This ANPR requests data or comment on specific issues relating to Regulation Z's open-end credit rules. These requests are numbered consecutively. Commenters are requested to refer to these numbers in their submitted comments, which will assist the Board and members of the public that review comments online. Questions are presented by subject matter as follows:

Scope of the review: Q1.

Format of Disclosures:

Account-opening disclosures, Q2-Q3.

Periodic statements, Q4-Q6.

Credit card application disclosures (the “Schumer box”), Q7-Q8.

Subsequent disclosures, Q9.

Model forms and clauses, Q10-Q12.

Content of Disclosures:

Classifying and labeling fees as “finance charges” and “other charges,” Q13-Q20.

Over-the-credit-limit fees, Q21-Q22.

“Effective” or “historical” annual percentage rate on periodic statements, Q23-Q25.

Disclosures about rate changes, Q26-Q27.

Balance calculation methods, Q28-Q30.

Minimum payments, Q31-Q33.

Payment allocation, Q34-Q36.

Tolerances, Q37.

Other questions, Q38-Q42.

Substantive protections:

General, Q43.

Accessing credit card accounts, Q44.

“Convenience checks,” Q45.

Unsolicited issuance of credit cards, Q46.

Prompt crediting of payments, Q47-Q51.

Additional Issues:

Providing guidance not expressly addressed in existing rules, Q52.

Adjusting exceptions based on de minimis amounts, Q53.

Improving plain language and organization; identifying technical revisions, Q54.

Deleting obsolete rules or guidance, Q55.

Recommendations for legislative changes, Q56.

Recommendations for nonregulatory approaches, Q57.

Reviewing other aspects of Regulation Z, Q58

The Board also requests that when possible, comment letters should use a standard typeface with a font size of 10 or 12. This enables the Board to convert text submitted in paper form to machine-readable form through electronic scanning, and eases automated retrieval of comments for review.

The Congress based the Truth in Lending Act (TILA) on findings that economic stability would be enhanced and competition among consumer credit providers would be strengthened by the informed use of credit, which results from consumers' awareness of the credit's cost. The purposes of the TILA are: (1) To provide a meaningful disclosure of credit terms to enable consumers to compare the various credit terms available in the marketplace more readily and avoid the uninformed use of credit; and (2) to protect consumers against inaccurate and unfair credit billing and credit card practices. 15 U.S.C. 1601(a).

TILA's disclosures differ somewhat depending on whether consumer credit is an open-end (revolving) plan or a closed-end (installment) loan. TILA also contains procedural and substantive protections for consumers, for both open-end and closed-end transactions.

TILA is implemented by the Board's Regulation Z. 12 CFR part 226; 15 U.S.C. 1604(a). An Official Staff Commentary interprets the requirements of Regulation Z. 12 CFR part 226 (Supp I). Creditors that follow in good faith Board or official staff interpretations are insulated from civil liability, criminal penalties, or administrative sanction. 15 U.S.C. 1640(f).

TILA, enacted in 1968, was substantially revised by the Truth in Lending Simplification Act of 1980. Regulation Z was revised and reorganized to implement the new law, effective in 1982 (46 FR 20892, April 7, 1981). Since then, the regulation has not been reviewed in its entirety, although much of it has been reviewed in individual rulemakings, to implement new legislation, in response to congressional requests for reports, or pursuant to public hearings. 1 The Official Staff Commentary is typically updated annually.

Scope of the Review . The Board periodically reviews it regulations to update them. The Board plans to review Regulation Z over the next few years. The regulation is sufficiently lengthy and complex, however, that conducting the review in stages appears to be the most appropriate approach. The Board is proposing to focus the first stage of the review on Regulation Z's rules for open-end (revolving) credit accounts that are not home-secured, chiefly general-purpose credit cards and merchant-specific credit plans, although the rules apply to open-end lines generally. Other aspects of the regulation would also be addressed if the Board determines that it is necessary or appropriate to do so. Accordingly, comment is also requested on other ways that Regulation Z could be improved in Section VI, below. Plans for future stages of the review of Regulation Z are discussed in Section VII, below. Some provisions in Regulation Z apply to both open- and closed-end credit. Even though the Board is proposing to review Regulation Z in stages, the Board will consider the need for consistency across the regulation in proposing revisions.

Q1. The Board solicits comments on the feasibility and advisability of reviewing Regulation Z in stages, beginning with the rules for open-end credit not home-secured. Are some issues raised by the open-end credit rules so intertwined with other TILA rules that other approaches should be considered? If so, what are those issues, and what other approach might the Board take to address them?

Goals . In reviewing Regulation Z, the Board's primary goal is to improve, if possible, the effectiveness and usefulness of open-end disclosures and substantive protections. Consumers' use of open-end credit, especially lines accessed by credit cards, has grown markedly. The ways in which consumers can access open-end lines and the uses they can make of these lines have both expanded. Pricing has become more complex and products increasingly diverse, especially for general purpose credit cards. Taken together, these factors suggest it is appropriate to consider whether the open-end disclosure rules and substantive protections of Regulation Z are achieving their intended purposes, which are to permit consumers to make informed decisions about the use of credit and to protect consumers against inaccurate and unfair credit billing and credit card practices. The review will also consider ways to address concerns about information overload, which can adversely affect how meaningful the disclosures are to consumers. Disclosures required under TILA are required to be clear and conspicuous; the Board intends to study alternatives for improving the format of disclosures, including revising the model forms and clauses published by the Board, to ensure that consumers get timely information in a readable form.

TILA also seeks to establish uniformity in creditors' disclosures to promote comparison shopping. Thus, in conducting the review, the Board will consider ways that the rules can be clarified for creditors to facilitate compliance and promote consistency in their disclosures. Pursuant to the Board's mandate under the Economic Growth and Regulatory Paperwork Reduction Act, the Board also intends to consider ways to reduce unnecessary regulatory burden consistent with the purposes and requirements of TILA. ( See 68 FR 35589, June 16, 2003; 69 FR 2852, January 21, 2004; 69 FR 43347, July 16, 2004.)

Following the ANPR, the Board may determine that proposed revisions to Regulation Z's open-end credit rules are appropriate, but there may be other responses to the issues raised. For example, the Board may consider whether to recommend legislative changes. The Board may conclude that a non-regulatory response would be the most effective approach in addressing some issues, for example the issuance of recommended best practices or consumer education efforts. These alternative approaches are discussed in Section VI, below.

The Board's Authority under TILA. TILA mandates that the Board prescribe regulations to carry out the purposes of the act. 15 U.S.C. 1604(a). In promulgating open-end credit rules to implement TILA, the Board is also authorized, among other things, to do the following:

• Issue regulations that contain such classifications, differentiations, or other provisions, or provide for such adjustments and exceptions for any class of transactions, that in the Board's judgment are necessary or proper to effectuate the purposes of TILA, facilitate compliance with the act, or prevent circumvention or evasion. 15 U.S.C. 1604(a).

• Exempt from all or part of TILA any class of transactions if the Board determines that TILA coverage does not provide a meaningful benefit to consumers in the form of useful information or protection. The Board must consider factors identified in the act and publish its rationale at the time a proposed exemption is published for comment. 15 U.S.C. 1604(f).

• Exempt from TILA certain transactions involving consumers who first provide a written waiver of their TILA protections and whose annual earned income or net assets at the time of the transaction exceeds a certain dollar figure ($200,000 and $1,000,000, respectively), which the Board may adjust for inflation. 15 U.S.C. 1604(g).

• Provide tolerances for numerical disclosures other than the annual percentage rate (APR), so long as the tolerances are narrow enough to prevent disclosures that are misleading or that circumvent TILA's purposes. 15 U.S.C. 1631(d).

Open-end Consumer Credit in Today's Marketplace. The principal examples of open-end credit not home-secured are general-purpose credit cards and merchant-specific credit plans, which may or may not involve cards. In determining how the Board's goals for the Regulation Z review can best be met, the Board will consider the nature and function of open-end credit accounts, and how the market for open-end credit has developed since the last major review of the open-end rules.

Recent studies and consumer surveys (including a 2001 survey of consumers with general purpose credit cards discussed in the April 2002 article noted below) provide some data on open-end credit plans and how consumers use them, particularly credit card accounts, as follows: 2

• Increased number of cards held. In 2001, 73 percent of households had at least one general purpose credit card with a revolving feature, compared to 43 percent in 1983. The 2001 consumer survey noted above showed that 20 percent of the respondents obtained a new general purpose credit card within the previous year, and that around 84 percent of those respondents did so as a result of a solicitation. The survey also showed that nearly two-thirds of the respondents who had acquired a new card in the previous year already held two other credit card accounts, and over one-third of respondents with general purpose credit cards with a revolving feature held three or more.

• Wide range of uses. Open-end plans, credit cards in particular, are widely used in today's marketplace. Credit cards serve as a substitute for cash and checks for millions of routine purchases, and allow consumers to engage in transactions such as telephone and Internet purchases. Also, credit limits can be high, and consumers now commonly finance the purchase of “big-ticket” items (such as appliances and furniture) under an open-end plan rather than a closed-end installment loan, as they did in the past. Card issuers have also developed other access methods for consumers to use their accounts, such as by offering “convenience checks” that may be used for purchases or to transfer balances from other accounts. In the 2001 survey noted above, about 20 percent of respondents having general purpose credit cards with a revolving feature had transferred balances in the previous year.

• More complex pricing. General purpose credit-card pricing has become more complex. A single account may have multiple APRs for different types of credit extensions, or that apply for limited time periods. Credit cards are available to consumers with a much wider range of credit risks, due to improved technology for risk-evaluation. As a result, pricing is more varied. Also, competition has reduced “front-end” costs for general purpose credit cards as card issuers eliminate annual fees and offer substantial discounts in initial interest rates. On the other hand, “back-end” costs have increased through higher late fees, over-the-credit-limit fees, and the use of penalty rates for late payers. In the surveys noted above, about 30 percent of credit card users reported paying a late fee within the previous year.

• Additional account features. The 2001 survey noted above showed that in making choices about opening or replacing card accounts, consumers consider a variety of factors, ranging from cost information about rates, annual fees, and minimum payments, to benefits such as rebate and reward programs.

• Consumers' perceptions about account information. The 2001 survey of consumers with general purpose credit cards asked the respondents about their perceptions of information available for these accounts. Sixty-five percent said that useful information on credit terms was either “very easy” or “somewhat easy” to obtain, and only 6 percent thought it very difficult. But when asked questions about consumers' understanding and use of Truth in Lending disclosures at account opening or on monthly bills for general purpose credit cards, nearly one-third of the respondents suggested improvements could be made regarding format and clarity.

Under TILA, as implemented by Regulation Z, open-end credit exists when consumer credit is extended under a plan in which (1) the creditor reasonably contemplates repeated transactions, (2) the creditor may impose a finance charge from time to time on an outstanding unpaid balance, and (3) the credit is replenished as it is used, up to any limit set by the creditor. 15 U.S.C. 1602(i); 12 CFR 226.2(a)(20). The rules that apply to open-end credit also apply to creditors that issue “charge cards” that typically require outstanding balances to be paid in full at the end of each billing cycle. 12 CFR 226.2(a)(17)(iii). For purposes of this ANPR, the terms “open-end credit” and “credit card” encompass “charge card.”

Disclosures. TILA and Regulation Z require creditors offering open-end credit plans to disclose costs and other terms related to the plan. To summarize:

• Disclosures must be provided with credit card applications and solicitations. Consumers receive key cost information in an abbreviated manner, to help consumers decide whether to apply for the card account. For direct mail solicitations, the disclosures are presented in a highly structured table.

• Disclosures provided at account-opening describe how charges associated with the plan will be determined. Consumers receive information about the periodic rate, disclosed as an APR, that will be applied to the outstanding balance, along with other fees that may be assessed on the account. Consumers' rights and responsibilities in the case of unauthorized use or billing disputes are also explained. Consumers must receive these disclosures before the first transaction on the account.

• Disclosures on periodic statements reflect the activity on the account for the statement period. In addition to the APR based on the periodic rate, periodic statements must also disclose the effective or “historical” APR for the billing cycle. The effective APR includes finance charges imposed in addition to interest (such as cash advance fees or balance transfer fees). Transactions that occurred and any fees imposed during the cycle must be identified on the statement, along with any time period a consumer may have to pay an outstanding balance and avoid additional finance charges (the “grace period”).

• Disclosures about changes in account terms and about the terms for using a new credit feature or means of access are provided on an ad hoc basis.

Substantive and procedural protections. TILA and Regulation Z also provide procedural and substantive protections to consumers with open-end accounts, including special protections for credit cardholders, summarized below:

• Consumers using an open-end credit plan may assert a billing error, which triggers creditors' duty to investigate the allegation within prescribed time limits.

• Cardholders may assert against a card issuer claims or defenses arising from a credit card purchase, if the merchant honoring the card fails to resolve any dispute about the quality of the goods or services.

• Cardholders' liability for the unauthorized use of a credit card is capped at $50.

• Credit cards may be issued to consumers only upon request. One or more credit cards may be issued to cardholders in renewal of, or substitution for, an accepted card, with some conditions.

• Consumers' payments on the account must be credited as of the date the creditor receives the payment and creditors must refund credit balances.

• Creditors cannot offset consumers' credit card debt with funds held on deposit with the card issuer except in specified circumstances.

Under open-end plans, consumers generally control how the plan is accessed and the amount and timing of credit extensions and payments. Because consumers' decisions about using their open-end credit accounts are continuous, the relevance of key account terms to consumers' use of the account varies over the life of the account. Thus, the effectiveness of disclosures must be considered in light of the multiple functions they serve.

For example, some information received at account-opening may become relevant years later, for example, when a consumer who uses a credit card account for purchases decides for the first time to obtain a cash advance. Information provided on periodic statements tells consumers about account activity for the statement period, but it also allows consumers to make ongoing credit decisions about how much credit to use and how much of the outstanding balances to pay on various accounts. And consumers may use existing account-opening or periodic statement disclosures to compare offers they receive to apply for another account or transfer existing balances to another account.

Open-end disclosures are subject to few formatting rules. Creditors have great flexibility in designing account-opening, periodic statement, and other open-end disclosures. The primary exception to TILA and Regulation Z's flexible formatting rules for open-end credit is the abbreviated and segregated tabular disclosures required for credit card solicitations and applications (known as the “Schumer box”). 15 U.S.C. 1637(c); 12 CFR 226.5a(a)(2). TILA disclosures must be “clear and conspicuous,” which is generally interpreted to be in a “reasonably understandable form.” 15 U.S.C. 1632; 12 CFR 226.5(a)(1); comment 5(a)(1)-1. 3

In June 2004, the Board withdrew regulatory proposals that would have established a uniform standard for “clear and conspicuous” disclosures under Regulations B, E, M, Z, and DD. 69 FR 35541, June 25, 2004. Instead of adopting general definitions or standards that would apply across the five regulations, the Board decided to focus on individual disclosures and to consider ways to make specific improvements to the effectiveness of each disclosure. The Board noted that the effort to review individual disclosures would be undertaken in connection with the Board's periodic review of its regulations, commencing with the issuance of an ANPR to review the rules for open-end credit accounts under TILA and Regulation Z. Although the proposals defining “clear and conspicuous” were withdrawn, they reflected principles that will guide the Board in reviewing individual disclosures and revising the regulation and the Board's model forms and clauses.

In the questions that follow, the Board seeks comment on ways to make the disclosures for open-end credit accounts more understandable and noticeable. Commenters are specifically requested to identify any particular concerns relating to the format of electronic disclosures.

Account-opening disclosures. TILA's account-opening disclosures are provided to consumers before the plan is opened (or before the first transaction). 15 U.S.C. 1637(a); 12 CFR 226.5(b)(1). Creditors typically provide the TILA disclosures in an account agreement that also contains contract terms and state-law disclosures. The agreement is typically a lengthy document in a small type size.

A primary purpose of the account-opening disclosures is to allow consumers to have key information about the account before they use the plan at all. Because consumers' use of the plan may change over time, however, these disclosures remain important over the life of the plan. Consumers may also refer to their account-opening disclosures when comparing the terms of their existing account to offers subsequently received from other card issuers. As stated above, data from a 2001 survey indicate that a significant number of consumers respond to solicitations for new credit card accounts.

Data from the 2001 survey of consumers with general purpose credit cards reveals that about two thirds of the respondents said that useful information on credit terms was either “very easy” or “somewhat easy” to obtain. 4 However, about three-fourths of consumers also agree (strongly or somewhat) with the statement that TILA statements “are complicated.” Nearly one-third suggested improvements could be made to the format and clarity of Truth in Lending disclosures at account opening or on monthly bills for general purpose credit cards, such as by providing information that is “clearer, simpler, easier to understand, written in lay terms, or in larger print.”

The Board has received comments about the format of account-opening disclosures in connection with recent rulemakings. The views of the members of the Board's Consumer Advisory Council (CAC) have also been solicited. Many who commented believe that much of the information considered to be important is already contained in the disclosures; because a lot of information is provided at account opening, however, there is the potential for information overload, which can impair the disclosures' effectiveness. Accordingly, in connection with the review of Regulation Z, the Board proposes to consider ways to ease consumers' ability to navigate through the disclosures.

Several format changes have been suggested that might assist in this regard. Some members of the CAC believe that disclosures would be improved by including a page-one “executive summary” paragraph or a disclosure table to highlight key features and terms of the account, similar to the Schumer box disclosure provided with credit card solicitations. Such an executive summary need not be limited to information included in the Schumer box, but could incorporate other information, such as abbreviated description of items that, based on consumer surveys, are considered to be most important to consumers ( e.g. , an annual fee, potential rate changes, amount of credit line, minimum monthly payment, special account benefits). Either as a part of this notion, or as a stand-alone change, consumers might benefit from a directory or “table of contents” box that would highlight for readers where specific terms might be found, to assist consumers in navigating through the document (for example, “Late fees * * * see paragraphs 12, 14”). This concept addresses the anecdotal evidence that consumers often choose not to read the entire disclosure at once, but seek out information on specific terms from time to time, at the outset of the account relationship and subsequently.

Q2. What formatting rules would enhance consumers' ability to notice and understand account-opening disclosures? Are rules needed to segregate certain key disclosures from contractual terms or other information so the disclosures are more clear and conspicuous? Should the rules require that certain disclosures be grouped together or appear on the same page? Are minimum type-size requirements needed, and if so, what should the requirements be?

Q3. Are there ways to use formatting tools or other navigational aids for TILA's account-opening disclosures that will make the disclosures more effective for consumers throughout the life of the account? If so, provide suggestions.

Periodic statements. TILA and Regulation Z contain few formatting rules for disclosures provided on periodic statements. Periodic statement disclosures provide information about account activity during the statement period; but consumers might also use information on the statements to make decisions about payments and the future use of their account, which affects the overall cost of credit. The Board solicits comment on the general need for format requirements for periodic statements, including the following:

Q4. Format rules could require certain disclosures to be grouped together or appear on the same page where it would aid consumer's understanding. For example, some card issuers disclose a 25-day grace period on the back of the periodic statement that can be used to calculate the payment due date; the same card issuer might also show a “please pay by date” on the front of the periodic statement that is based on a 20-day period. Some consumers might assume the 20-day period reflects the due date; other consumers may ascertain the actual due date by looking on the back of the statement. Potential consumer confusion might be reduced by requiring creditors to disclose the grace period or the actual due date on the first page of the statement, adjacent to the “please pay by” date. Is such a rule desirable? Are there other disclosures that should be grouped together on the same page?

Q5. Could the cost of credit be more effectively presented on periodic statements if less emphasis were placed on how fees are labeled, and all fees were grouped together on the periodic statement? Are there other approaches the Board should consider? If so, provide suggestions.

Q6. How could the use of formatting tools or other navigational aids make the disclosures on periodic statements more effective for consumers?

Credit card application disclosures (the “Schumer box”) . The disclosures required for credit card solicitations and applications have the most regimented format requirements. TILA disclosures must be presented in a table (known as the “Schumer box”) with headings substantially similar to those published in the Board's model forms. (Format requirements for “take-one” applications are quite flexible; card issuers have the option to use the format required for direct-mail applications.)

In 2000, the Board revised the format requirements for these tabular disclosures. 65 FR 58903, October 3, 2000. The regulation's sole type-size requirement applies to direct-mail application disclosures; the APR for purchases must be in at least 18-point type size. 12 CFR 226.5a(b)(1). Also, the “clear and conspicuous” standard is interpreted to mean that application disclosures must be “in a reasonably understandable form and readily noticeable to the consumer.” Disclosures that are printed in a 12-point type size have a safe harbor in the regulation under this standard. Comment 5a(a)(2)-1.

Q7. Is the “Schumer box” effective as currently designed? Are there format issues the Board should consider? If so, provide suggestions.

Q8. Balance transfer fees and cash advance fees may be disclosed inside the “Schumer box” or clearly and conspicuously elsewhere on or with the application. 12 CFR 226.5a(a)(2)(i). Given the prevalence of balance transfer promotions in credit card applications and solicitations, should balance transfer fees be included in the Schumer box?

Subsequent disclosures. Creditors have great flexibility under TILA and Regulation Z in disclosing changes in account terms and the terms for new credit features or access devices offered after the account is opened.

Q9. Are there formatting tools or navigational aids that could more effectively link information in the account-opening disclosures with the information provided in subsequent disclosures, such as those accompanying convenience checks and balance transfer checks? If so, provide suggestions.

Model forms and clauses. The Board publishes model forms and model clauses to ease compliance. Creditors are not required to use these forms or clauses, but creditors that use them properly are deemed to be in compliance with the regulation regarding those disclosures. See 15 U.S.C. 1604(b). The Board has few model clauses and forms for account-opening or periodic statement disclosures.

Q10. Should existing clauses and forms be revised to improve their effectiveness? If so, provide specific suggestions.

Q11. Would additional model clauses or forms be helpful? If so, please identify the types of new model clauses and forms that the Board should consider developing.

Q12. In developing any proposed revisions or additions to the model forms or clauses, the Board plans to utilize consumer focus groups and other research. The Board is aware of studies suggesting that, for example, bolded headings that convey a message are helpful, but using all capital letters is not. 5 Is there additional information on the navigability and readability of different formats, and on ways in which formatting can improve the effectiveness of disclosures?

TILA is designed to provide consumers with information about costs and terms to enable them to make comparisons among creditors and different credit programs, or determine whether they should use the credit line at all. In the questions that follow, the Board solicits comment generally on how the content of disclosures can be improved to enhance consumers' understanding about costs and terms. In addition, comment is specifically requested on how disclosures can be simplified while ensuring that consumers have the information they need to make informed decisions about the use of their credit accounts.

How a particular fee is classified affects when and how the fee is disclosed under TILA. Creditors offering open-end credit must disclose fees that are “finance charges” as well as “other charges” that are part of the credit plan.

A “finance charge” is broadly defined as any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor, as an incident to or a condition of the extension of credit. 15 U.S.C. 1605; 12 CFR 226.4. Interest, cash advance fees, and balance transfer fees are examples of finance charges. Finance charges must be disclosed in the account-opening statement. If imposed in a particular billing cycle, finance charges must be disclosed on the periodic statement, where the fee must be labeled as a “finance charge.” If a finance charge fee increases, a change-in-terms notice is generally required. If imposed in a particular billing cycle, a finance charge must also be included in the effective (or “historical”) APR, which expresses the total finance charge, not just interest, as an annual rate. 15 U.S.C. 1606(a)(2). Non-recurring loan fees, points, or similar finance charges related to the opening, renewing, or continuing of an open-end account are excluded from the effective APR. 12 CFR 226.14(c)(3), footnote 33, comment 14(c)-7.

If the fee is not a finance charge, but is significant and imposed as part of the plan, it is an “other charge” and must be disclosed at account-opening; on each applicable statement, though not with any particular label; and, for some but not all “other charges,” on a change-in-terms notice when the amount of the fee increases. 15 U.S.C. 1637(a)(5), 12 CFR 226.6(b), 7(h); comment 6(b)-1. Examples of “other charges” are penalty fees for late payment or exceeding a credit limit, and periodic membership or participation fees that are payable whether or not the consumer actually uses the credit plan.

If the fee is neither a finance charge nor an “other charge” (for example, returned check fees), TILA does not require that it be disclosed initially. If such a fee is charged to the consumer and billed to the account, the fee must be disclosed on the relevant periodic statement just as any other transaction item must be disclosed.

For the credit card industry as a whole, fee income has grown significantly in importance. With that trend, the types of fees creditors charge on open-end consumer credit accounts have grown in number and variety. As creditors charge new fees that are not specifically addressed by Regulation Z, creditors are sometimes unsure if the fee should be disclosed under TILA, and if so, whether it should be characterized as a finance charge or “other charge.” The rules for open-end accounts provide no tolerance for errors in disclosing the finance charge. In reviewing Regulation Z, the Board plans to consider whether there are ways to provide more clarity for creditors as to how particular fees should be classified.

Regulation Z follows TILA in giving the terms “finance charge” and “other charge” broad and flexible meanings. This ensures that the rules are adaptable to changing conditions, but also creates some degree of uncertainty. Regulation Z and the staff commentary diminish the uncertainty somewhat by expressly identifying examples of charges that constitute finance charges and types that do not. 15 U.S.C. 1605; 12 CFR 226.4(b) and (c). Nevertheless, rules that specifically address every fee generated in the marketplace are not practicable.

In response to a December 2002 staff proposal to clarify the status of two new fees in the staff commentary, many industry commenters called for a different approach to cost disclosures that would provide more certainty about fees' proper classification. 67 FR 72618, December 6, 2002; 68 FR 16185, April 3, 2003. Some industry commenters suggested that more certainty could be provided, for example, if fees were classified as finance charges based on whether payment of the fee is required as a condition to obtaining credit. They asserted that this standard would ease compliance and reduce litigation risks and promote comparison shopping by decreasing the risk that creditors might disclose the same fee differently.

Q13. How could the Board provide greater clarity on characterizing fees as finance charges or “other charges” imposed as part of the credit plan? Under Regulation Z, finance charges include fees imposed as a condition of the credit as well as fees imposed “incident to” the credit. This includes “service, transaction, activity, and carrying charges.” 12 CFR 226.4(b)(2). What types of fees imposed in connection with open-end accounts should be excluded from the finance charge, and why? How would these fees be disclosed to provide uniformity in creditors' disclosures and facilitate compliance?

Q14. How do consumers learn about the fees that will be imposed in connection with services related to an open-end account, and any changes in the applicable fees?

Q15. What significance do consumers attach to the label “finance charge,” as opposed to “fee” or “charge”?

Q16. Some industry representatives have suggested a rule that would classify fees as finance charges only if payment of the fee is required to obtain credit. How would creditors determine if a particular fee was optional? Would costs for certain account features be excluded from the finance charge provided that the consumer was also offered a credit plan without that feature? Would such a rule result in useful disclosures for consumers? Would consumers be able to compare the cost of the different plans? Would such a rule be practicable for creditors?

Q17. Some industry representatives have suggested a rule that would classify a fee as a finance charge based on whether the fee affects the amount of credit available or the material terms of the credit. How would such a standard operate in practice? For example, how would creditors distinguish finance charges from “other charges”? What terms of a credit plan would be considered material?

Q18. TILA requires the identification of other charges that are not finance charges and may be imposed as part of the plan. The staff commentary interprets the rule as applying to “significant charges” related to the plan. Has that interpretation been effective in furthering the purposes of the statute? Would another interpretation be more effective? Criteria that have been suggested as relevant to determining whether the Board should identify a charge as an “other charge” include: the amount of the charge; the frequency with which a consumer is likely to incur the charge; the proportion of consumers likely to incur the charge; and when and how creditors disclose the charge, if at all. Are those factors relevant? Are there other relevant factors?

Q19. What other issues should the Board consider as it addresses these questions? For instance, in classifying fees for open-end plans generally, do home equity lines of credit present unique issues?

Q20. How important is it that the rules used to classify fees for open-end accounts mirror the classification rules for closed-end loans? For example, the approach of excluding certain finance charges from the effective APR for open-end accounts is not consistent with the approach recommended by the Board for closed-end loans. In a 1998 report to the Congress concerning reform of closed-end mortgage disclosures, the Board endorsed an approach that would include “all required fees” in the finance charge and APR. (The report is at http://www.federalreserve.gov/boarddocs/press/boardacts/1998. )

Over-the-credit-limit fees. Anecdotal evidence indicates that “penalty” fees imposed on open-end credit accounts, such as over-the-credit-limit fees and late-payment fees, have increased in recent years. Adequate disclosure of over-the-credit-limit fees may be of particular importance to consumers who have low-limit credit card accounts.

Fees for paying late or exceeding a credit limit are disclosed with credit card applications and solicitations; in account-opening statements; and on periodic statements for billing cycles when the fees are imposed. Although TILA does not specifically address the characterization of these fees, Regulation Z provides that the fees are not “finance charges” but must be disclosed as “other charges.” 12 CFR 226.4(c)(2); comment 6(b)-1. In a recent case involving the disclosure of an over-the-credit-limit fee, the United States Supreme Court upheld the Board's regulation excluding such fees from the finance charge. See Household Credit Services v. Pfennig , 541 U.S. 232 (2004).

Concerns have been raised about some card issuers' practice of allowing consumers to remain over their credit limit for multiple billing cycles. For example, a creditor may establish an initial credit limit, but once that limit is exceeded the creditor might not require the consumer to bring the account balance below the originally established credit limit. As a result, the creditor may impose an over-the-credit-limit fee on a continuing basis for each month the consumer carries a balance in excess of the original credit limit.

Q21. The staff commentary to Regulation Z provides guidance on when a fee is properly excluded from the finance charge as a bona fide late payment charge, and when it is not. See Comment 4(c)(2)-1. Is there a need for similar guidance with respect to fees imposed for exceeding a credit limit, for example, where the creditor does not require the consumer to bring the account balance below the originally established credit limit, but imposes an over-the-credit-limit fee each month on a continuing basis?

Q22. Because of technical limitations or other practical concerns, credit card transactions may be authorized in circumstances that do not allow the merchant or creditor to determine at the moment of the transaction whether the transaction will cause the consumer to exceed the previously established credit limit. How do card issuers explain to consumers their practice of approving transactions that might result in the consumer's exceeding the previously established credit limit for the account and being charged an over-the-credit-limit fee? When are over-the credit-limit fees imposed; at the time of an approved transaction, or later such as at the end of the billing cycle? The Board specifically requests comments on whether additional disclosures are needed regarding the circumstances in which over-the-credit-limit fees will be imposed.

Under TILA the finance charge is also disclosed as an annualized rate, the APR. The APR is based on the periodic rate (interest) for purposes of credit card solicitations and applications, account-opening disclosures, and advertisements for open-end plans. But for periodic statements, creditors must also disclose an “effective” or “historical” APR that includes any finance charges other than interest imposed during the billing cycle (such as cash advance fees). TILA requires non-interest finance charges to be amortized over one billing cycle for purposes of calculating the effective APR, and as a result, such fees can result in a high double-digit (or sometimes, triple-digit) effective APR on periodic statements. That is why under the regulation and staff commentary, non-recurring loan fees, points, or similar finance charges related to the opening, renewing, or continuing of an open-end account are currently excluded from the effective APR that is disclosed for a particular billing cycle.

The utility of disclosing the effective APR, which is mandated by the statute, is controversial. The legislative history of TILA suggests that Congress adopted the effective APR for open-end credit to ensure that the cost of credit in the form of transaction charges or minimum or fixed finance charges was fully and uniformly disclosed. The history also indicates that Congress was aware that the effective APR would vary from the nominal APR, possibly substantially, when such charges were imposed. Moreover, in at least one hearing Congress heard testimony that an effective APR would not be useful to consumers, and might confuse them.

Consumer advocates believe the effective APR is a key disclosure. They contend that a sharp rise in the APR caused by the imposition of a fee makes consumers more likely to notice the fee and, therefore, to understand that their action triggering the fee increased the overall cost of credit. Consumer advocates have also stated that the effective APR should be used by consumers in evaluating their credit options and how they might avoid such charges in the future. Consumer advocates sometimes refer to this theory as the “shock value” of the APR.

Over the years, industry representatives have provided comments questioning the value to consumers of disclosing the effective APR on periodic statements. They believe the effective APR could be eliminated without diminishing consumer protections because in their view it confuses consumers who do not understand how it differs from the APR based on the periodic interest rate. Industry representatives also assert that the effective APR overstates the cost of cash advances because it is based on amortizing the fees over one billing cycle even though some consumers may carry the advance for a longer period.

Q23. Have changes in the market and in consumers' use of open-end credit since the adoption of TILA affected the usefulness of the historical APR disclosure? If so, how? The Board seeks data relevant to determining the extent to which consumers understand and use the historical APR disclosed on periodic statements. Is there data on how disclosure of the historical APR affects consumer behavior? Is it useful to consumers to include in the historical APR transaction charges such as cash advance fees and fees to transfer balances from other accounts?

Q24. Are there ways to improve consumers' understanding of the effective APR, such as by providing additional context for the disclosure? For example, should consumers be informed that the effective APR includes fees as well as interest, and that it assumes the fees relate to credit that was extended only for a single billing period?

Q25. Are there alternative frameworks for disclosing the costs of credit on periodic statements that might be more effective than disclosing individual fees and the effective APR? For example, would consumers benefit from a disclosure of the total dollar amount of all account-related fees assessed during the billing cycle, or the total dollar amount of fees by type? Would a cumulative year-to-date total for certain fees be useful for consumers?

Disclosures about rate changes. Under Regulation Z, some changes to the terms of an open-end plan require additional notice. (The statute does not address changes in terms to open-end plans.) The general rule is that 15 days' advance notice is required to increase the finance charge (including the interest rate) or an annual fee. 12 CFR 226.9(c)(1). However, advance notice is not required in all cases. For example, if the interest rate or other finance charge increases due to a consumer's default or delinquency, notice is required, but need not be given in advance. 12 CFR 226.9(c)(1); comment 9(c)(1)-3. And no change-in-terms notice is required if the creditor specifies in advance the circumstances under which an increase to the finance charge or an annual fee will occur. Comment 9(c)-1. For example, some credit card account agreements permit the card issuer to increase the interest rate if the consumer pays late, or if card issuer learns the consumer paid late on another credit account, even if the consumer has always paid the card issuer on time. Under Regulation Z, because the circumstances are specified in advance in the account agreement, the creditor need not provide a change-in-terms notice 15 days in advance of the increase; the new rate will appear on the periodic statement for the cycle in which the increase occurs.

Consumer advocates have expressed concerns that consumers who have triggered certain penalty rates may not be aware of the possibility of the increase, and thus are unable to shop for alternative financing before the increased rate takes effect.

Q26. Is mailing a notice 15 days before the effective date of a change in interest rates adequate to provide timely notice to consumers?

Q27. How are account-holders alerted to increased interest rates due to consumers' default on this account or another credit account? Are existing disclosure rules for increases to interest rates and other finance charges adequate to enable consumers to make timely decisions about how to manage their accounts? If not, provide suggestions.

In addition to rates and fees, the cost of credit can also be affected by the creditor's method of calculating the outstanding credit balance; the size of the consumer's monthly payment; and the creditor's allocation of that payment among different charges and transactions. As explained below, the Board seeks comment on the need for regulatory revisions to enhance consumers' understanding of the effect of these factors on the cost of credit.

Balance calculation methods. Under TILA and Regulation Z, consumers receive information on how account balances are calculated for open-end accounts although TILA does not govern which calculation methods creditors must use. Creditors may identify common balance calculation methods by name on credit card application disclosures. The method is described in more detail in account-opening disclosures and on periodic statements. See 15 U.S.C. 1637(a)(2), (b)(7), (c)(1)(A)(iv); 12 CFR 226.5a(b)(6), 226.6(a)(3), 226.7(e). The Board has published model clauses for some common balance calculation methods. 12 CFR 226, Appendix G-1.

The balance calculation method used by a creditor can affect the cost of credit. For example, for purposes of assessing finance charges on unpaid balances, some creditors include balances from the previous cycle, although some do not. Others may include purchases made during the current cycle, although not all do.

Q28. How significantly does the balance calculation method affect the cost of credit given typical account use patterns?

Q29. Do consumers understand that different balance calculation methods affect the cost of credit, and do they understand which balance calculation methods are more or less favorable for consumers? Would additional disclosures at account-opening assist consumers and, if so, what type of disclosures would be useful?

Q30. Explanations of balance calculation methods are complex and may include contractual terms such as rounding rules. Precise explanations are required on account-opening disclosures and on periodic statements. Should the Board permit more abbreviated descriptions on periodic statements, along with a reference to where consumers can obtain further information about the calculation method, such as the credit agreement or a toll-free telephone number?

Disclosing the effects of making only minimum payments. Subject to any required minimum payment, consumers are free to decide each billing period how much to pay on outstanding balances. The consumer's payment amount each period affects the overall cost of credit, and can result in negative amortization if the payments are insufficient to cover the accrued interest charges. Furthermore, if a consumer's account balance exceeds the established credit limit and the consumer's payment is not large enough to bring the balance below the limit, an over-the-credit-limit fee might be assessed even if the payment satisfied the minimum amount specified by the creditor.

TILA and Regulation Z do not require disclosures associated with payment amounts, except to require an advance notice when a change in the method of calculating the minimum payment will increase it. 12 CFR 226.9(c)(1). Minimum-payment amounts are set by agreement and disclosed in the periodic statement at the creditor's option or because of other applicable law. The banking agencies, through the Federal Financial Institutions Examination Council, have provided guidance to card issuers on safety-and-soundness issues relating to minimum payments, but the guidance does not mandate particular consumer disclosures. See the Board's Division of Banking Supervision and Regulation SR 03-1, Account Management and Loss Allowance Methodology for Credit Card Lending, January 8, 2003.

In recent years, consumer advocates have raised concerns about whether consumers understand the effects of making only minimum payments on their open-end accounts. Provisions in certain proposed bankruptcy reform bills before Congress would require creditors to provide standardized examples of the time it would take to pay off an assumed balance if the consumer makes only the minimum payment. See , for example, Sec. 1301 of H.R. 975, 108th Congress. The bills would allow consumers to obtain an estimate of how long it would take to pay their actual account balance by calling a toll-free telephone number established by the creditor. Industry representatives note that disclosures based on the status of individual accounts are burdensome; they also say that the disclosure would not be helpful to consumers because it would be based on an unrealistic assumption that the consumer has stopped using the account for new extensions of credit.

Consumer advocates have also expressed concerns about open-end accounts that are specifically established to finance a single purchase that is equal to or nearly equal to the credit limit, because consumers do not receive disclosures about the total payment amount and the time it will take to repay the debt based on the minimum payment. But industry representatives have noted that requiring separate disclosures at account opening in such cases would unfairly disadvantage merchants' credit plans because issuers of general purpose credit cards would not provide such disclosures at the point of sale for an identical transaction.

Q31. Is it appropriate for the Board to consider whether Regulation Z should be amended to require: (1) Periodic statement disclosures about the effects of making only the minimum payment (such as, disclosing the amortization period for their actual account balance assuming that the consumer makes only the minimum payment, or disclosing when making the minimum payment will result in a penalty fee for exceeding the credit limit); (2) account-opening disclosures showing the total of payments when the credit plan is specifically established to finance purchases that are equal or nearly equal to the credit limit (assuming only minimum payments are made)? Would such disclosures benefit consumers?

Q32. Is information about the amortization period for an account readily available to creditors based on current accounting systems, or would new systems need to be developed? What would be the costs of implementing such a rule?

Q33. Is there data on the percentage of consumers, credit cardholders in particular, that regularly or continually make only the minimum payments on open-end credit plans?

Payment allocation. Some accounts that have multiple features apply different periodic rates to particular features such as purchases, cash advances, and balance transfers. How a consumer's payment is allocated to the balance for each feature affects the consumer's cost of credit. For example, assume a consumer has a $100 outstanding balance for purchases carrying a 0% promotional APR, and a $150 outstanding balance from cash advances carrying an 18% APR. If the consumer makes a $100 payment, and the payment is allocated first to the balance carrying the lowest rate (the purchase balance), the consumer will pay finance charges on $150, the entire cash advance balance. Had the creditor allocated the consumer's payment to the cash advance, the consumer would incur finance charges only on the remaining cash advance balance of $50.

A creditor's method for allocating payment may be included in the credit contract, but neither TILA nor Regulation Z requires a creditor to use a particular payment allocation method or to disclose the method it uses. Indeed, the staff commentary expressly indicates that disclosure of the allocation of payments is not required. Comment 6(a)(3)-2.

Q34. What are the common methods of payment allocation and how much do they affect the cost of credit for the typical consumer?

Q35. Do creditors typically disclose their allocation methods, and if so, how?

Q36. Is it appropriate for the Board to consider whether Regulation Z should be amended to require disclosure of the payment allocation method on the periodic statement? Would such a disclosure materially benefit consumers? Some creditors offer a low promotional rate, such as a 0% APR for cash advances for a limited time and a higher APR for purchases. Creditors typically do not allocate any payments to purchases until the entire cash advance is paid off. Are additional disclosures needed to avoid consumer confusion or misunderstanding? What would the cost be to creditors of providing such a disclosure? What level of detail would provide useful information while avoiding information overload?

TILA authorizes the Board to permit tolerances for numerical disclosures other than the APR. 15 U.S.C. 1631(d). Such tolerances are required to be narrow enough to prevent the tolerance from resulting in misleading disclosures or disclosures that circumvent the purposes of TILA.

Q37. What tolerances should the Board consider adopting pursuant to this provision? Should the Board expressly permit an overstatement of the finance charge on open-end credit? Would that adequately address concerns over proper disclosure of fees? How narrow should any tolerance be to ensure TILA's goal of uniformity is preserved?

Q38. In considering changes to the disclosures required by Regulation Z, the Board seeks data relevant to the costs and benefits of the proposed revisions. Accordingly, commenters proposing revisions to the disclosure requirements are requested to provide data estimating the cost difference in complying with the existing rules compared to any proposed alternatives, including any one-time costs to implement the changes.

Q39. Are there particular types of open-end credit accounts, such as subprime or secured credit card accounts, that warrant special disclosure rules to ensure that consumers have adequate information about these products?

Q40. Are there additional issues the Board should consider in reviewing the content of open-end disclosures? For example, in 2000, the Board revised the requirements for disclosures that accompany credit card applications and solicitations. 65 FR 58903, October 3, 2000. Is the information currently provided with credit card applications and solicitations adequate and effective to assist consumers in deciding whether or not to apply for an account?

Q41. Are there classes of transactions for which the Board should exercise its exemption authority under 15 U.S.C. 1604(a) to effectuate TILA's purpose, facilitate compliance or prevent circumvention or evasion, or under 15 U.S.C. 1604(f) of TILA because coverage does not provide a meaningful benefit to consumers in the form of useful information or protection? If so, please address the factors that the Board is required to consider under the statute.

Q42. Should the Board exercise its authority under 15 U.S.C. 1604(g) to provide a waiver for certain borrowers whose income and assets exceed the specified amounts?

TILA and Regulation Z provide protections to consumers who obtain open-end credit. Some protections apply only to transactions involving credit cards; others apply to all extensions of credit under an open-end plan. Protections involving billing disputes generally allow consumers to avoid paying the disputed amount while the card issuer investigates the matter, and prohibit card issuers from assessing finance charges on the disputed amount or reporting the amount as delinquent until the investigation is completed. To summarize the rules:

• Consumers using an open-end credit plan may assert a billing error, which triggers creditors' duty to investigate the allegation within prescribed time limits. A “billing error” includes a periodic statement that reflects an extension of credit for property or services: (1) Not authorized by the consumer; or (2) not accepted by the consumer, or not delivered to the consumer as agreed (for example, when clothing is sent in the wrong size or color). A billing error also includes creditors' failure to credit payments or to deliver statements to a consumer's address of record. 15 U.S.C. 1666; 12 CFR 226.13.

• A cardholder may assert against the card issuer a claim or defense for defective goods or services purchased with a credit card, as to unpaid balances for the goods or services, if the merchant honoring the card fails to resolve the dispute. This right is limited to disputes exceeding $50 for purchases made in the consumer's home state or within 100 miles. 15 U.S.C. 1666i; 12 CFR 226.12(c).

• Cardholders' liability for the unauthorized use of a credit card is capped at $50. But cardholders have no liability for charges made after notification is given to the card issuer, or charges made when the card itself (or other sufficient means of identifying the cardholder) is not presented. 15 U.S.C. 1643; 12 CFR 226.12(b).

• Credit cards may be issued to consumers only upon request. One or more credit cards may be issued to cardholders in renewal of, or substitution for, an accepted card, with some conditions. 15 U.S.C. 1642; 12 CFR 226.12(a).

• Payments received from a consumer on an open-end credit plan must be posted promptly to the consumer's account. Under Regulation Z, payments generally must be credited to a consumer's account as of the date of receipt, except when a delay in crediting does not result in a finance charge or “other charge” being imposed. Creditors may specify requirements for the consumer to follow in making payments. 15 U.S.C. 1666c; 12 CFR 226.10.

Q43. The Board solicits comments on whether there is a need to revise the provisions implementing TILA's substantive protections for open-end credit accounts. For example, are the existing rules adequate, and if not, why not? Are creditors' responsibilities under the rules clear? Do the existing rules need to be updated to address particular types of accounts or practices, or to address technological changes?

Accessing credit card accounts. TILA defines a credit card as “any card, plate, coupon book or other credit device existing for the purpose of obtaining money, property, labor, or services on credit.” 15 U.S.C. 1602(k). In addition, Regulation Z provides that a credit card must be a device “that may be used from time to time to obtain credit.” 12 CFR 226.2(a)(15).

It is increasingly common for consumers to access their credit card plans without presenting the card, for example, in making purchases over the Internet and by telephone. Credit card transactions conducted by telephone or Internet receive all of TILA's protections, even though the physical device is not presented to the merchant when the account number is transmitted.

Q44. Information is requested on whether industry has developed, or is developing, open-end credit plans that allow consumers to conduct transactions using only account numbers and do not involve the issuance of physical devices traditionally considered to be credit cards. If such plans exist, what policies do such creditors have for resolving accountholder claims when disputes arise?

“ Convenience checks .” Credit card issuers also provide account-holders with “convenience checks” that can be used to obtain cash, purchase goods or services, or pay the outstanding balance on another account. Convenience checks are mailed to consumers unsolicited, sometimes with consumers' monthly statements. The amount of each check issued by the consumer will be billed to the consumers' credit card account. Convenience checks allow consumers to use their credit card account to finance the purchase of goods or services at merchants that do not accept credit cards. Anecdotal evidence also suggests convenience checks are used for large-dollar transactions, such as college tuition payments.

Currently, a convenience check is not treated as a credit card under Regulation Z because it can be used only once and not “from time to time.” Although the rules for resolving billing errors apply to all transactions conducted under an open-end plan, including those involving convenience checks, TILA's protections regarding merchant disputes, unauthorized use of the account, and the prohibition against unsolicited issuance apply only to credit cards and do not cover transactions using convenience checks. 6

In discussing the issue at the October 2003 meeting of the Board's Consumer Advisory Council, some members stated that Regulation Z's protections for credit cards should be revised to apply to all credit extended under a credit card account, whether the card itself or another device, such as a convenience check, is used. They noted that the Board could cover convenience checks by revising the regulation's definition of a “credit card” for this purpose, to eliminate the requirement that the device be usable “from time to time.” But others stated that convenience checks should not be covered by TILA's protections and should be treated the same way as a check drawn on a deposit account.

Q45. Have consumers experienced problems with convenience checks relating to unauthorized use or merchant disputes, for example? Should the Board consider extending any of TILA's protections for credit card transactions to other extensions on credit card accounts and, in particular, convenience checks?

Unsolicited issuance of credit cards. Limitations on issuing unsolicited credit cards were added to TILA in 1970 to address concerns about theft, inconvenience to consumers, and consumers' management of their personal finances. TILA generally prohibits creditors from issuing credit cards except in response to a request or application but exempts cards issued as renewals or substitutions to replace an accepted card. 15 U.S.C. 1642.

In 2003, Board staff revised the commentary to the relevant provision of Regulation Z, § 226.12(a), to allow card issuers to replace an accepted card with more than one card, subject to certain conditions. 68 FR 16185, April 3, 2003. Based on the revisions, card issuers can, for example, issue credit cards using a new format or technology to existing accountholders, even though the new card is intended to supplement rather than replace the traditional card. Based on the public comments, staff stated it planned to recommend that the Board consider amending § 226.12(a) to allow the unsolicited issuance of additional cards on an existing account even when the accountholder's existing card is not being replaced, under certain conditions.

Q46. Should the Board consider revising Regulation Z to allow creditors to issue additional credit cards on an existing account at any time, even when there is no renewal or substitution of a previously issued card? If so, what conditions or limitations should apply? For example, should the Board require that the additional cards be sent unactivated? If activation is required, should the Board allow issuers to use alternative security measures in lieu of activation, such as providing advance written notice to consumers that additional cards will be sent?

Payments received from a consumer on an open-end credit plan must be credited to the account as of the date the payment is received by the creditor. Creditors cannot impose a finance charge or “other charge” if the creditor has received payment in a readily identifiable form in the amount, manner, location, and time indicated by the creditor to avoid the imposition of the charge. 12 CFR 226.10(a). Creditors may specify requirements for making payments such as setting a cut-off hour for payment to be received, but the requirements must be reasonable and it should not be difficult for most consumers to make conforming payments. Comments 10(b)-1, -2.

Consumer advocates have raised concerns about the reasonableness of card issuers' cut-off hours. They note that some creditors' service centers are open 24 hours 7 days a week to receive mail delivery and electronic payments continuously. In addition, questions have arisen concerning creditors' use of third-party payments processors, and whether the receipt of payments by the third-party is deemed to be receipt by the creditor.

Q47. What are the cut-off hours used by most issuers for receiving payments? How do issuers determine the cut-off hours?

Q48. Do card issuers' payment instructions and cut-off hours differ according to whether the consumer makes the payment by check or electronic fund transfer, or by using the telephone or Internet? What is the proportion of consumers who make payments by mail as opposed to using expedited methods, such as electronic payments?

Q49. Do the existing rules and creditors' current disclosure practices clearly inform cardholders of the date and time by which card issuers must receive payment to avoid additional fees? If not, how might disclosure requirements be improved?

Q50. Do the operating hours of third-party processors differ from those of creditors, and if so, how? Do creditors treat payments received by a third-party processor as if the payment was received by the creditor? What guidance, if any, is needed concerning creditors' obligation in posting and crediting payments when third-party processors are used?

Q51. Should the Board issue a rule requiring creditors to credit payments as of the date they are received, regardless of the time?

In addition to responding to the Board's request for comments on the open-end credit issues identified above, the Board invites the public to discuss other ways that Regulation Z might be improved and to provide specific suggestions for implementing those changes, including:

Q52. Providing guidance not expressly addressed in existing rules. Board staff is asked to provide informal oral advice on an ongoing basis about how Truth in Lending rules may apply to new products and circumstances not expressly addressed in Regulation Z and its official staff commentary. The Board invites the public to identify issues where they believe staff's informal advice should be formalized or addressed anew. Should such changes be adopted after notice and public comment, they would apply prospectively and compliance would become mandatory after an appropriate implementation period.

Q53. Adjusting exceptions based on de minimis amounts. To facilitate compliance, the Board has provided a number of exceptions based on de minimis dollar amounts. For example, TILA's open-end rules require creditors to transmit periodic statements at the end of billing cycles in which there is an outstanding balance or a finance charge is imposed; the regulation relieves creditors of that duty if the outstanding debit or credit balance is $1 or less (and no finance charge is imposed). 15 U.S.C. 1637(b); 12 CFR 226.5(b)(2)(i). Similarly, the Board provides for a simplified way to calculate the effective APR on periodic statements when a minimum finance charge is assessed and is 50 cents or less. 12 CFR 226.14(c)(4). Should de minimis amounts such as these be adjusted, and if so, to what extent?

Q54. Improving plain language and organization; identifying technical revisions. The Board is required to use “plain language” in all proposed and final rules published after January 1, 2000. 12 U.S.C. 4809. The Board invites comments on whether the existing rules are clearly stated and effectively organized, and how, in the upcoming review of Regulation Z, the Board might consider making the text of Regulation Z and its official staff commentary easier to understand. Are there technical revisions to the regulation or commentary that should be addressed?

Q55. Deleting obsolete rules or guidance. A goal of the Regulation Z review is to delete provisions that have become obsolete due to technological or other developments. Are there any such provisions?

Q56. Recommendations for legislative changes. Are there any legislative changes to TILA the Board should consider recommending to the Congress? For example, where a rule is based on a dollar amount established by the statute, the Board seeks comment on whether to recommend adjustments of those dollar amounts to the Congress, and if so, the amount of such adjustments.

Q57. Recommendations for nonregulatory approaches. In addition to requesting comment on suggestions for regulatory or statutory changes, the Board seeks comment on nonregulatory approaches that may further the Board's goal of improving the effectiveness of TILA's disclosures and substantive protections. Such approaches could include guidance in the form of best practices or consumer education efforts. For example, calculation tools are widely available on the Internet. How might the availability of those tools be used to address concerns that consumers need better information about the effects of making only minimum payments on their account? Are there any data that indicate the extent to which consumers access calculation tools that are publicly available?

Q58. Reviewing other aspects of Regulation Z. Although the Board is proposing to focus the review primarily on the rules for open-end credit, are there other areas or particular sections of Regulation Z that should be included in this initial stage of the review? For example:

(a) Definitions and rules of construction. Are changes needed to the definitions or rules of construction in § 226.2 of the regulation? Unless defined in the regulation, terms have the meaning given to them by state law or contract. Are there specific terms that are not defined in Regulation Z that should be? For example, the Board's staff has received questions about § 226.20, which generally requires creditors to provide new TILA disclosures when a closed-end loan is refinanced. Under the regulation and staff commentary, a “refinancing” is generally deemed to occur when an existing obligation has been satisfied and replaced by a new obligation, “based on the parties” contract and applicable law.” See Comment 20(a)-1. Concerns have been raised about the current approach, and whether it results in uniform application of Regulation Z because different states are free to draw different conclusions about when a particular set of circumstances constitutes a “satisfaction and replacement.” Courts may take a case-by-case approach to ascertain the parties' intent before deciding whether a new promissory note satisfied and replaced the original note, or whether the new note merely “relates back” to the original note that is not deemed to be extinguished. The issue raised is whether the Board should consider adopting a definition of “refinancing” that does not rely on state law and seeks to create a more uniform approach in determining when new disclosures are required.

(b) Exempt transactions. Section 226.3 of Regulation Z implements the provisions of 15 U.S.C. 1603, which specifies classes of transactions not covered by TILA. Do rules implementing 15 U.S.C. 1603 need to be updated?

Although the focus of this ANPR is TILA and Regulation Z's rules for open-end credit not secured by a home, the Board has the following plans for reviewing other areas of Regulation Z:

• Predatory mortgage lending. Issues related to predatory mortgage lending will be examined in public hearings held pursuant to the Home Ownership and Equity Protection Act (HOEPA), which amended TILA in 1994. HOEPA uses rate and fee triggers to identify a class of high-cost closed-end mortgage loans, and it provides consumers entering into these transactions with additional disclosures and special protections. HOEPA requires that the Board periodically hold public hearings on home-equity lending and the adequacy of protections under HOEPA. After holding hearings in 2000, the Board amended the rules implementing HOEPA, which became effective on October 1, 2002. Board staff plans to ask the Board to consider holding further hearings under HOEPA during 2006.

• Closed-end mortgage credit. From 1996 to 1998, the Board and HUD studied possible regulatory changes to TILA and the Real Estate Settlement Procedures Act (RESPA) to improve mortgage-related disclosures. The Board concluded that meaningful changes to the disclosures required legislative action. The Board and HUD submitted a joint report to the Congress outlining a framework that could be used as a starting point for considering legislative changes. Although legislation has not been enacted, in 2002 HUD commenced a rulemaking that sought to adopt many of the changes recommended in the Board-HUD joint report. HUD's proposal was not finalized, and HUD has announced that it will issue a revised proposal for public comment in the near future. The Board believes that significant changes to mortgage disclosures under TILA would best be considered in connection with HUD's future rulemaking.

• Home-equity lines of credit and adjustable-rate mortgage loans. Staff plans to initiate a separate review, in 2005, of Regulation Z's rules requiring brochures and generic disclosures when consumers obtain applications for closed-end adjustable-rate mortgages (ARMs) and open-end home-equity lines of credit (HELOCs). The issues to be considered deal mainly with variable-rate mortgage lending, which are distinct from issues affecting general open-end credit rules. The ARM rules would be reviewed in consultation with the other federal agencies. Because the HELOC and ARM rules are similar, these rules are best reviewed simultaneously to maximize consistency.

The FAA has implemented new procedures for maintaining AD dockets electronically. As of May 17, 2004, new AD actions are posted on DMS and assigned a docket number. We track each action and assign a corresponding directorate identifier. The DMS AD docket number is in the form “Docket No. FAA-2004-99999.” The Transport Airplane Directorate identifier is in the form “Directorate Identifier 2004-NM-999-AD.” Each DMS AD docket also lists the directorate identifier (“Old Docket Number”) as a cross-reference for searching purposes.

We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed under ADDRESSES. Include “Docket No. FAA-2004-19812; Directorate Identifier 2003-NM-197-AD” in the subject line of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments submitted by the closing date and may amend the proposed AD in light of those comments.

We will post all comments we receive, without change, to http://dms.dot.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of that Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You can review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you can visit http://dms.dot.gov.

We are reviewing the writing style we currently use in regulatory documents. We are interested in your comments on whether the style of this document is clear, and your suggestions to improve the clarity of our communications that affect you. You can get more information about plain language at http://www.faa.gov/language and http://www.plainlanguage.gov.

You can examine the AD docket on the Internet at http://dms.dot.gov, or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the DMS receives them.

We have received several reports of cracking of the web bulkhead at nacelle station 180 on several Boeing Model 747 airplanes equipped with Pratt and Whitney Model JT9D-3 and -7 (except -70) series engines. These airplanes had approximately 4,100 to 18,500 total flight cycles and 23,500 to 89,100 total flight hours. The cracking was caused by fatigue and sonic-induced vibration. Fatigue cracking of the web bulkhead, if not detected and corrected, could result in the loss of the load path of the bulkhead at nacelle station 180, which when combined with the loss of the midspar load path, could result in the in-flight separation of the engine and strut. Such separation may result in secondary damage to the airplane and consequent reduced controllability of the airplane.

We have reviewed Boeing Alert Service Bulletin 747-54A2220, dated July 31, 2003. The service bulletin describes procedures for repetitive detailed inspections to detect cracking of the aft and forward surfaces of the bulkhead web at nacelle station 180, and repair if necessary. The compliance time for the repetitive detailed inspections is either 600 or 1,200 flight cycles, depending on the configuration of the airplane. Accomplishing the actions specified in the service information is intended to adequately address the unsafe condition.

We have evaluated all pertinent information and identified an unsafe condition that is likely to exist or develop on other airplanes of this same type design. Therefore, we are proposing this AD, which would require you to use the service information described previously to perform these actions, except as discussed under “Difference Between the Proposed AD and Service Bulletin.”

The service bulletin specifies that you should repair cracks in accordance with the applicable 747 Structural Repair Manual (SRM), but this proposed AD would require you to repair any crack that exceeds the repair limits specified in the applicable SRM in one of the following ways:

• Using a method that we approve; or

• Using data that meet the type certification basis of the airplane, and that have been approved by a Boeing Company Designated Engineering Representative who has been authorized by the FAA to make those findings.

This proposed AD would affect about 223 airplanes worldwide and 73 airplanes of U.S. registry. The proposed actions would take about 1 work hour per airplane, at an average labor rate of $65 per work hour. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $4,745, or $65 per airplane, per inspection cycle.

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.

For the reasons discussed above, I certify that the 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. 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 regulatory evaluation of the estimated costs to comply with this proposed AD. See the ADDRESSES section for a location to examine the regulatory evaluation.

The FAA has implemented new procedures for maintaining AD dockets electronically. As of May 17, 2004, new AD actions are posted on DMS and assigned a docket number. We track each action and assign a corresponding directorate identifier. The DMS AD docket number is in the form “Docket No. FAA-2004-99999.” The Transport Airplane Directorate identifier is in the form “Directorate Identifier 2004-NM-999-AD.” Each DMS AD docket also lists the directorate identifier (“Old Docket Number”) as a cross-reference for searching purposes.

We invite you to submit any relevant written data, views, or arguments regarding this proposed AD. Send your comments to an address listed under ADDRESSES . Include “Docket No. FAA-2004-19766; Directorate Identifier 2002-NM-161-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the proposed AD. We will consider all comments submitted by the closing date and may amend the proposed AD in light of those comments.

We will post all comments we receive, without change, to http://dms.dot.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of our docket Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You can review the DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you can visit http://dms.dot.gov.

We are reviewing the writing style we currently use in regulatory documents. We are interested in your comments on whether the style of this document is clear, and your suggestions to improve the clarity of our communications that affect you. You can get more information about plain language at http://www.faa.gov/language and http://www.plainlanguage.gov.

You can examine the AD docket on the Internet at http://dms.dot.gov, or in person at the Docket Management Facility office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Management Facility office (telephone (800) 647-5227) is located on the plaza level of the Nassif Building at the DOT street address stated in the ADDRESSES section. Comments will be available in the AD docket shortly after the DMS receives them.

The Civil Aviation Authority (CAA), which is the airworthiness authority for the United Kingdom, notified us that an unsafe condition may exist on all BAE Systems (Operations) Limited (Jetstream) Model 4101 airplanes. The CAA advises that, during a test flight following maintenance work, the aileron trim system did not function correctly. Investigation revealed that the aileron trim cables were connected incorrectly (cross-connected), though the aileron trim chain was installed correctly. This condition, if not corrected, could result in failure of the aileron trim system and consequent reduced controllability of the airplane.

BAE Systems (Operations) Limited has issued Service Bulletin J41-27-061, Revision 1, dated July 12, 2002. The service bulletin describes procedures for replacing the aileron trim chain with a new, improved aileron trim chain, and modifying the installation of the aileron trim chain. The aileron trim cables cannot be cross-connected on the new aileron trim chain. Thus, accomplishing the actions specified in the service information is intended to adequately address the unsafe condition. The CAA mandated the service information and issued British airworthiness directive 006-11-2001 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 the FAA informed of the situation described above. We have examined the CAA's findings, evaluated all pertinent information, and determined that we need to issue an AD for products of this type design that are certificated for operation in the United States.

Therefore, we are proposing this AD, which would require accomplishing the actions specified in the service information described previously, except as discussed under “Differences Among the Proposed AD, Service Information, and British Action.”

British airworthiness directive 006-11-2001 specifies a compliance time of “not later than the next aileron trim circuit break down, or by 31 March 2005, whichever is the sooner.” This proposed AD specifies a compliance time of 30 months after the effective date of this AD. We find that this is a compliance time that is comparable in length to that in the British airworthiness directive, will allow the majority of operators sufficient time to accomplish the proposed action during a regularly scheduled maintenance visit, and will not compromise safety.

The Accomplishment Instructions of the referenced service bulletin describe procedures for reporting compliance with the service bulletin. This proposed AD would not require that action.

This proposed AD would affect about 57 airplanes of U.S. registry. The proposed actions would take about 36 work hours per airplane, at an average labor rate of $65 per work hour. Required parts would cost about $2,500 per airplane. Based on these figures, the estimated cost of the proposed AD for U.S. operators is $275,880, or $4,840 per airplane.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, the FAA is charged with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this AD.

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.

For the reasons discussed above, I certify that the 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. 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 regulatory evaluation of the estimated costs to comply with this proposed AD. See the ADDRESSES section for a location to examine the regulatory evaluation.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

Electronic filing of comments (preferred method): Please submit electronic comments (proposals) and other data to Subsistence@fws.gov. Please submit as either WordPerfect or MS Word files, avoiding the use of any special characters and any form of encryption.

The Federal Subsistence Board will hold a public meeting in Anchorage, Alaska, within the comment period to receive comments on this proposed rule. Widespread notice will be made of this meeting in the Statewide newspapers and by general news release.

In Title VIII of the Alaska National Interest Lands Conservation Act (ANILCA) (16 U.S.C. 3111-3126), Congress found that “the situation in Alaska is unique in that, in most cases, no practical alternative means are available to replace the food supplies and other items gathered from fish and wildlife which supply rural residents dependent on subsistence uses * * *” and that “continuation of the opportunity for subsistence uses of resources on public and other lands in Alaska is threatened * * *” As a result, Title VIII requires, among other things, that the Secretary of the Interior and the Secretary of Agriculture (Secretaries) implement a joint program to grant a preference for subsistence uses of fish and wildlife resources on public lands in Alaska, unless the State of Alaska enacts and implements laws of general applicability that are consistent with ANILCA and that provide for the subsistence definition, preference, and participation specified in Sections 803, 804, and 805 of ANILCA.

The State implemented a program that the Department of the Interior previously found to be consistent with ANILCA. However, in December 1989, the Alaska Supreme Court ruled in McDowell v. State of Alaska that the rural preference in the State subsistence statute violated the Alaska Constitution. The Court's ruling in McDowell required the State to delete the rural preference from the subsistence statute and, therefore, negated State compliance with ANILCA. The Court stayed the effect of the decision until July 1, 1990. As a result of the McDowell decision, the Department of the Interior and the Department of Agriculture (Departments) assumed, on July 1, 1990, responsibility for implementation of Title VIII of ANILCA on public lands. On June 29, 1990, the Departments published the Temporary Subsistence Management Regulations for Public Lands in Alaska in the Federal Register (55 FR 27114).

As a result of this joint process between Interior and Agriculture, these regulations can be found in the Code of Federal Regulations (CFR) both in Title 36, “Parks, Forests, and Public Property,” and Title 50, “Wildlife and Fisheries,” at 36 CFR 242.1-242.28 and 50 CFR 100.1-100.28, respectively. The regulations contain subparts as follows: Subpart A, General Provisions; Subpart B, Program Structure; Subpart C, Board Determinations; and Subpart D, Subsistence Taking of Fish and Wildlife.

Consistent with Subparts A, B, and C of these regulations, as revised May 7, 2002 (67 FR 30559), the Departments established a Federal Subsistence Board to administer the Federal Subsistence Management Program. The Board's composition includes a Chair appointed by the Secretary of the Interior with concurrence of the Secretary of Agriculture; the Alaska Regional Director, U.S. Fish and Wildlife Service; the Alaska Regional Director, U.S. National Park Service; the Alaska State Director, U.S. Bureau of Land Management; the Alaska Regional Director, U.S. Bureau of Indian Affairs; and the Alaska Regional Forester, USDA Forest Service. Through the Board, these agencies participated in the development of regulations for Subparts A, B, and C, and the annual Subpart D regulations.

Federal Subsistence Management Regulations (50 CFR 100.3 and 36 CFR 242.3) currently specify that they apply on “all navigable and non-navigable waters within the exterior boundaries...” of the parks, refuges, forests, conservation areas, recreation areas, and Wild and Scenic Rivers. This includes hundreds of thousands of acres of saltwater embayments within National Wildlife Refuge boundaries that were not withdrawn prior to Statehood where the Secretaries have unintentionally exerted jurisdiction. We have concluded that our regulations (50 CFR 100.3 and 36 CFR 242.3) are in error as they relate to some bays associated with certain Refuges in Western Alaska. Therefore, we believe it is appropriate to correct the Federal Subsistence Management Regulations for Public Lands in Alaska to accurately reflect the intended jurisdiction in those areas.

During the early interagency discussions relative to inclusion of fisheries management in the Federal Subsistence Management Program, there does not appear to have been any intention to specifically extend Federal jurisdiction to various embayments where there was no pre-Statehood withdrawal of submerged lands and waters. The preambles of the Advance Notice of Proposed Rulemaking (61FR 15014, April 4, 1996) and the Proposed Rule (62 FR 66215, December 17, 1997) refer only to jurisdiction problems along rivers, not in marine areas.

Prior to 1999, the Federal Subsistence Management Program clearly and specifically identified the waters under its jurisdiction in the 1992 rule that set out the structure of the Federal Program (57 FR 22940, May 29, 1992). The various embayments under discussion were not included in that 1992 rule. The Ninth Circuit Court decision in Alaska v. Babbitt, 72.3d 698 (1995) (the Katie John decision), expanded Federal subsistence management to those navigable waters where the Federal Government holds reserved water rights. As work began to identify these waters, discussion centered on the problem of “checkerboard jurisdiction” as it occurred on rivers within Conservation System Units. Federal officials recognized that meaningful management of a subsistence priority could not be accomplished unless there was a more unified area of jurisdiction within Federal conservation system units and other Federal areas. As a result, wording was adopted that extended Federal jurisdiction over subsistence fisheries to “all navigable and non-navigable waters within the exterior boundaries * * *” This wording created some unforeseen consequences.

Additionally, ANILCA Section 103 is very specific that in coastal areas, boundaries for new additions to Federal reservations shall not extend seaward beyond the mean high-tide line unless the State concurs. The regulations published in compliance with that section delineating the National Wildlife Refuge boundaries (48 FR 7890, February 24, 1983) specify that Federal ownership does not extend below mean high tide except where the State may agree to that extension. Even though maps show hundreds of thousands of acres of marine waters (exclusive of pre-Statehood withdrawals) within the exterior boundaries of refuges, the Fish and Wildlife Service has never attempted nor intended to exercise any jurisdiction within those areas. Reworded Federal Subsistence Management Regulations would bring consistency among these documents.

A further point of conflict arises over the identification of the boundary of the Alaska Maritime National Wildlife Refuge (and, therefore, the waters within that boundary.) One interpretation of the Refuge maps and BLM Master Title Plats is that there is a landward boundary of the Alaska Maritime NWR identified and that the seaward boundary is located at the boundary of territorial waters. If this interpretation is correct, then the Federal Subsistence Management Program would have subsistence fisheries jurisdiction over most of the marine waters in the State of Alaska. This was clearly not the intent when including all waters within the exterior boundaries.

Additionally, in the final Issue Paper and Recommendations of the Alaska [Katie John] Policy Group (attachment to Acting Regional Solicitor Dennis Hopewell's memorandum of June 15, 1995, as amended July 12, 1995), he stated that:

He made the following recommendations:

In order to correct any misconceptions regarding Secretarial intent; to create consistency among Solicitor opinions, subsistence regulations, and boundary regulations; and to avoid unnecessary complications and public confusion, we are proposing the amendments contained herein. The proposed § __.3(b) includes those areas (Alaska Maritime and Yukon Delta) where marine waters are included, and the regulations apply to both navigable and non-navigable waters. These are the refuge areas where pre-Statehood withdrawals exist. The proposed § __.3(c) includes those areas where marine waters are not included, but the regulations still apply to both navigable and non-navigable waters. The proposed § __.3(d) includes those areas where the regulations apply only to non-navigable waters. These are the unassociated BLM lands that are not a part of a conservation system unit and have not been withdrawn from the public domain for specific purposes. Also, the addition of the text “other than military lands” is a clarification, inasmuch as the military lands have never been included in the Federal Subsistence Management Program because of national security and defense reasons and because they are not considered “public” lands.

Because this rule relates to public lands managed by an agency or agencies in both the Departments of Agriculture and the Interior, identical text would be incorporated into 36 CFR part 242 and 50 CFR part 100.

A Draft Environmental Impact Statement (DEIS) for developing a Federal Subsistence Management Program was distributed for public comment on October 7, 1991. That document described the major issues associated with Federal subsistence management as identified through public meetings, written comments, and staff analysis, and examined the environmental consequences of four alternatives. Proposed regulations (Subparts A, B, and C) that would implement the preferred alternative were included in the DEIS as an appendix. The DEIS and the proposed administrative regulations presented a framework for an annual regulatory cycle regarding subsistence hunting and fishing regulations (Subpart D). The Final Environmental Impact Statement (FEIS) was published on February 28, 1992.

Based on the public comments received, the analysis contained in the FEIS, and the recommendations of the Federal Subsistence Board and the Department of the Interior's Subsistence Policy Group, the Secretary of the Interior, with the concurrence of the Secretary of Agriculture, through the U.S. Department of Agriculture—Forest Service, implemented Alternative IV as identified in the DEIS and FEIS (Record of Decision on Subsistence Management for Federal Public Lands in Alaska (ROD), signed April 6, 1992). The DEIS and the selected alternative in the FEIS defined the administrative framework of an annual regulatory cycle for subsistence hunting and fishing regulations. The final rule for Subsistence Management Regulations for Public Lands in Alaska, Subparts A, B, and C, published May 29, 1992, implemented the Federal Subsistence Management Program and included a framework for an annual cycle for subsistence hunting and fishing regulations. The following Federal Register documents pertain to this rulemaking:

An environmental assessment was prepared in 1997 on the expansion of Federal jurisdiction over fisheries and is available by contacting the office listed under FOR FURTHER INFORMATION CONTACT. The Secretary of the Interior with the concurrence of the Secretary of Agriculture determined that the expansion of Federal jurisdiction did not constitute a major Federal action significantly affecting the human environment, and therefore, signed a Finding of No Significant Impact.

The intent of all Federal subsistence regulations is to accord subsistence uses of fish and wildlife on public lands a priority over the taking of fish and wildlife on such lands for other purposes, unless restriction is necessary to conserve healthy fish and wildlife populations. A Section 810 analysis was completed as part of the FEIS process. The final Section 810 analysis determination appeared in the April 6, 1992, ROD, which concluded that the Federal Subsistence Management Program may have some local impacts on subsistence uses, but the program is not likely to significantly restrict subsistence uses.

These rules contain no new information collection requirements subject to Office of Management and Budget (OMB) approval under the Paperwork Reduction Act of 1995. They apply to the use of public lands in Alaska. The information collection requirements described in the rule were approved by OMB under 44 U.S.C. 3501 and were assigned clearance number 1018-0075, which expires August 31, 2006. We will not conduct or sponsor, and you are not required to respond to, a collection of information request unless it displays a currently valid OMB control number.

Economic Effects—This rule is not a significant rule subject to OMB review under Executive Order 12866. This rulemaking will impose no significant costs on small entities; this rule does not restrict any existing sport or commercial fishery on the public lands, and subsistence fisheries will continue at essentially the same levels as they presently occur. The number of businesses and the amount of trade that will result from this Federal-land related activity is unknown but expected to be insignificant.

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq. ) requires preparation of regulatory flexibility analyses for rules that will have a significant economic effect on a substantial number of small entities, which include small businesses, organizations, or governmental jurisdictions. The Departments have determined that this rulemaking will not have a significant economic effect on a substantial number of small entities within the meaning of the Regulatory Flexibility Act.

This rulemaking will impose no significant costs on small entities; the exact number of businesses and the amount of trade that will result from this Federal-land related activity is unknown. The number of small entities affected is unknown; however, the fact that the effects will be seasonal in nature and will, in most cases, not impact continuing preexisting uses of public lands indicates that the effects will not be significant.

Title VIII of ANILCA requires the Secretaries to administer a subsistence preference on public lands. The scope of this program is limited by definition to certain public lands. Likewise, these regulations have no potential takings of private property implications as defined by Executive Order 12630.

The Service has determined and certifies pursuant to the Unfunded Mandates Reform Act, 2 U.S.C. 1502 et seq. , that this rulemaking will not impose a cost of $100 million or more in any given year on local or State governments or private entities. The implementation of this rule is by Federal agencies, and no cost is involved to any State or local entities or Tribal governments.

The Service has determined that these final regulations meet the applicable standards provided in Sections 3(a) and 3(b)(2) of Executive Order 12988 on Civil Justice Reform.

In accordance with Executive Order 13132, the rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. Title VIII of ANILCA precludes the State from exercising management authority over wildlife resources on Federal lands.

In accordance with the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), 512 DM 2, and E.O. 13175, we have evaluated possible effects on Federally recognized Indian tribes and have determined that there are no effects. The Bureau of Indian Affairs is a participating agency in this rulemaking.

On May 18, 2001, the President issued Executive Order 13211 on regulations that significantly affect energy supply, distribution, or use. This Executive Order requires agencies to prepare Statements of Energy Effects when undertaking certain actions. As this rule is not a significant regulatory action under Executive Order 13211, affecting energy supply, distribution, or use, this action is not a significant action and no Statement of Energy Effects is required.

William Knauer drafted these regulations under the guidance of Thomas H. Boyd of the Office of Subsistence Management, Alaska Regional Office, U.S. Fish and Wildlife Service, Anchorage, Alaska. Taylor Brelsford, Alaska State Office, Bureau of Land Management; Greg Bos, Carl Jack, and Rod Simmons, Alaska Regional Office, U.S. Fish and Wildlife Service; Sandy Rabinowitch and Bob Gerhard, Alaska Regional Office, National Park Service; Warren Eastland and Dr. Glenn Chen, Alaska Regional Office, Bureau of Indian Affairs; and Steve Kessler, Alaska Regional Office, USDA-Forest Service provided additional guidance.

For the reasons set out in the preamble, the Secretaries propose to amend Title 36, part 242, and Title 50, part 100, of the Code of Federal Regulations, as set forth below.

For further information, please see the information provided in the direct final action, with the same title, that is located in the “Rules and Regulations” section of this Federal Register publication.

For further information, please see the information provided in the direct final action, with the same title, that is located in the “Rules and Regulations” section of this Federal Register publication.

For additional information, please see the immediate final rule published in the “Rules and Regulations” section of this Federal Register .

This document relates to an NPRM previously issued by NHTSA (69 FR 27990, May 17, 2004; Docket 2004-17694) that proposed to add a vehicle-to-pole test to Federal Motor Vehicle Safety Standard (FMVSS) No. 214, “Side Impact Protection” (49 CFR 571.214). The pole test simulates a vehicle's side impact crash into narrow fixed objects like telephone poles and trees. If adopted as a final rule, the proposed pole test could result in the installation of dynamically deploying side impact air bag systems and other measures to protect front seat occupants against head, thoracic, abdominal and pelvic injuries in side crashes.

In the proposed pole test, an anthropomorphic test dummy representing a 5th percentile adult female is in the front outboard seat on the struck side of the vehicle. Vehicles would have to be certified as complying with an established head injury criterion and with thoracic and pelvic injury criteria developed for the new dummy. The agency has also proposed to use this dummy in FMVSS No. 214's existing moving deformable barrier (MDB) test, which simulates a moving vehicle-to-vehicle “T-bone” type intersection crash. Today's NPRM proposes the specifications and calibration requirements for the 5th percentile adult female test dummy that NHTSA seeks to use in these FMVSS No. 214 crash tests. 1

The development of a small, second-generation side impact dummy was undertaken in 1993 by the Occupant Safety Research Partnership (OSRP), a consortium of the U.S. Council for Automotive Research (USCAR), and dummy manufacturer First Technology Safety Systems (FTSS). (USCAR was formed in 1992 by DaimlerChrysler, Ford and General Motors, as a research and development organization.) The OSRP determined that there was a need for a test dummy that would be better suited to help evaluate the performance of advanced side impact countermeasures, notably air bags, for occupants that are smaller than the 50th percentile size male. The new dummy was named SID-IIs, indicating “SID” as side impact dummy, “II” as second generation, and “s” as small. The SID-IIs dummy was extensively tested in the late 1990s and early 2000 in vehicle crashes by Transport Canada, and to a limited extent by U.S. automobile manufacturers and suppliers, and the Insurance Institute for Highway Safety (IIHS).

The dummy specified in today's document is a modified version of the original SID-IIs dummy. NHTSA's laboratory evaluation of the biofidelity of the SID-IIs revealed chest displacement transducer mechanical failures and some ribcage and shoulder structural problems. Post test evidence showed that the ribs of the unmodified SID-IIs did not remain constrained by the rib guides, which allowed their vertical motion during some impactor and sled tests, which in turn raised concerns regarding the structural integrity of the ribs and the deflection potentiometers, as well as the accuracy of the deflection measurements. The agency's Vehicle Research and Test Center (VRTC) modified the dummy's thorax in 2001 to incorporate floating rib guides to better stabilize the kinematics of the dummy's ribs, and revised the shoulder and its rib guide design to prevent distorting vertical rib motion. The modified dummy proposed today is hereinafter referred to as the “SID-IIsFRG,” the “FRG” indicating the floating rib guide and other modifications to the dummy. 2

The SID-IIsFRG has a mass of 44.5 kg (98 pounds) and a seated height of 790 mm (31.1 inches). The dummy is capable of measuring accelerations, deflections and/or forces in the head, thorax, shoulder, abdomen and pelvis body regions. The dummy is described in detail in a NHTSA technical report entitled, “Summary of the NHTSA Evaluation of the SID-IIsFRG Side Impact Crash Test Dummy Including Assessment of Durability, Biofidelity, Repeatability, Reproducibility and Directional Sensitivity” (November 2004), and in the PADI document (October 2004), which have been placed in the docket for today's NPRM. (A number of technical reports providing further test details on the dummy, such as its repeatability and reproducibility, have also been placed in docket 17694, supra. )

Data from the 1990-2001 National Automotive Sampling System (NASS) Crashworthiness Data System (CDC) indicate a need for a dummy that has the capability of predicting the risk of injury to a segment of small-statured vehicle occupants in side crashes. Table 1 shows the injury distribution of the estimated target population less than 65 inches (in) in stature in all types of side impact crashes between 12 and 25 mph delta V.

The 1990-2001 NASS/CDS data also indicate that there are differences in the body region distribution of serious injuries between small and medium stature occupants in these side collisions. The data suggests that small stature occupants have a higher proportion of head, abdominal and pelvic injuries than medium stature occupants, and a lower proportion of chest injuries (Samaha et al. , “NHTSA Side Impact Research: Motivation for Upgraded Test Procedures,” 18th ESV Conference Proceedings). The agency believes that, in addition to a 50th percentile adult male dummy, use of a small-statured dummy in side impact testing would better represent the population at-risk in side impacts and substantially enhance protection for small adult occupants.

NHTSA began an extensive evaluation of the SID-IIs in 2000. The biofidelity of the dummy was assessed in component and sled testing that examined the ability of the dummy to load a vehicle as a cadaver does, and to replicate cadaver responses that best predict injury potential. Our finding from the sled tests was that a 8.9 m/s test was too severe to assess the durability and other characteristics of the dummy. Some of the 8.9 m/s tests resulted in damaged ribs, bent potentiometer shafts and crushed potentiometer housings. NHTSA's examination of the causes of the damage to the SID-IIs revealed the rib guides for the shoulder, thorax and abdomen ribs did not sufficiently prevent vertical movement of the ribs (“rib jump”), and that the dummy's rib stops allowed excessive deflection of the ribs. The observed damage raised concerns regarding the structural integrity of the ribs and the deflection measuring potentiometers, as well as the accuracy of the dummy's deflection measurements, particularly for a dummy that could possibly be used for regulatory purposes.

After extensive evaluation of these failures, the agency began incremental modifications of the dummy to improve the dummy's durability. 3 Because vertical movement of the ribs was deemed to be one of the causes for the damage to the thorax and abdomen regions of the dummy, VRTC developed the “floating rib guide” system, which prevents the compressed ribs from leaving the outside perimeter of the rib guides. The new guides “float” with the ribs as they expand in the anterior-posterior direction during the compression process, and thereby prevent rib jump. The FRG design includes deeper rib guides than on the unmodified SID-IIs dummy in both the thorax and abdomen regions. During deflection, the ribs contact carbon fiber cover plates affixed to the rib guides in the front and rear of the dummy. Guide pins and springs allow the rib guides to expand outwards, thus maintaining the ribs within the outside perimeter of the rib guides during the deflection event.

In addition, the shoulder rib guide of the dummy was reshaped and deepened beyond the front edge of the shoulder rib to keep the shoulder rib from moving vertically during its compression. The damping material of the shoulder rib assembly was made thinner and spanned the entire width of the steel band. The FRG design used vinyl-coated aluminum rib stops to reduce excessive rib deflection, as excessive deflection was also one of the causes of bent potentiometer shafts and crushed potentiometer housings. To further protect the instrumentation, the new rib stops were located to reduce the maximum lateral rib deflection from 69 mm to 60 mm. 4

NHTSA conducted sled tests and air bag out-of-position tests comparing the durability of the FRG dummy to an unmodified SID-IIs dummy. The tests showed that the SID-IIsFRG design prevented rib jump and potentiometer damage that were evident in the unmodified dummy. These results are discussed in section VII of this preamble.

NHTSA also conducted tests to compare the measurement capabilities and response levels of the SID-IIsFRG to the SID-IIs dummy (“Summary of the NHTSA Evaluation of the SID-IIsFRG Side Impact Crash Test Dummy Including Assessment of Durability, Biofidelity, Repeatability, Reproducibility and Directional Sensitivity” (November 2004), supra. ) The SID-IIsFRG displayed comparable measurements in all conditions except for high-speed flat wall sled tests and high-speed purely lateral probe impacts to the upper torso of the dummy. During these tests, the SID-IIsFRG dummy exhibited smaller rib deflections (10 percent smaller), but larger thorax load wall forces (17 percent) and T1 accelerations (20 percent larger) than the SID-IIs. Similar trends of reduced chest deflections between SID-IIs FRG and SID-IIs were reported by Transport Canada in a set of paired side impact crash tests of two identical Camry vehicles in limited vehicle crash tests (“SID-IIs Response in Side Impact Testing,” Tylko and Dalmotas, SAE Paper No. 2004-01-0350).

NHTSA also conducted two pairs of repeat crash tests comparing the SID-IIsFRG and the SID-IIs (“Development of the SID-IIsFRG,” supra ). The two tests included repeat oblique pole impacts with a dummy in the driver seat of a 2002 Ford Explorer. One of the tests was with the SID-IIsFRG (test number v4563), and the other was with the SID-IIs (test number v4601). NHTSA also conducted a pair of repeat tests using the Side New Car Assessment Program (NCAP) protocol  5 with a 2001 Ford Focus, the first with a SID-IIsFRG in the driver's seat and an unmodified SID-IIs in the rear left passenger seat (test number v4576), and the second with an unmodified SID-IIs in the driver's seat and a SID-IIsFRG in the rear left passenger seat (test number v4562).

In this limited set of repeat crash tests by the agency, the results indicated that maximum thorax and abdomen deflections for the SID-IIsFRG, for the most part, were less than those of the SID-IIs. The limited crash test results appear to be consistent in trend with impactor and sled test results.

A technical report and other materials describing the SID-IIsFRG in detail have been placed in the docket for today's NPRM (Docket No. 18865) and in Docket No. 17694. The specifications for the proposed SID-IIsFRG consist of: (a) A drawing package containing all of the technical details of the dummy; (b) a parts list; and (c) a manual containing procedures for assembly, disassembly, and inspection (PADI) of dummy components. These materials have been placed in Docket No. 18865. These drawings and specifications ensure that the dummies are uniform in design and construction. The certification tests proposed in this NPRM would assure that the dummy responses are within the established qualification corridors and further validate the uniformity of dummy assembly, structural integrity, and adequacy of instrumentation. As a result, the repeatability and reproducibility of the dummy's performance in dynamic testing would be ensured.

Drawings and specifications for the SID-IIsFRG are available for examination in the NHTSA docket section. Copies of those materials and the user manual may also be obtained from Leet-Melbrook, Division of New RT, 18810 Woodfield Road, Gaithersburg, MD 20879, tel. (301) 670-0090.

Anthropometry and mass of the SID-IIsFRG are based on the Hybrid III 5th percentile frontal female dummy and also generally match the size and weight of a 12- to 13-year-old child. The head and neck designs are based on the Hybrid III 5th percentile female dummy. The legs are Hybrid III 5th percentile female design available also with femur load cell instrumentation.

At the same time, the dummy's torso construction is distinctly different from other Hybrid III series of dummies as the SID-IIsFRG design is particularly oriented for assessing the potential for side impact injury. The dummy's upper torso is made up of a rigid metallic spine to which six steel bands lined with bonded polymer damping material are attached to simulate the impact performance of the human shoulder (1 rib), thorax (3 ribs) and abdomen (2 ribs). Linear potentiometers are attached from the ribs to the spine for compression measurements. Provisions are available for mounting tri-axial accelerometer packs to the spine at T 1 and T 12 and at each rib. 6 Replaceable foam pads are secured directly to the ribs and a neoprene jacket covers the complete chest assembly. The upper torso accommodates the attachment of the neck at the upper end and the lumbar spine at the lower end.

A stub arm on the impacted side is attached to the lateral aspect of the shoulder through a three-axis load cell. Tri-axial accelerometer packs can also be installed at the shoulder and at the upper and lower parts of the stub arm for side airbag inflation injury assessment.

The dummy's pelvis is a machined assembly with detachable hard urethane iliac wings at each side and covered by vinyl flesh. The pelvis design is shaped in a seated human-like posture and allows the attachment of the lumbar spine at its top and the legs at the left and right sides. The pelvis can be impacted from either side without any change in hardware. Replaceable foam crush plugs at the hip joint are used to control the lateral pelvis response. The pelvis design allows the measurement of impact loads at the acetabulum and iliac wing as well as accelerations at the pelvis center of gravity (c.g.).

The external dimension and assembly weight of the SID-IIsFRG are shown in Table 3 below. Additional dimensional information may be found in the September 2004 Technical Drawings and Specification package in Docket No. 18865.

The SID-IIsFRG is instrumented to assess injury to the head, neck, shoulder, thorax, abdomen, pelvis, stub arm and lower extremities. A complete list of the instrumentation available for this dummy is shown in drawing 180-0000, sheet 3 of 6. Table 3—External Dimensions and Assembly.

Biofidelity is a measure of how well a test device duplicates the responses of a human in an impact. Two methods are currently available for assessing the biofidelity of a dummy in side impact testing. The first is a procedure of the International Organization of Standardization (ISO), referred to as the ISO TR 9790 methodology (Irwin et al. , “Guidelines for Assessing the Biofidelity of Side Impact Dummies of Various Sizes and Ages,” 2002 Stapp Car Crash Journal, Vol. 46, #2002-22-0016). It determines the biofidelity of a dummy by how well the dummy's body segment and/or subsystem impact responses replicate cadaver responses in defined impact environments. The second is the Biofidelity Ranking System developed by NHTSA (Rhule H., et al. , 2002 Stapp Car Crash Journal, Vol. 46, p. 477, “Development of a New Biofidelity Ranking System for Anthropomorphic Test Devices”). The SID-IIsFRG was evaluated by both methods.

The biofidelity requirements defined in ISO TR 9790 are based on two types of head drop tests, three types of lateral neck bending tests, four types of shoulder impact tests, six types of lateral thoracic tests, five abdominal test conditions and thirteen lateral pelvis impact tests. The measured response values are assessed on their fit to the established cadaver response corridors. A value of 10 is given if the dummy's segment response is completely within the boundaries of the cadaver response corridor. A value of 5 is given if the most important portion of the dummy's segment response lies within one corridor width outside of the specified performance boundaries and in others, such as for unusually complex shapes of response curves, by group judgment of a group of biomechanical experts on the fit of the data. A value of zero is given if neither of the above conditions is met.

The overall dummy's biofidelity is found by weighted average of the scores of different body regions. Five classifications indicate the degree of biofidelity of the overall dummy rating. A dummy with a rating above 8.6 is classified as excellent, 6.5 to 8.6 as good, 4.4 to 6.5 as fair, 2.6 to 4.4 as marginal, and below 2.6 as unacceptable.

The ISO methodology was used by OSRP members to evaluate the SID-IIsFRG in September 2004 (“Technical Summary of OSRP-SIDIIs Upgrade,” September 2004). A copy of the document is in the docket for this NPRM. As shown in Table 4, the SID-IIsFRG received an ISO Biofidelity rating of 5.9, which corresponds to a “fair” classification. Scherer et al. had rated the SID-IIs Beta Prototype dummy a rating of 7.0, placing it in the ISO classification of “good.” 7

The OSRP-developed ISO ratings for the SID-IIs and SID-IIsFRG dummies compare favorably with other side impact dummies. The overall ES-2re  8 dummy's biofidelity rating was determined to be 4.6, while the SID (49 CFR Part 572 Subpart M) and EuroSID-1 dummies received ratings of 2.3 and 4.4, 9 respectively. The SID-HIII received an overall rating of 3.8 (63 FR 41468).

The NHTSA method of evaluating the biofidelity of a dummy determines the biofidelity based on two assessment measures: (a) The ability of a dummy to load the relevant contact surfaces as a cadaver does (termed “External Biofidelity”); and (b) the ability of a dummy to replicate those cadaver responses that best predict injury potential (“Internal Biofidelity”). This ranking system evaluates the dummy's ability to replicate the cadaver loading responses at the whole body level, and how that body replicates the loading of interfacing external structures.

Similar to the ISO TR 9790 biofidelity rating system, the NHTSA ranking system is based on a comparison between cadaver and dummy responses in head drop tests, thorax and shoulder pendulum tests, and whole body sled tests including abdominal and pelvic offset test conditions. Each test condition is assigned a weighting factor, based on the number of human subjects tested, to form a biomechanical response corridor and the relevance of the biofidelity test to the intended test environment. For each response requirement, the cumulative variance of the dummy response relative to the mean cadaver response (DCV), and the cumulative variance of the mean cadaver response relative to the mean plus one standard deviation (CCV) are calculated. The ratio of DCV/CCV expresses how well the dummy response duplicates the mean cadaver response. A smaller ratio indicates better biofidelity.

Although this method does not establish an “absolute” ranking scale, the ranks provide a relative sense of the “number of standard deviations” the dummy's responses are away from the mean human response. If the dummy biofidelity ranking is below two, the dummy is behaving similar to the human cadaver. The evaluation methodology provides a comparison of both dummy response to cadaver response as well as a comparison of two or more dummies.

Tables 5 and 6 were constructed to provide a comparison of external and internal biofidelities between the SID-IIsFRG, the ES-2re and the SID-HIII (Part 572 Subpart M) 50th percentile male side impact dummies. 10

The data in Table 5 indicate that the SIDIIsFRG dummy has comparable Overall External Biofidelity with the ES-2re dummy and has better biofidelity than the SID-HIII dummy. At the body segment level, the SID-IIsFRG produces better External Biofidelity ranks than the ES-2re in the Head/Neck, Thorax and Abdomen and worse ranks than the ES-2re in the Shoulder and Pelvis. The SID-IIsFRG produces better External Biofidelity ranks than the SID-HIII in all body regions except the Head/Neck.

Table 6 provides a comparison of the Internal Biofidelity ranks of the three dummies. The data indicate that the SID-IIsFRG Overall Biofidelity rank is better than those of the two 50th percentile male dummies, both with and without the abdomen being included in the biofidelity ranking calculations. All body region Internal Biofidelity ranks of the SID-IIsFRG are better than, or comparable to, those of the ES-2re and SID-HIII.

Based on the Overall External and Internal Biofidelity ranks, the SID-IIsFRG and the ES-2re dummies were found to be nearly equivalent and are lower than the SID-HIII dummy. 11

Based on the information from the biofidelity assessment, the agency tentatively concludes that the SID-IIsFRG is well suited for assessing the risk of injury to the small size occupant segment.

A dummy's repeatability and reproducibility analysis is typically based on component tests and a series of sled tests. In the tests, the impact input is carefully controlled to minimize the variability of external effects on the dummy's response. Component tests are better controlled, and thus produce more reliable estimates of the dummy's repeatability and reproducibility than is possible in sled and vehicle tests. Component tests are also needed to certify the dummy's performance relative to the established response corridors for each major body segment. That is, if the dummy's component is or becomes deficient, the certification test will identify to the user that the component will not respond properly in impact tests, and that a replacement of parts should precede further testing. Sled tests, on the other hand, offer a method of efficiently evaluating the dummy as a complete system in an environment much like a vehicle test. Sled tests are needed to establish the consistency of the dummy's kinematics, its impact response as an assembly, and the integrity of the dummy's structure and instrumentation under controlled and representative crash environment test conditions.

Two SID-IIsFRG dummies were tested and exposed to both component and sled test conditions multiple times to determine the dummy's ability to respond consistently. The evaluation of the SID-IIsFRG during these tests is described in the following technical reports: “Repeatability and Reproducibility Analysis of the SID-IIsFRG Dummy in the Sled Test Environment,” February 2004; and “Repeatability and Reproducibility Analysis of the SID-IIsFRG Dummy in the Certification Test Environment,” March 2004 (see NHTSA Docket No. 17694) and “Summary of the NHTSA Evaluation of the SID-IIsFRG Side Impact Crash Test Dummy Including Assessment of Durability, Biofidelity, Repeatability, Reproducibility and Directional Sensitivity” (Docket No. 18865). The following discussion summarizes the finding of these reports.

Component tests were conducted on head, neck, shoulder, thorax with arm, thorax without arm, abdomen, and pelvis body regions. The tests are described in Section X of this preamble, “Proposed certification tests.” The repeatability assessment was made using Coefficient of Variation (CV) in percentage as a measure. A CV value of less than 5 percent is considered excellent, 5-8 percent good, 8-10 percent acceptable, and above 10 percent unacceptable. 12 The reproducibility was established by comparing the percent CV of two different dummies' combined responses.

The results of the component repeatability tests indicate “excellent” repeatability for the SID-IIsFRG dummy for all components except for the thorax with arm, which has a “good” rating.

The results of the component tests generally indicated “excellent” to “good” reproducibility for the dummy for all components. The pelvis lateral acceleration was the only elevated reproducibility response at a CV of 9.1 (“acceptable”). The agency believes that some of this elevated variability was due to inconsistent force-deflection characteristics of the pelvis plug. As described in Section VI of this preamble, we believe that the variability of the pelvis lateral acceleration can be improved by incorporating force-deflection limits for the pelvis plug into the specifications for the test dummy. Today's NPRM proposes such performance requirements in Section VI of this preamble.

The sled tests were conducted on a Hyge-type sled system, on which a bench seat and impact load wall were mounted. During the test, the SID-IIsFRG slid down the bench seat and impacted the rigid load wall. The first set of tests was conducted with a flat load wall at 6.7 meters/second (m/s). The selected impact speed reflected one of the impact environments in agency-sponsored PMHS (post-mortem human subject) tests that provided a partial basis for the development of biomechanical performance corridors. However, in this test series, the shoulder rib was found to have bottomed out against the rib stops.

In order to produce a more suitable test condition in the range of intensity that would be expected in a crash test, the sled speed was reduced and a second series of three tests was conducted (with a flat wall) at 6.0 m/s. The dummy's arm was positioned down in these flat wall tests. The third series of tests was also conducted at 6.0 m/s with a 101 mm abdomen offset block on the load wall (“abdominal offset tests”), and with the dummy's arm in the up orientation. The 101 mm offset block was oriented such that it would impact the abdomen only, above the pelvis and below the lower thoracic rib. The objective of the abdomen offset tests was to provide a test environment with severe loading of the abdominal region.

Generally the responses in the 6.7 m/s flat wall sled tests displayed either excellent or good repeatability in all measurements, except for concerns that the SID-IIsFRG dummy's shoulder rib was at or very close to reaching the maximum available displacement. 13 The SID-IIsFRG dummies also generally demonstrated excellent or good reproducibility for measurements proposed for incorporation into FMVSS No. 214 (69 FR 27990, supra ).

The dummies exhibited overall excellent or good repeatability in all injury indicating measurements in this test series. However, the resultant pelvis acceleration of dummy serial number (S/N) #56 had a marginally unacceptable CV of = 10.9%. NHTSA notes that the CV for resultant pelvis acceleration was calculated using the highest peak value within the data trace, which could be either the first or the second peak. NHTSA believes that the magnitude of the peak, and whether it was the first or the second peak during the impact, was determined by the stiffness characteristic of the pelvis plugs used in the tests. An excessively stiff plug would be the cause for high first peaks usually occurring within the first 5 ms in certification tests, while a softer plug would favor the predominance of a higher second peak, occurring in the latter part of the impact event, that is later than 5 ms from time of impact. The agency believes that the performance requirements specified in today's document for the pelvis plug will prevent use of excessively stiff plugs, and that softer plugs will result in a more consistent pelvis response measurement.

The dummies demonstrated excellent or good repeatability and reproducibility in all of the abdominal offset test measurements, except that the CV of the peak resultant pelvis acceleration for one of the dummies was 10.5%. NHTSA believes that the elevated CV was due to the variability of the pelvis plug response.

Based on the testing of the SID-IIsFRG dummy, the agency tentatively concludes that the repeatability and reproducibility of the SID-IIsFRG's responses establishes the suitability for use in the agency's side impact test programs.

The stiffness limits of the pelvis plug proposed in this NPRM affect mostly the peak pelvic acceleration, peak acetabulum force, and peak iliac force levels of the dummy, as well as the maximum force measured by the impacting pendulum. In the pelvis certification test of the dummy, the pendulum impact probe is centered on the pelvis plug that is mounted within the pelvis flesh cavity in front of and in line with the acetabulum load cell's longitudinal axis either at the right or left H-points of the dummy (depending on the side of the dummy to be impacted). The original recommended practice was to require that the pelvis plug be discarded after each impact.

In agency testing, NHTSA observed that some of the data traces of the dummy's pelvis acceleration showed an inconsistent first peak in the data trace that was generated by the probe's impact. (“Summary of the NHTSA Evaluation of the SID-IIsFRG Side Impact Crash Test Dummy Including Assessment of Durability, Biofidelity, Repeatability, Reproducibility and Directional Sensitivity” (November 2004), supra. ) Agency evaluation showed that the inconsistency of the first peak acceleration response was caused by variability of the crush characteristics of the pelvis plugs ( i.e. , variability of the resistance force during compression) rather than by other characteristics of the dummy. The plug as originally specified for the SID-IIs provided practically no control over its stiffness characteristics.

Agency evaluation indicated that control of the crush characteristics of the pelvis plug would significantly improve the consistency of all of the dummy's pelvis responses as well as the force values measured by the impact probe. Based on an evaluation of plugs with a variety of force deflection characteristics, NHTSA has developed a force-displacement corridor for the pelvis plug that assures less variability of the pelvis acceleration response. As a result, a test procedure was developed for measuring the force-displacement characteristics of the plugs. The proposed procedure evaluates a plug by quasi-statically compressing it to a deflection range between 22 and 25 mm and a corresponding resistance force between 1920 and 2160 Newtons (N) at minimum compression and 2000 to 2240 N at maximum compression. 14 ( See Drawing—Plug Pelvis #180-4450.)  15 Only plugs that meet the specified force levels at prescribed compression would be certified for use in a side impact test using the dummy.

A plug is certified after passing the compression test. The agency anticipates that users may either purchase the plugs commercially or certify the plugs themselves. For pelvis calibration, the certified plug is inserted into the pelvis cavity of the dummy and the dummy's pelvis is calibrated according to the proposed Part 572 test procedure. It should be noted that the pelvis plugs can only be used once per either vehicle crash test or pelvis certification application. After the dummy's pelvis is calibrated, the plug must be discarded. A new certified plug is inserted into the pelvis cavity of the dummy for every crash test incorporating the SID-IIsFRG. Carefully controlled and certified crush characteristics of the plugs will assure that their use will produce consistent and reliable pelvis response in the impact environment.

NHTSA examined the durability of the SID-IIs dummy in the context of the potential use of the dummy for regulatory purposes. In testing under FMVSS compliance and NHTSA's consumer information programs, test dummies are exposed to a wide range of side crash conditions. They may be tested with vehicles with highly advanced crashworthiness technologies and with vehicles that lack adequate structure and/or features that effectively mitigate the crash forces. A crash test dummy has to have sufficient durability to maintain its structural integrity and measurement ability throughout this range of potential test conditions.

The agency's assessment of the SID-IIs began with an evaluation of the dynamic performance of the dummy in sled tests conducted at 8.9 m/s and 6.7 m/s with various impact surfaces. 16 These test velocities were chosen to replicate agency-sponsored PMHS impacts in sled tests involving 8.9 m/s and 6.7 m/s changes in velocity. 17 Those NHTSA PMHS tests had approximated some of the biomechanical tests performed in the 1980s and 1990s by Wayne State University, University of Michigan Transportation Research Institute and others that were used to develop the ISO 9790 impact response corridors for assessing the biofidelity of test dummies. 18 The biomechanical data from the PMHS tests enabled NHTSA to develop the injury criteria that would predict the risk of injury in side impact crashes. 19

One finding of the sled tests was that the 8.9 m/s test was too severe to assess the durability and other characteristics of the dummy. Impact tests of the SID-IIs dummy into a 4-inch padded 103 kPa flat wall at 8.9 m/s indicated abdominal rib deflections as high as 62 mm. Impacts into a 3-inch 400 kPa padded flat wall at 8.9 m/s produced abdominal rib deflections bordering 70 mm, including an indication of flat topping. (Flat topping is an indication that the dummy's rib deflection mechanism is either binding or reaching the end of the available stroke, and consequently, the dummy's abdomen is not responding correctly to the load from the intruding side structure. When flat topping occurs, the potentiometer ceases to produce useful deflection measurements, and in some instances experiences physical damage.) Some of these abdominal deflections were in excess of predicting a probability of a 50% risk of AIS 4+ abdominal injury.

On the other hand, NHTSA found that the 6.7 m/s sled test was more appropriate for evaluating the durability of the dummy. Sled impacts into a padded wall at 6.7 m/s yielded maximum abdominal rib deflections of approximately 45 mm with 103 kPa padding and 61 mm with 400 kPa padding. Inasmuch as the 61 mm abdominal rib deflection was just above the 25% probability of AIS 4+ injury level and the deflection data trace contained no indication of flat topping or other signal irregularities, the 6.7 m/s impact speed was selected as an impact intensity that the dummy must withstand without structural damage and instrumentation failures. 20 The SID-IIs did not show durability problems in the 6.7 m/s sled tests into a padded wall.

Follow on tests, however, indicated a possible durability problem with the SID-IIs in 6.7 m/s sled tests using a rigid wall with a 101 mm abdominal offset. The agency conducted the tests to replicate biomechanical sled test impact configurations previously reported by Maltese et al. (“Response Corridors of Human Surrogates in Lateral Impacts,” supra ). These abdominal offset tests significantly damaged the dummy. Damage in some of the tests included deformed abdominal ribs, bent abdominal potentiometer shafts, and/or gouged damping material. Further analysis of the sled tests and pendulum tests with the SID-IIs suggested that either vertical motion of the ribs and/or excessive rib compression caused the damage to the ribs and the potentiometers.

These failures prompted NHTSA's Vehicle Research and Test Center to search for ways to improve the abdominal rib response through a redesign of the existing SID-IIs rib guides, including subsequent introduction of floating rib guides. The agency wanted to make certain that the SID-IIs dummy was sufficiently robust and durable in all foreseeable impact environments. Modifications of the SID-IIs dummy leading to the SID-IIsFRG design are discussed in Section IIb of this preamble. The FRG design modifications have prevented damage to the dummy even under very severe loading conditions. Three test series are summarized below.

In the first series, NHTSA conducted two sets of seven 6.7 m/s sled tests to evaluate the durability of the SID-IIsFRG. They included rigid wall thorax and rigid 101 mm abdomen offset impact configurations. In contrast to previous testing of an unmodified SID-IIs dummy to these test configurations, the SID-IIsFRG experienced no damage either to the potentiometers or any of the thoracic and abdominal ribs. There were no losses of or discontinuities in the potentiometer data signals. (“Development of the SID-IIs FRG,” Section 7.3, supra. Other durability tests are also discussed in this report.)

In another series evaluating the FRG design, the agency tested the durability of the FRG revised shoulder rib (containing a wider rib damping material area) and redesigned shoulder rib guide. An out-of-position side air bag test in the passenger side of a 2000 BMW 528i was selected because that test had resulted in damage to both the shoulder rib and shoulder potentiometer of an unmodified SID-IIs. In the tests, the dummy was positioned directly against the side air bag, as outlined by the Technical Working Group (Lund, A., Chairman of the Side Air Bag Out-of-Position Injury Technical Working Group, “Recommended Procedures for Evaluating Occupant Injury Risk from Deploying Side Airbags,” August 2000). The test conditions allowed the side air bag to contact the thoracic and abdominal ribs with an upward component. In these tests, the SID-IIsFRG had none of the damage to the shoulder rib and shoulder potentiometer that was observed in the unmodified SID-IIs. The shoulder rib guide design prevented the rib from jumping out of the rib guide, thus eliminating permanent rib distortion and damaging the potentiometer. “Development of the SID-IIs FRG,” Section 7.4.

In a third series of durability pendulum tests, rigidly fixed thoraxes of the unmodified SID-IIs and the SID-IIsFRG, with their jackets off, were tested in a perpendicular, 15 degree upward impact configuration at a velocity of 2.84 m/s (6.4 miles per hour). When subjected to a localized pendulum impact centered on #2 thoracic rib, the potentiometer shafts of the unmodified SID-IIs bent, and potentiometer bushings pulled out of the potentiometer bearing assemblies. Id., Section 7.9. In contrast, the SID-IIsFRG potentiometer measured rib deflections while sustaining no structural damage.

In sum, the FRG design has significantly improved the durability of the SID-IIs dummy and made it useful for the assessment of risk injury in the most severe automotive impact environments. 21

The SID-IIsFRG is designed to have equivalent performance when impacted from either the left or right side. However, most agency tests have been left side impacts. To convert the dummy's impact side from left to right side and vice versa, the entire dummy's thorax, abdomen, and shoulder structure, upon disengagement of the neck and of the lumbar spine at the lower torso interfaces, is rotated as a unit around the vertical axis with respect to the neck and the lumbar spine without any further modifications. Limited agency testing of the dummy converted from left to right side impact indicated complete compliance to the calibration corridors, except for the head response being below the lower calibration limit by 1g. The agency does not believe this to be a problem, since the head used in this test was a single test of a dummy build with consideration for only left side impact. Once the calibration specifications are proposed for right and left side impacts, the vehicle manufacturers should have no problem manufacturing the heads complying to the calibration specifications for both right and left side impacts.

The method for reversing the dummy for use in either left-or right-side impacts is discussed in the PADI document for the SID-IIsFRG dummy.

Limited NHTSA tests indicate that the SID-IIsFRG dummy's thoracic and abdominal rib deflection and upper spine (T 01 ) and lower spine (T 12 ) acceleration measurements exhibit a degree of directional sensitivity depending on pendulum impact angle and velocity. The agency conducted pendulum oblique impact tests at 4.3 m/s on the dummy's shoulder, thorax, and abdomen. Tests were conducted on the SID-IIsFRG at 4.3 m/s with the dummy's midsagittal plane oriented perpendicular to the trajectory of the impact probe, and at an oblique frontal angle of +30 degrees, +15 degrees and at −15 degrees posterior to the lateral plane of the dummy. The dummy in those tests measured reduced shoulder, thoracic and abdominal rib deflections in the +30 and +15 degrees oblique impacts when compared to pure lateral impacts. The thoracic reduction ratios were 0.78 and 0.79 for oblique angles of +15 and −15 degrees. Similar reduction ratios in deflection are experienced in abdominal and shoulder impacts tests in +30 degree impacts, but the ratios reduce as the angle decreases to +15 degrees. The SID-IIsFRG dummy's peak Y (lateral) acceleration of the upper spine and lower spines in 4.3 m/s oblique impacts show lower levels of directional sensitivity as compared to the deflection measurements, except for the elevated ratios of the upper spine in abdominal impact at +15 degrees (1.27) and higher ratios of lower spine (3.22) and upper spine (2.20) accelerations in +30 degree impacts.

To NHTSA's knowledge, biomechanical data on whether and the degree to which human cadavers experience directional sensitivity in oblique impacts do not exist. It is unknown how the dummy's directional sensitivity relates to the human experience.

While the pendulum tests show that directional sensitivity of the dummy's ribcage exists, the directional sensitivity of the SID-IIsFRG in +15 and −15 degree impacts appears comparable to those of other side impact dummies. Further, the loading of the dummy in the pendulum tests is unlike the loading experienced in a vehicle crash test. The pendulum has a small and rigid impact face and a relatively small mass that is intended to load a specific localized region of the dummy. In contrast, in a vehicle crash test, an intruding vehicle structure loads the dummy in multiple areas during a collision. The intruding area is usually fairly large, is typically energy absorbing, and changes its configuration and force of impact direction during the crash. The agency is not aware of vehicle crash test data that provides evidence of consistent increases or decreases in the dummy responses due to oblique loading. Accordingly, while the pendulum tests indicate that the dummy has some sensitivity to impact direction, this finding has not been established as being relevant to loading conditions in vehicle tests.

The proposed calibration procedures in general follow the test conditions and specifications contained in FTSS's document, “SID-IIs Small Side Impact Crash Test Dummy User's Manual,” February 2002. NHTSA used this document as a basis because of FTSS involvement with OSRP in the design and development of the dummy.

The head is dropped from 200 mm onto a flat, rigid steel plate such that the midsagittal plane of the head makes a 35 degree angle with respect to the impact surface while the head's anterior-posterior axis remains horizontal. When the dummy head is dropped in accordance with the above test conditions, the resultant acceleration of the center of gravity of the head must be between 125 and 145 g's. This proposed corridor is narrower than that specified by FTSS for this dummy (115-145 g's). The NHTSA data base, consisting of two heads dropped in a series five impacts each, indicated that the SID-IIsFRG head is capable of meeting the narrower limits.

The proposed test procedure involves attaching the dummy's neck-headform assembly to a pendulum fixture. The pendulum is raised to a height from which it falls to achieve a velocity of 5.57 ± 0.06 m/s at the instant the pendulum hits the hexcell deceleration block. Based on tests of two neck-headform assemblies, the agency determined that the neck would limit the headform lateral flexion-rotation between 74 and 79 degrees, and the resistance moment about the occipital condyle from −40 to −45 N-m compared to 72-82 degrees and maximum moment of −36 to −43 N-m suggested in the FTSS user manual.

The dummy's thoracic response is ascertained by testing the thorax with the arm and the thorax without the arm. In the tests, the dummy is seated on a specified bench seat. The thorax with arm test calls for the dummy's arm being oriented downward to the lowest detent. A pendulum impactor is guided so as to strike the dummy's arm at 6.7 m/s at the midpoint level of the second rib. The dummy's shoulder rib as well as its upper, middle and lower thorax ribs would have to meet deflection limits of 28-34 mm, 23-28 mm, 28-33 mm; and 31-36 mm, respectively. In addition, the peak accelerations would have to be 40 to 46 g's at the upper spine (T 1 ) and 37 to 41 g's at the lower spine (T 12 ). FTSS suggests in its SID-IIs user manual deflection limits for the upper rib of 24-32 mm, for middle rib 26-42 mm, and for the lower rib 34-42 mm, and for accelerations the limits of 35-50 g's for the upper and 22-48 g's for the lower spines. However, while the FTSS suggested limits in general are broader in range they are not directly comparable to the SID-IIsFRG dummy performance values, because of differences in the thorax and shoulder designs between the two dummy types.

The test of the thorax without the dummy's arm is conducted in the same way as the thorax with arm test, except that the stub arm is removed and the impact by the pendulum is at 4.3 m/s. The upper, middle and lower ribs would have to meet the deflection limits of 33 to 39 mm, 38 to 43 mm, and 33-39 mm, respectively, as well as limit the peak acceleration of the upper (T 1 ) spine between 14 and 18 g's and the lower (T 12 ) spine between 8 and 12 g's. FTSS suggested limits for SID-IIs upper rib deflection is 30-44 mm, for the middle rib 42-58 mm, and for the lower rib 36-52 mm, and accelerations the limits of 13-19 g's for the upper and 8-12g's for the lower spines. As in the thorax test with arms, the FTSS suggested limits in general are broader in range. However, they are not directly comparable to the SID-IIsFRG dummy performance values because of differences in the thorax and shoulder designs between the two dummies.

The abdomen assembly is part of the upper thorax assembly and is represented by two ribs and the deflection sensors. The abdomen test is performed on a seated dummy with the dummy's arm removed. When the dummy's abdomen is impacted by a pendulum at 4.3 m/s, the deflection of each abdominal rib would have to be between 36 and 42 mm, and the peak acceleration of the lower spine (T 12 ) laterally oriented accelerometer range between 11 g's and 15 g's. FTSS suggested abdominal deflection limits are 42-60 mm for the upper and lower abdominal ribs and 9.5-12 g's for the lower spine (T 12 ). As in thorax tests, the performance limits between the SID-IIS and FRG dummies are not directly comparable, because of differences in their abdomen designs.

This test would be performed on a fully assembled, seated dummy that has a certified pelvis plug meeting the force deflection characteristics specified in the designated pelvis plug drawing (see section VI, supra ). The dummy pelvis would be impacted laterally by a pendulum at a velocity of 6.7 ± 0.1 m/s. Peak acceleration of the impactor and of the pelvis would have to be within the limits of 45 to 49 g's, and 42 and 46 g's, respectively. Peak force responses of the acetabulum would have to be between 3882 and 4270 N and peak iliac wing force response between 524 and 730 N. Comparable limits suggested in the FTSS user manual for the SID-IIs dummy's impactor and pelvis accelerations are 38-42 g's and 46-60 g's, respectively. As in thorax and abdomen tests, the performance limits between the SID-IIs and FRG dummies are not directly comparable, because of differences in the pelvis plug specifications.

A possible shoulder calibration test is described in the FTSS user manual, supra. In it, the dummy's shoulder would have to meet deflection and acceleration limits. However, the agency tentatively believes that a 4.3 m/s calibration test for the shoulder is not necessary because the evaluation of the shoulder appears to be achieved by the thorax with arm test. Both tests produced nearly identical shoulder response values. Comments are requested on this issue.

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

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

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

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

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

This rulemaking action was not considered a significant regulatory action under Executive Order 12866. This rulemaking action was also determined not to be significant under the Department of Transportation's (DOT's) regulatory policies and procedures (44 FR 11034, February 26, 1979). This document proposes to amend 49 CFR Part 572 by adding design and performance specifications for a 5th percentile adult female side impact dummy that the agency may use in compliance tests of Federal side impact protection standards and other related purposes. If this proposed Part 572 rule becomes final, it would affect only those businesses that choose to manufacture or test with the dummy. It would not impose any requirements on anyone.

The cost of an uninstrumented SID-IIsFRG is $49,000. Instrumentation would add $40,470 as specified for Part 572 and compliance purposes. Fully instrumenting the dummy (beyond that specified in this notice) could add up to $135,088, if full instrumentation were desired by dummy users. Full instrumentation is not required by this NPRM. Because the economic impacts of this proposal are so minimal, no further regulatory evaluation is necessary.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996), whenever an agency is required to publish a proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities ( i.e., small businesses, small organizations, and small governmental jurisdictions), unless the head of the agency certifies the rule will not have a significant economic impact on a substantial number of small entities. The Small Business Administration's regulations at 13 CFR Part 121 define a small business, in part, as a business entity “which operates primarily within the United States.” (13 CFR 121.105(a)).

We have considered the effects of this rulemaking under the Regulatory Flexibility Act. I hereby certify that the proposed rulemaking action would not have a significant economic impact on a substantial number of small entities. This action would not have a significant economic impact on a substantial number of small entities because the addition of the test dummy to Part 572 would not impose any requirements on anyone. This rulemaking action by NHTSA does not require anyone to manufacture the dummy or to test vehicles with it.

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

Executive Order 13132 requires agencies to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

NHTSA has analyzed this proposed amendment in accordance with the principles and criteria set forth in Executive Order 13132. The agency has determined that this proposal does not have sufficient federalism implications to warrant consultation and the preparation of a Federalism Assessment.

This proposed rule would not have any retroactive effect. Under 49 U.S.C. 30103, whenever a Federal motor vehicle safety standard is in effect, a State may not adopt or maintain a safety standard applicable to the same aspect of performance which is not identical to the Federal standard, except to the extent that the state requirement imposes a higher level of performance and applies only to vehicles procured for the State's use. 49 U.S.C. 30161 sets forth a procedure for judicial review of final rules establishing, amending, or revoking Federal motor vehicle safety standards. That section does not require submission of a petition for reconsideration or other administrative proceedings before parties may file suit in court.

Under the Paperwork Reduction Act of 1995, a person is not required to respond to a collection of information by a Federal agency unless the collection displays a valid control number from the Office of Management and Budget (OMB). This proposed rule would not have any requirements that are considered to be information collection requirements as defined by the OMB in 5 CFR Part 1320.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272) directs NHTSA to use voluntary consensus standards in its regulatory activities unless doing so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g. , materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies, such as the Society of Automotive Engineers (SAE). The NTTAA directs NHTSA to provide Congress, through OMB, explanations when the agency decides not to use available and applicable voluntary consensus standards.

This proposed rulemaking involves technical standards. The NPRM proposes to use SAE standards in the specifications for the instrumentation of the SID-IIsFRG, which accords with the NTTAA. This proposal would adopt most of the specifications of the SID-IIs which was developed by the private sector, except for the FRG modifications. As explained in this preamble, the agency has tentatively determined that the FRG modifications are needed to assure the durability of the test dummy in crash tests.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, Federal law requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted for inflation with base year of 1995). Before promulgating a NHTSA rule for which a written statement is needed, section 205 of the UMRA generally requires the agency to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule.

This proposed rule would not impose any unfunded mandates under the UMRA. This proposed rule would not meet the definition of a Federal mandate because it would not impose requirements on anyone. It would amend 49 CFR Part 572 by adding design and performance specifications for a side impact dummy that the agency may use in the Federal motor vehicle safety standards. If this proposed rule becomes final, it would affect only those businesses that choose to manufacture or test with the dummy. It would not result in costs of $100 million or more to either State, local, or tribal governments, in the aggregate, or to the private sector.

Executive Order 12866 requires each agency to write all rules in plain language. Application of the principles of plain language includes consideration of the following questions:

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

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

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

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

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

You may also submit your comments to the docket electronically by logging onto the Dockets Management System Web site at http://dms.dot.gov. Click on “Help & Information” or “Help/Info” to obtain instructions for filing the document electronically.

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

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

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

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

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

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

2. On that page, click on “search.”

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

4. On the next page, which contains docket summary information for the docket you selected, click on the desired comments. You may download the comments. Although the comments are imaged documents, instead of word processing documents, the “pdf” versions of the documents are word searchable.

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

Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit http://dms.dot.gov.

In consideration of the foregoing, NHTSA is proposing to amend 49 CFR Part 572 as follows:

We intend any final action resulting from this proposal to be as accurate and as effective as possible. Therefore, we solicit comments or suggestions from the public, other concerned governmental agencies, the scientific community, industry, or any other interested party concerning the economic analysis or the proposed rule to designate critical habitat for Astragalus jaegerianus (69 FR 18018, April 6, 2004). We particularly seek comments concerning:

(1) The reasons why any habitat should or should not be determined to be critical habitat as provided by section 4 of the Act, including whether the benefits of exclusion outweigh the benefits of specifying such area as part of the critical habitat;

(2) Specific information on the amount and distribution of Astragalus jaegerianus habitat, and what habitat is essential to the conservation of this species and why;

(3) Land use designations and current or planned activities in the subject area and their possible impacts on proposed habitat;

(4) Any foreseeable economic, national security, or other potential impacts resulting from the proposed designation of critical habitat; in particular, any impacts on small entities or families;

(5) Whether the economic analysis identifies all State and local costs attributable to the proposed critical habitat designation. If not, what costs are overlooked;

(6) Whether the economic analysis makes appropriate assumptions regarding current practices and likely regulatory changes imposed as a result of the designation of critical habitat;

(7) Whether the economic analysis correctly assesses the effect on regional costs associated with land use controls that derive from the designation;

(8) Whether the designation will result in disproportionate economic impacts to specific areas that should be evaluated for possible exclusion from the final designation;

(9) Whether the economic analysis appropriately identifies all costs that could result from the designation; and

(10) Whether our approach to critical habitat designation could be improved or modified in any way to provide for greater public participation and understanding, or to assist us in accommodating public concern and comments.

All comments and information submitted during the initial comment period on the proposed rule need not be resubmitted. If you wish to comment, you may submit your comments and materials concerning the draft economic analysis and proposed rule by any one of several methods ( see ADDRESSES section).

Please submit Internet comments to fw1Lanemv@r1.fws.gov in an ASCII file format and avoid the use of special characters and encryption. Please also include “Attn: Lane Mountain Milk-vetch Critical Habitat” in your e-mail subject header, and your name and return address in the body of your message. If you do not receive a confirmation from the system that we have received your Internet message, contact us directly by calling our Ventura Fish and Wildlife Office ( see FOR FURTHER INFORMATION CONTACT section).

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

Comments and materials received, as well as supporting documentation used in preparation of the proposal to designate critical habitat, will be available for inspection, by appointment, during normal business hours, in our Ventura Fish and Wildlife Office at the above address.

Astragalus jaegerianus (Lane Mountain milk-vetch) is a member of the pea family (Fabaceae) that is restricted in its range to a portion of the west Mojave Desert north of Barstow, in San Bernardino County, CA. It is a wispy perennial herb with cream-to-purple flowers, whose zig zag stems grow up through low desert shrubs, referred to as host shrubs, that provide it with support. The stems wither at the end of each growing season, and the plant overwinters as a taproot. The visibility of populations can fluctuate dramatically from year to year, depending on climatic conditions. In favorable years, seed production may be substantial. In unfavorable years, the plants may desiccate prior to flowering or setting seed, or the taproots may remain dormant and not resprout.

Populations of Astragalus jaegerianus are concentrated in four geographically distinct areas that are arrayed more or less linearly along a 20 mile (32 kilometer) long axis that trends in a northeasterly-to-southwesterly direction. The Goldstone and Brinkman Wash-Montana Mine populations occur entirely on Department of Defense (Army) lands at Fort Irwin. The Paradise Wash population occurs primarily on Army lands, with a portion on Federal lands administered by the Bureau of Land Management (BLM). The Coolgardie population occurs primarily on BLM-managed lands, with a portion on small privately owned parcels scattered between the Federal lands.

We listed Astragalus jaegerianus as threatened on October 6, 1998 (63 FR 53596) due to threats of increasing habitat loss and degradation. The primary threat is loss of individuals and habitat due to proposed military training activities. Other potential threats include recreational mining, off-highway vehicle use, and alteration in habitat from the encroachment of nonnative species.

On April 6, 2004, we published a proposed rule in the Federal Register (69 FR 18018) to designate critical habitat for Astragalus jaegerianus. We proposed to designate approximately 29,522 acres (ac) (11,947 hectares (ha)) of critical habitat in San Bernardino County, CA. The first comment period on the proposed critical habitat rule for Astragalus jaegerianus closed on May 21, 2004.

Critical habitat identifies specific areas, both occupied and unoccupied, that are essential to the conservation of a listed species and that may require special management considerations or protection. If the proposed rule is made final, section 7 of the Act will prohibit destruction or adverse modification of critical habitat by any activity funded, authorized, or carried out by any Federal agency. Federal agencies proposing actions affecting areas designated as critical habitat must consult with us on the effects of their proposed actions, pursuant to section 7(a)(2) of the Act. We note, however, that a recent 9th Circuit judicial opinion, Gifford Pinchot Task Force v. United State Fish and Wildlife Service, has invalidated the Service's regulation defining destruction or adverse modification of critical habitat. We are currently reviewing the decision to determine what effect it (and to a limited extent Center for Biological Diversity v. Bureau of Land Management (Case No. C-03-2509-SI, N.D. Cal.)) may have on the outcome of consultations pursuant to Section 7 of the Act.

Section 4 of the Act requires that we consider economic and other relevant impacts prior to making a final decision on what areas to designate as critical habitat. We have prepared a draft economic analysis for the proposal to designate certain areas as critical habitat for Astragalus jaegerianus. This analysis considers the potential economic effects of designating critical habitat for A. jaegerianus. It also considers the economic effects of protective measures taken as a result of other Federal, State, and local laws that aid habitat conservation in areas proposed for designation.

Approximately 52 percent of the lands within the proposed designation of critical habitat for Astragalus jaegerianus occur on Army lands at Fort Irwin, and 32 percent of the lands occur on BLM lands. Less than 1 percent of the lands proposed are State lands, and approximately 15 percent of the lands proposed are on privately owned parcels interspersed with BLM lands. We know of no Tribal lands within these boundaries of proposed critical habitat.

The economic analysis addresses the impacts of Astragalus jaegerianus conservation efforts on activities occurring on lands proposed for designation. The analysis measures lost economic efficiency associated with mining and off-highway vehicle recreation, as well as potential uncertainty to landowners and project delay.

The economic analysis includes both pre-designation and post-designation economic costs to various entities as a result of Astragalus jaegerianus conservation activities. Pre-designation costs are those costs estimated to have occurred from the time the species was listed until the proposal of critical habitat. The estimated pre-designation costs range from $1.58 million to $2.1 million. These costs are associated primarily with two major conservation efforts: those taken by the Army to plan for and implement conservation actions at Fort Irwin, and those taken by the BLM to plan for, and implement, conservation actions within the framework of the West Mojave Plan, a multiple species habitat conservation plan and amendment to the California Desert Conservation Area Plan.

The total post-designation costs are expected to range from $5.84 million to $13.01 million. These costs are associated primarily with land acquisition, land management activities, and project-related surveys and monitoring associated with conservation of Astragalus jaegerianus over a 20-year time period.

With respect to the Army lands at Fort Irwin, the analysis only focuses on the direct costs associated with Astragalus jaegerianus conservation, and does not attempt to quantify the potential impacts to military readiness, if any, that may result from critical habitat designation.

The primary author of this notice is Connie Rutherford, Ventura Fish and Wildlife Office ( see ADDRESSES section).

The authority for this action is the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq. ).

The FMP, which was implemented by publication of the final rule in the Federal Register on December 15, 1999 (64 FR 69888), divides management unit species into two categories: actively managed and monitored. Harvest guidelines for actively managed species (Pacific sardine and Pacific mackerel) are based on formulas applied to current biomass estimates. Biomass estimates are not calculated for species that are only monitored (jack mackerel, northern anchovy, and market squid).

At a public meeting each year, the biomass for each actively managed species is reviewed by the Pacific Fishery Management Council's (Council) Coastal Pelagic Species Management Team (Team). The biomass, harvest guideline, and status of the fisheries are then reviewed at a public meeting of the Council's CPS Advisory Subpanel (Subpanel). This information is also reviewed by the Council's Scientific and Statistical Committee (SSC). The Council reviews reports from the Team, Subpanel, and SSC and, after providing time for public comment, makes its recommendation to NMFS. The annual harvest guideline and season structure are published by NMFS in the Federal Register as soon as practicable before the beginning of the appropriate fishing season. The Pacific sardine season begins on January 1 and ends on December 31 of each year.

Public meetings of the Team and Subpanel were held at the Southwest Regional Office in Long Beach, CA, on September 28, 29, and 30, 2004 (69 FR 55144, September 13, 2004). The Council reviewed the report at its November meeting in Portland, OR, and listened to comments from its advisory bodies and the public. The Council then adopted the 2005 harvest guideline for Pacific sardine.

Based on a biomass estimate of 1,193,515 metric tons (mt), the harvest guideline for Pacific sardine for January 1, 2005, through December 31, 2005, is 136,179 mt. The biomass estimate is 102,928 mt higher (approximately 10 percent higher) than last year's estimate.

The harvest guideline is allocated one-third for Subarea A, which is north of 39° 00′ N. lat. (Pt. Arena, CA) to the Canadian border, and two-thirds for Subarea B, which is south of 39° 00′ N. lat. to the Mexican border. Under this proposed rule, the northern allocation for 2004 would be 45,393 mt; the southern allocation would be 90,786 mt. In 2004, the northern allocation was 40,916 mt and the southern allocation was 81,831 mt.

Normally, an incidental landing allowance of sardine in landings of other CPS is set at the beginning of the fishing season. The incidental allowance would become effective if the harvest guideline is reached and the fishery closed. A landing allowance of sardine up to 45 percent by weight of any landing of CPS is authorized by the FMP. An incidental allowance prevents fishermen from being cited for a violation when sardine occur in schools of other CPS, and it minimizes bycatch of sardine if sardine are inadvertently caught while fishing for other CPS. Sardine landed with other species also requires sorting at the processing plant, which adds to processing costs. Mixed species in the same load may damage smaller fish. The size of the sardine population was estimated using a newly modified version of the integrated stock assessment model called Age-structured Assessment Program (ASAP). Using this new ASAP model was recommended by the Coastal Pelagic Species Stock Assessment Review panel held in June 2004 in La Jolla, CA. This new ASAP model replaces the old Catch-at-Age-Analysis of Sardine-Two Area Model (CANSAR-TAM, a forward-casting, age-structured analysis) used in previous years. ASAP is a flexible forward-simulation that allows for the efficient and reliable estimation of a large number of parameters. ASAP uses fishery dependent and fishery independent data to obtain annual estimates of sardine abundance, year-class strength, and age-specific fishing mortality for 1983 through 2004. The ASAP model allows one to account for the expansion of the Pacific sardine stock northward to include waters off the northwest Pacific coast and for the incorporation of data from the Mexican sardine fishery. Information on the fishery and the stock assessment are found in the report Assessment of Pacific Sardine Stock for U.S. Management in 2005 (see ADDRESSES ).

The formula in the FMP uses the following factors to determine the harvest guideline:

1. The biomass of age one sardine and above . For 2005, this estimate is 1,193,515 mt.

2. The cutoff . This is the biomass level below which no commercial fishery is allowed. The FMP established this level at 150,000 mt.

3. The portion of the sardine biomass that is in U.S. waters . For 2005, this estimate is 87 percent, based on the average of larval distribution obtained from scientific cruises and the distribution of the resource obtained from logbooks of aerial fish-spotters.

4. The harvest fraction . This is the percentage of the biomass above 150,000 mt that may be harvested. The fraction used varies (5-15 percent) with current ocean temperatures. A higher fraction is used for warmer ocean temperatures, which favor the production of Pacific sardine, and a lower fraction is used for cooler temperatures. For 2005, the fraction was 15 percent based on three seasons of sea surface temperature at Scripps Pier, California.

Based on the estimated biomass of 1,193,515 mt and the formula in the FMP, a harvest guideline of 136,179 mt was determined for the fishery beginning January 1, 2005. The harvest guideline is allocated one-third for Subarea A, which is north of 39° 00′ N. lat. (Pt. Arena, CA) to the Canadian border, and two-thirds for Subarea B, which is south of 39° 00′ N. lat. to the Mexican border. The northern allocation is 45,393 mt; the southern allocation is 90,786 mt.

These proposed specifications are issued under the authority of, and NMFS has preliminarily determined that it is in accordance with, the Magnuson-Stevens Fishery Conservation and Management Act, the FMP, and the regulations implementing the FMP at 50 CFR part 660, subpart I.

This proposed rule is exempt from review under Executive Order 12866.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities as follows:

As a result, a regulatory flexibility analysis is not required and none has been prepared.

Federal regulations at 50 CFR part 679 implement the FMP and govern the groundfish fisheries in the BSAI. The Council prepared the FMP and NMFS approved it under the Magnuson-Stevens Act. General regulations governing U.S. fisheries also appear at 50 CFR part 600.

The FMP and its implementing regulations require NMFS, after consultation with the Council, to specify annually the total allowable catch (TAC) for each target species and the “other species” category, the sum of which must be within the optimum yield range of 1.4 million to 2.0 million metric tons (mt) (see § 679.20(a)(1)(i)). Regulations at § 679.20(c)(1) further require NMFS to solicit public comment on proposed annual TACs and apportionments thereof, PSC allowances and prohibited species quota (PSQ) reserves established by § 679.21, seasonal allowances of pollock, Pacific cod and Atka mackerel TAC, including pollock Community Development Quota (CDQ), and CDQ reserve amounts established by § 679.20(b)(1)(iii) and to publish proposed harvest specifications in the Federal Register . The proposed harvest specifications set forth in Tables 1 through 13 of this action satisfy these requirements.

Under § 679.20(c)(3), NMFS will publish the final annual specifications for 2005 and 2006 after (1) considering comments received within the comment period (see DATES ), (2) consulting with the Council at its next meeting beginning the week of December 6, 2004, and (3) considering new information presented in the EA and the final 2004 SAFE reports prepared for the 2005 and 2006 groundfish fisheries.

With some exceptions, regulations at § 679.20(c)(2)(ii) require that one-fourth of each proposed initial TAC (ITAC) amount and apportionment thereof, one-fourth of each CDQ reserve established under § 679.20(b)(1)(iii), and one-fourth of each proposed PSC allowance established under § 679.21 become available at 0001 hours, Alaska local time (A.l.t.), January 1, on an interim basis and remain in effect until superseded by the final harvest specifications. Regulations at § 679.20(c)(2)(ii)(A) and (B) require that the proposed first seasonal allowance of non-CDQ and CDQ pollock, Pacific cod, and Atka mackerel becomes available at 0001 hours, A.l.t., January 1, on an interim basis and remains in effect until superseded by the final harvest specifications. Regulations at § 679.20(c)(2)(ii) do not provide for an interim harvest specification for either the hook-and-line and pot gear sablefish CDQ reserve or for sablefish managed under the Individual Fishing Quota (IFQ) program. Interim harvest specifications and apportionments thereof for the 2005 fishing year will be published in a separate Federal Register notice.

Amendments 48/48 to the FMP and to the Fishery Management Plan for Groundfish of the Gulf of Alaska (GOA) were unanimously recommended by the Council in October 2003 and approved by NMFS on October 12, 2004. The final rule implementing Amendments 48/48 was published November 8, 2004, (69 FR 64683). Amendments 48/48 revise the administrative process used to establish annual specifications for the groundfish fisheries of the GOA and the BSAI. The goals of Amendments 48/48 in revising the harvest specifications process are to (1) manage fisheries based on the best scientific information available, (2) provide for adequate prior public review and comment on Council recommendations, (3) provide for additional opportunity for Secretarial review, (4) minimize unnecessary disruption to fisheries and public confusion, and (5) promote administrative efficiency.

Based on the approval of Amendments 48/48, the Council recommended 2005 and 2006 proposed harvest specifications for BSAI groundfish. These proposed harvest specifications are based on the 2003 SAFE report. In November 2004, the 2004 SAFE report will be used to develop the final 2005 and 2006 groundfish acceptable biological catch amounts (ABC). When possible, this proposed rule will identify any proposal that may be anticipated to change in the final specifications. The 2006 harvest specification will be updated in early 2006, when final harvest specifications for 2006 and new harvest specification for 2007 are implemented.

In June 2004, the Council adopted Amendment 82 to the FMP. This amendment would establish a framework for management of the Aleutian Islands (AI) directed pollock fishery. If approved by NMFS, this amendment would be implemented after the commencement of the 2005 fishing year. Section 803 of the Consolidated Appropriations Act of 2004 (CAA), Pub. L. No. 108-199, requires the AI directed pollock fishery to be allocated to the Aleut Corporation for economic development of Adak, Alaska. Prior to the CAA, the AI directed pollock fishery was managed pursuant to the American Fisheries Act (AFA), Pub. L. No. 105-277, Title II of Division C. The AFA allocated the AI directed pollock fishery to specific harvesters and processors named in the AFA. The CAA supersedes that portion of the AFA. Together, the CAA and the AFA effectively allocate the AI directed pollock fishery to the Aleut Corporation after subtraction of the CDQ directed fishing allowance and incidental catch allowance (ICA) from the pollock TAC. The implementation of section 803 of the CAA requires amending AFA provisions in the FMP and in the regulations at 50 CFR part 679. This would be accomplished by Amendment 82, if it is approved.

Until a decision is made on whether to approve Amendment 82, NMFS will prohibit the non-CDQ AI directed pollock fishery in the interim and final harvest specifications for 2005 and 2006 based on the statutory language of section 803 of the CAA. The AI pollock TAC recommended by the Council under the provisions of proposed Amendment 82 will be included in the 2005 and 2006 proposed, interim, and final harvest specifications to allow the Administrator, Alaska Region, NMFS (Regional Administrator), to open the AI directed pollock fishery if and when the regulations for Amendment 82 are effective. As stated above, this prohibition is authorized by section 803 of the CAA, which requires that only those who are selected by the Aleut Corporation and approved by NMFS may participate in the non-CDQ AI directed pollock fishery. For additional information, see the November 16, 2004, notice of availability (69 FR 67107) and the December 7, 2004, proposed rule for Amendment 82.

The Council recommended an upper limit for the AI pollock TAC equal to 19,000 mt, except that when the AI pollock ABC is less than 19,000 mt, AI pollock TAC shall be no more than 40 percent of the Allowable Biological Catch (ABC). The directed pollock fishery allocation to the Aleut Corporation would be seasonally apportioned. The Council also adopted a chinook salmon bycatch limit for the AI directed pollock fishery. Tables 1 and 2 list the 2005 and 2006 proposed allocations and seasonal apportionments of the AI pollock TAC based on regulations that would implement Amendment 82, if it is approved.

Other actions that may affect the 2005 and 2006 harvest specifications are based on recommendations from the Council's Plan Team. The Council may consider apportionment of the Pacific cod ABC or TAC by Bering Sea subarea and AI subarea separately instead of by the full BSAI management area. Also, the Council may consider separating some rockfish species from the “other rockfish” species category.

The proposed ABC levels are based on the best available biological and socioeconomic information, including projected biomass trends, information on assumed distribution of stock biomass, and revised technical methods used to calculate stock biomass. In general, the development of ABCs and overfishing levels (OFLs) involves sophisticated statistical analyses of fish populations and is based on a successive series of six levels, or tiers, of reliable information available to fishery scientists. Tier one represents the highest data quality and tier six the lowest level of data quality available.

The best information currently available is set forth in Appendix A to the final SAFE report for the 2004 BSAI groundfish fisheries dated November 2003 (see ADDRESSES ). Information on the status of stocks will be updated with the 2004 survey results and reconsidered by the Plan Team in November 2004 for the 2004 SAFE report. The final harvest specifications will be based on the 2004 SAFE report.

In October 2004, the Scientific and Statistical Committee (SSC) and the Council reviewed the Plan Team's preliminary projections for 2004 biomass amounts, as presented in the 2003 SAFE report, as the basis for the 2005 and 2006 proposed ABC, OFL, and TAC amounts. Due to time constraints, the Council's Advisory Panel did not provide recommendations for the proposed harvest specifications. The SSC concurred with the Plan Team's recommendations, which estimate the 2005 and 2006 proposed ABCs and OFLs by using a projection of 2004 and 2005 groundfish harvest with the November 2003 SAFE report model projections of 2004 ABCs for groundfish stocks managed at tiers 1-3. The Council adopted the OFL and ABC amounts recommended by the SSC (Table 1), except for Atka mackerel. The Council recommended using the 2004 OFL and ABC amounts for Atka mackerel based on survey data that became available October 8, 2004, instead of using the projected amounts for 2005 and 2006. The Council recommended that the 2005 and 2006 proposed TACs be set equal to the 2004 TACs, except for minor decreases for sablefish and Pacific ocean perch and minor increases in 2005 for Pacific cod and rock sole based on preliminary data evaluated by the Plan Team. The Council also recommended an AI pollock TAC to support a directed pollock fishery, pending approval of Amendment 82. The Council recommended using the 2004 PSC allowances for the 2005 and 2006 proposed allowances. The Council will reconsider the OFL, ABC, TAC, and PSC amounts in December 2004 after the Plan Team incorporates new status of stocks information into a final 2004 SAFE report, for the 2005 and 2006 BSAI groundfish fishery. None of the Council's recommended proposed TACs for 2005 or 2006 exceed the recommended 2005 or 2006 proposed ABC for any species category. NMFS finds the Council's recommended proposed 2005 and 2006 OFLs, ABCs, and TACs are consistent with the best available information on the biological condition of the groundfish stocks.

Table 1 lists the 2005 and 2006 proposed OFL, ABC, and TAC, ITAC and CDQ amounts for groundfish in the BSAI. The proposed apportionment of TAC amounts among fisheries and seasons is discussed below.