanglements. As a result of sea turtle entanglements observed during the spring of 2003, NMFS issued a temporary final rule restricting all pound net leaders throughout the Virginia Chesapeake Bay and portions of the tributaries from July 16 to July 30, 2003, pursuant to the framework mechanism of the 2002 interim final rule (68 FR 41942, July 16, 2003).

Sea turtles have been documented entangled in pound net leaders. Data collected in 1983 and 1984 found turtle entanglement in pound nets with small mesh leaders (defined as 8 to 12 inch (20.3 to 30.5 cm) stretched mesh) to be insignificant, but in 173 of the pound nets examined with large mesh leaders (defined as >12 to 16 inch (>30.5 to 40.6 cm) stretched mesh), 30 turtles were found entangled (0.2 turtles per net; Bellmund et al. , 1987). This study also found that in 38 nets examined with stringer mesh, 27 turtles were documented entangled (0.7 turtles per net). The sampling area was concentrated in the western Chesapeake Bay, with some sampling occurring in other portions of the Virginia Chesapeake Bay. Surveys in 1979 and 1980 also found that most of the pound net leaders that captured sea turtles consisted of large mesh (12 to 16 inches (30.5 to 40.6 cm)) and were found in the lower Chesapeake Bay (Lutcavage 1981).

In recent years, pound nets have been observed, and sea turtles have been documented in the leaders. During the spring of 2001, with limited monitoring effort, a NMFS observer reported finding five moderately to severely decomposed loggerhead turtles against four different large mesh pound net leaders (approximately 13 inch (33 cm) mesh) along the Eastern shore of Virginia in early June. Given the decomposition state and lack of multiple wrapped, entangling line around the turtles, these turtles were determined to be not entangled in the leaders, and the cause of death was uncertain. Virginia Marine Resources Commission (VMRC) law enforcement agents also documented one live and three dead sea turtles in pound net leaders along the Eastern shore during the spring of 2001. The live turtle was entangled in a leader with greater than 12 inches (30.5 cm) stretched mesh, but the leader mesh size of the other entanglements was not recorded. Additionally, during June of 2000, VMRC law enforcement agents reported disentangling two live sea turtles from two Eastern shore leaders with greater than 12 inches (30.5 cm) stretched mesh.

To better understand the interactions between sea turtles and pound net gear, NMFS conducted pound net monitoring during the spring of 2002 and 2003. In 2002, NMFS monitored the active pound nets (n=70) throughout the Virginia Chesapeake Bay from April 25 to June 1. As the 2002 interim final rule was not yet in place, approximately 8 of the leaders surveyed had stretched mesh greater than or equal to 12 inches (30.5 cm) or leaders with stringers. Eleven sea turtles were found in pound net gear, but not all of the mortalities could be directly attributed to interactions with pound nets. Four sea turtles were found entangled in leaders, including two dead Kemp's ridley and two dead loggerhead sea turtles. One of the Kemp's ridleys was found in a leader with 8 inch (20.3 cm) stretched mesh, one loggerhead was found in a leader with stringers, and the other two animals were found in leaders with 14 inch (35.6 cm) stretched mesh. Based upon necropsy reports, constriction wounds, and the magnitude of entanglement, entrapment in pound net leaders was determined to be the cause of death of these animals. Two additional loggerhead sea turtles were found alive in pound net leaders, impinged on the leaders with their head and front flippers through the mesh. These two animals were observed as not being able to swim off of the leaders under their own ability. One moderately decomposed loggerhead was found in the top line of a leader, but given the lack of tight multiple wraps of line around the turtle, it was inconclusive as to whether it was entangled before death or whether it washed into the net after having died elsewhere. Four moderately to severely decomposed loggerheads were found in leaders, but due to their decomposition state and lack of entanglement in the mesh, it appeared that the animals floated into the nets. These four sea turtles were not considered as entangled in or impinged on the pound net leaders.

From April 21 to June 11, 2003, NMFS monitored the active pound net leaders (n=56) with stretched mesh measuring less than 12 inches (30.5 cm). This monitoring effort resulted in the documentation of 17 sea turtles found in pound net leaders. Of the 17 sea turtles, five sea turtles were entangled in pound net leaders, of which two were loggerheads (one dead) and three were Kemp's ridleys (two dead). There is sufficient information to conclude that the death of these turtles was attributable to entanglement in the pound net leaders given the degree of entanglement and multiple wrapping of line around their flippers, their decomposition state (fresh dead to moderately decomposed), and their buoyancy (negatively buoyant, which typically suggests recent mortality). Additionally, 12 sea turtles were found held against, or impinged on, pound net leaders by the current. Of these 12 impingements, 10 were loggerhead sea turtles (one dead), one was an alive Kemp's ridley sea turtle, and one alive sea turtle's species identification was unable to be determined. Two of these live animals had their head and/or flipper through the leader mesh, but when observed, the line was not wrapped multiple times around the turtle. As the impinged turtles were not observed being able to move vertically on the net, if a turtle could not breathe from the position where it was impinged, it would have a low likelihood of survival if it remained on the net for longer than approximately an hour. Of the 11 live impingements, approximately 7 were found underwater, unable to reach the surface to breathe, with an average of 3 hours until slack tide. Eleven of the 17 incidents involved leaders measuring 11.5 inches (29.2 cm) stretched mesh, while six of the sea turtles were entangled in or impinged on 8 inch (20.3 cm) stretched mesh leaders. In 2002 and 2003, most of the observed sea turtles were found in nets along the Eastern shore of Virginia, but three turtles were found in leaders in the Western Chesapeake Bay.

Sea turtle entanglements in pound net leaders are difficult to detect. The sea turtles previously observed in leaders were found at depths ranging from the surface to approximately 6 feet (1.8 m) under the surface. The ability to observe a turtle below the surface depends on a number of variables, including water clarity, sea state, and weather conditions. Generally, turtles entangled more than a few feet below the surface cannot be observed due to the poor water clarity in the Chesapeake Bay. In 2001 and 2002, side scan sonar was used to attempt to detect sub-surface sea turtle entanglements; no verified sea turtle acoustical signatures were observed during these surveys (Mansfield et al. , 2002a; Mansfield et al. , 2002b). However, the effectiveness of side scan sonar surveys are limited by weather and sea conditions ( e.g., suspended sediments are reflected by the sonar and monitoring is only successful in calm seas), and the acoustical signature may vary with the sea turtle's orientation and location in the net, size, and decomposition state (Mansfield et al. 2002a; Mansfield et al. 2002b). Sonar surveys have potential in detecting sub-surface turtle entanglements and impingements, but given the caveats, the results obtained to date must be treated cautiously. While most of the previously observed sea turtles were found near the surface, it remains unclear whether the visual surface monitoring biased the location of the take results. Sea turtles may be found throughout the water column given their preferences for water temperature ( e.g., generally greater than 11° C) and foraging ( e.g., loggerheads and Kemp's ridleys in Virginia are primarily benthic foragers). Mansfield and Musick (2003) found that 7 sea turtles (6 loggerheads and 1 Kemp's ridley) tracked in the Virginia Chesapeake Bay from May 22 to July 17, 2002, dove to maximum depths ranging from approximately 13.1 ft (4 m) to 41 ft (12.5 m). While the percentage of time sea turtles spend at the surface compared to at depth is still being clarified, sea turtles may be found throughout the water column. As pound net leader characteristics are generally consistent from top to bottom, it is probable that more sea turtles are in pound net leaders than are observed or reported and the previous monitoring efforts represent a minimum record of sea turtle entanglement and impingement.

The 2002 and 2003 monitoring results documenting the entanglement of sea turtles in leaders with less than 12 inches (30.5 cm) stretched mesh represents new information not previously considered in prior assessments of the Virginia pound net fishery, and entanglements in and impingements on these leaders appear to be more of a significant problem than originally believed. As such, additional restrictions are warranted to prevent sea turtle entanglement in and impingement on pound net gear.

High strandings of threatened and endangered sea turtles are documented on Virginia beaches each spring. The magnitude of this stranding event has increased in recent years. During May and June, total reported Virginia sea turtle strandings were 84 in 1995, 85 in 1996, 164 in 1997, 183 in 1998, 129 in 1999, 161 in 2000, 256 in 2001, and 180 in 2002. In 2003, preliminary data indicate that 312 dead sea turtles stranded on Virginia beaches during May and June, with most of these occurring during the latter half of June. Strandings have also been elevated in July, generally the first half of the month. For instance, in 2003, the stranding peak occurred during the last two weeks of June, but strandings remained consistent through the second week of July, with a preliminary total of 48 turtles stranding from July 1 to 15. Furthermore, from 1996 to 2003, strandings were generally elevated during the first half of July, with an average of 23 strandings documented from July 1 to 15. In the latter half of July, strandings typically decrease; from 1996 to 2003, an average of 11 strandings were documented from July 16 to 31.

Most of the stranded sea turtles in Virginia have been threatened loggerheads, but endangered Kemp's ridley, green and leatherback sea turtles have also stranded. Out of 1,559 total strandings in May and June from 1995 to 2003, 1,372 loggerheads, 108 Kemp's ridleys, 28 leatherbacks, 1 green, and 50 unidentified turtles were found in Virginia. The majority of stranded turtles have been of the juvenile/immature life stage. Most of the stranded turtles reported in Virginia during the spring have been moderately to severely decomposed. For instance, in the spring of 2003, approximately 85 percent of the strandings were either moderately to severely decomposed, compared to approximately 6 percent that were fresh dead. The ability to conduct necropsies is compromised by the condition of the stranded animals, and severely decomposed turtles are not usually necropsied. The majority of the stranded turtles that were examined by necropsy in the spring of previous years had relatively good fat stores and full stomachs/digestive tracts, suggesting that the animals were in good health prior to their death.

From mid-May to mid-July 2003, approximately 47 percent of the stranded animals were found along the Chesapeake Bay side of the Eastern shore of Virginia, 23 percent were found in the Virginia Beach ocean area, 15 percent in the Western Bay, 8 percent along the oceanside of the Eastern shore, and 7 percent in the southern Chesapeake Bay areas. While the distribution of sea turtle strandings in Virginia varies slightly from year to year, there has been a high concentration of stranded sea turtles found along the Eastern shore in recent years. It is possible that some Virginia Chesapeake Bay turtle strandings are swept into the Chesapeake Bay from elsewhere, as the water patterns and currents entering the Chesapeake Bay could concentrate sea turtle strandings around the mouth with certain wind conditions (Valle-Levinson et al. , 2001). Similarly, southwesterly winds result in surface water outflows throughout the entrance to the Chesapeake Bay, which could result in sea turtles being carried out of the Chesapeake Bay. However, it is likely that in the Virginia Chesapeake Bay, most mortalities have occurred relatively close to the stranding location (Lutcavage 1981). A NMFS observer tagged 6 floating dead sea turtles during the spring of 2003, and 2 sea turtles were recovered the next day - one stranded approximately 500 yards (457 m) away on the Eastern shore and another was found 6-7 nautical miles (11.1-13 km) south of the Western Bay tagging location.

NMFS has evaluated the potential sea turtle mortality sources in Virginia waters, and will continue to do so in the future. While some turtles with traumatic carapace injuries, propeller-like wounds or imbedded fish hooks have been documented each year, no cause of mortality is obvious for the majority of turtles that strand. Determining the cause of death in stranded sea turtles is difficult, given the level of decomposition of most stranded turtles and the lack of evidence, due in part to sea turtles' anatomy ( e.g., hard carapace, scaly skin). However, the circumstances surrounding the spring strandings are consistent with fishery interactions as a likely cause of some perhaps a significant number of sea turtles deaths and, therefore, strandings. These circumstances include relatively healthy turtles prior to the time of their death, a large number of strandings in a short time period, no external wounds on the majority of the turtles, no common characteristic among stranded turtles that would suggest disease as the main cause of death, and turtles with finfish in their stomachs (which has been believed to indicate interactions with fishing gear (Bellmund et al. , 1987) or bycatch discarded from vessels (Shoop and Ruckdeschel, 1982)).

While a concentration of strandings has been consistently found in the vicinity of pound nets, and a number of dead floating sea turtles were documented around pound nets in recent years, a cause and effect relationship between pound net interactions and high spring strandings cannot be statistically derived based on the available data. However, NMFS has documented that fishing with pound net leaders results in lethal and non-lethal take of sea turtles. NMFS concludes that this constitutes sufficient evidence to form the basis for these proposed restrictions on pound net leaders.

Sea turtles have been documented entangled in and impinged on pound net leaders, and the purpose of this proposed action is to prevent sea turtle entanglements in and impingements on Virginia pound net gear. The documented interactions between sea turtles and pound net leaders, as well as the annual Virginia spring strandings, are of concern for the following reasons: (1) All of the entangled, impinged and stranded animals are listed as either endangered or threatened under the ESA which means these species are in danger of extinction or likely to become endangered; (2) the level of strandings in Virginia has been elevated the last seven years, and there is no reason to believe that high spring strandings will abate in future years without regulatory action; (3) sea turtles have been observed entangled in leader mesh sizes smaller than what is currently restricted; (4) sea turtles have been observed impinged on leaders by the current, a phenomenon not previously believed to occur with such frequency, and impingements are likely to continue to occur on small mesh leaders in areas where impingements have been documented; (5) the greatest percentage of Virginia spring strandings in recent years has been along the southern tip of the Eastern shore, where a large number of pound nets are located; (6) approximately 50 percent of the Chesapeake Bay loggerhead foraging population is composed of the northern subpopulation, a subpopulation that may be declining; and (7) most of the stranded turtles have been juveniles, a life stage found to be critical to the long term survival of the species.

Most loggerheads in U.S. waters come from one of five genetically distinct nesting subpopulations. The largest loggerhead subpopulation occurs from 29° N. lat. on the east coast of Florida to Sarasota on the west coast and shows recent increases in numbers of nesting females based upon an analysis of annual surveys of all nesting beaches. However, a more recent analysis limited to nesting data from the Index Nesting Beach Survey program from 1989 to 2002, a period encompassing index surveys that are more consistent and more accurate than surveys in previous years, has shown no detectable trend (B. Witherington, Florida Fish and Wildlife Conservation Commission, pers. comm., 2002). Thus, it is unclear whether the increase in documented sea turtle mortalities in Virginia could partly be a function of the status of the South Florida subpopulation of loggerheads, which make up approximately 50 percent of the loggerheads found in the Chesapeake Bay. The northern subpopulation that nests from northeast Florida through North Carolina is much smaller, and nesting numbers are stable or declining. Genetic studies indicate that approximately one-half of the juvenile loggerheads inhabiting Chesapeake Bay during the spring and summer are from the smaller, northern subpopulation (TEWG, 2000; Bass et al. , 1998; Norrgard, 1995). Approximately 3,800 nesting females are estimated for the northern subpopulation of loggerhead sea turtles (TEWG, 2000). The impact of the high level of mortality experienced by loggerhead turtles each spring off Virginia on the population's ability to recover is of significant concern. The northern subpopulation produces 65 percent males, while the South Florida subpopulation is estimated to produce 20 percent males (NMFS SEFSC, 2001). As males do not appear to show the same degree of site fidelity as females, the high proportion of males produced in the northern subpopulation may be an important source of males for all loggerheads inhabiting the Atlantic. The loss of the male contribution from the northern subpopulation may restrict gene flow and result in a loss of genetic diversity to the loggerhead population as a whole. The loss of females from the northern subpopulation may preclude future reproduction, reducing the likelihood of both future survival and recovery of the northern subpopulation of loggerheads. Given the vulnerability of these subpopulations to chronic impacts from human-related activities, the high level of spring sea turtle mortality in Virginia must be reduced to help ensure that these subpopulations of loggerheads will recover.

Most of the turtles stranding in Virginia waters during the spring are of the juvenile/immature life stages. The specific age at maturity for most sea turtles is unknown; the age of maturity for loggerheads occurs from approximately 21-35 years (TEWG, 2000). Studies have concluded that sea turtles must have high annual survival as juveniles and adults to ensure that sufficient numbers of animals survive to reproductive maturity to maintain stable populations (Crouse et al. , 1987; Crowder et al. , 1994; Crouse, 1999). Given their long maturation period, relatively small decreases in annual survival rates of both juvenile and adult loggerhead sea turtles may destabilize the population, thereby potentially reducing the likelihood of survival and recovery of the population. As such, the historical high level of mortality in Virginia plus the increase in loggerhead mortality documented during the last several years may negatively affect the recovery of the loggerhead population.

To conserve sea turtles, the AA proposes to prohibit the use of all pound net leaders from May 6 to July 15 each year in the Virginia waters of the mainstem Chesapeake Bay, south of 37° 19.0′ N. lat. and west of 76° 13.0′ W. long., and all waters south of 37° 13.0′ N. lat. to the Chesapeake Bay Bridge Tunnel (extending from approximately 37° 05′ N. lat., 75° 59′ W. long. to 36° 55′ N. lat., 76° 08′ W. long.) at the mouth of the Chesapeake Bay, and the portion of the James River downstream of the Hampton Roads Bridge Tunnel (I-64; approximately 36° 59.55′ N. lat., 76° 18.64′ W. long.) and the York River downstream of the Coleman Memorial Bridge (Route 17; approximately 37° 14.55′ N. lat, 76° 30.40′ W. long.). Additionally, the AA proposes to prohibit the use of all leaders with stretched mesh greater than or equal to 8 inches (20.3 cm) and leaders with stringers from May 6 to July 15 each year in the Virginia waters of the Chesapeake Bay outside the aforementioned closed area, extending to the Maryland-Virginia State line (approximately 37° 55′ N. lat., 75° 55′ W. long.) and the Rappahannock River downstream of the Robert Opie Norris Jr. Bridge (Route 3; approximately 37° 37.44′ N. lat, 76° 25.40′ W. long.), and from the Chesapeake Bay Bridge Tunnel to the COLREGS line at the mouth of the Chesapeake Bay.

This prohibition of pound net leaders would be effective from 12:01 a.m. local time on May 6 through 11:59 p.m. local time on July 15 each year. For the duration of this proposed gear restriction, fishermen would be required to stop fishing with pound net leaders altogether or pound net leaders measuring 8 inches (20.3 cm) or greater stretched mesh and pound net leaders with stringers, depending upon the location of their pound net site as indicated above.

NMFS has sufficient evidence to conclude that there is a localized interaction between sea turtles and pound nets along the Eastern shore of Virginia and in the Western Chesapeake Bay. Sea turtles have been observed in pound net gear along the Eastern shore in recent years. Sea turtles have also been found impinged on and entangled in leaders in the Western Bay, during recent monitoring studies as well as surveys in the 1980s. Entanglements in and impingements on pound net leaders have been documented in leaders with as small as 8 inch (20.3 cm) stretched mesh and in leaders with stringers. Impingements occur when the sea turtles are held against the net by the current, which could happen with any mesh size ( i.e., on leaders smaller than 8 inches (20.3 cm) stretched mesh) in areas where impingements were previously documented ( e.g., the southern portion of the Eastern shore, where currents appear to be strong). At this time, NMFS cannot determine the current strength that results in impingements, but available data show that impingements have only occurred in certain areas, locations where observer reports and anecdotal information suggest currents are “strong”. During 2003 monitoring efforts, there were few active pound nets found in the southern Chesapeake Bay outside the Eastern shore and Mobjack Bay (in the Western Chesapeake Bay) areas. The area where leaders would be prohibited was defined to exclude those pound nets in locations where sea turtles have never been found entangled or impinged, despite monitoring efforts. To prevent entanglements and impingements (leading to the potential subsequent drowning of sea turtles), NMFS proposes to prohibit all pound net leaders in a portion of the southern Chesapeake Bay.

While there have not been any documented entanglements or impingements outside the southern Chesapeake Bay area where all pound net leaders would be prohibited, NMFS is proposing to restrict leader mesh size in the remainder of the Virginia Chesapeake Bay to less than 8 inches (20.3 cm) stretched mesh and prohibit the use of stringers, because the best available information shows that sea turtles have been entangled in pound net leaders with stretched mesh 8 inches (20.3 cm) and greater and in leaders with stringers. Given that gillnets with less than 8 inches (20.3 cm) stretched mesh have been found to entangle sea turtles (Gearhart, 2002), there is the possibility that entanglements in leader mesh smaller than 8 inches (20.3 cm) stretched mesh could occur. However, given the differences between gillnet gear and pound net leaders ( e.g., monofilament versus multifilament material; drift, set, and runaround versus fixed stationary gear; gilling vs. herding fishing method), the lack of reported entanglements in pound net leaders with stretched mesh less than 8 inches (20.3 cm), and the lack of reported impingements in the area in which leader mesh size would be restricted, NMFS believes that allowing the use of leaders but restricting the stretched mesh size to less than 8 inches (20.3 cm) is protective of sea turtles. NMFS does not expect sea turtle impingements on pound net leaders to occur outside the leader prohibited area given the lack of observed impingements on pound net leaders, which appears to be related to geographical location and current strength. No sea turtles have been found entangled in or impinged on the pound or heart of pound net gear to date, and as such, the use of those components of the pound net gear is not restricted.

From 1994 to 2003, the average date of the first reported stranding in Virginia was May 13. However, sea turtle mortality would have occurred before the animals stranded on Virginia beaches. In order for the proposed pound net restrictions to reduce sea turtle interactions with pound net leaders, the proposed measures should go into effect at least one week prior to the stranding commencement date, or on May 6 each year. Implementing restrictions on this date would ensure protective measures would be in place at the time when sea turtles are expected to be in the Chesapeake Bay and are becoming vulnerable to mortality sources. Note that this is two days earlier than the date of the restrictions enacted in the 2002 interim final rule, as the date was modified based upon updated stranding information. Additionally, water temperature data support implementation of the proposed measures on May 6. Mansfield et al. (2001) and Mansfield and Musick (2003) state that analyses by the Virginia Institute of Marine Science have estimated that sea turtles migrate into the Chesapeake Bay when water temperatures warm to approximately 16 to 18° C. However, sea turtles do frequent waters as cool as 11° C (Epperly et al. , 1995). From 1999 to 2003, the average water temperature on May 6 at the NOAA National Ocean Service Kiptopeke, Virginia station was 15.7° C, with average water temperatures increasing to 16.3° C on May 7 and 17.1° C on May 8. An additional analysis conducted by the NMFS Southeast Fisheries Science Center found that in week 18 (April 30 to May 6) and week 19 (May 7 to May 13), approximately 85 percent and 90 percent, respectively, of the area encompassing the mouth of the Chesapeake Bay (from the COLREGS line to the 20 m (65.6 ft) depth contour) contained sea surface temperatures of 11° C and warmer (NMFS, unpub. data, 2003). This indicates that water temperatures around the mouth of the Chesapeake Bay are within sea turtles' preferred temperature range in early May and, therefore, supports the effective date of the proposed regulations.

A previous study in 1983 and 1984 found that sea turtle entanglements in pound net gear increased slowly until early June, then increased sharply and reached a plateau by late June, with few entanglements occurring after June (Bellmund et al. , 1987). Since the early 1980s, there has not been a directed pound net monitoring effort from mid-June to July, but monitoring for sea turtle strandings has continued during this time frame. As mentioned, typically the peak of Virginia strandings has been from mid-May to mid-June. However, strandings data show that the peak can occur earlier and later. For instance, in 2003, the stranding peak occurred during the last two weeks of June and strandings remained consistent through the second week of July ( e.g., 48 sea turtles stranded from July 1-15, 2003). The 2003 stranding peak was 10-15 days later than in 2001 and 2002 (Swingle and Barco, 2003). Given that sea turtle presence in the Chesapeake Bay is dependent upon water temperature, which makes the stranding peak somewhat variable, it is important to ensure sea turtles are protected during the period of apparent vulnerability (as indicated by elevated strandings). While there is some concern that entanglements could continue until the end of July or throughout the sea turtle residency period in the Chesapeake Bay, based upon the available data on sea turtle entanglements, impingements, and stranding patterns, the greatest potential for sea turtles to interact with pound net leaders would occur during May and June, and extend into the first half of July.

The time frame of the 2002 interim final rule extended until June 30. This end date was based on the previous Bellmund et al. (1987) study and the historical stranding patterns, showing that documented sea turtle entanglements and strandings, respectively, taper off at the end of June. The 2002 interim final rule also contained a framework mechanism that enabled NMFS to extend the regulations for up to 30 days, but that measure was not included in this proposed action due to difficulties experienced with enacting regulations on a real time basis. Given the variability in the stranding peak, the elimination of the framework mechanism, and the need to be protective of these listed species, the proposed measures would extend to July 15. Implementation of the proposed measures during this time period is expected to prevent sea turtle entanglement in and impingement on pound net leaders in the spring. Note that NMFS is seeking public comments not only on the measures included in this proposed rule ( e.g., the closure to the use of all pound net leaders, its geographical extent, the restrictions on leader mesh size and stringers, and their geographical extent), but also on the suitability of the time frame of the proposed measures. NMFS will consider comments on those topics as well as new developments in the scientific information base during the preparation of the final rule for this action.

NMFS plans to continue analyzing the potential natural and anthropogenic mortality sources in Virginia inshore, nearshore, and offshore waters. As part of this larger initiative, NMFS intends to continue to closely monitor sea turtle stranding levels and other fisheries active in the Chesapeake Bay and nearshore and offshore Virginia waters. Further, NMFS is beginning to implement a coordinated research program with pound net industry participants and other interested parties to develop and test pound net leader modifications with the goal of eliminating or reducing sea turtle interactions while retaining an acceptable level of fish catch. Additionally, in the near future, NMFS plans to holistically evaluate the impacts of pound nets (as well as other fishing gear types) on sea turtles throughout the Atlantic and Gulf of Mexico, as part of the Strategy for Sea Turtle Conservation and Recovery in Relation to Atlantic Ocean and Gulf of Mexico Fisheries (NMFS 2001).

The year-round reporting and monitoring requirements for this fishery established by the 2002 interim final rule remain in effect. For instance, all Virginia pound net fishermen are still required to report all sea turtle interactions ( e.g., dead or alive; entangled, impinged, or floated into their net) in any part of their pound net gear ( e.g., pound, heart, or leader) to NMFS within 24 hours of returning from the trip in which the take was documented. To date, NMFS has not received any reports from fishermen of sea turtles in their pound net leaders, but NMFS observers have documented these interactions. In 2003, several live sea turtle captures in pounds were reported to NMFS. Note that this action would change the telephone number to which to report sea turtle interactions from the telephone number previously included in the 2002 interim final rule.

NMFS is also proposing to modify the titles of adjacent sections of regulatory text for sea turtles and fishery interactions, in order to make the appropriate sections of regulatory text more easily identifiable to readers.

This proposed rule has been determined to be not significant for purposes of Executive Order 12866.

NMFS has prepared an initial regulatory flexibility analysis that describes the economic impact this proposed rule, if adopted, would have on small entities. A description of the action, why it is being considered, and the legal basis for this action are contained at the beginning of the preamble and in the SUMMARY section. A summary of the analysis follows:

The fishery affected by this proposed rule is the Virginia pound net fishery in the Chesapeake Bay. The proposed action prohibits all pound net leaders in a portion of the southern Chesapeake Bay, and prohibits leaders with stretched mesh greater than or equal to 8 inches (20.3 cm) and leaders with stringers in the remainder of the Virginia Chesapeake Bay, from May 6 to July 15 each year. Non-preferred alternative 1 is the same as the proposed action, but the time period of the restrictions is from May 6 to June 30. Non-preferred alternative 2 prohibits pound net leaders with 8 inches (20.3 cm) and greater stretched mesh, as well as leaders with stringers, in the Virginia Chesapeake Bay from May 6 to July 15. Non-preferred alternative 3 is the same as the proposed action, but the pound and heart, in addition to the leader, must also be removed in a portion of the southern Chesapeake Bay. Non-preferred alternative 4 prohibits all pound net leaders from May 6 to July 15 in the Virginia Chesapeake Bay. Finally, in addition to the mesh size restrictions in a portion of the Virginia Chesapeake Bay, non-preferred alternative 5 modifies the pound net leader configuration in a portion of the southern Chesapeake Bay (i.e., the area where all leaders are proposed to be prohibited in the proposed action) so that the mesh height is restricted to one-third the depth of the water, the mesh must be less than 8 inches (20.3 cm) and held with ropes 3/8 inches (0.95 cm) or greater in diameter strung vertically a minimum of every 2 feet (61 cm) and attached to a top line.

According to the 2002 VMRC data, there are 31 harvesters actively fishing pound nets from May 6 to July 15, with 10 harvesters located in the lower portion of the Virginia Chesapeake Bay and 21 harvesters located in the upper portion of the Virginia Chesapeake Bay. These 31 harvesters fish approximately 40 pound nets in the upper portion of the Virginia Chesapeake Bay (=21 harvesters x 1.9 pound nets/harvester) and 30 pound nets in the lower portion of the Virginia Chesapeake Bay (=10 harvesters x 3.0 pound nets/harvester). Based on 2000 to 2002 data, annual landings per harvester were 280,996 pounds (127,457 kg) in the upper portion of the Virginia Chesapeake Bay and 257,491 pounds (116,795 kg) in the lower portion of the Virginia Chesapeake Bay. Annual revenues per harvester were $64,483 and $105,298 in the upper and lower region, respectively. From May 6 to July 15, landings per harvester were 96,946 pounds (43,973 kg) in the upper region and 95,380 pounds (43,263 kg) in the lower region. Estimated revenues per harvester were $18,102 and $40,474 in the upper and lower region, respectively.

Of the 31 harvesters, 45 percent of the harvesters (=[4 located in the upper region +10 located in the lower region]/31 total harvesters) fishing from May 6 to July 15 would be affected by this proposed action. Approximately 34 pound nets in total would be affected by this proposed action, with 4 in the upper portion of the Virginia Chesapeake Bay and 30 in the lower portion of the Virginia Chesapeake Bay.

In the upper portion of the Virginia Chesapeake Bay, two potential responses to the leader mesh size restrictions would be either choosing to not fish or switching to a smaller leader mesh size during the restricted period. If a harvester chooses not to fish, their revenues decrease by 17.1 percent, since they incur revenue losses and the cost of removing their gear. If a harvester switches to a smaller mesh leader, his or her revenues would be reduced by 8.4 percent. For purposes of this analysis, we assumed the harvester will modify their gear since they want to minimize their economic loss. Therefore, in the upper bay region, annual revenues may be reduced by 8.4 percent per harvester under the proposed action. In the upper bay region, five of the six alternatives, not counting the “no action” alternative, are the same. The proposed action and non-preferred alternatives 1, 2, 3, and 5 require the leader mesh to be less than 8 inches (20.3 cm). As such, the impacts of those non-preferred alternatives would be the same as those for the proposed action in the upper bay area; annual revenues would be reduced by a low of 8.4 percent per harvester and 4 harvesters would be affected. Under non-preferred alternative 4, all leaders must be removed from the Virginia Chesapeake Bay. This alternative impacts all 21 harvesters in the upper region, and annual revenues per harvester would be reduced by 33.5 percent.

In the lower portion of the Virginia Chesapeake Bay where all leaders are prohibited under the proposed action, management actions vary between alternatives. Under all of the alternatives, all 10 harvesters would be impacted. With the proposed action, annual revenues per harvester would be reduced by a high of 43.2 percent. The proposed action and non-preferred alternative 4 are the same, and annual revenues per harvester would be reduced by 43.2 percent. The economic impact under non-preferred alternative 1 would be less compared to the proposed action (34.5 percent reduction in annual revenues versus 43.2 percent), because the restricted time period is shorter. The impact under the non-preferred alternative 3 would be greater than the proposed action (50.3 percent reduction in annual revenues versus 43.2 percent), because additional labor costs are incurred to remove the heart and pound in addition to the leader. Reductions in annual revenues per harvester would be less under non-preferred alternatives 2 and 5 in comparison to the proposed action, since these non-preferred alternatives allow a harvester to modify their gear and continue to fish. In the lower bay area, the non-preferred alternative 2 would reduce annual revenues per harvester by 8.6 percent to 12.1 percent, depending on how many nets they set. Under non-preferred alternative 5, annual revenues per harvester would be reduced by 12.1 percent. Taking no action would not have economic consequences, at least in the short term.

Annual industry revenues are $2.6 million for the pound net fishery. Under the proposed action, industry revenues would be reduced by 18.3 percent (=$0.476M/$2.6M). Under non-preferred alternatives 1, 2, 3, and 5, industry revenues would be reduced by 14.8 percent, 4.9 percent, 21.2 percent, and 5.8 percent, respectively. With the preceding five alternatives, 14 of 31 harvesters would be affected by the management actions. Under non-preferred alternative 4, all harvesters would be affected and forgone industry revenues would be reduced by 34.9 percent. Again, these numbers assume fishermen will switch to a smaller mesh leader and continue to fish in those areas with leader mesh size restrictions, instead of removing their leaders entirely.

This action does not proposed new reporting or record keeping requirements.

This proposed rule does not duplicate, overlap or conflict with other Federal rules.

For the reasons set forth in the preamble, 50 CFR part 223 is proposed to be amended as follows:

1. In § 223.205, paragraph (b)(15) is revised to read as follows:

2. In § 223.206, paragraph (d) (2)(iv) is removed; (d) introductory text and (d)(2) paragraph heading are revised; and paragraph (d)(9) is added to read as follows: