Established under the Public Works and Economic Development Act of 1965, as amended (42 U.S.C. 3121 et seq. ) (PWEDA), EDA's mission is to lead the Federal economic development agenda by promoting competitiveness and preparing American regions for growth and success in the worldwide economy. EDA partners with stakeholders throughout the United States to foster job creation, collaboration, and innovation. EDA's regulations, which are codified at 13 CFR chapter III, implement the agency's six economic development assistance programs authorized under PWEDA, as well as the Trade Adjustment Assistance for Firms Program and Trade Adjustment Assistance for Communities Program, which are authorized under chapters 3, 4, and 5 of title II of the Trade Act of 1974, as amended (19 U.S.C. 2341 et seq. ).

In an opinion published in the Wall Street Journal on January 18, 2011, President Obama recognized that Federal regulations sometimes fail to strike the correct balance, placing unreasonable burdens on businesses that stifle innovation and have had a chilling effect on growth and jobs. Also on January 18, 2011, the President signed Executive Order 13563 “Improving Regulation and Regulatory Review,” which requires Federal agencies to review existing rules to remove outdated regulations that stifle job creation and make the U.S. economy less competitive.

EDA is beginning the process of updating its regulations, which provide the framework through which the agency selects, awards, and administers its grant investments. Through this notice of inquiry (NOI), EDA requests input from the public on any obstacles created by EDA's current regulations and ways to improve them to help the agency better advance innovative economic development in the 21st century. The agency is particularly interested in learning of any perceived impediments to contemporary economic development practices that are produced as a cause or consequence of a particular regulation. Although EDA welcomes comments on all of its regulations, the agency requests particular input on those regulations that impact the creation and growth of Regional Innovation Clusters (RICs). In addition, EDA has identified potential issues in the area of property management on which the agency requests comments, as discussed below. As part of the Administration's commitment to open government, EDA is interested in broad public and stakeholder participation in this effort and strives to create a simplified regulatory system that balances the agency's fiduciary and transparency responsibilities with good, common sense customer service to our stakeholders and the American people.

EDA supports the development and growth of RICs as proven economic development tools through which American regions can create jobs and grow their economies. A RIC is an active network of similar, synergistic, or complementary organizations engaged in or with a particular industry sector, with active channels for business transactions, communications, and dialogue that share specialized infrastructure, labor markets, and services and that are located within a defined geographic region. These active channels support the genesis of business ideas, innovations, and initiatives that create new companies and jobs. A RIC's region may cross municipal, county, and other jurisdictional boundaries. A RIC often includes catalysts of innovation and drivers of regional economic growth, such as local universities, government research centers, and/or other research and development resources. In addition, participants in the RIC may have strategic partnerships with entities outside of the RIC's geographic region. A successful RIC will leverage the region's unique competitive strengths and find ways to nurture networks for business financing, business-to-business sales, education, and workforce development. These networks work in concert with local governments, venture capitalists, private banks, workforce investment boards, non-profit organizations, institutions of higher education (including community colleges), and other public and private agencies and institutions.

EDA seeks information on whether its regulations appropriately facilitate the creation and promotion of RICs and comments on ways the regulations can better support RICs. EDA also seeks comments on any impediments the regulations present to its stakeholders as they work toward the creation and implementation of RICs. For example, should EDA define what it means by a RIC in its “Definitions” section at 13 CFR 300.3 to provide stakeholders a clearer idea of what the agency seeks to encourage? If so, is the description above adequate as a definition? As another example, should EDA include a RIC analysis or strategy as part of the technical requirements of Comprehensive Economic Development Strategies as set out at 13 CFR 303.7(b)?

EDA has become aware of a potential issue with its property management regulations, which are set out at 13 CFR part 314. As trustee of appropriated taxpayer dollars, EDA safeguards the public's interest in grant assets, and the agency's property management regulations provide the framework through which this is accomplished. EDA takes and retains a security interest (the Federal Interest) in property, including real and personal property, purchased or improved with grant funds. See 13 CFR 314.1 and 314.2. The Federal Interest helps ensure that project property is used for the economic development purposes for which the grant was awarded. In general, EDA's regulations require that property purchased or improved with EDA assistance remain unencumbered and that the recipient hold title to the property for its estimated useful life. In some instances, these regulations have proved particularly challenging for public/private partnerships designed to advance a community's economic development priorities. EDA seeks input on innovative ways that would allow recipients to structure a project (and property ownership, as appropriate) to accomplish relevant economic development goals, while continuing to safeguard the Federal Interest. For example, are there practical ways to secure the Federal Interest without requiring the recordation of a Federal lien or other encumbrance, or the recipient to hold title to project property?

In addition, EDA seeks comments on the possibility of providing for additional flexibility with respect to the agency's encumbrance and subordination requirements as set out at 13 CFR 314.6 and 314.7. When EDA assistance is used to acquire or improve real property, the recipient must provide to EDA a locally recorded security interest in the property improved with grant funds. Such security interest can include a lien, mortgage, or another enumerated form of encumbrance. In the event that a project fails for any reason, EDA can recover the fair market value of its interest in the property and use those funds to make additional grants that will provide further opportunities for job creation. When EDA approves encumbrances on real property acquired or approved with program grant funds, EDA generally does not allow the Federal Interest to be subordinated to any other interest. However, given the realities of project development and real estate financing, EDA sometimes will allow (on a case-by-case basis) the Federal Interest to be subordinated provided that: EDA determines to its satisfaction that the recipient's financial standing is strong; the recipient will not default on its obligations; and the project cannot happen without the subordination. See 13 CFR 314.6(b).

The agency's subordination requirements provide needed flexibility when long-term financing is available and when the level of risk to the Federal Interest can be assessed at the outset. However, it has come to EDA's attention that the requirements may not provide the necessary flexibility when short-term financing is involved. Some financing tools available to recipients may be restricted to a relatively short period of time. For example, the credit allowance period under the New Markets Tax Credit (NMTC) Program is seven years ( see IRC 45D(a)(3)). Projects involving NMTC investments often refinance at the conclusion of the credit allowance period (see the NMTC Program FAQs for more information on the program, which are available on the U.S. Department of the Treasury's Web site at http://www.cdfifund.gov/docs/nmtc/2009/NMTC%20Compliance%20Monitoring%20FAQ.pdf ). Also, in some cases, short-term financing is the only type of financing that a recipient can realistically obtain. In such circumstances, other project lenders often want EDA to agree at the time project financing is negotiated to subordinate its interest in the future after the short-term loan matures so that follow-on financing can be put into place. Because future market conditions are uncertain, EDA cannot make the findings under 13 CFR 314.6(b) needed to subordinate the Federal Interest. A current agreement to subordinate in the future puts the Federal Interest at increased risk; are there mechanisms available to make that risk acceptable if it allows promising economic development projects to go forward?

Would it be useful for EDA's regulations to specifically provide for situations where short-term project financing is the only tool available? Specifically, should EDA agree to subordinate the Federal Interest in the future when future market conditions, the strength of the recipient, and the success of the project are largely unknown? In what situations should this tool be exercised? What award conditions should EDA require in connection with such arrangements? In some circumstances, EDA is able to hedge against risk by, for example, requiring a non-profit applicant to add a city or other local government body as a co-applicant. This avenue is not available in all cases. Given this, are there alternative mechanisms that can protect the Government's interest in case the project fails so that EDA can recover the Federal Interest to make new grants?

Although the examples above center on how EDA's regulations affect RIC development and adjustments to EDA's property management requirements, as noted above, EDA seeks public comments on any aspect of the regulations. Comments that identify potential regulatory impediments to economic development and make corresponding recommendations, as well as the commenter's experiences complying with the regulation at issue, will be instructive.

Comments should be submitted to EDA as described in the ADDRESSES section of this notice. EDA strongly encourages the use of the online feature on the agency's Web site to share comments and suggestions on improving the agency's regulations. The feature is easily accessible on EDA's Web site and offers participants an opportunity to view the comments of others. As noted above, the online commenting feature can be accessed at http://www.eda.gov/ . EDA will consider all comments submitted in response to this NOI that are received by 5 p.m. Eastern Time on March 14, 2011, as referenced under DATES . EDA will not accept public comments accompanied by a request that a part or all of the material be treated confidentially for any reason; EDA will not consider such comments and will return such comments and materials to the commenter. All public comments in response to this NOI must be in writing (including fax or e-mail) and will be a matter of public record. All comments submitted will be available for public inspection and copying at http://www.regulations.gov .

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2011-0033; Directorate Identifier 2010-NM-019-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov , including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

In response to numerous reports of smoke or flames in the passenger cabin of various models of transport category airplanes, we conducted a comprehensive in-flight entertainment (IFE) systems review. Earlier investigation of the reports had revealed that the source of the smoke and flames was from cabin IFE system components, including electronic seat boxes mounted under passenger seats, IFE wiring, IFE monitors, cabin lighting, wall outlets, and other non-essential cabin electrical systems.

The systems review disclosed that in order to minimize the risk of smoke or flames in the passenger cabin, a switch is needed in the flight compartment to enable the flightcrew to turn off electrical power to the IFE system and other non-essential electrical systems in the event of smoke or flames. The flightcrew's inability to turn off power to the IFE system and other non-essential electrical systems, if not corrected, could result in the inability to control smoke or flames in the airplane flight deck or passenger cabin during a non-normal or emergency situation.

We have reviewed Boeing Service Bulletin 777-23-0142, dated November 25, 2003. This service bulletin describes procedures for the following actions:

• Removing the cabin area control panels.

• Changing the wiring.

• Installing new cabin control panels.

• Modifying the purser station and the A-4 galley, as applicable.

• Installing cabin system management unit operational program software.

• Installing cabin area control panel operational program software.

• Installing zone management unit operational program software.

• Installing overhead electronics unit operational program software, if necessary.

• Making changes to the new configuration database.

• Installing the new configuration database to the cabin services system.

Boeing Service Bulletin 777-23-0142, dated November 25, 2003 refers to Jamco Service Letter SL-K0789, dated June 10, 1997, as an additional source of service information for modifying the cabin system control panel compartment for airplanes in Group 4 (as identified in Boeing Service Bulletin 777-23-0142, dated November 25, 2003).

Boeing Service Bulletin 777-23-0142, dated November 25, 2003, specifies prior or concurrent accomplishment of Boeing Service Bulletin 777-23-0057, dated April 9, 1998, which describes procedures for changing the wiring in the purser station for airplanes in Group 4 (as identified in Boeing Service Bulletin 777-23-0142, dated November 25, 2003).

Boeing Service Bulletin 777-23-0142, dated November 25, 2003, does not contain a compliance time for the required actions. This NPRM would require the actions be done within 60 months after the effective date of this AD. We have coordinated this difference with The Boeing Company.

We are proposing this AD because we evaluated all relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design. This proposed AD would require accomplishing the actions specified in the service information described previously.

Currently, there are no affected airplanes on the U.S. Register. The following table provides the estimated costs for U.S. operators to comply with this proposed AD if an affected airplane is imported and placed on the U.S. Register in the future.

According to the manufacturer, some of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. 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.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA 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 rulemaking action.

We 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 this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866,

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979), and

3. 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.

You can find our regulatory evaluation and the estimated costs of compliance in the AD Docket.

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

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2011-0034; Directorate Identifier 2010-NM-021-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov , including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

In response to numerous reports of smoke or flames in the passenger cabin of various models of transport category airplanes, we conducted a comprehensive in-flight entertainment (IFE) systems review. Earlier investigation of the reports had revealed that the source of the smoke and flames was from cabin IFE system components, including electronic seat boxes mounted under passenger seats, IFE wiring, IFE monitors, cabin lighting, wall outlets, and other non-essential cabin electrical systems.

The systems review disclosed that in order to minimize the risk of smoke or flames in the passenger cabin, a switch is needed in the flight compartment to enable the flightcrew to turn off electrical power to the IFE system and other non-essential electrical systems. The flightcrew's inability to turn off power to the IFE system and other non-essential electrical systems in the event of smoke or flames, if not corrected, could result in the inability to control smoke or flames in the airplane flight deck or passenger cabin during a non-normal or emergency situation.

We have reviewed Boeing Service Bulletin 777-23-0176, Revision 2, dated October 26, 2006. This service bulletin describes procedures for the following actions:

• Removing the cabin system control panel (CSCP) core partition (CP) software, the cabin area control panel (CACP) operational program software (OPS), the zone management unit (ZMU) OPS, and the cabin system management unit (CSMU) OPS.

• Installing CSCP-CP software.

• Installing CACP OPS software.

• Installing ZMU OPS software.

• Installing CSMU OPS software.

• Installing the new configuration database in the cabin management system (CMS) line replaceable units.

Boeing Service Bulletin 777-23-0176, Revision 2, dated October 26, 2006, specifies prior or concurrent accomplishment of Boeing Service Bulletin 777-23-0141, dated June 14, 2001, which describes procedures for replacing the OPS for the CSCP, the CACP, and the CSMU, and reinstalling the configuration database.

Boeing Service Bulletin 777-23-0176, Revision 2, dated October 26, 2006, also specifies prior or concurrent accomplishment of Boeing Service Bulletin 777-23-0010, dated April 25, 1996, which describes procedures for installing a new CSCP; a new CMS configuration database; and new OPS for the CSCP, ZMU, passenger address controller, cabin interphone controller, CACP, speaker drive module, overhead electronics unit, and seat electronics unit.

We are proposing this AD because we evaluated all relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design. This proposed AD would require accomplishing the actions specified in the service information described previously, except as discussed under “Differences Between the Proposed AD and Service Information.”

Boeing Service Bulletin 777-23-0176, Revision 2, dated October 26, 2006, does not contain a compliance time for the proposed modification specified in paragraph (g) of this NPRM. This NPRM proposes a compliance time of 60 months. This difference has been coordinated with The Boeing Company.

We estimate that this proposed AD would affect 47 airplanes of U.S. registry. The following table provides the estimated costs for U.S. operators to comply with this proposed AD.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. 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.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA 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 rulemaking action.

We 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 this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866,

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979), and

3. 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.

You can find our regulatory evaluation and the estimated costs of compliance in the AD Docket.

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

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2011-0035; Directorate Identifier 2010-NM-110-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

We will post all comments we receive, without change, to http://www.regulations.gov , including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA Airworthiness Directive 2010-0066, dated April 21, 2010 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

The unsafe condition is possible separation of the engine from the engine mount during flight. You may obtain further information by examining the MCAI in the AD docket.

Airbus has issued All Operators Telexes A300-71A6029, including Appendices 01, 02, 03, and 04, dated March 30, 2010; and A310-71A2036, including Appendices 01, 02, 03, and 04, dated March 30, 2010. GE has issued CF6-80C2 Service Bulletin 72-0222, Revision 4, dated February 29, 2000. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design.

We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information.

We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a Note within the proposed AD.

Based on the service information, we estimate that this proposed AD would affect about 53 products of U.S. registry. We also estimate that it would take about 10 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $45,050, or $850 per product.

In addition, we estimate that any necessary follow-on actions would take about 608 work-hours and require parts costing $322,000, for a cost of $373,680 per product. We have no way of determining the number of products that may need these actions.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. 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.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA 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 rulemaking action.

We 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 this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. 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 and placed it in the AD docket.

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

Later in this preamble under the Additional Information section, we discuss how you can comment on this proposal and how we will handle your comments. Included in this discussion is related information about the docket, privacy, and the handling of proprietary or confidential business information. We also discuss how you can get a copy of this proposal and related rulemaking documents.

The FAA's authority to issue rules on 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.

The FAA is issuing this rulemaking under the authority described in subtitle VII, part A, subpart III, section 44706, “Airport operating certificates.” Under that section, Congress charges the FAA 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, including issuing airport operating certificates that contain terms the Administrator finds necessary to ensure safety in air transportation. This proposed rule is within the scope of that authority because it would enhance safety in airport operations by requiring training of personnel accessing the non- movement area, periodic friction testing, and plans for low visibility operations.

The FAA issues airport operating certificates (AOCs) under part 139 to certain airports serving commercial passenger-carrying operations based on the type of commercial operations and size of aircraft served. Currently, 556 of the four classes of airports (I, II, III, IV) defined in part 139 hold FAA-issued airport operating certificates. Part 139 prescribes the minimum standards for maintaining and operating the physical airport environment.

Currently, part 139 requires periodic training for all personnel who access movement (runways and taxiways) and safety areas. Airlines and airports provide primary safety oversight in non-movement areas (ramps and aprons). Some airports voluntarily implement training for personnel accessing the non-movement area. FAA Advisory Circular (AC) 150/5210-20, Ground Vehicle Operations on Airports   1 provides guidance to airport operators developing training programs for safe ground vehicle operations and pedestrian control. This guidance applies to all personnel accessing the movement and non-movement areas.

Airport ramps typically are confined, congested areas in which departing and arriving aircraft are serviced by ramp workers, including baggage, catering, and fueling personnel. Additional personnel on ramps include airport police, FAA officials, and other airport, airline, and vendor staff. The presence of large numbers of people using equipment in a relatively small area, often under significant time pressure, creates an environment for injuries and aircraft damage. Errors occur because of carelessness, distractions, confusion, inadequate training, lack of supervision, and time pressure.

The Government Accountability Office (GAO) issued a report in 2007 stating a lack of complete accident data and standards for ground handling hindered efforts to improve airport ramp safety. 2 The GAO found that the FAA, National Transportation Safety Board (NTSB), and Occupational Safety and Health Administration (OSHA) investigated 29 fatal ramp accidents from 2001 through 2006. 3 Most fatal accidents involve ramp workers, but pilots and passengers have died in ramp accidents. The GAO report concluded that there are no Federal or industry-wide standards for ramp operations.

According to a 2007 Flight Safety Foundation article, turnover among personnel typically is high, training can be spotty, and standard operating procedures may be nonexistent or ignored. 4 The Flight Safety Foundation article also found that ramp accidents occur frequently and cause airlines to incur significant costs often not covered by insurance.

Furthermore, activities in the non-movement area affect the safety of crewmembers and passengers after the aircraft leaves the ramp area. Undetected aircraft damage from ramp activities can cause in-flight emergencies. In December 2005, an Alaska Airlines MD-80 departing from Seattle, WA, to Burbank, CA, experienced a sudden cabin depressurization. The aircraft returned to Seattle and landed without injuries. The investigation revealed that a ramp vehicle had punctured the aircraft fuselage, but no one had reported the incident. 5

Braking performance is critical for all aircraft especially on wet runway surfaces. Under certain conditions, hydroplaning or unacceptable loss of traction (tire/pavement contact) results in poor braking performance and possible loss of directional control. Standing water, runway contaminants ( e.g., fuel and rubber), and smoothing or “polishing” of surface aggregates reduce friction.

Research shows that a higher level of friction is achieved by forming or cutting closely spaced transverse grooves on the runway surface, which allows rain water to escape from beneath tires of landing aircraft. 6 Pavement grooving was the first major step in achieving safer pavement surfaces for aircraft operations in wet weather conditions. Studies conducted in the U.S. and United Kingdom determined that an open graded, thin hot-mix asphalt (HMA) surface course called “porous friction course” (PFC) also could achieve good results. This surface permits rain water to permeate through the course and drain off transversely to the side of the runway, preventing water buildup on the surface and creating a relatively dry pavement condition during rainfall. An FAA Technical Center study demonstrated that a high level of friction was maintained on PFC overlays for the entire runway length.

Today, most airports in the United States use these methods and materials. Consequently, the frequency of accidents and incidents caused by loss of directional control and inadequate stopping capability has been greatly reduced. However, the skid resistance of these surfaces deteriorates over time.

The FAA provides guidance and procedures in Advisory Circular 150/5320-12C, Measurement, Construction, and Maintenance of Skid Resistant Airport Pavement Surfaces. However, there is no FAA requirement for airports to regularly inspect and record runway friction levels or to ensure runways are maintained in a manner that provides adequate friction levels. Neither is there a requirement to perform tests using continuous friction measuring equipment (CFME) or to evaluate the drainage capabilities of runway surface grooving and transverse slopes.

The FAA has determined that visual evaluations of pavement friction are not sufficient. CFME provides quantitative results that can be used to determine whether friction values meet acceptable standards. A list of approved CFME can be found in AC 150/5320-12C. While some U.S. airports use CFME, others may use less effective methods to monitor build-up of rubber deposits and deterioration of friction characteristics.

A Surface Movement Guidance Control System (SMGCS) is a system of lighting, signs, and markings that allows an aircraft to operate to and from the runway in very low visibility in a controlled and safe manner. This system provides guidance to and control of aircraft, ground vehicles, and personnel on the movement area of an airport. Guidance relates to facilities, information, and advice necessary for pilots of aircraft or drivers of ground vehicles to navigate the movement area and to keep aircraft or vehicles on the surfaces or within the areas intended for their use. Control means the measures necessary to prevent collisions and ensure traffic flows smoothly and freely.

The FAA guidance on SMGCS is available in AC 120-57A, Surface Movement Guidance and Control System. Low-visibility operations exist when Runway Visual Range (RVR) reports on any active runway drop below 1,200 feet RVR. AC 120-57A provides recommendations for improved safety procedures to accommodate low-visibility ground operations. Some airports voluntarily adopted AC 120-57A SMGCS practices. Some U.S. airports were approved to conduct low-visibility operations, but have not adopted all of the AC 120-57A SMGCS practices. Moreover, no FAA requirement ensures airports implement these recommendations (including optimum ground equipment, lighting, and signage) where air carriers conduct low-visibility operations.

The potential significance of a ground movement error by a vehicle or aircraft during low-visibility operations is an increasing concern as more airline operations and multiple runway configurations are planned for the National Airspace System (NAS). Additionally, technology advances such as heads-up displays (HUD) and enhanced flight vision systems (EFV) increase low-visibility operating capability. The FAA and ICAO consider the recommended low-visibility practices in AC 120-57A, and specific enhanced ground equipment and guidance, necessary to ensure safety during low-visibility ground movement operations. Additionally, the FAA now requires Surface Movement Guidance and Control System (SMGCS) for commissioning new runways under the FAA's Operations Evolution Plan (OEP).

The FAA proposes to amend § 139.303 to require periodic training for all personnel authorized to access the non-movement area. The proposal also would add the definition of “non-movement area” to § 139.5. Second, the proposal would amend § 139.305 to require a certificate holder to evaluate the surface characteristics of runways. Third, the proposal would require a certificate holder that allows operations below 1,200 feet RVR to implement a SMGCS plan in its airport certification manual (ACM). Fourth, the FAA proposes to amend § 139.1 to clarify the applicability of this part based on only the passenger seats in an aircraft used for passenger-carrying operations. Finally, the FAA proposes a new § 139.115 that would prohibit fraudulent or intentionally false statements on an application for a certificate or other record required to be kept.

The FAA has concluded non-movement area safety can be improved with increased training. Airport workers must be knowledgeable and aware of the various activities that take place in the non-movement area. This knowledge and awareness reduces confusion and carelessness by individuals accessing the non-movement area. Accordingly, the FAA proposes to require training for all persons authorized to access the non-movement area. This training would complement the existing training for persons accessing the movement and safety areas, and could be combined with the training for persons accessing both the movement and non-movement areas. The FAA proposes the following exceptions for this training requirement:

• Airman exercising the privileges of an applicable airman certificate;

• Persons escorted by a trained individual; and

• Other persons identified in the certificate holder's ACM.

A person would complete this training prior to accessing the non-movement area, and at least yearly thereafter. The FAA intends to make this requirement effective one year after publication of the final rule to allow certificate holders time to develop a training program and complete training for all personnel accessing the non-movement area. After the effective date of this proposal, if adopted, all persons would complete the training prior to accessing the non-movement area, unless escorted by a trained individual.

The certificate holder would provide recurrent training as often as necessary to enable the person to maintain a satisfactory level of proficiency. Appropriate schedules for recurrent training may vary widely among certificate holders and individuals because of the specific needs of each certificate holder and individual. However, this recurrent training would occur at least yearly. Certificate holders may consider requiring recurrent training when a vehicle operator renews an expired airport identification badge or when a tenant renews a lease agreement.

All training curricula would include, at a minimum, airport familiarization with airport markings, signs, and lighting, procedures for operating in the non-movement area, and duties required by the ACM or regulations. Although AC 150/5210-20 provides detailed guidance on developing training curricula, a certificate holder could determine its optimal method for completing this training. In addition to providing training on these minimum components, the FAA recommends on-the-job training for personnel prior to unescorted access to the airside of the airport.

The curricula would address procedures for access to, and operation in, ramp and apron areas. Inadvertent entry by vehicles onto movement and non-movement areas of an airport poses a danger to both the vehicle operator and aircraft attempting to land, take off, or maneuver on the airport.

Methods for controlling access to the airside depend on the type and location of the airport. The training would discuss the methods for controlling access and how a person can ensure those methods are effective. The Airport Layout Plan is a useful tool for identifying access points and general layout of the airfield.

The curricula also would include procedures for operating in the non-movement area including wearing personal protective equipment and high visibility clothing, cautious driving and speed awareness, and backing up and spotting obstructions. The training would stress that aircraft always have the right-of-way over vehicles when maneuvering on non-movement areas.

Other duties that a person might encounter and require training for include fire prevention, hazardous weather, foreign object damage (FOD) prevention, reporting accidents/incidents, safety around propeller and jet engine intakes, approaching an arriving aircraft, safely positioning ground servicing equipment, and other safety topics workers may encounter specific to the airport. A certificate holder would retain records of this training for 24 months as required by existing § 139.301(b)(1).

Additionally, the FAA proposes to clarify the training requirement for persons accessing the movement and safety areas by substituting all “persons” for all “personnel” in § 139.303(c). The FAA has interpreted personnel to be broader than airport employees, but this proposed clarification would avoid confusion in interpreting the rule.

In an effort to improve safety, the FAA proposes a requirement to evaluate the surface characteristics of runways. This proposed requirement adopts existing guidance specified in Advisory Circular 150-5320-12C, Measurement, Construction, and Maintenance of Skid Resistant Airport Pavement Surfaces.

Because runway friction characteristics change over time, periodic runway friction measurements are needed not only to identify unacceptable runway friction levels but also to identify trends in changing runway conditions. Airport operators need to locate and restore areas on the pavement surface where friction has deteriorated below acceptable levels for aircraft braking performance.

The FAA proposes amending § 139.305 to require airports to establish and implement a runway friction testing program for each runway used by jet aircraft. A certificate holder with jet aircraft traffic should schedule periodic friction evaluations of each runway that accommodates jet aircraft. Components of the program would include a testing frequency that takes into consideration the volume and type of traffic as well as friction readings from CFMEs operated by trained personnel. Corrective action would be required, as needed. The airport operator also should locate potential hydroplaning areas as well as measure the depth and width of a runway's grooves to check for wear and damage.

Airports would establish and implement a program for testing performance of grooves and transverse slopes. Components of the program would include, at a minimum, instructions and procedures for conducting visual inspection of runway surfaces, taking the runway surface material and volume of traffic into consideration. On randomly-selected trafficked portions of the runway, the airport operator would have to measure the width and depth of grooves, inspect transverse slopes for desired performance, and take corrective action if testing reveals deterioration below established levels.

Each certificate holder with FAA-approved takeoff or landing operations below 1,200 feet RVR must provide appropriate low-visibility surface enhancements and ground movement procedures. The basis for the approval of low-visibility operations for each runway would be incorporated in the certificate holder's SMGCS plan. The plan would identify the responsibilities of all parties involved in low-visibility operations (e.g., airport operator, ATC, airport rescue and fire fighting (ARFF), air carriers, pedestrians, and ground vehicle operators). The plan should identify how and when these responsibilities will be carried out ( e.g., the plan may identify different requirements for operations between 1,200 feet RVR and 600 feet RVR, and those operations below 600 feet RVR). Accordingly, the FAA proposes to amend § 139.203 to require the ACM contain a SMGCS plan for airports approved for operations below 1,200 feet RVR. The specific responsibilities are addressed in the proposed amendments to § 139.303 (personnel/training requirements), § 139.311 (marking, signs, and lighting), § 139.327 (self-inspection program), § 139.319 (aircraft rescue and firefighting (ARFF): Operational requirements), and § 139.329 (pedestrians and ground vehicles).

A SMGCS plan would facilitate the safe movement of aircraft and vehicles on the airport by establishing more rigorous control procedures and requiring enhanced visual aids. Additionally, the ability to conduct low visibility operations allows a certificate holder to stay open during poor weather conditions, thus reducing flight delays and cancellations.

Only certificate holders that conduct low-visibility operations would be required to develop and implement a SMGCS plan. These plans would vary among airports because of local conditions, and would be subject to FAA approval.

Currently, § 139.1(a)(1) states that an airport must be certificated under part 139 to host scheduled passenger-carrying operations of an air carrier operating aircraft designed for more than nine passenger seats, as determined by the aircraft type certificate issued by a competent civil aviation authority.

The current wording has created confusion regarding operation of a particular aircraft type, a Cessna 208B Caravan, because it is certificated as a single-pilot aircraft, but has two pilot seats. In non-revenue service, the second pilot seat may be occupied by a passenger. However, in scheduled passenger-carrying operations the operating rule, § 135.113, prohibits passengers from occupying the second pilot seat, which means there are not more than nine passenger seats during those operations.

This proposal would clarify that the applicability of part 139 is based only on passenger seats in passenger-carrying operations as determined by either the regulations under which the operation is conducted or the aircraft type certificate.

To ensure the reliability of records maintained by a certificate holder and reviewed by the FAA, this proposal would prohibit intentionally false or fraudulent statements concerning an AOC. Specifically, the FAA proposes a new § 139.155 that prohibits the making of any fraudulent or intentionally false statement on an application for a certificate; the making of any fraudulent or intentionally false statement on any record or report required by the FAA; and the reproduction or alteration, for a fraudulent purpose, of any FAA certificate or approval. The FAA proposes to suspend or revoke an AOC for violation of any of these prohibitions by an owner, operator, or other person acting on behalf of the certificate holder. The FAA also proposes to suspend or revoke any other FAA certificate issued to the person committing the act. The requirement is similar to falsification prohibitions in 14 CFR parts 43, 61, 65, and 67.

This proposal contains an extension of a currently approved collection OMB-2120-0675 subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). The title, description, and number of respondents, frequency of the collection, and estimate of the annual total reporting and recordkeeping burden are shown below.

Title: Safety Enhancements to 14 CFR part 139, Certification of Airports

Summary: If adopted, § 139.303(g) will require training for all personnel authorized to access the non-movement area as designated in the Airport Certification Manual, regardless of their duties or duration of access.

Affected Public: A total of 256,000 people would need to have their training records added to the airport's records.

Frequency: Once a year.

Estimated average burden per employee: 0.1 hour per employee.

Estimated Annual Burden Hours: 256,000 × .05 = 12,800.

Estimated Annual Burden Costs: 12,800 × $15.00 = $192,000.

The agency is soliciting comments to—

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

(2) Evaluate the accuracy of the agency's estimate of the burden;

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

(4) Minimize the burden of collecting information on those who are to respond, including by using appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

In keeping with the U.S. obligations under the Convention on International Civil Aviation, it is FAA policy to conform to International Civil Aviation Organization (ICAO) Standards and Recommended Practices to the maximum extent practicable. The FAA has reviewed the corresponding ICAO Standards and Recommended Practices and has identified no differences with these proposed regulations.

Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 directs that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 96-39) prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, this Trade Act requires agencies to consider international standards and, where appropriate, that they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) 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 $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this proposed rule. Readers seeking greater detail should read the full regulatory evaluation, a copy of which is in the docket for this rulemaking.

In conducting these analyses, the FAA has determined that this proposed rule: (1) Has benefits that justify its costs, (2) is not an economically “significant regulatory action” as defined in section 3(f) of Executive Order 12866, (3) is not “significant” as defined in DOT's Regulatory Policies and Procedures; (4) would have a significant economic impact on a substantial number of small entities; (5) would not create unnecessary obstacles to the foreign commerce of the United States; and (6) would not impose an unfunded mandate on state, local, or tribal governments, or on the private sector by exceeding the threshold identified above. These analyses are summarized below.

The estimated cost of this proposed rule is $32.3 million in present value terms. The estimated potential benefits of adding safety enhancements to part 139 are $47.0 million in present value terms.

The benefits of this proposed rule consist of safety enhancements to part 139. These enhancements include providing additional training for people with access to the non-movement areas at airports which should reduce the number and severity of non-movement area accidents; adding a regulatory requirement for Runway Surface Evaluation Benefits, which should ensure reliability of runway surfaces in wet weather; and the development and integration of approved SMGCS plans into an ACM, which should reduce the number of diversions in bad weather. Over the 11-year period of analysis, the potential present value benefits of the proposed rule would be $47.0 million.

This proposed rule's present value costs consist of $31.6 million for training and $0.7 million for the development and integration of approved SMGCS plans into airport ACMs. The total present value cost of this rule is about $32.3 million.

The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation. To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.” The RFA covers a wide-range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions.

Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA.

However, if an agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear.

The proposed rule has two costs, a cost for training in the non-movement area and a cost for the development and inclusion of a SMGCS plan in the ACM.

Training costs apply to all airports, regardless of size. For the training costs, the FAA estimates that approximately 20% or 111 of the total 556 certificated airports are small entities. This is a substantial number of small entities. The FAA believes that there would be a significant economic impact on these small entities. However, the FAA proposes to mitigate the costs of the rule to small entities through one or more of the following items:

The Surface Movements Guidance and Control System (SMGCS) costs in this rule apply only to airports that have chosen to implement a SMCGS plan. The FAA estimates that there are currently 54 airports with approved SMCGS plans and 78 airports that are currently seeking to provide for low visibility operations but do not yet have a SMGCS plan. The costs of SMGCS plans may be significant. However, the cost of SMGCS plans has been and will be mitigated by AC guidance on how to prepare a plan with an example plan.

AC No.: 150/5320-12C, Date: 8/25/2004, Subject: Surface Movements Guidance and Control System contains information on how to prepare a SMGCS plan and an example of a typical SMGCS plan. It should be noted that this AC has a provision for the performance of a benefit-cost study before developing a detailed SMGCS plan. Therefore, any small entity developing a SMGCS plan would likely first determine that it would be cost-beneficial.

The actual SMGCS plan for a single runway need not be longer than 15 pages. The FAA will visit each airport to oversee and help with the SMGCS plans.

The FAA has considered alternatives to the proposed rule. For the training portion of the rule the FAA has considered doing nothing. However, this would not result in any improved safety in the ramp area. The FAA also considered a much more stringent curriculum for the ramp safety training. However, this would not allow for the differences between airports.

Therefore, the FAA believes the proposed rule is the most effective to improve ramp safety. In the case of SMGCS, most airports already have an alternative available to them. They can decide whether or not they want SMCGS facilities.

The FAA believes the proposed rule would have a significant economic impact on a large number of small entities. However the FAA believes that any adverse economic impacts that would result from the proposed rule could be substantially reduced by positive mitigations by the FAA. The FAA solicits comments regarding this determination.

The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal agencies from establishing standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to these Acts, the establishment of standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standard has a legitimate domestic objective, such as the protection of safety, and does not operate in a manner that excludes imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards. The FAA has assessed the potential effect of this proposed rule and determined that it would have only a domestic impact and therefore would not create unnecessary obstacles to the foreign commerce of the United States.

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (in 1995 dollars) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $143.1 million in lieu of $100 million. This proposed rule does not contain such a mandate; therefore, the requirements of Title II of the Act do not apply.

The FAA has analyzed the proposal under the principles and criteria of Executive Order 13132, Federalism. Most airports subject to this proposal are owned, operated, or regulated by a local government body (such as a city or county government), which, in turn, is incorporated by or as part of a State. Some airports are operated directly by a State. This action would have low costs of compliance compared with the resources available to airports, and it would not alter the relationship between certificate holders and the FAA as established by law.

Accordingly, the FAA has determined that this action would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, the FAA has determined that this rulemaking does not have federalism implications. The FAA will mail a copy of the NPRM to each State government specifically inviting comment.

FAA Order 1050.1E identifies FAA actions that are categorically excluded from preparation of an environmental assessment or environmental impact statement under the National Environmental Policy Act (NEPA) in the absence of extraordinary circumstances. The FAA has determined this proposed rulemaking action qualifies for the categorical exclusion identified in Chapter 3, paragraph 312d, and involves no extraordinary circumstances.

The FAA has analyzed this NPRM under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (May 18, 2001). The agency has determined that it is not a “significant energy action” under the executive order and it is not likely to have a significant adverse effect on the supply, distribution, or use of energy.

The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. The agency also invites comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, please send one copy of written comments, or if you are filing comments electronically, please submit your comments only one time.

The FAA will file in the docket all comments received, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments we receive on or before the closing date for comments. The agency will consider comments filed late if it is possible to do so without incurring expense or delay. This proposal may change in light of comments we receive.

Do not file in the docket information that you consider to be proprietary or confidential business information. Send or deliver this information directly to the person identified in the FOR FURTHER INFORMATION CONTACT section of this document. You must mark the information that you consider proprietary or confidential. If you send the information on a disk or CD-ROM, mark the outside of the disk or CD-ROM and also identify electronically within the disk or CD-ROM the specific information that is proprietary or confidential.

Under 14 CFR 11.35(b), when the agency is aware of proprietary information filed with a comment, it is not placed in the docket. It is held in a separate file to which the public does not have access, and noted in the docket that the agency received it. If the FAA receives a request to examine or copy this information, it is treated as any other request under the Freedom of Information Act (5 U.S.C. 552). The agency processes such a request under the DOT procedures found in 49 CFR part 7.

You can get an electronic copy using the Internet by—

(1) Searching the Federal eRulemaking Portal ( http://www.regulations.gov );

(2) Visiting the FAA's Regulations and Policies web page at http://www.faa.gov/regulations_policies/; or

(3) Accessing the Government Printing Office's web page at http://www.gpo.gov/fdsys/search/home.action.

You can also get a copy by sending a request to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue SW., Washington, DC 20591, or by calling (202) 267-9680. Make sure to identify the docket or notice number of this rulemaking.

You may access all documents the FAA considered in developing this proposed rule, including economic analyses and technical reports, from the internet through the Federal eRulemaking Portal referenced in paragraph (1).

In consideration of the foregoing, the Federal Aviation Administration proposes to amend Chapter I of title 14, Code of Federal Regulations, as follows:

On December 28, 2010, the Department published a proposed rule and proposed modification in the Federal Register requesting comments regarding the calculation of the weighted average dumping margin and antidumping duty assessment rate in certain antidumping duty proceedings (75 FR 81533). That proposed rule and proposed modification indicated that public comments are due on January 27, 2011. In response to requests to extend this deadline, and to ensure parties have the opportunity to prepare thorough and comprehensive comments, the Department is extending the deadline for submitting comments by twenty-two days, until February 18, 2011. The Department will consider all comments received before the close of the comment period. Rebuttal comments received after the end of the comment period will be considered, if possible, but their consideration cannot be assured.

Under section 223(f)(1) of the National Housing Act (12 U.S.C. 1715n(f)(1)) (NHA), FHA is authorized to insure mortgages executed in connection with the purchase or refinancing of an existing multifamily housing project. The existing multifamily housing project to be purchased or refinanced may have been financed originally with conventional debt, equity, or FHA insured mortgages. The section 223(f) program insures lenders against loss on mortgage defaults and allows for long term mortgages (up to 35 years). In general, a project is eligible for section 223(f) mortgage insurance if the sponsor can demonstrate that there is a definite market demand, and that the project is economically self-sufficient.

HUD's regulations implementing the section 223(f) program are codified at 24 CFR part 207 (entitled “Multifamily Housing Mortgage Insurance”). Section 207.1 of these regulations cross references to the eligibility requirements for existing projects contained in 24 CFR 200.24 and makes the eligibility requirements applicable to multifamily project mortgages insured under section 24 CFR part 207. 1 Section 200.24 provides that “a mortgage financing the purchase or refinance of an existing rental housing project * * * may be insured pursuant to the provisions of section 223(f) of the [National Housing] Act * * *” (emphasis added). Thus, while the statutory language of section 223(f) authorizes FHA mortgage insurance for existing multifamily housing projects, irrespective of whether the project is for rental or cooperative housing, HUD's regulations limit section 223(f) financing to rental housing.

Given the current downturn in the mortgage lending market, HUD has decided to reconsider the regulatory imposed limitation on section 223(f) mortgage financing to rental projects. A recent HUD report on U.S. Housing Market Conditions  2 indicated that performance in the multifamily (five or more units) housing sector continued to be weak in the third quarter of 2009. The report further notes that:

Like single-family housing financing, multifamily housing is thus facing a credit crunch. Lenders' efforts to increase capital reserves and loan committee efforts to tighten underwriting standards both reduce the availability of financing for all multifamily housing. Credit constraints thus exacerbate trends in an already weak multifamily market. FHA mortgage insurance could both improve the availability of funds to this sector and permit more favorable interest rates than would otherwise be likely. This credit enhancement would provide needed support to a market segment which is currently experiencing diminished operating cash flows and depreciated collateral values.

The lack of financing is a particular problem for cooperatives. Cooperatives contend with legal restrictions on cooperative share transfers and many require approval by the board of a cooperative for some membership or operational changes. These issues raise concerns with traditional financial institutions. In addition, “affordable” cooperatives, which have low initial purchase prices, limited maintenance fees, and a cap on unit resale prices, face further challenges because the potential for generating new income through turnover of units and additional assessments is low. HUD has received inquiries from several existing cooperatives that have expressed an interest in refinancing their underlying mortgages. The average age of these projects is 35 years.

Refinancing at the current low interest rates could improve the viability of these types of cooperative housing projects in several ways. By reducing the servicing cost of their underlying mortgage, often substantially due to a high rate when the loan was originally made, a board of directors can accomplish a number of desirable goals. Shareholders could finance the cost of necessary capital improvement projects, such as façade restoration or elevator renovations. Refinancing would also allow cooperative boards to avoid special assessments, a source of unexpected financial stress for many residents when doubled up with existing monthly maintenance fees. These types of assessments can be particularly painful during economic downturns when unemployment is relatively high in some urban areas.

Facilitating the refinancing of cooperatives through mortgage insurance issued under section 223(f) of the NHA would thus help to further HUD's mission of preserving affordable housing by assisting eligible cooperative projects to obtain refinancing to make necessary repairs and/or consolidate more expensive outstanding debt, thereby preserving affordable housing stock. Therefore, HUD is currently proposing to remove this regulatory limitation in recognition of cooperative financing needs.

This proposed rule would revise § 200.24 of HUD's regulations to enable owners of cooperative projects to obtain FHA insurance for their mortgage loans. Specifically, the proposed rule would amend § 200.24 to provide that “a mortgage financing the purchase or refinance of an existing rental housing project or refinance of the existing debt of an existing cooperative project under Section 207 of the [National Housing] Act, or for refinancing the existing debt of an existing nursing home, intermediate care facility, assisted living facility, or board and care home, or any combination thereof, under Section 232 of the [National Housing] Act, may be insured pursuant to provisions of Section 223(f) of the [National Housing] Act and such terms and conditions established by HUD.” Extending the section 223(f) mortgage insurance program to refinancing of the debt of multifamily cooperative housing projects is consistent with HUD's strategic goals of recreating a strong housing finance system and promoting affordable, financially sustainable multifamily housing options. When combined with judicious use of reserves to make capital improvements to maintain the property, the credit enhancement provided by this proposed rule will help rejuvenate properties and enhance the economic life of multifamily cooperative housing projects.

The Office of Management and Budget (OMB) reviewed this proposed rule under Executive Order 12866 (entitled “Regulatory Planning and Review”). This proposed rule was determined to be a “significant regulatory action,” as defined in section 3(f) of the Order (although not economically significant, as provided in section 3(f)(1) of the Order).

The docket file is available for public inspection in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW., Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the docket file by calling the Regulations Division at 202-402-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Information Relay Service at 800-877-8339.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. As discussed above, the purpose of the proposed rule is to expand eligibility for financing under section 223(f) to enable owners of multifamily cooperative housing projects to refinance their existing mortgage debt with FHA insurance. Owners of such projects will be able to obtain 223(f) financing under the same terms and conditions as currently eligible owners of multifamily rental projects. Cooperative housing owners will not be subject to any additional procedures or required to incur any additional costs.

Accordingly, the undersigned certifies that this rule will not have a significant economic impact on a substantial number of small entities. Notwithstanding HUD's determination that this rule will not have a significant effect on a substantial number of small entities, HUD specifically invites comments regarding any less burdensome alternatives to this rule that will meet HUD's objectives as described in the preamble to this rule.

A Finding of No Significant Impact (FONSI) with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding of No Significant Impact is available for public inspection between the hours of 8 a.m. and 5 p.m. weekdays in the Regulations Division, Office of General Counsel, Room 10276, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the FONSI by calling the Regulations Division at 202-708-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Information Relay Service at (800) 877-8339.

Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either (1) imposes substantial direct compliance costs on state and local governments, and is not required by statute, or (2) the rule preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This proposed rule would not have federalism implications and would not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order.

Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments, and on the private sector. This proposed rule would not impose any federal mandates on any state, local, or tribal governments, or on the private sector, within the meaning of the UMRA.

The information collection requirements for this proposed rule have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB control number 2502-XXXX. In accordance with the Paperwork Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information, unless the collection displays a currently valid OMB control number.

The Catalogue of Federal Domestic Assistance Number for the principal FHA mortgage insurance program is 14.155.

Accordingly, for the reasons stated above, HUD proposes to amend 24 CFR part 200 as follows:

This is a summary of the Commission's Notice of Proposed Rulemaking, ET Docket No. 10-235, FCC 10-196, adopted and released on November 30, 2010. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center (Room CY-A257), 445 12th Street, SW., Washington, DC 20554. The complete text of this document also may be purchased from the Commission's copy contractor, Best Copy and Printing, Inc., 445 12th Street, SW., Room, CY-B402, Washington, DC 20554. The full text may also be downloaded at: http://www.fcc.gov.

Pursuant to §§ 1.415, 1.419, and 1.430 of the Commission's rules, 47 CFR 1.415, 1.419, and 1.430, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using: (1) The Commission's Electronic Comment Filing System (ECFS), (2) the Federal Government's eRulemaking Portal, or (3) by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121, May 2, 1998.

• Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/ or the Federal eRulemaking Portal: http://www.regulations.gov.

• Paper Filers: Parties who choose to file by paper must file an original and four copies of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number.

Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

• All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St., SW., Room TW-A325, Washington, DC 20554. The filing hours are 8 a.m. to 7 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building.

• Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.

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1. In the Notice of Proposed Rulemaking ( NPRM ), the Commission initiated a process to further its ongoing commitment to addressing America's growing demand for wireless broadband services, spur ongoing innovation and investment in mobile and ensure that America keeps pace with the global wireless revolution, by making a significant amount of new spectrum available for broadband. Through this NPRM, the Commission takes preliminary steps to enable the repurposing of a portion of the UHF and VHF frequency bands that are currently used by the broadcast television service, which in later actions it expects to make available for flexible use by fixed and mobile wireless communications services, including mobile broadband. At the same time, the Commission recognizes that over-the-air TV serves important public interests, and its approach will help preserve this service as a healthy, viable medium. The approach the Commission proposed is consistent with the goal set forth in the National Broadband Plan (the “Plan”) to repurpose up to 120 megahertz from the broadcast television bands for new wireless broadband uses through, in part, voluntary contributions of spectrum to an incentive auction. Reallocation of this spectrum as proposed will provide the necessary flexibility for meeting the requirements of new applications.

2. The specific bands under consideration are the low VHF spectrum at 54-72 MHz (TV channels 2-4) and 76-88 MHz (TV channels 5 and 6), the high VHF spectrum at 174-216 MHz (TV channels 7-13), and the UHF bands at 470-608 MHz (TV channels 14-36) and 614-698 MHz (TV channels 38-51); for purposes of this NPRM, the Commission will refer to this spectrum as the “U/V Bands.” This NPRM proposes three actions that will establish the underlying regulatory framework to facilitate wireless broadband uses of the U/V Bands, while maintaining current license assignments in the band. First, the Commission proposes to add new allocations for fixed and mobile services in the U/V Bands to be co-primary with the existing broadcasting allocation in those bands. The additional allocations would provide the maximum flexibility for planning efforts to increase spectrum available for flexible use, including the possibility of assigning portions of the U/V Bands for new mobile broadband services in the future. Second, the Commission proposes to establish a framework that, for the first time, permits two or more television stations to share a single six-megahertz channel, thereby fostering efficient use of the U/V Bands. Third, the Commission intends to consider approaches to improve service for television viewers and create additional value for broadcasters by increasing the utility of the VHF bands for the operation of television services.

3. By taking these important steps to facilitate wireless broadband uses in the U/V Bands, this NPRM is the first in a series of actions that will allow us to make progress toward our goal of improving efficient use of the bands and enable ongoing innovation and investment through flexible use. The Commission intends to propose further actions consistent with other of the Plan's recommendations for the U/V Bands, including, but not limited to, the process of voluntarily returning broadcast licenses to the Commission and the licensing process and service rules for new fixed and mobile wireless communications services. As part of that process, the Commission will address the Plan's proposal for channel re-packing, the band plan for recovered spectrum and other related issues and will provide full opportunity for public comment on those issues at that time.

4. The National Broadband Plan. The Plan was issued on March 17, 2010. As required under the Recovery Act, the Plan seeks to ensure that every American has access to broadband capability and establishes clear benchmarks for meeting that goal. The Plan recommends making 500 megahertz of spectrum between 225 MHz and 3.7 GHz newly available to meet the needs of mobile, fixed and unlicensed wireless broadband in the next 10 years and for providing 300 megahertz of that amount for mobile flexible uses within 5 years, of which up to 120 megahertz would come from the broadcast television bands.

5. This NPRM takes the first step towards achieving these important objectives by proposing additional frequency allocations, a framework that will permit two or more television stations to share a single six-megahertz channel, and changes to rules for use of the VHF band to improve its utility for television service. The Commission recognizes that broadcast television provides an important service to the public, and our actions in this proceeding will take full account of the vital role played by over-the-air television while increasing the flexible use of spectrum in a manner that meets consumer and business needs. The Commission remains committed to preserving the free, over-the-air broadcast television service and maintaining the diversity of local voices and important informational and entertainment benefits it provides the American public.

6. It is our strong intention to provide for an orderly transition of a portion of the U/V Bands to flexible use, in a manner that will minimize any impact on over-the-air television broadcasting and the consumers it serves, both off-the-air and through multichannel video program distributors. In this regard, broadcast television stations and other primary services operating on the spectrum to be recovered will be co-primary with and be protected from interference from new broadband services for as long as they remain on channels in that spectrum.

7. To facilitate the recovery of underutilized television channels while continuing to maintain existing broadcast television services, the Commission also proposes in this NPRM new rules that would allow a television service licensee to voluntarily reduce its occupation of spectrum by offering to operate on a shared six megahertz channel. Under this provision, all of the stations sharing a channel would broadcast their services through the same ATSC digital television signal using that signal's multicasting capabilities. Each licensee would have the same rights and service obligations as a licensee operating from a full channel today, including the right to carriage by cable and satellite providers pursuant to the rules for mandatory carriage or retransmission consent. The Commission believes that channel sharing could be beneficial to certain licensees, particularly those that wish to save on their operating costs or minimize the amount of their investment in spectrum or transmission facilities. In addition, channel sharing could provide an incentive for broadcasters to relinquish spectrum for a portion of the proceeds of the revenues of a U/V Band spectrum auction, subject to Congress providing the Commission the authority to conduct an incentive auction. Further, channel sharing could offer opportunities for broadcasters serving minority, foreign language and niche interests that might have smaller audiences and lower income to operate at reduced cost and thereby improve their viability. In allowing stations to share channels, the Commission notes that in some instances changes in the operation of television stations could raise the possibility of interference to radio astronomy operations on channel 37 or to services operating on frequencies immediately above channel 51. It is the Commission's intent that any channel or other facilities changes that might be requested as part of sharing agreements not result in increased interference to radio astronomy operations on channel 37 or to operations of other services above channel 51. The Commission requests comments on specific steps that could be taken as part of the implementation of its sharing rules to mitigate the potential for such interference. The Commission describes its initial proposed rules for channel sharing by television licensees in this NPRM. The Commission is also aware that broadcasters have encountered technical issues in using VHF channels to provide satisfactory service to viewers. It intends to consider rule changes and other alternatives for making the VHF channels more desirable for DTV operation. The Commission's proposals for adding new allocations to the U/V bands, channel sharing by television stations and improving television service from VHF channels are discussed.

8. New Spectrum Allocations. The Commission proposes changes to the U.S. Table of Frequency Allocations in § 2.106 of the rules that would allow it to make a significant portion of the spectrum currently used for broadcast television available for flexible use, including fixed and mobile wireless broadband services. To facilitate repurposing of a portion of the U/V Bands in a later action, the Commission proposed in this NPRM to add allocations for fixed and mobile services in the U/V Bands (excluding channel 37) for non-Federal use, to be co-primary with that for broadcast services. This proposal would also expand the existing land mobile allocation in the areas where PLMRS and CMRS systems operate on specified frequencies in the 470-512 MHz band to be the same more generalized and flexible mobile allocation that would be specified for other frequencies in the U/V Bands.

9. These new allotments would allow us to consider the entire range of the U/V Bands in selecting the specific frequencies to be designated for new licensed and/or unlicensed uses. This approach will provide maximum flexibility in planning for the future assignment of a portion of the U/V Bands for flexible use, including new broadband services. The Commission's goal is to adopt a band that will provide for flexible use while continuing to support the needs of the television service. It is not proposing to change or add to the existing allocations for land mobile (medical telemetry and medical telecommand) and radio astronomy that are at 608-614 MHz (at channel 37). The Commission requests comments on this proposed plan for adding new allocations to the U/V Bands and invite suggestions for alternative approaches.

10. The Plan recommends that, to facilitate the recovery of spectrum, the Commission initiate a rulemaking proceeding to “establish a licensing framework to permit two or more stations to share a six-megahertz channel.” The Commission believes that the option of channel sharing, in addition to aiding in the broadband goals of the Plan, could also be beneficial to the television industry and to viewers. Television stations operating on shared channels could use the cost savings and additional income from such arrangements to strengthen their financial condition and to develop new and enhanced programming. Channel sharing could also provide existing small- and minority-owned stations an opportunity to enhance or preserve their local program offerings. The Commission anticipates providing broadcast stations an opportunity to voluntarily elect to share a channel. The Commission therefore seeks comment in this proceeding on the development of an appropriate regulatory structure for voluntary television channel sharing that will preserve over-the-air television as a healthy, viable medium going forward, in a way that would benefit consumers overall, while establishing mechanisms to make available additional spectrum for flexible broadband uses.

11. The Commission envisions, consistent with the Plan, that two stations could generally broadcast one primary HD video stream each over a shared six-megahertz channel or more than two stations broadcasting in SD (not HD) could share a six-megahertz channel. As noted in the Plan, “numerous permutations are possible, including dynamic arrangements whereby broadcasters sharing a channel reach agreements to exchange capacity to enable higher or lower transmission bit rates depending on market-driven choices.” In this regard, the Commission observes that at the Broadcast Engineering Forum participants expressed concerns that sharing a single channel would not be practical because it would not provide sufficient transmission capacity for two or more stations to offer the highest quality HD programming simultaneously. Stations were also concerned that channel sharing could impact or eliminate current and future DTV services, such as expansion of high-definition programming and deployment of mobile television service. The Commission intends to consider these issues in this proceeding and welcomes comments on these concerns.

12. Other approaches to channel sharing that involve sub-channel services such as mobile broadcast may also be possible. The Commission seeks comment on those approaches. The only requirement would be that all stations utilizing a shared channel be required to retain at least enough spectrum to operate one SD channel. The Commission seeks comment on this approach and whether stations sharing a single channel will be able to continue to comply with the requirement to operate at least one SD channel.

13. In designing a channel sharing plan that will result in the more efficient use of television spectrum and free channels for flexible use, the Commission indicated that its goal will be to retain as much of its existing policy framework for allocating, licensing, and operating television stations as possible. Despite sharing a single channel and transmission facility, each station will continue to be licensed and operated separately, have its own call sign and be separately subject to all of the Commission's obligations, rules, and policies. Each station's programming obligations will remain the same ( e.g., children's programming, political broadcasting, EAS, indecency), and a station will not be responsible for the programming or violations of any other station sharing its channel. In addition, stations sharing a channel will retain their rights to mandatory carriage on multiple video program distributors (MVPDs). While the licensees sharing a given channel and facility will independently maintain their own rights and obligations under their respective licenses, the Commission does not envision that channel sharing, from a technological perspective, would entail a fixed split of the six-megahertz channel into two three-megahertz blocks. Rather, the capacity of the six-megahertz would be shared and the Commission would leave it up to the licensees to determine the precise manner in which that capacity would be shared. Moreover, the Commission observed that it has licensed spectrum on a shared use basis—with each licensee remaining responsible for its own obligations and holding its own licensed rights—for a variety of services and under a number of different frameworks. For example, during the course of charting out an MSS licensing regime for Big LEO systems, the Commission adopted a plan in which four CDMA systems would each be authorized to operate over 11.35 megahertz of bandwidth in the same 1.6 GHz band, leaving the inter-system coordination to the satellite licensees themselves. Other examples of shared use include certain part 90 Private Land Mobile Radio Services (where the large number of shared users are coordinated through a system of frequency coordinators), many part 95 Personal Radio Services (such as the General Mobile Radio Service, where licensees share the same channels through an informal system of cooperation), and the part 97 Amateur Radio Service (where all frequencies are shared and coordinated by adherence to rules of operation set forth in part 97). The Commission seeks comment on how television broadcast stations can most effectively coordinate their individual rights and responsibilities while operating under the type of sharing arrangement proposed here. Finally, the Commission points out that only where necessary to implement a shared channel licensing scheme will it seek to change the existing policies and rules.

14. The Commission also proposes to limit channel sharing to television stations with existing applications, construction permits or licenses as of the date of adoption of this NPRM. The dual intentions in proposing this channel option are to provide (1) a means for stations that may need to be more economically efficient in their operations to share transmission resources and (2) a path for stations to make their spectrum available for new broadband services and continue to operate a broadcast television service. The Commission requests comment on this proposal.

15. Voluntary operation of broadcast stations on shared channels will help to increase the efficient use of the U/V Bands while ensuring that local public interest and service requirements continue to be fulfilled. Since it ultimately seeks an appropriate, market-based balance with flexible use in the U/V Bands, the Commission expects that the extent of channel sharing will vary between markets.

16. The Commission seeks comment on whether commercial and noncommercial educational (NCE) stations should be permitted to share a single television channel. NCE television stations operate on special reserved channels and are prohibited from airing commercial material. The Commission contemplates that stations that share a channel will continue to be licensed and operated separately, although they will be sharing a single transmitting facility. Therefore, there would be no overlap of programming between a commercial and NCE station. However, the Commission seeks comment on whether a commercial station should be permitted to operate on a shared channel reserved for NCE use. The Commission seeks to determine how the new “shared” channel might be partitioned or designated to preserve the NCE status while allowing the channel to be shared by a non-NCE entity.

17. The Commission seeks comment on whether to require that a certain level of television service be preserved in the shared channel environment. Specifically, it seeks comment on whether the Commission should consider any prospective loss of television service when determining whether to permit stations to make the modifications to their transmission facilities necessary to achieve channel sharing. Since stations sharing a single television channel must operate from a single transmission facility, changes to one or more of the stations' existing facilities will be necessary for sharing to occur. Such changes could result in a loss of television service to some persons presently able to receive over-the-air signal from one or more of the stations, and could also result in gains to television service.

18. The Commission notes that its current policy is to consider losses of service on a case-by-case basis, and it seeks comment on continuing that policy in the context of channel sharing arrangements. Although the Commission historically has viewed any loss of service as prima facie inconsistent with the public interest, its policy has been to consider and evaluate any counterbalancing factors an applicant may present to justify service losses. This balancing process, to determine whether the projected loss of service will be outweighed by other factors, involves more than a mere comparison of numbers. The Commission examines the extent of the loss, and whether any “white” or “gray” loss areas will be created. The Commission defines “white area” as an area where the population does not receive any over-the-air television service and “gray area” as one where the population receives only one over-the-air television service. The Commission may also examine whether the loss area is “underserved,” i.e., where the population receives less than five other existing services. The Commission may also examine whether the loss involves specialized programming such as that from a network.

19. In terms of counterbalancing factors, the Commission has examined whether gain areas will be created including establishment of first television service, second television service, first network service, etc. However, the mere fact that total gains exceed losses does not, standing alone, constitute an affirmative factor offsetting those losses. The Commission may also consider the availability of other television services in the loss area as well as whether the population which would lose service is outside the station's DMA and is predicted to receive the same network programming from a station in their home DMA. The Commission seeks comment on whether to consider these factors in a similar fashion when evaluating losses that result from facility modifications and relocations related to channel sharing.

20. In weighing the public interest benefits that will result from channel sharing, should the Commission consider mitigating circumstances such as the percentage of local cable penetration or satellite use in the loss area? Should sharing stations be allowed to offset otherwise disqualifying service losses by offering to deploy on-channel Digital Transmission Systems (DTS) or other technical measures to restore service to the loss area?

21. In addition to the specific areas set forth in this proceeding, the Commission seeks comment on other areas of interest with respect to channel sharing in conjunction with the recommendations of the Plan. For instance, what is the impact of channel sharing on the media ownership rules? The Commission contemplates that stations that share a channel will continue to be licensed and operated separately, although they will be sharing a single transmitting facility. What are the implications of channel sharing for the local TV ownership rule, the radio/TV cross-ownership rule and the newspaper/broadcast cross-ownership rule?

22. Full power television broadcast stations, and certain qualified low-power television broadcast stations, have a right to carriage on cable systems that the Supreme Court has recognized as essential to preserving “the widest possible dissemination of information from diverse and antagonistic sources.” Full power broadcasters have similar rights to mandatory carriage on satellite (DBS) systems. The rules proposed in this proceeding are designed to ensure that stations voluntarily electing to share a channel retain their existing rights to mandatory carriage, and the Commission seeks comment on such rules.

23. The Communications Act of 1934, as amended, provides for the mandatory carriage, by cable operators and satellite providers, of certain local broadcast signals. The Act and the Commission's implementing rules establish slightly different thresholds for carriage, depending on whether the station is full power or low-power, or commercial or noncommercial, and also depending on whether carriage is sought on a cable or DBS system. Stations meeting these thresholds are guaranteed carriage of only a single “primary” stream of programming, and carriage for any additional streams must always be negotiated. It is the Commission's intent to adopt a channel sharing framework that will neither increase nor decrease the carriage rights of any broadcaster on any type of system. The Commission anticipates, therefore, that regardless of the number of licensed stations sharing a six-megahertz channel, each would continue to have at least one, but only one, “primary” stream of programming. The Commission seeks comment on specific proposals and in general on the rules necessary to achieve this result.

24. Cable Carriage. A full power commercial station is entitled to carriage on a cable system when it is “licensed and operating on a channel regularly assigned to its community by the Commission,” and that community is within the same DMA as the cable system. A qualified noncommercial educational station (“NCE”), on the other hand, can be considered “local,” and eligible for mandatory carriage on a cable system, in one of two ways. It may either be licensed to a principal community within 50 miles of the system's headend, or the system's headend is within the station's noise limited signal contour (NLSC). Under very narrow circumstances, certain low-power broadcasters can also become “qualified” and eligible for must carry. Among the several requirements for reaching “qualified” status with respect to a particular cable operator, the low-power station must be “located no more than 35 miles from the cable system's headend.”

25. DBS Carriage. A full power station is entitled to request carriage by a DBS provider any time that provider relies on the statutory copyright license to retransmit the signal of any other “local” full power station ( i.e., one located in the same DMA). The standards are the same for both commercial and noncommercial broadcasters, and low-power broadcasters do not have DBS carriage rights.

26. Carriage of Shared Signals. The Commission seeks comment on whether the procedures proposed herein would ensure that a television station operating on a shared channel would continue to be:

• “Licensed and operating on a channel regularly assigned to its community by the Commission (for purposes of cable carriage of a commercial station)”;

• Licensed to a specific “principal community” or configured with technical facilities that have an NLSC that encompasses the cable system's principal headend (for purposes of cable carriage of a non-commercial station); and

• “Located within” a designated market area (for purposes of DBS carriage of commercial and noncommercial stations).

27. NCE Issues. The Commission seeks comment on whether an NCE television station sharing a channel with a commercial television station could affect the NCE station's continued eligibility for carriage. This is particularly relevant in the cable context, because, as discussed, commercial stations and NCEs must meet different criteria in order to be eligible for mandatory carriage. Because the Commission anticipates that sharing stations would continue to be licensed and operated separately, it does not anticipate that an NCE television station would lose its NCE status or eligibility by sharing a channel with a commercial station. The Commission seeks comment on this issue.

28. Technical Issues. The Commission also seeks comment on whether a station sharing a channel with one or more other stations, or the redesignation of a given 6 MHz channel as a “shared” channel, would affect the stations' ability to request local carriage on cable and DBS systems serving subscribers within the stations' market. Are there any unique aspects of channel sharing that could prevent a broadcaster, of any type, from achieving the necessary thresholds for mandatory carriage on any cable or DBS system on which it is currently carried? Cable and DBS systems are currently receiving the full 6 MHz signal from broadcasters but only carrying certain streams; would there be any technical differences, from the carrier's perspective, if two or more of these streams on a shared channel were the “primary” streams of different, individually licensed stations? Are there other technical issues that would be unique to a sharing scenario?

29. Differing Elections. Even if a commercial station meets the threshold for carriage, it may elect to pursue retransmission consent agreements with one or more MVPDs. When a station has made such an election, it may not be carried by the MVPD without its consent. The Commission seeks comment on how stations' carriage rights would be affected if one sharing station elects retransmission consent and the other elects must carry. The Commission anticipates that each station operating on a shared channel will be licensed and operated as a totally distinct entity with its own “primary” stream of programming, and that the sharing of a channel would not affect a sharing station's carriage election options or rights. The Commission seeks comment on this issue, particularly any technical implications for carrying one stream of a broadcast channel while not carrying another.

30. Shared signal issues. There are certain essential issues inherent to sharing a channel that we expect will be resolved by stations sharing a channel. For example, in addition to the threshold requirements discussed earlier, local stations are only eligible for mandatory carriage if they provide a “good quality signal” of at least −61 dBm to the cable or satellite provider. Failure to provide this signal level would therefore affect the carriage rights of all stations using the same channel. The Commission anticipates that stations will make any necessary changes to their proposed shared transmission facility to ensure continued carriage for sharing stations. The Commission seeks comment on what those changes might be, and, in general, what matters must be resolved by the stations themselves to ensure the success of channel sharing.

31. New Stations. Currently, licensees of newly operating stations that are otherwise qualified local stations may seek mandatory carriage of such stations, even outside of the standard election cycle. If the Commission permits new stations, or permittees with unbuilt stations, to operate on shared channels, will any revisions to its rules be in order to ensure that they are eligible to seek mandatory carriage as new stations after they commence broadcasting? The Commission seeks comment on this issue.

32. Low-power Stations. The Commission is considering allowing LPTV, Class A, and translator stations to operate on shared channels, both among themselves and with full power stations. If it does permit low-power stations to operate on shared channels, the Commission is also proposing to provide that currently qualified low-power stations retain their eligibility for must carry rights, but to create no new rights. The Commission seeks comment on these proposals. Are there other issues that should be considered with regard to allowing low power stations to channel share?

33. Other Carriage Issues. There are a number of other issues that may be relevant to the mandatory carriage of shared signals. For instance, if, as proposed, one stream of each individually licensed station on a single 6 MHz channel will be “primary” for purposes of must carry rights, should sharing broadcasters have any special obligation to identify the “primary” signals at the time they elect carriage? Given the variety of questions that may have some bearing on the development of these rules, the Commission seeks comment on any additional issues pertaining to the mandatory carriage of shared broadcast signals, including those not specifically raised in this NPRM.

34. Recognizing that UHF spectrum is highly desirable for flexible use, the Commission is interested in exploring the steps needed to increase the utility of VHF spectrum for television broadcasts. VHF channels have certain characteristics that have posed challenges for their use in providing digital television service. In particular, the propagation characteristics of these channels allow undesired signals and noise to be receivable at relatively farther distances, nearby electrical devices tends to emit noise in this band that can cause interference, and reception of VHF signals requires physically larger antennas that are generally not well suited to the mobile applications expected under flexible use, relative to UHF channels. The Commission recognizes that television broadcasters have had some difficulty in ensuring consistent reception of VHF signals, and it seeks comment through this NPRM on technical changes to the Commission's rules, broadcast transmission equipment, or television receiver technology that would improve the performance of VHF channels for television broadcasts, including the costs and benefits associated with such changes. The Commission's intent is to treat stakeholders in a fair and equitable manner through procedures established in later actions.

35. Solutions for VHF Reception Challenges. It is plain from the channel choices being made by broadcasters that reception issues are posing problems for use of the VHF channels. The Commission is therefore seeking solutions to the VHF digital TV reception difficulties. In this regard, it is considering changes to the DTV operating rules to mitigate or overcome these challenges. The Commission also intends to consider other solutions, including the possibility of indoor antenna performances standards, to make the VHF channels more useful to broadcasters. The Commission also noted that it has seen no indications that there are issues with the performance of television receivers, either traditional models with display screens or stand-alone set-top tuners, in receiving VHF channels.

36. VHF Band Noise/Power Increases. One of the problems with indoor VHF reception is noise from nearby (typically in the same room) consumer electronics equipment. While it would be desirable to reduce that noise, the rules limiting spurious emissions from unintentional radiators have been crafted to provide protection of licensed services while allowing production of economically viable devices. Further, any more stringent emissions limits the Commission might impose would not reduce emissions from existing products, nor would such limits reduce noise from incidental emitters (electric motors, switches, etc.), atmospheric disturbances and long range propagation effects that occur in the VHF bands (the latter especially at the low-VHF channels). Thus, at least at this time, the Commission does not believe it would be fruitful to attempt to reduce the permitted level of noise in the VHF bands. The Commission requests comment on whether there are actions it might take to reduce noise levels in the VHF bands used by the television service.

37. The other approach to overcoming noise is to increase the signal-to-noise ratio (S/N ratio) by raising the transmitted power, i.e., effective radiated power (ERP). A number of stations operating on high-VHF channels have already improved their service by increasing their transmitted power. Those stations received special temporary authorizations from the Commission for power increases that exceed the existing maximum power limits. In each of these cases, either the power increase does not cause increased interference to other stations or the station licensee has negotiated with another station to accept some minimum level of new interference. While the Commission is cognizant of the views regarding the limited expectations from power increases expressed at the Broadcast Engineers' Forum, the Commission nonetheless believes that, as demonstrated by the stations that have already increased their transmitted power, such increases can provide some level of improvement in reception of VHF television service. The Commission therefore believes it may be desirable to amend its rules to increase the maximum allowed ERP for VHF stations at least in Zone I, where the current maximum power levels are relatively low. The Commission is specifically proposing to raise the maximum allowed ERP for low-VHF stations in Zones I to 40 kW and for high-VHF stations in Zone I to 120 kW if the station's antenna height above average terrain is 305 meters or less. At antenna heights above 305 meters, the maximum power for both low-VHF and high-VHF stations would be lower in accordance with the table in the proposed rules in Appendix A. This proposal would effectively increase the maximum power for low-VHF and high-VHF stations in Zone I by 6 dB, a level consistent with that indicated as achievable by the VHF Reception Panel. The Commission does not propose to raise the maximum power limits for VHF stations in Zones II and III, as the existing limits still afford those stations the ability to provide stronger signals indoors to consumers who view their signals at locations close to their transmitters. The proposed new maximum power limits for VHF stations would allow such stations to provide signal strengths to areas close to their transmitters, i.e., generally their principle community areas, that are higher by an amount that would help to compensate for some of the higher noise levels that tend to be present where consumers use indoor antennas.

38. Stations requesting power increases under the proposed new limits would be required to afford protection to other full power television stations from new interference under the existing regime of desired-to-undesired (D/U) signals limits. The Commission believes such an increase would allow many VHF stations experiencing difficulties in reaching viewers indoors to raise their signal levels by a reasonable level to overcome localized noise indoors, consistent with maintaining the approximate range of service provided by the existing maximum power limits. It does, however, recognize that higher power operation would increase the service range of VHF stations by as much at 14 km (9 miles). The Commission stated that is intention is not generally to extend the service range of these stations, as such expansions can to some degree limit the potential for introduction of new stations and changes by other co-channel and first-adjacent channel stations by enlarging the service area that must be protected. Nonetheless, it believes the interests of making the VHF channels more useful to stations and consumers outweigh these concerns about limiting opportunities of other stations. The Commission requests comment on this proposal and suggestions for alternative approaches, including both power limits and protection of service. In this regard, any increases in VHF power under this proposal by existing stations and new stations that are located within 300 kilometers (183 miles) of our border with Canada or within 400 kilometers (248.5 miles) of our border with Mexico will need to be coordinated with the appropriate foreign administration.

39. The Commission also observes that the provisions governing transmission of television signals in §§ 73.682(a)(14) and 73.625(c) of the rules specify that it shall be standard to employ horizontal polarization. The ERP of a television station is therefore considered to be that of its horizontally polarized component. However, § 73.682(a)(14) also provides that circular or elliptical polarization may be employed and that, in such cases, transmission of the horizontal and vertical components in time and space quadrature shall be used. Where such polarizations are used, the ERP of the vertically polarized component may not exceed the ERP of the horizontally polarized component. Stations therefore could achieve an increase in signal levels at indoor locations of perhaps 3 dB by using circular polarization. This step could also be combined with an increase in ERP (horizontal ERP) under the proposal to allow higher VHF maximum power levels. We encourage stations to make use of the option to use increased power under the vertical polarization provisions as a means to improve reception of their signals by indoor viewers.

40. A collateral issue that arises in the context of consideration of increases in the power limits for digital television stations on VHF channels is whether the Commission should also increase the minimum distance requirements for new, post-transition VHF channel allotments with regard to other stations or channel allotments on the same and first-adjacent channels, as specified in §§ 73.616 and 73.623(d) of the rules. Stations on new allotments that operate at the proposed new power limits and are at or close to the current minimum distances with regard to other stations could cause more interference to such stations (and vice versa) than would occur under the current power limits. Increasing those distances would resolve the interference concerns but would also tend to limit opportunities or new stations or for stations desiring to change channels (which necessitates modifying the allotment on which they operate). The Commission generally believes it would be desirable to maintain the current distance standards for new and changed allotments in order to avoid further limiting opportunities for new allotments. The Commission therefore is not proposing to change the minimum distance requirements for new and modified allotments.

41. In taking this approach, the Commission observes that the rules require a station that operates on a new allotment that meets the distance standards to protect other co-channel and adjacent channel stations from new interference in accordance with the desired-to-undesired (D/U) ratio interference protection criteria in § 73.616(e). In describing the services to be protected, this paragraph provides that “[f]or this purpose, the population served by the station receiving additional interference does not include portions of the population within the noise-limited service contour of that station that are predicted to receive interference from the post-transition DTV allotment facilities of the applicant * * *” The rules are not specific, however, as to the post-transition DTV allotment facilities of the applicant, that is, the facilities that a station would be allowed under the allotment without concern for new interference. The Commission proposes to amend § 73.616(e) to clarify that the post-transition DTV allotment facilities are the maximum facilities allowed currently under § 73.622(f). Thus, an applicant for a new station would be allowed to operate up to the current maximum facilities of ERP and antenna height on a new allotment that meets the distance requirements.

42. A station on a new allotment could also operate with facilities that exceed the post-transition allotment facilities if such operation would not cause new interference to other stations as defined under § 73.616(e). In addition, a licensee could apply to operate a station on a new allotment at facilities that exceed the post-transition allotment facilities (up to the proposed new limits) and could possibly cause new interference to another station by taking steps to avoid such interference. Such steps could include use of a directional antenna and/or location of the station's transmitter at a site that is different from the site of the allotment (such sites are generally farther from any stations that would otherwise receive interference). The Commission requests comment on its plan to maintain the existing distance requirements as it increases the maximum allowed power for digital TV stations on VHF channels and on whether it should alternatively increase the minimum distance requirements to match the changes in the power limits. The Commission also asks parties that advocate that it increase the minimum distance requirements to submit suggestions for new minimum distance standards.

43. Indoor Antennas. The antenna used to receive signals is a critical element in the television service path. The antenna component of a TV receive system (which consists of an antenna, connecting cable and receiver) should be able to pick up as much of the available signal energy as possible. If an antenna has a very low ability to receive signals or if the level of the desired signal is low, reception may not be possible. In view of the observed poor high-VHF reception capabilities of the majority of the indoor antennas examined in two studies by Meintel, Sgrignoli and Wallace and the FCC Laboratory mentioned in the NPRM and the likelihood that the low-VHF performance of those antennas is even poorer, the Commission intends to consider establishing standards to ensure that indoor antennas are effective for low-VHF channel reception. While the Commission has not regulated these products previously, it believes that it has authority to set standards to ensure that the performance of indoor antennas is adequate to allow reception of low-VHF channels by TV receive systems under the All Channel Receiver Act, which is codified in section 303(s) of the Communications Act of 1934, as amended. In this regard, section 303(s) specifically provides that the Commission shall “[h]ave authority to require that apparatus designed to receive television pictures broadcast simultaneously with sound be capable of adequately receiving all frequencies allocated by the Commission to television broadcasting * * *” Because an antenna capable of adequately picking up low-VHF channels is necessary to allow all-channel reception of over-the-air broadcast signals, the Commission believes that the standards proposed would further its section 303(s) mandate. The Commission requests comment on its authority to establish standards for the ability of indoor antennas to receive all of the channels allocated for television service.

44. The Commission request comment, information and suggestions regarding the need for, and desirability of, standards for indoor antennas. The Commission is specifically proposing to require that indoor antennas comply with the industry set standards in ANSI/CEA-2032-A, “Indoor TV Receiving Antenna Performance Standard,” February 2009. The ANSI/CEA-2032-A standard defines test and measurement procedures for determining the performance of indoor TV receiving antennas. Section 3.2.2 of this standard provides that to meet the standard, an antenna must have measured gain that exceeds:

• −12 dBd on all CEA test channels 2, 4, and 6 in the VHF low band

• −8 dBd on all CEA test channels 7, 9, 11 and 13 in the VHF high band and

• −8 dBd on all CEA test channels contained in the UHF band (channels 14-[51])

ANSI/CEA-2032-A further specifies that the test procedures in CEA-744-B are to be employed to measure the antenna performance. It also provides standards for active (amplified) antennas, including gain, intermodulation and spurious emission. Further, ANSI/CEA-2032-A provides for labeling antenna packaging and antennas to indicate the channels or bands of channels for which the antenna meets the specified technical requirements. The Commission observes that the high-VHF and UHF performance levels under this industry-developed standard are well within the capabilities of the antennas tested in the MSW and FCC Laboratory studies of indoor antennas. Under this proposal, all indoor television antennas would be required to meet the ANSI/CEA-2032-A standards for reception of low-VHF, high-VHF and UHF signals. In addition, to ensure compliance with these standards indoor antennas would be subject to the Commission's “verification” equipment procedure in part 2 of the rules. This would promote the Commission's objective of improving indoor reception in the VHF bands and well as ensure that indoor antennas are able to adequately receive UHF signals. Antennas that are built-in to, or designed for use with, specific devices such as portable television receivers, dongles, laptop computers, and similar TV reception equipment would not be subject to this requirement. Given the findings of the antenna studies by MSW and its Laboratory staff the Commission believes that the performance levels set forth in ANSI/CEA-2032-A are well within the capabilities of currently available consumer grade television receive antennas.

45. The Commission requests comment on whether the ANSI/CEA-2032-A performance standards are sufficient to ensure adequate reception of digital television signals at most indoor locations and whether the CEA-744-B measurement procedures are appropriate for determining compliance. The Commission also asks whether there might be other standards or measurement methods that might be more appropriate. Its intent is to ensure that consumers are able to achieve indoor reception of digital television signals, and especially of VHF signals, that are comparable to indoor reception of the signals of the former analog television system. The Commission also asks for comment an alternative approach under which it would require only that manufacturers measure indoor antennas using the CEA-744-B test procedure and comply with the labeling requirements of ANSI/CEA-2032-A. Under that approach, antennas would also be subject to the Commission's verification equipment authorization procedure. The Commission invites interested parties to submit comment, information and suggestions for alternative standards regarding all aspects of the indoor antenna issue.

46. Other Approaches/Solutions for Improving Reception of VHF TV Services. In addition to power increases for VHF band stations and standards for indoor antennas, the Commission also intends to consider additional options for improving television service in the VHF bands. Interested parties are invited to submit ideas and suggestions for additional measures we could take to improve reception of television signals on VHF channels. The Commission requests that parties submit materials information and analyses describing conditions and phenomenon that contribute to VHF reception difficulties and ideas for overcoming or mitigating them.

47. As required by the Regulatory Flexibility Act (RFA), 1 the Commission has prepared this present Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities by the policies and rules proposed in this Notice of Proposed Rule Making ( NPRM ). Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for specified on the first page of this NPRM. The Commission will send a copy of this NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). 2

48. In this NPRM the Commission is initiating a process to address America's growing demand for wireless broadband services, spur ongoing innovation and investment in mobile and ensure that America keeps pace with the global wireless revolution, by making a significant amount of new spectrum available for broadband. Through this NPRM, we take preliminary steps to repurpose a portion of the UHF and VHF frequency bands that are currently used by the broadcast television service, which in later actions we expect to make available for flexible use by fixed and mobile wireless communications services, including mobile broadband. This approach is consistent with the National Broadband Plan (the “Plan”)  3 recommendation to repurpose 120 megahertz from the broadcast television bands for new wireless broadband uses through revising (repacking) the channel assignments of TV stations and voluntary contributions of spectrum to an incentive auction. Reallocation of this spectrum as proposed will provide the Commission flexibility in providing additional spectrum resources for meeting the needs of these new applications. At the same time, we recognize that over-the-air TV serves important public interests, and our approach will help preserve this service as a healthy, viable medium. We remain mindful of the informational and entertainment benefits broadcast television provides the public, and our goal is to provide additional options for broadcast licensees.

49. The proposed action is authorized under sections 4(i), 301, 302, 303(e), 303(f), 303(r),of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 301, 302, 303(e), 303(f), and 303(r).

50. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. 4 The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.”  5 In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. 6 A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA. 7

51. Television Broadcasting. This Economic Census category “comprises establishments primarily engaged in broadcasting images together with sound. These establishments operate television broadcasting studios and facilities for the programming and transmission of programs to the public.”  8 The SBA has created the following small business size standard for Television Broadcasting firms: Those having $14 million or less in annual receipts. 9 The Commission has estimated the number of licensed commercial television stations to be 1,395. 10 In addition, according to Commission staff review of the BIA Publications, Inc., Master Access Television Analyzer Database (BIA) on March 30, 2007, about 986 of an estimated 1,395 commercial television stations (or approximately 72 percent) had revenues of $13 million or less. 11 We therefore estimate that the majority of commercial television broadcasters are small entities.

52. We note, however, that in assessing whether a business concern qualifies as small under the above definition, business (control) affiliations  12 must be included. Our estimate, therefore, likely overstates the number of small entities that might be affected by our action, because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies. In addition, an element of the definition of “small business” is that the entity not be dominant in its field of operation. We are unable at this time to define or quantify the criteria that would establish whether a specific television station is dominant in its field of operation. Accordingly, the estimate of small businesses to which rules may apply does not exclude any television station from the definition of a small business on this basis and is therefore possibly over-inclusive to that extent.

53. In addition, the Commission has estimated the number of licensed noncommercial educational (NCE) television stations to be 390. 13 These stations are non-profit, and therefore considered to be small entities. 14

54. In addition, there are also 2,386 low power television stations (LPTV). 15 Given the nature of this service, we will presume that all LPTV licensees qualify as small entities under the above SBA small business size standard.

55. Cable Television Distribution Services. Since 2007, these services have been defined within the broad economic census category of Wired Telecommunications Carriers; that category is defined as follows: “This industry comprises establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired telecommunications networks. Transmission facilities may be based on a single technology or a combination of technologies.”  16 The SBA has developed a small business size standard for this category, which is: All such firms having 1,500 or fewer employees. To gauge small business prevalence for these cable services we must, however, use current census data that are based on the previous category of Cable and Other Program Distribution and its associated size standard; that size standard was: All such firms having $13.5 million or less in annual receipts. 17 According to Census Bureau data for 2002, there were a total of 1,191 firms in this previous category that operated for the entire year. 18 Of this total, 1,087 firms had annual receipts of under $10 million, and 43 firms had receipts of $10 million or more but less than $25 million. 19 Thus, the majority of these firms can be considered small.

56. Cable Companies and Systems. The Commission has also developed its own small business size standards, for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers, nationwide. 20 Industry data indicate that, of 1,076 cable operators nationwide, all but eleven are small under this size standard. 21 In addition, under the Commission's rules, a “small system” is a cable system serving 15,000 or fewer subscribers. 22 Industry data indicate that, of 6,635 systems nationwide, 5,802 systems have under 10,000 subscribers, and an additional 302 systems have 10,000-19,999 subscribers. 23 Thus, under this second size standard, most cable systems are small.

57. Cable System Operators. The Communications Act of 1934, as amended, also contains a size standard for small cable system operators, which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.”  24 The Commission has determined that an operator serving fewer than 677,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the total annual revenues of all its affiliates, do not exceed $250 million in the aggregate. 25 Industry data indicate that, of 1,076 cable operators nationwide, all but ten are small under this size standard. 26 We note that the Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million, 27 and therefore we are unable to estimate more accurately the number of cable system operators that would qualify as small under this size standard.

58. The specific bands under consideration are the low VHF spectrum at 54-72 MHz (TV channels 2-4) and 76-88 MHz (TV channels 5 and 6), the high VHF spectrum at 174-216 MHz (TV channels 7-13), and the UHF bands at 470-608 MHz (TV channels 14-36) and 614-698 MHz (TV channels 38-51); for purposes of this NPRM, we will refer to this spectrum as the “U/V Bands.”  28 This NPRM proposes three actions that will establish the underlying regulatory framework to facilitate wireless broadband uses of the U/V Bands, without affecting current license assignments in the band. First, we are proposing to add new allocations for fixed and mobile services in the U/V Bands to be co-primary with the existing broadcasting allocation in those bands. The additional allocations would provide the maximum flexibility for planning efforts to increase spectrum available for flexible use, including the possibility of assigning portions of the U/V Bands for new mobile broadband services in the future. Second, we are proposing to establish a framework that permits two or more television stations to share a single six-megahertz channel, thereby enhancing efficient use of the U/V Bands. Third, we intend to consider approaches to create value for television viewers and broadcasters by increasing the utility of the VHF bands for the operation of television services.

59. By establishing the underlying regulatory framework to facilitate wireless broadband uses in the U/V Bands, this NPRM is the first in a series of actions that will allow us to make progress toward our goal of improving efficient use of the bands and enable ongoing innovation and investment through flexible use. We will propose further actions consistent with other of the Plan's recommendations for the U/V Bands, including, but not limited to, the process of voluntarily returning broadcast licenses to the Commission and the licensing process and service rules for new fixed and mobile wireless communications services.

60. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities. 29

61. We do not propose in this NPRM to specify a band plan for the spectrum to be recovered, we do, however, request comment on how we should re-configure the current U/V Bands to ensure that the services involved, i.e., broadcast television as well as new fixed and mobile services, can best be supported. Recognizing that UHF spectrum is useful for mobile services, one approach would be to select the spectrum to be recovered from the upper portion of the UHF band and designate it for use by the wireless communications service (WCS). This would effectively extend the current allocation plan and WCS spectrum in the adjacent WCS bands at 700 MHz (WCS 700 MHz bands) to include new lower adjacent frequencies. Alternatively, it might be technically desirable to configure the bands to provide paired spectrum in separate bands for broadband applications, or to designate a portion of the spectrum for unpaired uses or different wireless services. For example, current rules in the U/V Band allow for unlicensed use of unassigned channels (“white spaces”), and the Plan recommended the creation of a nationwide contiguous band for unlicensed use. We also request comment on whether a new U/V Band plan should incorporate an unlicensed block of spectrum, or if other bands would be better suited to this purpose.

62. We seek comment on other areas of interest with respect to channel sharing in conjunction with the recommendations of the National Plan. We welcome comments from stations that anticipate that they may participate in channel sharing as well as from other interested parties.

63. None.

64. Pursuant to sections 4(i), 301, 302, 303(e), 303(f) and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.154(i), 301, 302, 303(e), 303(f) and 303(r), this Notice of Proposed Rule Making is adopted.

65. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Notice of Proposed Rule Making, including the Initial Regulatory Flexibility Analysis to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR parts 2, 15, and 73 to read as follows:

This NPRM is organized as follows:

FMCSA encourages you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted without change to http://www.regulations.gov and will include any personal information you provide.

If you submit a comment, please include the docket number for this rulemaking (FMCSA-2010-0167), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an e-mail address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.

To submit your comment online, go to http://www.regulations.gov and click on the “submit a comment” box, which will then become highlighted in blue. In the “Document Type” drop down menu, select “Proposed Rules,” insert “FMCSA-2010-0167” in the “Keyword” box, and click “Search.” When the new screen appears, click on “Submit a Comment” in the “Actions” column. If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8 1/2 by 11 inches, suitable for copying and electronic filing. If you submit comments by mail and would like to know that they reached the facility, please enclose a stamped, self-addressed postcard or envelope.

FMCSA will consider all comments and material received during the comment period and may change this proposed rule based on your comments.

To view comments, as well as documents mentioned in this preamble, available in the docket, go to http://www.regulations.gov and click on the “read comments” box in the upper right hand side of the screen. Then, in the “Keyword” box insert “FMCSA-2010-0167” and click “Search.” Next, click the “Open Docket Folder” in the “Actions” column. Finally, in the “Title” column, click on the document you would like to review. If you do not have access to the Internet, you may view the docket online by visiting the Docket Management Facility in Room W12-140 on the ground floor of the Department of Transportation West Building, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

Anyone may search the electronic form of 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 DOTs complete Privacy Act Statement in the Federal Register notice published on April 11, 2000 (65 FR 19476).

If you have comments on the collection of information discussed in this notice of proposed rulemaking (NPRM), you must also send those comments to the OIRA, OMB. To ensure that your comments are received on time, the preferred methods of submission are by e-mail to oira_submissions@omb.eop.gov (include docket number “FMCSA-2010-0167” and “Attention: Desk Officer for FMCSA, DOT” in the subject line of the e-mail) or fax at 202-395-6566. An alternate, though slower, method is by U.S. mail to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503, ATTN: Desk Officer, FMCSA, DOT.

On January 21st, 2009, President Obama issued a Memorandum on Transparency and Open Government in which he described how: “Public engagement enhances the Government's effectiveness and improves the quality of its decisions. Knowledge is widely dispersed in society, and public officials benefit from having access to that dispersed knowledge.”

To support the President's open government initiative, DOT has partnered with the Cornell eRulemaking Initiative (CeRI) in a pilot project, Regulation Room, to discover the best ways of using Web 2.0 and social networking technologies to: (1) Alert the public, including those who sometimes may not be aware of rulemaking proposals, such as individuals, public interest groups, small businesses, and local government entities that rulemaking is occurring in areas of interest to them; (2) increase public understanding of each proposed rule and the rulemaking process; and (3) help the public formulate more effective individual and collaborative input to DOT. Over the course of several rulemaking initiatives, CeRI will use different Web technologies and approaches to enhance public understanding and participation, work with DOT to evaluate the advantages and disadvantages of these techniques, and report their findings and conclusions on the most effective use of social networking technologies in this area.

DOT and the Obama Administration are striving to increase effective public involvement in the rulemaking process and strongly encourage all parties interested in this rulemaking to visit the Regulation Room Web site, http://www.regulationroom.org, to learn about the rule and the rulemaking process, to discuss the issues in the rule with other persons and groups, and to participate in drafting comments that will be submitted to DOT. In this rulemaking, CeRI will submit to the rulemaking docket a Summary of the discussion that occurs on the Regulation Room site; participants will have the chance to review a draft and suggest changes before the Summary is submitted. Participants who want to further develop ideas contained in the Summary, or raise additional points, will have the opportunity to collaboratively draft joint comments that will be also be submitted to the rulemaking docket before the comment period closes.

Note that Regulation Room is not an official DOT Web site, and so participating in discussion on that site is not the same as commenting in the rulemaking docket. The Summary of discussion and any joint comments prepared collaboratively on the site will become comments in the docket when they are submitted to DOT by CeRI. At any time during the comment period, anyone using Regulation Room can also submit individual views to the rulemaking docket through the Federal rulemaking portal Regulations.gov, or by any of the other methods identified at the beginning of this Notice.

For questions about this project, please contact Brett Jortland in the DOT Office of General Counsel at (202) 366-9314 or at brett.jortland@dot.gov.

This NPRM would improve CMV safety and reduce paperwork burden by increasing the use of EOBRs within the motor carrier industry, which will improve HOS compliance. The approach has three components: (1) Requiring EOBRs to be used by considerably more motor carriers and drivers than those covered by the Agency's April 5, 2010 final rule that addressed the remedial use of EOBRs for motor carriers with significant HOS violations (2) requiring motor carriers to develop and maintain systematic HOS oversight of their drivers, and (3) simplifying the supporting documents requirements so motor carriers can make the best use of EOBRs and their support systems as their primary means of recording HOS information and ensuring HOS compliance.

The Motor Carrier Act of 1935 (Pub. L. 74-255, 49 Stat. 543, August 9, 1935, now codified at 49 U.S.C. 31502(b)) (the 1935 Act) provides that “[t]he Secretary of Transportation may prescribe requirements for—(1) Qualifications and maximum hours of service of employees of, and safety of operation and equipment of, a motor carrier; and (2) qualifications and maximum hours of service of employees of, and standards of equipment of, a motor private carrier, when needed to promote safety of operation.” This NPRM addresses “safety of operation and equipment” of motor carriers and “standards of equipment” of motor private carriers and, as such, is well within the authority of the 1935 Act.

The Motor Carrier Safety Act of 1984 (Pub. L. 98-554, Title II, 98 Stat. 2832, October 30, 1984, now codified at 49 U.S.C. 31136) (the 1984 Act) provides concurrent authority to regulate drivers, motor carriers, and vehicle equipment. It requires the Secretary to:

Section 211 of the 1984 Act also grants the Secretary broad power in carrying out motor carrier safety statutes and regulations to “prescribe recordkeeping and reporting requirements” and to “perform other acts the Secretary considers appropriate” (49 U.S.C. 31133(a)(8) and (10)).

The HOS regulations are designed to ensure that driving time—one of the principal “responsibilities imposed on the operators of commercial motor vehicles”—does “not impair drivers' ability to operate the vehicles safely” (49 U.S.C. 31136(a)(2)). EOBRs that are properly designed, used, and maintained would not only permit motor carriers to schedule vehicle and driver operations more efficiently, but would also enable motor carriers to more effectively and accurately track their drivers' on-duty driving hours, thus preventing HOS violations and resulting crashes. Requirements that motor carriers retain certain other supporting documents, in addition to EOBR records, further assist the Agency in ensuring driver and motor carrier compliance with the HOS rules. Driver compliance with the HOS rules, in turn, helps ensure that “the physical condition of [commercial motor vehicle drivers] is adequate to enable them to operate the vehicles safely” (49 U.S.C. 31136(a)(3)). Indeed, the Agency considered whether this proposal would impact driver health under 49 U.S.C. 31136(a)(3) and (a)(4). Because the proposal could increase compliance with the HOS regulations, including driving and off-duty time requirements, it would actually have a positive effect on the physical condition of drivers. ( See the discussion of health impacts at Section VI of this NPRM regarding environmental analyses.)

The requirements in 49 U.S.C. 31136(a)(1) concerning safe motor vehicle maintenance, equipment, and loading are not germane to this proposed rule because EOBRs and supporting documents influence driver operational safety rather than vehicular and mechanical safety. Consequently, the Agency has not assessed the proposed rule against that requirement. However, to the limited extent 49 U.S.C. 31136(a)(1) pertains specifically to driver safety, the Agency has taken this statutory requirement into account throughout the proposal.

Section 9104 of the Truck and Bus Safety and Regulatory Reform Act (Pub. L. 100-690, November 18, 1988, 102 Stat. 4181, at 4529) also anticipates the Secretary promulgating “a regulation about the use of monitoring devices on commercial motor vehicles to increase compliance by operators of the vehicles with hours of service regulations” and requires the Agency to ensure that any such device is not used to “harass vehicle operators” (49 U.S.C. 31137(a)).

Based on the statutory framework reviewed previously, FMCSA has the authority to adopt an industry-wide requirement that all motor carriers subject to HOS requirements under 49 CFR part 395 install and use EOBR-based systems.

Section 113(a) of the HMTAA requires the Secretary to prescribe regulations to improve—(A) compliance by CMV drivers and motor carriers with HOS requirements; and (B) the effectiveness and efficiency of Federal and State enforcement officers reviewing such compliance. The cost of such regulations must be reasonable to drivers and motor carriers (section 113(a)(2)).

HMTAA section 113(b) describes what elements must be covered in the new regulations. HMTAA section 113(b)(1) states that the regulations must allow for a “written or electronic document * * * to be used by a motor carrier or by an enforcement officer as a supporting document to verify the accuracy of a driver's record of duty status [RODS].” The legislative history emphasizes that requiring the retention of supporting documents would allow enforcement personnel to support or disprove allegations of HOS violations, including preventing firms from playing “hide and seek” or discarding supporting documents (S. 1640, 140 Cong. Rec. S11320, S11323, 1994 WL 422479, August 11, 1994). Section 113(b)(1) further directs the Secretary to include in the regulations a description of identification items (that include either driver name or vehicle number) that would facilitate matching these supporting documents with RODS.

Section 113(b)(2) states that the regulations shall specify the “number, type, and frequency of supporting documents that must be retained by the carrier.”

Section 113(b)(3) requires that the regulations specify that supporting documents shall be retained by the motor carrier for at least 6 months from the date of a document's receipt.

Section 113(b)(4) calls for the Agency to draft regulations “* * * to authorize, on a case-by-case basis, self compliance systems * * *” for motor carriers, including “a group” of motor carriers.

Under section 113(b)(5), the Agency shall include a provision in its regulations that allows the Agency to issue waivers from certain requirements under 49 CFR 395.8(k) when sufficient supporting documentation is provided to enforcement personnel through an intelligent-vehicle highway system, as defined by section 6059 of the Intelligent Vehicle Highway Systems Act (IVHSA) (Pub. L. 102-240, December 18, 1991, 105 Stat. 2189, 2195). The Federal Highway Administration (FHWA), the predecessor organization to FMCSA within the Department of Transportation (DOT), did not draft the regulations authorized under section 113(b)(5). The IVHSA was subsequently repealed ( see section 5213 of TEA-21, 112 Stat. 463); there currently is no statutory guidance on waivers as the term was used in section 113(b)(5). However, this provision does not affect this rulemaking because other regulatory avenues exist for motor carriers to apply for waivers, exemptions, and pilot programs.

Section 113(c) defines a supporting document as “any document that is generated or received by a motor carrier or commercial motor vehicle driver in the normal course of business that could be used, as produced or with additional identifying information, to verify the accuracy of a driver's record of duty status.” Consequently, this NPRM does not propose to require generation of new documents outside the normal course of the carrier's business.

Current Federal HOS regulations (49 CFR part 395) limit the number of hours a CMV driver may drive. The regulations also limit, during each 7- or 8-day period, the maximum on-duty time before driving is prohibited (exceptions are listed in 49 CFR 395.1(k), (n), and (o)). Such rules are needed to prevent CMV operators from driving for long periods without opportunities to obtain adequate sleep. Sufficient sleep is necessary to ensure that a driver is alert behind the wheel and able to respond appropriately to changes in the driving environment.

With certain exceptions, 2 motor carriers and drivers are required by 49 CFR 395.8 to keep RODS to track driving, on-duty, and off-duty time. FMCSA and State agencies use these records to ensure compliance with the HOS rules.

On April 5, 2010, the Agency issued a final rule that addressed the limited, remedial use of EOBRs for motor carriers with significant HOS violations (75 FR 17208). That final rule required a motor carrier that was found during a compliance review to have a 10 percent violation rate for any HOS regulation in Appendix C of 49 CFR part 385 to install and use EOBRs on all of that carrier's CMVs. The compliance or implementation date for the rule is June 4, 2012. Although FMCSA received comments recommending expanding the reach of the rule beyond the number of motor carriers the 2010 remedial directive is estimated to affect, the limited scope of the NPRM prevented the Agency from doing so. As noted in the preamble to the 2010 final rule, however, FMCSA recognizes that the potential safety risks associated with HOS violations are such that mandatory EOBR use for a broader population might be appropriate. Accordingly, this proposed rule would expand the scope of mandatory EOBR use beyond the population of motor carriers that are or would be subject to a remedial directive as a result of the April 2010 final rule.

This NPRM honors the Agency's commitment to safety by taking action to improve compliance with the HOS rules. It responds to issues that would have been addressed in the April 2010 final rule were it not for the limited scope of the NPRM. As FMCSA noted in its April 2010 final rule:

A fundamental principle of the FMCSRs, stated in 49 CFR 390.11, is that a motor carrier has the duty to require its drivers to comply with the FMCSRs, including HOS-related duties and prohibitions. Motor carriers have historically required their drivers, as a condition of employment, to provide supporting documents, such as fuel receipts, toll receipts, bills of lading, and repair invoices. They compare these documents to the drivers' entries on the RODS (or the record provided by the automatic on-board recording device (AOBRD) or EOBR, if such a device is used) to help verify the accuracy of the HOS reported by their CMV drivers. The FMCSRs require motor carriers to retain these supporting documents, as well as the paper and electronic RODS, for a period of 6 months from the date of receipt.

Although the FMCSRs have always required a “remarks” section to augment the duty status information contained in the RODS document, it was not until January 1983 that the use of supporting documents was explicitly required. The final rule revising the recordkeeping requirements for 49 CFR part 395 to explicitly require supporting documents was published November 26, 1982 (47 FR 53383); but the rule did not define the term “supporting documents,” and questions arose concerning what the Agency expected motor carriers to retain.

On November 17, 1993 the Agency published regulatory guidance (Regulatory Guidance for the Federal Motor Carriers Safety Regulations (58 FR 60734)) on a variety of topics, including supporting documents. Supporting documents were the subject of Question 10 for 49 CFR 395.8 which provides in pertinent part:

The following year, in HMTAA section 113, Congress directed the Agency to prescribe regulations to amend 49 CFR part 395 to improve driver and motor carrier compliance with the HOS regulations. ( See the Legal Basis section of this NPRM.) Section 113 also defined supporting documents in a manner nearly identical to the Agency's regulatory guidance: “For purposes of this section, a supporting document is any document that is generated or received by a motor carrier or commercial motor vehicle driver in the normal course of business that could be used, as produced or with additional identifying information, to verify the accuracy of a driver's record of duty status” (HMTAA sec. 113(b)(1)).

In its revised regulatory guidance, published on April 4, 1997 ( Regulatory Guidance for the Federal Motor Carrier Safety Regulations (62 FR 16370)), the Agency emphasized the need for motor carriers to provide adequate HOS oversight. Specifically, the Agency added two Q&A guidance items to 49 CFR 395.3:

A year later, on April 20, 1998, the Agency published an NPRM in which it proposed to define “supporting documents” identically to the HMTAA definition (63 FR 19457). It also proposed requiring motor carriers to develop and use an HOS supporting document auditing system that would include a procedural manual. The manual would identify the types of documents used, specify how the audit system would work, how drivers recording inaccurate information on their RODS would be notified, and how a carrier would take corrective action to improve drivers' compliance. If a motor carrier did not have a supporting document auditing system, it would have to maintain various types of business documents and require its drivers to collect and submit those documents in order to support the accuracy of the drivers' RODS. Finally, the NPRM proposed to allow use of “automated, electronic, or laser technology” systems to maintain copies of records or documents, including those requiring a signature, so long as the motor carrier was able to provide alternate means for signature verification.

Many commenters to the 1998 NPRM expressed concern that the Agency was considering addressing HOS supporting documents separately from the HOS advance notice of proposed published on November 5, 1996 (61 FR 57252). FMCSA responded by including proposed changes to the methods of verifying HOS compliance through supporting documents in its May 2, 2000, NPRM on HOS regulations (65 FR 25540). The supporting documents section of that NPRM focused upon operations involving long or regional trips away from a home base with little supervision of, contact with, or control over the driver. The Agency proposed that the paperwork burdens for all other operations be minimized and stated that, whenever possible, FMCSA would be prepared to accept records that are required by other Federal agencies. Notably, the Department of Labor's (DOLs) Wage and Hour Division regulations require motor carrier employers to maintain time records for 2 years (29 CFR part 516). The Agency believed this approach would meet the requirements of section 113 of the HMTAA and be consistent with the dual objectives of (1) improving the enforcement of the HOS regulations and (2) simplifying the recordkeeping requirements of motor carriers.

The April 2003 HOS final rule did not implement the HMTAA provision for supporting documents as proposed. One of the reasons was that the Agency decided to not move forward with its May 2000 proposal for five motor carrier operational categories (long-haul (LH), regional, and three types of local operations), with significantly different recordkeeping requirements for the local and for the regional and LH carriers. However, the final rule did state (at 68 FR 22490):

FMCSA published a supplemental NPRM (SNPRM) on supporting documents on November 3, 2004 (69 FR 63997). The SNPRM proposed that motor carriers must review and verify the HOS records of both employee drivers and independent owner-operators proposed to require that drivers submit to the motor carrier all supporting documents along with the RODS; and specified that motor carriers must maintain supporting documents in a method that allows cross reference to the RODS. The SNPRM also proposed a self-monitoring system for supporting documents that would be a carrier's primary method for ensuring compliance with the HOS regulations: An FMCSA Special Agent or other authorized government safety official could deem a system to be effective if fewer than 10 percent of the drivers' paper RODS or AOBRD records were found to be false. Finally, the SNPRM also proposed to permit the use of electronic documents as a supplement to, and, in certain circumstances, in lieu of, paper supporting documents.

Commenters on the SNPRM raised concerns with the number and quality of supporting documents drivers and carriers were expected to obtain and retain; the lack of specificity of the self-monitoring system; the potential burdens for motor carriers to verify, inspect, and maintain these documents and link them to RODS; and the availability of sufficient FMCSA resources to enforce the regulation and to assess applications for exemptions. In addition, the Agency discovered a longstanding error in the computation of the information collection burden associated with the HOS regulations. This error had caused the Agency to significantly underestimate the information collection burden attributable to the SNPRM. FMCSA withdrew the SNPRM on October 25, 2007 (72 FR 60614).

The use of advanced technologies in the supporting documents context was the subject of FMCSA and predecessor agency enforcement policy. In August 1997, an enforcement policy memorandum limited the use of advanced technology, mainly global positioning system (GPS) records, during investigations regarding motor carrier compliance with FMCSRs. At the time the memorandum was issued, the Agency stated that it recognized that the technologies, which were emerging and being implemented within the industry in 1997, offered a positive opportunity to advance operational safety performance. At the same time, the time-and-location information the new technologies provided was noted to be considerably more precise than location information handwritten in a paper RODS and could tip the playing field to the disadvantage of carriers that had adopted those technologies. In order to promote and encourage motor carriers to use these new technologies in their operations and safety management systems, the Agency decided to limit its use of technology data and electronically produced records during reviews and for regulatory enforcement purposes.

In the years since the Agency established that policy, the use of advanced vehicle location tracking technologies has become widely accepted and an integral component of motor carriers' logistics, fleet operations, and safety management systems. Reasoning that the 1997 policy had achieved its purpose, FMCSA rescinded the policy on November 19, 2008 (73 FR 69717). On a related matter, the Agency formally re-initiated work on the Supporting Documents Rulemaking in July 2009.

On January 15, 2010, the American Trucking Associations (ATA) filed a Petition for a Writ of Mandamus in the United States Court of Appeals for the District of Columbia Circuit (DC Cir. No. 10-1009). ATA petitioned the court to direct FMCSA to issue an NPRM on “supporting documents” in conformance with the requirements set forth in section 113 of the HMTAA within 60 days after the issuance of the writ and a final rule no later than 6 months after the issuance of the NPRM. The court granted the petition for writ of mandamus on September 30, 2010, ordering FMCSA to issue an NPRM on the supporting document regulations by December 30, 2010. A copy of the Petition for Writ has been placed in the docket for this NPRM. Partially in response to petitioner's court filing, FMCSA issued interim guidance on HOS supporting documents and mobile communications/tracking policy on June 10, 2010 (75 FR 32984). In addition to removing certain documents from the list of supporting documents a carrier must maintain, that guidance confirmed that carriers are liable for the actions of their employees if they have the means by which to detect HOS violations. The guidance made it clear that the 1997 enforcement policy memorandum had been made less relevant by the widespread use of vehicle location tracking technologies. Today's proposed rule would supersede, in most respects, that interim guidance.

The April 2010 final rule sets forth new performance standards for devices and systems used to produce electronic HOS records. It also mandates the use of these devices by motor carriers that have demonstrated serious noncompliance with the HOS regulations. In addition, the rule provides incentives to encourage motor carriers to use EOBRs on a voluntary basis by providing relief from the requirement that such motor carriers maintain supporting documents to verify driving time. Because the Agency agrees with numerous commenters that EOBRs with GPS or similar location data produce regular time and CMV location position histories sufficient to verify adequately a driver's on-duty driving activities, motor carriers voluntarily maintaining the time and location data produced by EOBRs would need to maintain only those additional supporting documents that are necessary to verify on-duty not driving (ODND) activities and off-duty status (75 FR 17208, at 17212, 17233, and 17234).

This NPRM would improve CMV safety and reduce paperwork burdens by increasing the use of EOBRs within the motor carrier industry, which will improve HOS compliance. The approach has three components: (1) Requiring EOBRs to be used by considerably more motor carriers and drivers than the April 2010 final rule, (2) requiring motor carriers to develop and maintain systematic HOS oversight of their drivers, and (3) simplifying the supporting documents requirements so motor carriers can make the best use of EOBRs and their support systems as their primary means of recording HOS information and ensuring HOS compliance. FMCSA believes this approach strikes an appropriate balance between promoting highway safety and minimizing cost and operational burdens on motor carriers in certain operations that have inherently less crash risk.

FMCSA proposes mandatory installation and use of EOBRs in all CMVs for which the use of RODS is currently required. CMVs operating in interstate commerce using accurate and true time records to record drivers' HOS under the provisions of 49 CFR 395.1(e)(1) and (2) may continue to use these records. While they are not required to install and use EOBRs, nothing in this proposed rule precludes them from doing so.

A key factor that allowed the Agency to consider proposing a broader EOBR mandate was the rise in the estimate of the Economic Value of a Statistical Life (VSL). As FMCSA discussed in the April 2010 EOBR final rule, DOT issued a memorandum on February 5, 2008, instructing its modal agencies to estimate the economic value of preventing a human fatality at $6 million. See “Treatment of the Economic Value of a Statistical Life in Departmental Analyses” (available at: http://ostpxweb.dot.gov/policy/reports/080205.htm ). FMCSA also published a notice in the Federal Register describing this policy change (73 FR 35194, June 20, 2008). The previous VSL, which was used in the Regulatory Impact Analysis (RIA) for the EOBR NPRM (Docket: FMCSA-2004-18940), was $3.0 million. Given that the VSL doubled, the net benefits of the April 5, 2010, rule, as well as those of other FMCSA rules under development, were recalculated using the new figures. This recalculation resulted in a reappraisal of the regulatory options by the Agency. Moreover, a broader mandate is more cost effective because of the widespread availability and functionality of on-board communications and logistics management systems already adopted in the motor carrier industry. 3

FMCSA proposes mandatory installation and use of EOBRs in interstate CMVs currently required to complete RODS under 49 CFR 395.8. Under today's proposal, motor carriers currently allowed to use time cards could continue to do so under the provisions of 49 CFR 395.1(e)(1).

The provisions of 49 CFR 395.1(e)(2), 4 which also permit time-card use, are available to drivers of property-carrying CMVs that do not require a CDL and who operate within a 150 air-mile radius of the driver's normal work-reporting location under the current provisions.

In short, all SH drivers that record their HOS using the timecard provision of 49 CFR 395.1(e)(1) and (2) may continue to use timecards. The Agency acknowledges that drivers working for motor carriers that keep timecards under 49 CFR 395.1(e)(1) and (2) may occasionally operate beyond the parameters of those provisions (for example, by operating outside the specified 100- or 150-air-mile radii). Under this NPRM, they would be allowed to continue using RODS for those days, as opposed to using EOBRs. The Agency requests commenters' views related to this matter. Specifically, should motor carriers whose drivers usually operate within the limits of the 49 CFR 395.1(e)(1) and (2) provisions, but occasionally beyond them, be required always to use EOBRs? For these carriers, what threshold should trigger EOBR use? Should the threshold be based upon the amount of time drivers operate beyond the time limits or the number of miles traveled beyond the distance limits (for example, 1 day per week, 2 days per week, 5 days per month, or another threshold)? Should the threshold be based upon the proportion of drivers working for a given motor carrier who operate beyond the time or distance limits?

The Agency considered including carriers, vehicles, and drivers of bulk HM in this NPRM. It did so because a crash involving a CMV transporting bulk HM can endanger a large number of people, cause significant damage to infrastructure, and generate greater traffic congestion than a crash involving a CMV transporting other cargoes. Although these events are infrequent, the Pipeline and Hazardous Materials Safety Administration's Hazardous Materials Risk Management Program considers the potential risks they pose to persons, property, and the environment to be “low probability, high consequence events” (Comparative Risks of Hazardous Materials and Non-Hazardous Materials Truck Shipment Accidents/Incidents, Final Report. Prepared for Federal Motor Carrier Safety Administration, March 2001). The Agency seeks additional data and information concerning the safety of bulk HM carriers in that are not currently required to use RODS. This will aid the Agency in determining whether to require this category of motor carriers to use EOBRs.

Similarly, the risk of fatalities or serious injuries when a crash involves a passenger-carrying CMV is such that the Agency considered proposing a requirement for EOBR use in this industry sector (excluding the 9-15 passenger carriers not for direct compensation segment). DOT's Motor Coach Safety Action Plan notes seven priority action items to reduce motorcoach crashes, fatalities, and injuries. The first priority action item is to initiate rulemaking to require EOBRs on all motorcoaches. The provisions of today's proposal would apply only to those passenger carrier operations where the driver is required to complete a RODS. The Agency, however, considered proposing a requirement for SH motor carriers of passengers to use EOBRs. It seeks additional data and information about the safety of this group of carriers, drivers, and vehicles.

FMCSA considered requiring only drivers in LH operations (that is, those operating beyond a 150 air-mile radius) to use EOBRs. An “LH only” option would address the segment of the motor carrier industry with the highest safety and HOS compliance gaps and has the highest estimated net benefit. However, it would not address the safety concerns associated with SH motor carriers, especially those operations on the days when RODS, rather than timecards, are required. FMCSA requests comment on the costs, benefits, and practicality of implementing a “LH Only” option.

The Agency also considered requiring EOBRs for all motor carriers subject to 49 CFR part 395. The estimated compliance costs of this “true universal” approach, which the National Transportation Safety Board (NTSB)  5 and others advocated, exceed the estimated safety benefits for most SH motor carriers; and the overall net benefits are negative. The option selected in the proposed rule is estimated to generate benefits that exceed the costs of installing EOBRs and the costs associated with increased levels of compliance with the HOS rules. This option also has the highest estimated net benefits of the options considered for this proposed rulemaking. It also acknowledges the operational distinctions between motor carriers allowed to use timecards under 49 CFR 395.1(e)(1) and (2) exclusively, and the other motor carriers that would be required to use EOBRs. More information concerning the estimated costs and benefits is available in the RIA associated with this rulemaking.

Although not analyzed as part of this rulemaking action, FMCSA also requests comments on the advantages, disadvantages, and practicality of a potential exemption from the EOBR requirements for motor carriers with few or no HOS violations.

Finally, FMCSA proposes changing the term “activity” to “status” in § 395.8(e)(1) to clarify that HOS requirements include completing records of duty status—a commonly used term of art in part 395.

It is likely that a final rule resulting from this NPRM would be published sometime prior to the June 4, 2012, compliance date for the April 2010 EOBR final rule. As stated in 49 CFR 385.805, FMCSA can issue remedial directives to any motor carrier subject to 49 CFR part 395 of the FMCSRs on and after June 4, 2012. Even if the final rule were to take effect shortly after publication, today's NPRM does not propose to change the compliance date of the April 2010 final rule.

The remedial directive provision in the April 2010 rule allows the Agency to require motor carriers to use EOBRs and also to retain a wider range of supporting documents than otherwise would be required. Even after the compliance date proposed in this NPRM for the transition to mandatory EOBR use, the Agency would retain the authority to issue remedial directives to:

• Motor carriers subject to 49 CFR part 395 but not otherwise required to use AOBRDs or EOBRs, and

• Motor carriers who use EOBRs, but have HOS violations that would trigger a remedial directive could be required to retain and maintain supporting documents verifying driving time.

In proposing a compliance date for mandatory use of EOBRs, the Agency considered the safety benefits as well as the potential cost impacts to motor carriers. The annualized cost for a motor carrier that does not currently use a fleet management system (FMS) or other “EOBR-ready” system ranges from $525 to $785 per power unit (PU). For a motor carrier that uses an “EOBR-ready” FMS, the annualized cost is $92 per PU. Considering that the estimated annual revenue per PU (on an industry-wide basis) is approximately $172,000, the annual cost of an EOBR is between 0.3 percent and 0.5 percent of operating revenue. When the costs of purchasing, completing, auditing, and storing paper RODS, and the potential for improved productivity resulting from motor carriers' having access to more comprehensive EOBR data are considered, using EOBRs can actually be less expensive than using RODS. 6

The fact remains, however, that the aggregate impact of a wider EOBR mandate will be significant because of the large number of small business entities that will be required to install and use EOBRs in their CMVs. The motor carrier industry is extremely diverse in terms of the size of fleets, the types of passengers or commodities transported, and the size of businesses. The Agency anticipates that a motor carrier operating a fleet of 150 or fewer PUs would likely be considered small under Small Business Administration (SBA) guidelines. About 99 percent of motor carriers of property and 96 percent of motor carriers of passengers in FMCSA's Motor Carrier Management Information System (MCMIS) would be considered small businesses.

For these reasons, FMCSA is proposing a compliance date for mandatory EOBR use 3 years after the effective date of a final rule. The Agency seeks comment on factors it should consider to determine if the compliance date might need to be adjusted and, if so, how. For example, should larger motor carriers be required to install and use EOBRs earlier than smaller ones; and what should the number of PUs be to determine this size threshold? Should EOBR use be phased-in over a period of time, in proportion to the number of PUs in a motor carrier's fleet? Are there other potential phase-in schedules FMCSA should consider? If so, please provide supporting data and information.

In the January 2007 NPRM, FMCSA acknowledged the concern at that time of many motor carriers that voluntary installation of EOBRs would place them at a competitive disadvantage compared to carriers not using EOBRs. In response, FMCSA's April 2010 EOBR final rule provided two incentives to promote motor carriers' use of EOBRs that comply with 49 CFR 395.16:

(1) Motor carriers voluntarily using EOBRs that comply with 49 CFR 395.16 will receive partial relief from the supporting documents requirements of 49 CFR part 395. Specifically, these motor carriers will no longer be required to retain and maintain supporting documents related to driving time because this information will be maintained by and be accessible from the EOBR.

(2) The HOS portion of a compliance review will include both focused and random samples, but only the random sample results will be used to assign the carrier a safety fitness rating under 49 CFR part 385. If FMCSA finds a 10 percent or higher HOS-violation rate based on an initial focused sample, this may be used as the basis for a possible civil penalty. The assessment would also include a random sampling of the motor carrier's overall HOS records; this would be used as the basis for a safety fitness rating. Motor carriers required to use EOBRs under the terms of a remedial directive do not have access to this incentive.

These incentives would continue to be available to motor carriers that voluntarily use EOBRs, until the compliance date of the final rule resulting from this rulemaking.

Motor carriers have a duty to ensure that their drivers are complying with the requirements and prohibitions imposed upon them (49 CFR 390.11). This proposed rulemaking would explicitly continue the obligation of motor carriers to use the information contained in supporting documents to ensure that their drivers comply with prescribed HOS limits. 7 The manner in which those documents are generated would not be material—the duty applies equally to documents generated by electronic mobile communications/tracking systems as well as to paper records (49 CFR 395.11(a)). Motor carriers could be deemed to have knowledge of the contents of those documents (49 CFR 395.11(b)).

An HOS management system refers to the controls, policies, programs, practices, and procedures used by a motor carrier to systematically and effectively monitor each driver's compliance with HOS requirements and to verify the accuracy of the information contained in each driver's RODS (49 CFR 395.11(a)). A motor carrier's duty to maintain an HOS management system, as explained in this NPRM, is analogous to its duties in other management areas that are already prescribed in the driver and vehicle regulations, such as 49 CFR 382.10 (motor carrier duty to ensure compliance with part 40 controlled substances and alcohol regulations), 49 CFR 391.1 (general duty of motor carriers to ensure qualifications of drivers), 49 CFR 391.25 (motor carrier duty to make annual inquiry and review of driving record), and 49 CFR 396.3 (motor carrier duty to make systematic inspection, repair, and maintenance of CMVs).

FMCSA also proposes to amend 49 CFR part 385, Safety Fitness Procedures, Appendices B and C, to include among the listed acute and critical citations a motor carrier's failure to adopt and properly administer an “hours of service management system.” To meet the safety fitness standard in 49 CFR part 385, a motor carrier would have to have in place the controls, policies, programs, practices, and procedures to systematically and effectively monitor each driver's compliance with HOS requirements.

FMCSA proposes to adopt verbatim the statutory definition from HMTAA section 113(c): “A supporting document is any document that is generated or received by a motor carrier or CMV driver in the normal course of business that could be used, as produced or with additional identifying information, to verify the accuracy of a driver's RODS.” Significantly, this Congressional direction expands the definition of “supporting documents” beyond Agency practice to include all documents that “could be used” to verify drivers' RODS.

Collectively, the supporting documents required must provide the motor carrier (and a safety investigator) with the driver's identification and a complete and accurate history of the driver's duty status, by date, time, and location. Therefore, as proposed in 49 CFR 395.11(e)(1), the proposed requirements for supporting documents would include certain elements. The descriptions of these elements would be consistent with the requirements of the April 2010 EOBR final rule. Safety investigators and other designated officials of FMCSA have the authority to request any record of a motor carrier, lessor, or person controlling or controlled by the motor carrier (49 U.S.C. 504(c)).

Supporting documents must contain the following required elements: Personal identification, date, time, and location, either in an individual document or in specified combination, as set forth in section 395.11(e).

The driver's name, or a personal identification number (PIN) associated with the driver's name, is central to developing a RODS for each driver subject to the HOS regulations. A unit (vehicle) number may be used so long as it can be associated with the driver operating the vehicle at a specific date, time, and location.

The date of an event and the time the event began and ended (time-stamp) are central to place an event within a sequence of duty status items. For activities that represent a single point in time, this would include, for example, the time a CMV entered a shipper's or consignee's location.

The location description associated with the supporting document must be sufficiently precise to enable Federal, State, and local enforcement personnel to quickly determine the vehicle's geographic location on a standard map or road atlas; “location” means the nearest city, town, or village. If the location information is automatically recorded on an electronic document, it must be derived from a source not subject to alteration by the motor carrier, driver, or third party. Because AOBRDs and EOBRs play a significant role in motor carrier safety, FMCSA is proposing to modify 49 CFR 395.8(e) to prohibit tampering with or modifying these devices in such a way that driver duty status is not accurately recorded.

Related to this, the Agency is also proposing expressly to prohibit the use of electronic jamming devices that interfere with EOBRs and other electronic communication or vehicle tracking systems. Although FMCSA's goal is to forestall the use of jammers to avoid HOS compliance, some of these devices can interfere with air traffic control and other critical safety communication systems and thus pose additional safety risks.

The number of documents that a motor carrier would need to examine, review, and retain will vary according to the motor carrier's operational circumstances. For example, operations where a motor carrier's drivers pick up fully-loaded trailers at one consignee, drive for several hundred miles, drop the trailer at its destination, and pick up another fully-loaded trailer from another consignee would have fewer on-duty non-driving periods than an operation where a driver brings an empty trailer to a shipper, loads it, and drops portions of the load at many receivers' locations. The number of documents could also vary according to the type and variety of a driver's daily assignments the quality and completeness of the supporting documents available, as well as the geographic area and commercial character of the region in which the carrier operates.

Consistent with the direction provided in section 113(b)(2) of the HMTAA, this NPRM addresses the “type” of supporting documents that must be used to verify RODS. In doing so, the Agency recognizes the diversity of carrier operations and operational circumstances, and provides a flexible range of document types that a carrier can use to define its compliance system, appropriate with its needs. Examples of the types of documents that may be used to satisfy the supporting documents requirement are set out in the definition of “hours of service management system” in proposed 49 CFR 395.2. In contrast to the broad range of documents used as examples of supporting documents in current guidance at 49 CFR 395.8(k)(1), the Agency would require the motor carrier to retain sufficient supporting documents from the following four categories: (1) Payroll; (2) trip-related expense records and receipts; (3) FMS communication logs; and (4) a bill of lading or equivalent document. The supporting documents retained in the four categories identified might be individual records within a supporting document that covers multiple activities of individual drivers (such as dispatch records organized according to individual driver assignments) or specific types of activities of multiple drivers (such as pickup and delivery records for drivers assigned to one shipper's account) to reflect the beginning and end of each on-duty non-driving period.

The Agency proposes to require carriers to retain, for each driver, at least one supporting document for the beginning and end of each ODND period. Only one document would be needed for the beginning and end of each ODND period if that document contained all of the data elements set forth in proposed 49 CFR 395.11(e) ( i.e., driver name or PIN, date and time, and location).

If the motor carrier does not retain one single supporting document that shows all of the required data elements, it would be required to retain sufficient documents, from any of the four categories listed above, to show collectively all of the required information: the driver identification and the location, date and time of the duty status changes. Such an approach addresses the requirements of section 113(c) of HMTAA regarding documents that can be used “as produced” separately or collectively, “with additional identifying information,” to verify the accuracy of the driver's RODS.

The Agency stresses that the types of documents proposed to be retained would not normally be generated during periods when drivers are actually off-duty. However, FMCSA has the statutory authority to request any documents related to the operation of CMVs in interstate commerce.

Additionally, the Agency is responding to section 113(b)(2) of the HMTAA concerning “frequency” of supporting documents retention by adding proposed language under 49 CFR 395.8(h) to require the driver to submit all corresponding supporting documents to the employing motor carrier within 3 days following the completion of the RODS. Drivers will be required to forward supporting documents for which they are responsible (mainly, trip-related expense reports and receipts) for each day that they provide a RODS. Additionally, reflecting the widespread use of both electronic documents and document scanning systems, drivers would be required to forward those documents to the motor carrier within 3 days of receipt, instead of the 13 days in the current regulations ( see 49 CFR 395.8(i)). Motor carriers and their customers are rapidly moving to electronic, paperless systems that can provide near-instantaneous access to HOS-relevant data and records. If a supporting document is submitted electronically, the driver should submit it the same duty day (49 CFR 395.11(h)).

The proposed “certification provision” acknowledges the diversity of carrier operations and the fact that the proposed minimum number of supporting documents will not be available to all drivers and/or carriers for all periods for each day of operation. The certification provision would allow a carrier that retains none of these supporting documents in its normal course of business or, alternatively, does not retain sufficient documents from the four categories noted above, to certify that no supporting documents were available.

The certification provision is not a “loophole,” however; motor carriers that falsely certify the absence of supporting documents would be subject to the maximum penalty authorized by law. It is true that Congress instructed FMCSA, when assessing civil penalties, to consider a number of factors, including the nature, circumstances, extent, and gravity of the violation committed, as well as the degree of culpability, history of prior offenses, ability to pay, effect on ability to continue to do business, and other such matters as justice and public safety may require (49 U.S.C. 521(b)(2)(D)). But the overriding concern of Congress was clearly stated in the final sentence of that provision: “In each case, the assessment shall be calculated to induce further compliance.” Because motor carriers that submit false certifications are deliberately subverting an essential element of the hours-of-service regulations and may well be concealing practices that place both their own drivers and the public at increased risk, FMCSA believes that nothing less than the maximum penalty would “induce further compliance.” The Agency has no desire to impose the maximum penalty and does not expect to do so frequently; FMCSA's hope is that the deterrent effect of maximum penalties will make such action unnecessary. However, the Agency believes it should have these penalties available to deal with extreme violations. False certification is an egregious—indeed fraudulent—violation of the FMCSRs.

FMCSA proposes a retention period of 6 months as specified in section 113(b)(3) of the HMTAA. This is consistent with the existing retention period for other HOS paper and electronic documents. However, the Agency seeks to clarify that while the section heading for current 49 CFR 395.8(k) is “ Retention of driver's record of duty status,” paragraph (k)(1) discusses the requirement to “maintain” such documents, which is consistent with judicial interpretation of maintaining documents for subsequent use by carrier and Agency personnel. Consequently, 49 CFR 395.8(k)(1) would be amended merely to add the phrase “retain and” prior to the term “maintain,” to indicate the relationship between the terms.

The statute requires FMCSA to provide exemptions for qualifying “self-compliance systems,” instead of supporting documents retention. In satisfaction of HMTAA section 113(b)(4), the proposed rule would add a provision to authorize, on a case-by-case basis, motor carrier self-compliance systems (49 CFR 395.11(i)). A motor carrier could apply for an exemption under existing part 381 provisions for additional relief from the requirements for retaining supporting documents for RODS. Among other things, an application for exemption must include a statement that explains how the applicant would ensure that he or she could achieve a level of safety that is equivalent to, or greater than, the level of safety that would be obtained by complying with 49 CFR part 395. We request that commenters provide information describing their self-compliance systems, or the systems they might anticipate developing.

Under E.O. 12866 (58 FR 51735, October 4, 1993) and DOT policies and procedures, FMCSA must determine whether a regulatory action is “significant,” and therefore subject to OMB review and the requirements of the E.O. The Order defines “significant regulatory action” as one likely to result in a rule that may:

FMCSA determines that this proposed rule would have an annual effect of $100 million or more. In addition, because of public interest about the rulemakings related to HOS compliance, it is a significant regulatory action within the meaning of the E.O. and under the regulatory policies and procedures of DOT. The Agency has, therefore, conducted an RIA of the costs and benefits of this NPRM. The RIA is summarized below. The full analysis is available in the docket pertaining to this rulemaking.

FMCSA evaluated the costs and benefits associated with the proposed rule on EOBRs and their affect on improving compliance with the underlying HOS rules. In the RIA associated with this rulemaking, the Agency updated its assessment of the baseline level of non-compliance with the current HOS rules to account for changes in certain factors such as inflation, a decline in HOS violations that has preceded the mandate for EOBR use, and the decline in CMV-related crashes. Included in this analysis as alternative baselines are Options 2 and 3 from the recently published NPRM for the HOS rules for property carriers (Option 1 of the HOS NPRM is to retain the current HOS rules). The major changes for both HOS options 2 and 3 are to: Allow at most 13 hours of on-duty time within the daily driving window; limit continuous on-duty drive time to 7 hours, at which point a 30 minute off-duty or sleeper-berth period would be required; and to require at least two overnight periods in each 34-hour restart period. HOS Option 2, however, also reduces daily drive time from 11 to 10 hours, while HOS Option 3 retains 11 hours of drive time. To avoid confusion between the HOS options and the options for the EOBR NPRM, HOS Option 2 and HOS Option 3 are referred to as Baseline 2 and Baseline 3, respectively.

The Agency is currently considering three options for the EOBR mandate. Option 1 would require EOBRs for all drivers required to use paper RODS. Option 2 expands Option 1 to include all passenger-carrying CMVs subject to the FMCSRs and all shipments of bulk HM, regardless of whether the drivers use paper RODs or are exempted from doing so, as described under the SH operations provisions in § 395.1(e). Option 3 would include all CMV operations subject to the HOS requirements.

In this NPRM, FMCSA also proposes changes to requirements concerning HOS supporting documents. The Agency has clarified its supporting document requirements, recognizing that EOBRs themselves serve as the most robust form of documentation for on-duty driving periods. The Agency has been careful not to increase the burden associated with retention of the supporting documents; but it also cannot claim, even with EOBR use, that it has reduced the burden of supporting documents.

Although the “foundation” RODS burden would drop dramatically, primarily due to the elimination of paper RODS, the overall supporting documents burden would not be reduced. This is because carriers will still be required to maintain supporting documents. In addition, while motor carriers may gain efficiencies in reviewing electronic RODS, as opposed to paper RODS, against supporting documents to ensure driver compliance, the overall burden of review for this task is not expected to change. These proposed changes are expected to improve the quality and usefulness of the supporting documents and, thereby, (1) improve the Agency's ability to effectively and efficiently review motor carriers' HOS records, and (2) detect and assess violations during on-site compliance reviews. The Agency is currently unable to evaluate the extent to which the proposed changes to the supporting documents requirements will lead to reductions in crashes.

The following table (Table 1) summarizes the analysis. The figures presented are annualized using 7 percent and 3 percent discount rates.

FMCSA estimates that all options presented in this RIA have positive net benefits under any baseline, that is, under any version of the HOS rules. However, the greatest safety impacts of the HOS rules are seen in LH operations, and the inclusion of SH operations diminishes the net benefits of this EOBR rule. Therefore Option 3, which includes all carrier operations, results in much lower net benefits as compared to Options 1 and 2. The alternative baselines reflect changes to the HOS rules that affect only LH, RODS-using operations.

A fundamental purpose of the HOS regulations is to reduce crash risk in order to improve safety, and as elaborated at length in the 2010 HOS proposed rule, the Agency has concluded that the proposed rules will have significant safety benefits. Ideally, the agency would have data to directly measure crash risk by hours of driving and other dimensions for which regulations are proposed. Because the Agency has been not been able to gather such data, it has based its analysis, in significant part, on share of crashes that are fatigue-coded.

The agency recognizes that using share of crashes that are fatigue-coded could have two possible problems: Accident inspectors may be more likely to code crashes as fatigue-related if the driver has been on the road longer. Also, the share of crashes that are coded as fatigue-related may conceivably increase simply because the share of crashes caused by other factors goes down. There could be no increase in the risk of a fatigue-related crash (the central question), but an increase in the share of fatigue-related crashes. The Agency has little evidence that either of these factors is a significant problem. Nonetheless, while the data are not as complete as FMCSA would like them to be, the Agency aimed to limit, to the extent possible, the likelihood that drivers will be fatigued, either when they come on duty or during or at the end of a working period. Safety benefits are based on this reduction in fatigue and an associated reduction in fatigue-coded crashes.

FMCSA sought information from the public on driving exposure data at each hour in order to be able to calculate relative crash risk at each hour. FMCSA seeks the same information for this rule since fatigue coded crashes are not the perfect measure of safety benefits from HOS compliance. If the agency receives information about relative crash risk, the agency will revise and update the benefits calculations for this EOBR provision in the final rule stage.

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612) requires Federal agencies to consider the effects of the regulatory action on small business and other small entities and to minimize any significant economic impact. The term “small entities” comprises small businesses and not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. Accordingly, DOT policy requires an analysis of the impact of all regulations on small entities, and mandates that agencies strive to lessen any adverse effects on these businesses.

Under criteria established by the SBA, firms with annual revenues of less than $25.5 million are considered small for all North American Industrial Classification System (NAICS) codes falling under the truck transportation sub-sector (NAICS 484) or the bus transportation sub-sector (NAICS 485). Many motor carriers, however, are private carriers that transport goods or passengers for parent companies who are not primarily engaged in truck-transportation, for example, airlines, railroads, retail stores, and landscaping or home contracting businesses with SBA size thresholds associated with their industries that are different from those used for truck or bus transportation.

FMCSA does not collect revenue data for most carriers nor can it identify, carrier-by-carrier, to which industry sub-sectors each firm belongs. Carriers do, however, report the number of PUs they operate in the U.S. on Form MCS-150. With regard to truck PUs, the Agency determined in the 2003 Hours of Service Rulemaking RIA  10 that a PU produces about $172,000 in revenue annually (adjusted for inflation). 11 According to the SBA, motor carriers with annual gross revenue of $25.5 million are considered small businesses. 12 This equates to about 150 PUs (25,500,000/172,000). FMCSA believes that this 150 PU figure would be applicable to private carriers as well: Because the sizes of the fleets they are able to sustain are indicative of the overall size of their operations, large CMV fleets can generally only be managed by large firms. There is a risk, however, of overstating the number of small businesses because the operations of some large non-truck or bus firms may require only a small number of CMVs. The Agency has identified about 482,000 motor carriers that operate 150 or fewer power units, about 99% of property carriers.

For passenger carriers, the Agency conducted a preliminary analysis to estimate the average number of PUs for a small entity earning $7 million annually, based on an assumption that a passenger carrying CMV generates annual revenues of $150,000. This estimate compares reasonably to the estimated average annual revenue per PU for the trucking industry ($172,000). A lower estimate was used because buses generally do not accumulate as many vehicle miles traveled (VMT) per PU as trucks, 13 and it is assumed, therefore, that they would generate less revenue on average. The analysis concluded that passenger carriers with 47 PUs or fewer ($7,000,000 divided by $150,000/PU = 46.7 PU) would be considered small entities. The Agency examined its registration data and found that 96 percent of, or just over 19,000, interstate passenger carriers have 47 PUs or fewer.

FMCSA believes that implementation of the proposed rule would not require additional reporting, recordkeeping, or other paperwork-related compliance requirements beyond those that are already required in the existing regulations. In fact, the proposed rule is estimated to result in paperwork savings, particularly from the elimination of paper RODS. Drivers can complete, review, and submit EOBR records much more rapidly compared to paper RODS. Furthermore, motor carriers would experience compensatory time-saving and administrative efficiencies as a result of using EOBR records in place of paper RODS. The level of savings would vary with the size of the carrier implementing the systems (larger carriers generally experience greater savings).

Under current regulations, most CMV drivers are required to fill out RODS for every 24-hour period. The remaining population of CMV drivers is required to fill out time cards at their workplace (reporting location). Motor carriers must retain the RODS (or timecards) for 6 months. FMCSA estimates annual recordkeeping cost savings from this proposed rule of about $688 per driver. This is comprised of $486 for a reduction in time drivers spend completing paper RODS and $56 submitting those RODS to their employers; $116 for motor carrier clerical staff to handle and file the RODS; and $30 for elimination of expenditures on blank paper RODS for drivers. Two of the options discussed in this NPRM would extend the EOBR mandate to carrier operations that are exempt from the RODS. Paperwork savings would not accrue to drivers engaged in these operations.

Of the population of motor carriers that FMCSA regulates, 99 percent of motor carriers of property and 96 percent of motor carriers of passengers are considered small entities under the SBA's definition. Because small businesses are such a large part of the demographic the Agency regulates, providing exemptions to small business to permit noncompliance with safety regulations is not feasible and not consistent with good public policy. The safe operation of CMVs on the Nation's highways depends on compliance with all of FMCSA's Safety Regulations. Accordingly, the Agency would not allow any motor carriers to be exempt from coverage of the rule based solely on a status as a small entity.

FMCSA analyzed an alternative 5-year implementation schedule that would have provided a longer implementation period for small businesses. However, the estimated cost of compliance for motor carriers, including small businesses, did not decrease from the 3-year “baseline” proposed implementation period. Furthermore, a considerably longer implementation period could compromise the consistency of compliance-assurance and enforcement activities, and, thereby, diminish the rule's potential safety benefits. Therefore, the Agency's proposal includes a single compliance date for all motor carriers that would be subject to the new rule's requirements.

However, the Agency recognizes that small businesses may need additional information and guidance in order to comply with the proposed regulation. In order to improve their understanding of the proposal and any rulemaking that would result from it, FMCSA proposes to conduct outreach aimed specifically at small businesses. FMCSA would conduct Webinars and other presentations as needed and upon request, at no charge to the participants. These would be held after the final rule has published and before the rule's compliance date. To the extent practicable, these presentations would be interactive. Their purpose would be to describe in plain language the compliance and reporting requirements so that they are clear and readily understood by the small entities that would be affected

EOBRs can lead to significant paperwork savings that can in part or fully offset the costs of the devices. The Agency, however, recognizes that these devices entail a significant up-front investment than can be burdensome for small carriers. At least one vendor, however, provides free hardware and recoups the cost of the device over time in the form of higher monthly operating fees. The Agency is also aware of lease-to-own programs that allow the carriers to spread the purchase costs over several years. Nevertheless, the typical carrier would likely be required to spend $1,500-$2,000 per CMV to purchase and install EOBRs, and several hundred dollars per year for service fees. This estimate is higher than the estimate used in the April 2010 EOBR rulemaking for two primary reasons.

This proposed mandate would be permanent and also would require EOBRs to be installed and used in approximately 20 times as many CMVs than were estimated to be affected by the April 5, 2010, final rule. Therefore, the Agency cannot assume that an adequate number of the lower-cost devices would be available to meet the needs of that larger market. Current revenue data from the manufacturer of the device cited in the April 2010 final rule indicate that its market share is relatively low.

A second reason for using a higher cost for this analysis is that, in response to motor carrier customer demand, EOBR suppliers have expanded the functionality of their products and services. Hours-of-service recording and monitoring are functions commonly offered as part of comprehensive fleet management systems, rather than in stand-alone devices. Many motor carriers are recognizing the potential operational benefits they can gain from the use of fleet management systems, and the marketplace is responding with products and services tailored to motor carriers of all sizes. However, the Agency is not dismissing the possibility that “stand-alone” EOBRs, providing only hours-of-service recording and reporting (similar to the first AOBRDs in the 1980s), may be offered for sale or lease at a lower cost than devices with other functionalities in addition to HOS compliance. The Agency requests comments and data about EOBR cost.

Based on direct experience with the devices and conversations with vendors, the Agency believes these devices are extremely durable and can be kept operational for many years. In addition to purchase costs, carriers would also likely spend about $40 per month per CMV for monthly service fees.

On January 18, 2011, the President issued a memorandum entitled Regulatory Flexibility, Small Business, and Job Creation. In it, the President directed agencies to consider certain flexibilities for small entities. Furthermore, the President directed agencies to include an explicit justification for not providing such flexibilities and directs the agencies, when initiating rulemaking that will have a significant economic impact on a substantial number of small entities, to give serious consideration to whether and how it is appropriate, consistent with law and regulatory objectives, to reduce regulatory burdens on small businesses, through increased flexibility. Such flexibility may take many forms, including:

• Extended compliance dates that take into account the resources available to small entities;

• Performance standards rather than design standards;

• Simplification of reporting and compliance requirements (as, for example, through streamlined forms and electronic filing options);

• Different requirements for large and small firms; and

• Partial or total exemptions.

The President further directs that whenever an executive agency chooses, for reasons other than legal limitations, not to provide such flexibility in a proposed or final rule that is likely to have a significant economic impact on a substantial number of small entities, it should explicitly justify its decision not to do so in the explanation that accompanies that proposed or final rule. The Agency requests public comment on the extent to which flexibility could be incorporated into the rulemaking, beyond the options considered in the proposal, while fulfilling its safety mandate.

In establishing FMCSA, Congress's enabling legislation called safety “our highest priority.” Motor Carrier Safety Improvement Act of 1999, sec. 113, Public Law 106-159, 113 Stat. 1748, 1750. Our regulatory authority over motor carriers stems from 1935 and has since been augmented by comprehensive legislation that conferred broad rulemaking authority. We have attempted to balance our statutory obligations with the need to consider regulatory alternatives and the burdens they present to various entities, including small entities. But given our safety mandate, exempting 98% of our regulated population from this new requirement based simply on their small business status would severely undermine our safety mission and ignore our congressional mandate. Our proposal did consider alternatives and exemptions, as discussed earlier in this document. The Agency does not believe that it is feasible to exempt small businesses from a requirement to use EOBRs. Because of the nature of the commercial motor vehicle industry, there would be no reliable way for an enforcement official to determine if a driver or CMV is operating as a small business on a particular day. Even if the Agency could develop a system to make that daily determination, it has not been analyzed to determine if it could be implemented in a cost beneficial manner.

Also, as we propose in the regulatory text at 49 CFR 395.11(i) to address supporting documents, motor carriers can apply for an exemption based on a process under 49 CFR part 381. A motor carrier could apply for an exemption under existing part 381 provisions for additional relief from the requirements for installing and using EOBRs. Such exemptions can be granted for up to two years, and the Agency believes this is the best way to balance regulatory relief with its safety mission.

The Unfunded Mandates Reform Act of 1995 requires Agencies to evaluate whether an Agency action would result in the expenditure by State, local and Tribal governments, in the aggregate, or by the private sector, of $140.8 million or more (as adjusted for inflation) in any 1 year, and if so, to take steps to minimize these unfunded mandates. This rule would not result in the expenditure by State, local and Tribal governments, in the aggregate, of $140.8 million or more in any 1 year, nor would it affect small governments. As Table 2 shows, this rulemaking would result in private sector expenditures in excess of the threshold for any of the proposed options. Gross costs, however, are expected to be more than offset in savings from paperwork burden reductions.

A rule has implications for Federalism under Executive Order 13132 if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on such governments. This proposed action has been analyzed in accordance with E.O. 13132. FMCSA has determined that this rule would not have a substantial direct effect on States, nor would it limit the policymaking discretion of States. Nothing in this document preempts any State law or regulation. A State that fails to adopt the proposed amendments, if finalized, within 3 years of the effective date of the final rule, will be deemed to have incompatible regulations and will not be eligible for Basic Program or Incentive Funds under the Motor Carrier Safety Assistance Program in accordance with 49 CFR 350.335(b).

The regulations implementing E.O. 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this rule.

This proposed rule does not have Tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.

Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq. ), Federal agencies must obtain approval from OMB for each collection of information they conduct, sponsor, or require through regulations. This NPRM proposes regulatory changes to several parts of the FMCSRs, but only those applicable to part 395, “Hours of Service of Drivers,” would alter or impose information collection requirements. The information collection requirements of this NPRM would affect OMB Control Number 2126-0001, which is currently approved through August 31, 2011, at 181,270,000 burden hours.

As described under the analysis concerning E.O. 12866, nearly all of the estimated reduction in paperwork burden that would result from this rulemaking would come from a reduction in the burden associated with the elimination of RODS for nearly all motor carrier operations. This reduction would not take place, however, until three years after the effective date of a final rule resulting from this proposed rulemaking action.

OMB requires agencies to provide a specific, objective estimate of the burden hours imposed by their information collection requirements (5 CFR 1320.8(a)(4)). This NPRM proposes a compliance date 3 years after the date of publication of the final rule to allow regulated entities a reasonable opportunity to satisfy its requirements. The PRA limits estimates of paperwork burdens to a 3-year period. During the initial 3 years following publication of the final rule, the requirements of part 395, including information collection requirements, would remain unchanged. At an appropriate time, the Agency would provide notice and request public comment on the changes in the paperwork burden of part 395 resulting from implementation of the rule after the 3-year period. At the present time, the Agency believes that the regulatory changes proposed by this NPRM will ultimately effect a net reduction in the paperwork burden of OMB Control Number 2126-0001 ( See the RIA for more information). The Agency requests information concerning any changes in paperwork burden from motor carriers currently using EOBR devices.

The National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq., as amended) requires Federal agencies to consider the consequences of, and prepare a detailed statement on, all major Federal actions significantly affecting the quality of the human environment. In accordance with its procedures for implementing NEPA (FMCSA Order 5610.1, Chapter 2.D.4(c) and Appendix 3), FMCSA prepared a draft Environmental Assessment (EA) to review the potential impacts of this proposed rulemaking. The draft EA findings are summarized below. The full EA is in the docket pertaining to this rulemaking.

Implementation of this proposed action would alter to some extent the operation of CMVs. However, the proposal, if implemented, would not require any new construction or change significantly the number of CMVs in operation. FMCSA finds, therefore, that noise, endangered species, cultural resources protected under the National Historic Preservation Act, wetlands, and resources protected under section 4(f) would not be impacted by this rulemaking.

The EA finds negligible impacts on air quality and no adverse effect on public safety. FMCSA anticipates that drivers of CMVs operated by carriers required to use EOBRs would increase their compliance with the requirements of the HOS rules. From an emissions standpoint, this could lead to drivers taking more off-duty time parked with the engine idling, which increases engine emissions on a per-mile basis. This rulemaking, however, also has the potential to prevent CMV crashes and resulting emissions. When emissions that would otherwise result from prevented CMV crashes are subtracted from the emissions generated by additional compliance with the HOS regulations, FMCSA determines that the overall change in pollutants would be negligible. Because of the enhanced HOS compliance that is likely to result from this rulemaking, it is also likely that the rulemaking would result in an increase in public safety. Drivers for carriers brought into HOS compliance would experience reduced crash risk and be less likely to have crashes. Separately, the rulemaking proposes to eliminate the use of paper-based RODS documentation, which reduces paper use.

As discussed in the EA, FMCSA also analyzed this proposed rule under the Clean Air Act, as amended (CAA) section 176(c), (42 U.S.C. 7401 et seq. ) and implementing regulations promulgated by the Environmental Protection Agency.

FMCSA concludes that the rule changes would have an overall minimal impact on the environment, and therefore would not require an environmental impact statement. The provisions under the proposed action do not, individually or collectively, pose any significant environmental impact. FMCSA requests comments on this analysis.

FMCSA determines that the proposed rule would not significantly affect energy supply, distribution, or use. Therefore, no Statement of Energy Effects is required.

E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks, requires agencies issuing “economically significant” rules that involve an environmental health or safety risk that may disproportionately affect children, to include an evaluation of the regulation's environmental health and safety effects on children. As discussed previously, this proposed rule is economically significant; but it would cause no environmental or health risk that disproportionately affects children.

This action meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

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

The National Technology Transfer and Advancement Act (15 U.S.C. 272 note) requires Federal agencies proposing to adopt Government technical standards to consider whether voluntary consensus standards are available. If the Agency chooses to adopt its own standards in place of existing voluntary consensus standards, it must explain its decision in a separate statement to OMB.

FMCSA determined that there are no voluntary national consensus standards for the design of EOBRs as complete units. However, as a part of the April 2010 EOBR final rule, the Agency found there are many voluntary consensus standards concerning communications and information interchange methods that could be referenced as part of comprehensive performance-based requirements for EOBRs to ensure their reliable and consistent utilization by motor carriers and enforcement officers. For example, the digital character set requirement references the American Standard Code for Information Interchange (ASCII) character set specifications, the most widely used form of which is ANSI X3.4-1986. This is described in the Document Information Systems—Coded Character Sets—7-Bit ASCII (ANSI document ANSI INCITS 4-1986 (R2002)) published by the American National Standards Institute (ANSI). In another example, the Agency would reference the 802.11 family of standards for wireless communication published by Institute of Electrical and Electronics Engineers (IEEE). The April 2010 EOBR final rule incorporated by reference these standards, and others, in 49 CFR 395.18.

As part of the development of the April 2010 EOBR final rule, FMCSA reviewed and evaluated the European Commission Council Regulations 3821/85 (analog tachograph) and 2135/98 (digital tachograph). These are not voluntary standards, but rather are design-specific type-certification programs. The Agency concluded that these standards lack several features and functions (such as CMV location tracking and the ability for the driver to enter remarks) that FMCSA believes are necessary to include in its proposed performance-based regulation. It further concluded that the standards require other features (such as an integrated license document on the driver's data card) that are not appropriate for U.S. operational practices.

Section 522(a)(5) of the Transportation, Treasury, Independent Agencies, and General Government Appropriations Act, 2005 (Pub. L. 108-447, div. H, 118 Stat. 2809 at 3268) requires DOT and certain other Federal agencies to conduct a privacy impact assessment of each proposed rule that will affect the privacy of individuals. Although the Agency determined that the same personally identifiable information (PII) for CMV drivers currently collected as part of the RODS and supporting documents requirements would continue to be collected under this rulemaking, it recognizes the significance of the decision to require, even in limited circumstances, that PII, previously kept in paper copy, now be kept electronically. Privacy is a significant consideration in FMCSA's development of this proposal. As stated earlier, FMCSA recognizes that the need for a verifiable EOBR audit trail (a detailed set of records to verify time, date, and physical location data for a particular CMV) must be counterbalanced by privacy considerations. As part of the development of the April 2010 EOBR final rule, the Agency considered, but rejected, certain alternative technologies to monitor drivers' HOS (including in-cab video cameras and bio-monitors) as too invasive of personal privacy. All CMV drivers subject to 49 CFR part 395 must have their HOS accounted for to ensure they have adequate opportunities for rest. This NPRM would not change the Agency's policies, practices, or regulations regarding its own collection and storage of HOS records of individual drivers whose RODS are reviewed. It would not change the technology by which compliance is to be documented, as stated in the April 2010 EOBR final rule, in a way that enhances both the sharing of information and its capacity to be data processed.

As stated in the April 2010 final rule, and as is the case with all FMCSRs, the HOS information recorded on EOBRs would be accessible to Federal and State enforcement personnel only when compliance assurance activities are conducted at the facilities of motor carriers subject to the RODS requirement or when the CMVs of those carriers are inspected at roadside. Motor carriers would not be required to upload this information into Federal or State information systems accessible to the public. This would aid data security and ensure that general EOBR data collection does not result in a new or revised Privacy Act System of Records for FMCSA. (Evidence of violation of any FMCSA requirements uncovered during a compliance or enforcement activity is transferred to a DOT/FMCSA Privacy Act System of Records.) As FMCSA has previously discussed regarding EOBRs, the Agency complies with the Freedom of Information Act in implementing DOT regulations (75 FR 17221, April 5, 2010; 49 CFR part 7).

What this NPRM would change, and change significantly, is the capacity of HOS data to be processed and converted to more usable information for the purpose of determining drivers' and motor carriers' compliance with the HOS regulations. Although no CMV operator would be required to upload this data to a Federal or State database accessible to the public, the electronic formulation of the data would make it easier for a CMV operator to keep track of the activities of its drivers. Similarly, Federal and State law enforcement and safety authorities, including FMCSA, would be better able to do the same. As shown in other contexts, the increased accessibility, accuracy, and reliability of geospatial location information has made electronically generated and preserved data attractive to a variety of audiences. As discussed above, the Agency has tailored this NPRM to recognize the privacy interests of CMV drivers.

The entire privacy impact assessment is available in the docket for this proposed rule.

For the reasons stated in the preamble, FMCSA is proposing to amend 49 CFR Chapter III as follows:

The monkfish fishery is jointly managed by the Councils, with the NEFMC having the administrative lead. The fishery extends from Maine to North Carolina, and is divided into two management units: The Northern Fishery Management Area (NFMA) and the Southern Fishery Management Area (SFMA).

The Councils developed Amendment 5 with the primary goal of bringing the Monkfish FMP into compliance with the requirements of the reauthorized Magnuson-Stevens Act. The 2006 reauthorization of the Magnuson-Stevens Act contains several new requirements including the requirement that all fisheries adopt ACLs to prevent overfishing, and measures to ensure accountability.

Amendment 5 was also developed to bring the Monkfish FMP into compliance with recently revised National Standard 1 (NS1) Guidelines (74 FR 3178; January 16, 2009) which not only establish a process for setting ACLs and guidance for establishing AMs, but also provides updated guidelines for establishing reference points and control rules ( i.e., maximum sustainable yield (MSY), optimum yield (OY), overfishing limits (OFL), acceptable biological catch (ABC), ACLs, and annual catch targets (ACTs)) and clarifies the relationships among them. Amendment 5 would establish biological and management reference points to be consistent with NS1 guidelines utilizing recent scientific information from the 2007 Northeast Data Poor Stocks Working Group assessment.

In addition to establishing revised biological and management reference points, ACLs, and AMs for the monkfish fishery, Amendment 5 also proposes measures intended to promote efficiency and reduce waste in the monkfish fishery. First, a measure is being proposed that would minimize regulatory discards resulting from monkfish trip limit overages by allowing vessels to land an additional trip limit (one day's worth) and have their DAS usage for that trip adjusted to account for the overage. Second, a measure is being proposed that would allow the landing of monkfish heads separate from the body by adding a new conversion factor and authorized landing form to the FMP. Lastly, a measure is being proposed in Amendment 5 that would enable changes to be made to the Monkfish RSA Program through a framework adjustment versus an FMP amendment.

Public comments are being solicited on Amendment 5 and its incorporated documents through the end of the comment period stated in this notice of availability. A proposed rule that would implement Amendment 5 will be published in the Federal Register for public comment. Public comments on the proposed rule must be received by the end of the comment period provided in this notice of availability of Amendment 5 to be considered in the approval/disapproval decision on the amendment. All comments received by April 4, 2011, whether specifically directed to Amendment 5 or the proposed rule for Amendment 5, will be considered in the approval/disapproval decision on Amendment 5. Comments received after that date will not be considered in the decision to approve or disapprove Amendment 5. To be considered, comments must be received by close of business on the last day of the comment period.

The Magnuson-Stevens Act requires that each regional fishery management council submit any fishery management plan amendment it prepares to NMFS for review and approval, disapproval, or partial approval by the Secretary of Commerce (Secretary). The Magnuson- Stevens Act also requires that NMFS, upon receiving a fishery management plan amendment, immediately publish a notice in the Federal Register announcing that the amendment is available for public review and comment.

The king and Tanner crab fisheries in the exclusive economic zone of the BSAI are managed under the FMP. The FMP was prepared by the North Pacific Fishery Management Council (Council) under the Magnuson-Stevens Act as amended by the Consolidated Appropriations Act of 2004 (Pub. L. 108-199, section 801). Amendments 18 and 19 amended the FMP to include the Program. Regulations implementing these amendments were published on March 2, 2005 (70 FR 10174), and are located at 50 CFR part 680.

NMFS established the Program as a catch share program for nine crab fisheries in the BSAI. The Individual Fishing Quota (IFQ) portion of the Program assigned quota share (QS) to persons based on their historic participation in one or more of these nine BSAI crab fisheries during a specific time period. Under the Program, NMFS issued four types of QS: Catcher vessel owner (CVO) QS was assigned to holders of License Limitation Program (LLP) licenses who delivered their catch onshore or to stationary floating crab processors; catcher/processor vessel owner (CPO) QS was assigned to LLP holders that harvested and processed their catch at sea; captains and crew onboard catcher/processor vessels were issued catcher/processor crew (CPC) QS; and captains and crew onboard catcher vessels were issued catcher vessel crew (CVC) QS. Each year, a person who holds QS may receive IFQ, which represents an exclusive harvest privilege for a portion of the annual total allowable catch (TAC). Under the program, QS holders can form cooperatives to pool the harvest of the IFQ on fewer vessels to minimize operational costs.

NMFS also issued processor quota share (PQS) under the Program. Each year, PQS yields an exclusive privilege to receive for processing a portion of the IFQ in each of the nine BSAI crab fisheries. This annual exclusive processing privilege is called IPQ. A portion of the QS issued yields IFQ that is required to be delivered to a processor with a like amount of unused IPQ. IFQ derived from CVO QS is subject to annual designation as either Class A IFQ or Class B IFQ. Ninety percent of the IFQ derived from CVO QS for a fishery and region is designated as Class A IFQ, and the remaining 10 percent of the IFQ is designated as Class B IFQ. Class A IFQ must be matched and delivered to a processor with IPQ. Class B IFQ is not required to be delivered to a processor with IPQ. Each year there is a one-to-one match of the total pounds of Class A IFQ with the total pounds of IPQ issued in each crab fishery and region.

In most crab fisheries, the Program established regional designations for QS and PQS to ensure that municipalities that were historically active as processing ports continue to receive socioeconomic benefits from crab deliveries or to encourage the development of processing capacity in specific isolated municipalities. To accomplish this, the Program imposes regional delivery requirements to specific geographic regions based on historic geographic delivery and processing patterns.

The Western Aleutian Islands golden king crab ( Lithodes aequispinus ) (WAG) fishery is managed under the Program. Existing regulations require that 50 percent of the golden king crab harvested with catcher vessel Class A IFQ issued for this fishery be delivered to a processor located in the West region (west of 170° W. Long.) with West-designated IPQ. The purpose of these delivery requirements is to support the development of processing facilities in Adak and Akta, two isolated municipalities in the West region. The only shore-based processing facility capable of processing WAG in this region has been located in the City of Adak. In April 2009, the Adak facility closed and, in September 2009, the facility's owners officially filed for Chapter 11 bankruptcy. At this time, no processing facility capable of processing WAG crab is open in the West region, and none is likely to open in the near future, yet Federal regulations require that crab harvested with Class A IFQ be processed in the West region.

On February 18, 2010, NMFS published an emergency action to exempt West-designated IFQ and West-designated IPQ for the WAG fishery from the West regional designation until August 17, 2010 (75 FR 7205). NMFS extended the emergency action on August 17, 2010 (75 FR 50716), and the extension is in effect through February 20, 2011. Removing the West regional designation from this IFQ and IPQ has temporarily relaxed the requirements that these shares be used in the West region.

At its April 2010 meeting, the Council adopted Amendment 37 to the FMP to address the lack of processing capacity in the West region. Amendment 37 would establish a process for QS holders, PQS holders, and the cities of Adak and Atka to request that NMFS exempt the WAG fishery from the West regional delivery requirements. The Council and NMFS recognize that the regional delivery requirements would be untenable if processing capacity is not available in the region, potentially resulting in unutilized TAC. Amendment 37 would establish a means to enhance stability in the fishery, while continuing to promote the sustained participation of the municipalities intended to benefit from the West regional delivery requirements.

Amendment 37 would identify the QS holders, PQS holders, and municipalities who would be eligible to apply for an exemption from the West regional delivery requirements. The Council selected the following eligibility requirements for contract parties as necessary to request an exemption: (1) Any person or company that holds in excess of 20-percentof the West-designated WAG QS; (2) any person or company that holds in excess of 20-percentof the West-designated WAG PQS; and (3) the cities of Adak and Atka. If an exemption is granted by NMFS, the exemption would apply to all West-designated IFQ and IPQ holders for the remainder of the crab fishing year. Participants holding 20-percentor less of either share type would have no direct input into the contract negotiations or applications; however, the exemption would not obligate an IFQ or IPQ holder to deliver or process outside of the West region, but would provide that flexibility.

The Council considered several thresholds of QS and PQS ownership when considering eligibility criteria. The Council recommended a greater than 20-percentminimum participation threshold for eligibility because the inclusion of share holders with less economic incentive to harvest or process West-designated WAG could impede effective negotiations. Participants with less than or equal to 20-percentownership could withhold participation in an exemption to extract more favorable terms from larger entities with greater economic incentive to fully harvest and process the IFQ and IPQ. IFQ and IPQ holders that are substantially invested in the fishery are more likely to act quickly to ensure that TAC is fully utilized. By establishing the greater than 20-percent threshold, this proposed action is intended to provide a balance between efficiency and the participation of QS and PQS holders. Additionally, these eligibility criteria are intended to balance the interests of WAG fishery QS and PQS holders with the municipalities intended to benefit from the West regional delivery requirements.

Based on the analysis and public testimony, the Council adopted Amendment 37 in April 2010, and submitted Amendment 37 to NMFS for review by the Secretary. Amendment 37 would modify the FMP to allow eligible participants to submit an application to NMFS requesting an exemption from the West regional delivery requirements. The application would require the eligible parties to agree to a master contract and the completion of an application. Upon approval of a completed application, NMFS would post notice of an annual exemption from the WAG West regional delivery requirements at the NMFS Web site at http://alaskafisheries.noaa.gov. Such an exemption would enable all West-designated Class A IFQ and IPQ holders to deliver and receive WAG crab at processing facilities outside of the West region, thereby promoting the full utilization of the TAC when processing capacity is not available in the West region.

Public comments are being solicited on proposed Amendment 37 through the end of the comment period ( see DATES ). NMFS intends to publish a proposed rule in the Federal Register for public comment that would implement Amendment 37, following NMFS's evaluation under the Magnuson-Stevens Act procedures. Public comments on the proposed rule must be received by the close of the comment period on Amendment 37 to be considered in the approval/disapproval decision on Amendment 37. All comments received by the end of the comment period on Amendment 37, whether specifically directed to the FMP amendment or the proposed rule, will be considered in the approval/disapproval decision on Amendment 37. Comments received after the end of the public comment period for Amendment 37, even if received within the comment period for the proposed rule, will not be considered in the approval/disapproval decision on the amendment. To be considered, comments must be received—not just postmarked or otherwise transmitted—by the close of business on the last day of the comment period.