[Federal Register Volume 61, Number 140 (Friday, July 19, 1996)]
[Notices]
[Pages 37734-37738]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18179]
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ENVIRONMENTAL PROTECTION AGENCY
[FRL-5537-7]
Retrofit/Rebuild Requirements for 1993 and Earlier Model Year
Urban Buses; Certification of Retrofit/Rebuild Equipment on the Basis
of Life Cycle Cost Requirements
AGENCY: Environmental Protection Agency.
ACTION: Notice of agency certification of equipment on the basis of
compliance with life cycle cost ceiling of the urban bus retrofit/
rebuild program.
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SUMMARY: This notice announces the decision of the Director of the
Engine Programs and Compliance Division to expand the certification of
certain equipment to include the basis of compliance with the life
cycle cost requirements of the urban bus retrofit/rebuild program.
The effective date of certification of Detroit Diesel Corporation's
(DDC) equipment for upgrading its 1979 through 1989 model year urban
bus engines of model 6V92TA equipped with mechanical unit injection
(MUI) is October 2, 1995 (60 FR 51472). That certification was based on
reduction in particulate matter (PM) of 25 per cent or more, but not on
DDC's guarantee to make the equipment available to all operators for
less than the applicable life cycle ceiling (hereinafter referred to as
``life cycle cost requirements''). Expanding the basis of certification
of DDC's upgrade kit to include the basis of life cycle cost
requirements will be beneficial to the urban bus program objective of
reducing ambient levels of PM emissions. This notice affects only those
bus operators choosing compliance program 2.
As a result of today's notice, the certification level of the DDC
kit may be considered by the Agency when ``post-rebuild'' PM levels are
established in mid-1996. The post-rebuild levels to be established in
mid-1996 must be used by operators complying with compliance program 2
when calculating average fleet emissions for 1998 and thereafter.
Therefore, today's Federal Register notice will tend to lower ambient
levels of PM emissions from fleets which comply with compliance program
2.
The Agency has reviewed DDC's notification of intent to certify,
other information, as well as comments received, and determines that
certification of the DDC equipment should be expanded to include the
basis of life cycle cost requirements. Copies of both DDC's
notification and other relevant information are available for review in
the public docket located at the address indicated above.
Category VII of Public Docket A-93-42, entitled ``Certification of
Urban Bus Retrofit/Rebuild Equipment'' contains DDC's notification of
intent to certify, the new cost information, and comments received, and
other relevant materials. This docket is located at the address below.
DATES: A letter dated June 24, 1996, from the Director of the Engine
Programs and Compliance Division to DDC establishes the effective date
of certification on the basis of complying with the applicable life
cycle cost requirements. A copy of this letter can be found in the
public docket at the address listed below.
ADDRESSES: U.S. Environmental Protection Agency, Public Docket A-93-42
(Category VII), Room M-1500, 401 M Street SW., Washington, DC 20460.
The DDC notification of intent to certify, as well as other
materials specifically relevant to it, are contained in the public
docket indicated above. Docket items may be inspected from 8 a.m. until
5:30 p.m., Monday through Friday. As provided in 40 CFR Part 2, a
reasonable fee may be charged by the Agency for copying docket
materials.
FOR FURTHER INFORMATION CONTACT: William Rutledge, Engine Programs and
Compliance Division (6403J), U.S. Environmental Protection Agency, 401
M Street SW., Washington, DC 20460. Telephone: (202) 233-9297.
SUPPLEMENTARY INFORMATION:
I. Background
On April 21, 1993, the Agency published final Retrofit/Rebuild
Requirements for 1993 and Earlier Model Year Urban Buses (58 FR 21359).
The retrofit/rebuild program is intended to reduce the ambient levels
of particulate matter (PM) in urban areas and is limited to 1993 and
earlier model year urban buses operating in metropolitan areas with
1980 populations of 750,000 or more, whose engines are rebuilt or
replaced after January 1, 1995. Operators of the affected buses are
required to choose between two compliance options: Program 1 sets
particulate matter emissions requirements for each urban bus engine in
an operator's fleet which is rebuilt or replaced; Program 2 is a fleet
averaging program that establishes specific annual target levels for
average PM emissions from urban buses in an operator's fleet. In
general, to meet either of the two compliance options, operators of the
affected buses must use equipment which has been certified by the
Agency.
A key aspect of the program is the certification of retrofit/
rebuild equipment. Emissions requirements under either of the two
compliance options depend on the availability of retrofit/rebuild
equipment certified for each engine model. To be used for Program 1,
equipment must be certified as meeting a 0.10 g/bhp-hr PM standard or,
if equipment is not certified as meeting the 0.10 PM standard, as
achieving a 25 percent reduction in PM. Equipment used for Program 2
must be certified as providing some level of PM reduction that would in
turn be claimed by urban bus operators when calculating their average
fleet PM levels attained under the program. For Program 1, information
on life cycle costs must be
[[Page 37735]]
submitted in the notification of intent to certify in order for
certification of the equipment to initiate (or trigger) program
requirements. To trigger program requirements, the certifier must
guarantee that the equipment will be available to all affected
operators for a life cycle cost of $7,940 or less at the 0.10 g/bhp-hr
PM level, or for a life cycle cost of $2,000 or less for the 25 percent
or greater reduction in PM emissions. Both of these values are based on
1992 dollars and are increments above costs associated with a standard
rebuild. If the Agency determines that the life cycle cost requirements
are met, then certification would be based on life cycle cost
requirements in addition to reducing PM emissions.
Under program 2, operators calculate their average fleet emissions
using specified ``pre-rebuild'' and ``post-rebuild'' engine PM emission
levels (as well as other factors). The final rulemaking of April 21,
1993, established the pre-rebuild emissions levels, and intended that
post-rebuild levels be established at two subsequent points in time,
based on the certification levels of equipment certified by those
points. Post-rebuild levels were established for the first two years of
the program in a Federal Register notice of September 2, 1994 (59 FR
45626).
Section 85.1403(c) requires that final post-rebuild levels be
established based on equipment certified by July 1, 1996, to meet the
PM standard and as being available to all operators for less than an
appropriate life cycle cost ceiling. These ``post-rebuild'' levels are
to be used in the calculations of fleet target levels for 1998 and
thereafter, for engines scheduled for retrofit/rebuild in calendar
years 1997 and thereafter. Section 85.1403(c)(1)(iii) requires that
post-rebuild emission levels be the lowest emission level (greater than
0.1 g/bhp-hr) certified as meeting the emission and cost requirements
of 85.1403(b)(2), for any engine model for which no equipment has been
certified by July 1, 1996 as meeting the requirements of 85.1403(b)(1).
The Agency announced certification of the DDC upgrade kit for the
1979-1989 6V92TA engines in the Federal Register on October 2, 1995 (60
FR 51472) based on compliance with the 25% reduction standard, but
without determination of compliance with the life cycle cost ceiling.
That certification does not restrict use of the upgrade kit by
operators under compliance program 1, until other equipment is
certified which triggers the 0.10 g/bhp-hr standard, nor does it
restrict its use under compliance program 2.
II. Information Concerning Life Cycle Cost
By a notification of intent to certify signed March 16, 1995, and
with cover letter dated April 11, 1995, Detroit Diesel Corporation
(DDC) applied for certification of equipment applicable to it's 6V92TA
model engines having mechanical unit injectors (MUI) that were
originally manufactured between January 1979 and December 1989. DDC, in
its notification of intent to certify, requests certification on the
basis of life cycle cost requirements and guarantees to make the
equipment available to all operators for less than the applicable life
cycle ceiling (hereinafter referred to as ``life cycle cost
requirements''). Several public comments were received which discussed
the life cycle cost requirements of the DDC kit. As stated in the
Federal Register notice of October 2, 1995, however, the Agency saw no
advantage to such certification at that time because the emission
standard had been triggered earlier by certification of other
equipment, and did not respond to those comments at that time.
As explained in Federal Register notice of March 4, 1996 (61 FR
8275), the Agency upon reconsideration believes that it may be
beneficial to the program to expand the basis of certification of DDC's
upgrade kit to include the basis of life cycle cost requirements.
In its notification of intent to certify, DDC states that the
equipment will be offered to all affected urban bus operators for a
maximum purchase price of $5,562, and has submitted life cycle cost
information. DDC states that there is no incremental cost associated
with the upgrade kit compared to a standard rebuild, and guarantees
that it will offer the kit to all affected operators for less than the
incremental life cycle cost ceiling of $2,000 (1992 dollars). Cost
information provided by DDC indicates that the suggested transit list
price of the upgrade kit is less than the sum of the suggested list
prices of the individual components, if purchased separately. DDC
indicates that all of the components of the upgrade kit, with exception
of the blower by-pass valve assembly, are currently replaced or
reworked during ``standard rebuild'' by the majority of operators. DDC
states that there is no incremental additional installation cost, fuel
cost, or maintenance cost compared to that related to a standard engine
overhaul. Additionally, when an engine (before rebuild with the kit) is
not identical to the certified configuration, certain components must
be changed. DDC states that there are no ``conversion'' charges
associated with such ``non-like'' core components of their certified
upgrade kit.
In addition to its initial request in its notification of intent to
certify, DDC reiterated its request that this equipment be certified on
the basis of life cycle cost requirements in a letter to the Agency
dated December 15, 1995, and provided additional information concerning
transit pricing level. Other new information in the docket include a
summary of a survey on engine rebuilding practices of 23 transit
systems, entitled ``American Public Transit Association Transit Bus
Diesel Engine Rebuilding Survey'', and dated January 1991. A Federal
Register notice of March 4, 1996 (61 FR 8275) announced that the Agency
was considering certification of the DDC equipment on the basis of life
cycle cost requirements, receipt of new information available for
public review, and the initiation of a 45-day public comment period
during which the Agency would receive comments regarding certification
on the basis of life cycle cost requirements. That comment period
officially ended on April 18, 1996.
Comments were received from two parties during the comment period
of the March 4, 1996, Federal Register notice, consisting of a bus
operator and a manufacturer of exhaust catalysts applicable to diesel
engines. Summaries of these comments are provided below, along with
Agency responses.
During the comment period of the June 5, 1995, Federal Register
notice, two parties commented about the DDC costs. The March 4, 1996,
Federal Register notice provided summaries of these comments along with
Agency responses. No further cost information, discussion of cost
information, or discussion of Agency responses has been received from
these two parties.
III. Summary and Analyses of Comments
Two parties provided comments in response to the March 4, 1996
Federal Register notice--an urban bus operator and the Johnson Matthey
Corporation. The following is a summary of these comments, and the
Agency's response.
Comments of the Tri-County Metropolitan District of Oregon (TRI-
MET) suggest that terminology (``cost/availability'') used in the March
4, 1996, Federal Register notice is confusing. While the term ``cost/
availability'' was intended to be a more concise expression, the Agency
believes that other wording may be more appropriate. Today's Federal
Register notice uses the
[[Page 37736]]
phrase ``life cycle cost requirements'' to be more consistent with
language used in the program regulations.
TRI-MET also asks whether the kit will be a trigger (of program
requirements) if the Agency certifies the DDC kit on the basis of life
cycle cost requirements.
Certification of the Engelhard Corporation's CMX catalyst on May
31, 1995 (60 FR 28402) triggered program requirements for the engines
in question. The CMX catalyst is certified on the bases of reducing PM
emissions by at least 25 percent and complying with life cycle cost
requirements. That certification affects operators using compliance
program one (1), until equipment is certified which triggers the 0.10
g/bhp-hr standard. When applicable engines are rebuilt or replaced six
(6) months or more after the date of the CMX certification (that is,
rebuilt or replaced on or after December 1, 1995), operators must use
equipment certified to reduce PM by at least 25 percent.
Johnson Matthey, Incorporated (JMI), provided three comments, the
first two of which are relevant to the emission testing performed by
DDC to determine PM reduction attributed to the upgrade kit. First, JMI
comments that a review of DDC service manuals shows that no new urban
bus engines were manufactured with the serial number of the test engine
used by DDC. JMI questions the origins of the test engine, and
indicates that data derived from the engine is not valid and should not
be used for program certification for consistency reasons because the
engine is not representative of a bus engine. Second, JMI notes that a
complete list of parts for the rebuild and upgrade of the test engine
were not provided by DDC. JMI believes that such a parts list is needed
to determine whether the DDC rebuild is ``* * * typical of the current
practice exercised by the transits * * *''.
In its notification of intent to certify, DDC states that the core
engine was a 1979 model year with an automotive model number, but that
the original history of the core engine is not known. Prior to baseline
testing, the engine was completely rebuilt to a typical high-volume
coach rating (294 horsepower) of an original 1979 urban bus
configuration. As discussed below, the Agency believes that the
original configuration of the bus engine, prior to it being used in the
DDC certification test program, is not relevant in this case.
Generally speaking, the Agency's interest in review of test engine
history is to reasonably assure that PM reductions predicted by testing
candidate equipment can be attained on in-use urban bus engines.
Testing of engines in urban bus configurations is preferred because the
testing demonstration of the urban bus program is minimal, when
compared with the new engine certification program. Testing of engines
in non-urban bus configurations, or of engines equipped with
inappropriate emission-related parts, may be of uncertain value toward
meeting the assurance needed. Further, if engines are tested in a pre-
rebuild condition, then engine origins and maintenance history may be
important. The Agency believes that knowledge of the condition and
configuration of test engines, both pre-rebuild and post-rebuild, and
for baseline and candidate configurations, are valid concerns and the
bases for our general expectation that test engines for certification
testing be urban bus configurations.
The Agency believes that the concerns regarding test engine origins
expressed by JMI should not prevent certification. DDC does not need to
test the engine in its as-received, pre-rebuild configuration--the
emission level of the as-received configuration is not relevant because
DDC's upgrade kit is used only upon engine rebuild. DDC, in its
notification of intent to certify, states that baseline emissions data
were developed after rebuilding the test engine to an original 1979
urban bus configuration. Given that DDC did not test in the pre-rebuild
configuration, but only after rebuild to the urban bus configuration,
the serial number of the block is not important. The Agency received no
comments requesting a parts lists or questioning DDC's rebuild before
the upgrade kit was certified on October 2, 1995 (60 FR 51472) to
reduce PM by at least 25 percent.
Notwithstanding the previous discussion, JMI's comment regarding
the lack of a list of parts used by DDC in the rebuild and upgrade is
valid, and the Agency believes such information should be available for
public review. Lists of the emission-related parts used in test
engine(s) will document the actual tested engine configurations and
should be part of the public record. The Agency has requested DDC to
provide these lists to be made part of its notification in the public
docket. JMI's comment, however, suggesting that the list is needed to
determine whether the DDC rebuild is ``* * * typical of the current
practice exercised by the transits * * *'' should not prevent
certification because the baseline rebuild does not have to be ``* * *
typical * * *'' to be a valid baseline. Sections 85.1403(b) and
85.1406(a)(2)(v)(B) of the program regulations are clear--PM reduction
is based on the emissions levels of the original engine configuration.
DDC states that its baseline PM level was developed using its test
engine rebuilt to a 1979 model year configuration.
While some rebuilds, as of yet uncertified and not required under
the urban bus program, may result in lower PM exhaust levels than the
original engine configurations, this is not necessarily the case for
all rebuilds. The urban bus program requires engine configurations
having PM levels lower than the original engine configuration.
Certification is available for other rebuild kits or equipment which
reduce PM and meet other program requirements.
JMI's final comment concerns life cycle costs of the DDC kit. JMI
comments that operators and rebuilders typically rebuild engines using
a combination of reworked components and either DDC/original equipment
(OE) parts or non-OE parts. JMI says that OE parts are often purchased
through a bid process at an average 18 percent less than list price,
and non-OE parts are usually purchased at an average 40 percent less
than OE price. JMI presents two analyses of costs, one for a scenario
using discounted OE parts and another for a scenario using non-OE
parts. Both analyses assume cylinder kits, blower, turbocharger, and
heads are reworked by the transit's or rebuilder's labor force for 45
percent of the cost of a new OE part. The analysis including OE parts
with reworked components indicates that this scenario is $2,243.22 less
than the suggested price of the DDC kit. The scenario including non-OE
parts with reworked components indicates a greater difference from the
suggested price of the DDC kit. This analysis indicates a typical
rebuild of $2,913, which JMI states is $2,649 less than the suggested
price of the DDC kit. JMI states that it believes the DDC kit exceeds
the $2,000 life cycle ceiling for a typical overhaul.
The Agency appreciates the effort put forth by JMI in providing
these cost analyses, and recognizes that a range of parts costs can
exist due to factors such as discounts from suggested retail prices due
to normal competitive practice, discounts incident to bid processes or
large purchases, and non-OE parts pricing. As a result of such price
differences, plus the extent to which components are reworked ``in-
house'', the cost of a rebuild might vary widely. It is therefore
difficult to determine an accurate figure for the cost of a
``standard'' rebuild. The Agency believes that further modification can
be applied to the JMI analyses to depict actual rebuild practice
concerning cylinder kits, and to take into account
[[Page 37737]]
the relative usage of non-OE parts versus OE parts. The Agency modifies
the JMI analysis, as discussed below, to construct a ``weighted'' cost
for a rebuild, based on information provided by DDC, the APTA survey,
and in comments of the Engelhard Corporation. This ``weighted'' cost
approach is used to more closely characterize what typically occurs in
the field, on the average, based on the information available.
The first modification reflects replacing, not reworking, cylinder
kits. The JMI scenarios include cylinder kits that JMI states are
typically reworked for $830.03, which is 45 percent discount from DDC's
suggested price (if purchased separately). DDC indicated, in a
telephone conversation with the Agency, that most operators do not
rework cylinder kits. This is supported by the previously-mentioned
APTA survey and a study conducted by the Agency (see the report
entitled ``Heavy-Duty Rebuild Practices'', dated March 21, 1995, by T.
Stricker and K. Simon), both of which support that most operators
replace, and not rework, cylinder kits. Copies of the report ``Heavy-
Duty Rebuild Practices'', and the APTA survey can be found in the
public docket located at the address above. Engelhard, in its comments
of July 19, 1995, indicates that aftermarket cylinder kits cost
$1,139.94.
The second modification reflects weighting the reported costs for
non-OE and OE parts, to reflect usage. The APTA survey indicates that
67.4 percent of operators parts business is with OE parts suppliers,
and 32.6 percent is with non-OE suppliers. Use of this information is
discussed below to determine a weighted cost for certain components.
The construction of the ``weighted'' cost of a rebuild, based on
available information, is summarized as follows. The APTA survey
indicates that roughly 95 percent rebuild engines in-house. Therefore,
for simplicity, the ``weighted'' rebuild assumes that the blower,
turbocharger, and heads are reworked in-house as stated by JMI. Except
for the cylinder kits, it is assumed that the costs associated with
reworking these three components are the values presented by JMI (that
is, reworked at 45 percent of OE price, purchased individually). For
the other parts, including cylinder kits, a weighted cost is determined
as the sum of the non-OE cost, weighted 32.6 percent, plus the DDC
suggested cost of parts, weighted 67.4 percent. This weighting is based
on the APTA survey showing the relative split in operators' parts
business between OE and non-OE parts suppliers. The costs used for the
non-OE parts (except for the cylinder kits) and OE parts are the values
used in the JMI analyses. The non-OE cost for cylinder kits is taken as
the aftermarket list price reported in Engelhard's comments. The cost
of the blower bypass valve is not included in the ``weighted'' rebuild,
because DDC indicates that it is not always replaced.
The table below details the cost of a ``weighted'' rebuild, based
on the available information, and permits comparison with the suggested
price of the certified DDC upgrade kit. Program regulations do not
define ``standard rebuild'', nor instruct that the lowest possible or
highest possible cost of a rebuild is appropriate for determining
compliance with life cycle cost requirements. The Agency recognizes
that there are a number of uncertainties and assumptions involved with
this ``weighted'' approach, but believes, based on the available
information, that this approach is more likely to characterize what
typically occurs in the field.
COST \1\ OF A ``WEIGHTED'' REBUILD
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``Weighted''
Item in DDC kit Non-OE cost OE cost (-18%) rebuild DDC kit
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Cylinder Kits........................... $1,139.94 $1,512.51 $1,391.05
Gasket kit.............................. 132.10 180.53 164.74
Air Inl Hose............................ 8.97 12.26 11.19
Blower Bypass Valve not always replaced: ................ 0.00
Fuel Injectors...................... 266.98 364.87 332.96
LB Camshaft......................... 349.10 477.11 435.38
RB Camshaft......................... 349.10 477.11 435.38
Blower Asm.......................... 199.26 ................ 199.26
Turbo Asm........................... 352.35 ................ 352.35
Heads Asm........................... 425.35 ................ 425.35
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Totals:......................... ................ ................ 3,747.66 5,561.92
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\1\ The costs used for the non-OE parts (except for the cylinder kits) and the OE parts are the values used in
the JMI analyses. The non-OE cost for cylinder kits is based on data from Engelhard Corporation. The OE costs
are based on suggested DDC costs for parts purchased separately, and discounted 18 percent as JMI suggests.
The individual parts costs within the DDC kit are not relevant to this comparison.
While it is difficult to accurately establish the cost of a
``standard'' rebuild, the Agency believes that the direct comparison of
suggested retail prices that DDC has presented, supported by the above
comparison of costs, adequately demonstrates compliance with the
applicable life cycle cost requirements.
Only one operator has challenged DDC's costs. Muncie Indiana
Transit System, commenting on the Federal Register notice of June 5,
1995, stated that the ``cost associated with the use of this kit is
obviously far in excess of the limits required by the EPA's Retrofit/
Rebuild Program'', but provided no other information or further
discussion on its concern with cost. The Agency believes that the above
comparison of costs disputes this comment.
JMI also comments that the DDC kit takes away an operator's element
of choice regarding which scenario it uses to rebuild engines, by
requiring that all or part of a rebuild come from DDC. The Agency
believes that the parts in DDC's upgrade kit are emission-related
components, and as such can reasonably be included in a certified kit
because it provides assurance that engines so rebuilt will result in a
known condition and a known engine emissions configuration. Both engine
condition and configuration are important to in-use emissions
performance. The urban bus program clearly provides for certification
of upgrade kits which bring engines to a later model year configuration
that is certified at a lower emission level than the original
configuration. DDC's certified upgrade
[[Page 37738]]
kit meets this programmatic intent. Certification under the urban bus
program is available to other parties complying with program
requirements.
In summary, the Agency believes that the information that DDC has
presented, supported as discussed above, adequately demonstrates
compliance with the applicable life cycle cost requirements of the
urban bus program.
IV. Certification
The Agency has reviewed the information of the DDC notification of
intent to certify, comments received from interested parties, and other
information, and finds that the notification of intent to certify
complies with the life cycle cost requirements specified in section
85.1403(b)(2)(ii). These findings do not change the Agency's findings
stated in the notice of October 2, 1995 (60 FR 51472).
Today's Federal Register notice announces certification for the
above-described equipment on the basis of compliance with the life
cycle cost requirements. The effective date of certification is the
date of a letter provided earlier from the Director of the Engine
Programs and Compliance Division to DDC. A copy of this letter can be
found in the public docket at the address listed above.
V. Operator Responsibilities and Requirements
Today's Federal Register notice does not change the
responsibilities and/or requirements of bus operators affected by the
urban bus retrofit/rebuild program.
Today's Federal Register notice announces that the above-discussed
DDC equipment complies with the life cycle cost requirements specified
in section 85.1403(b)(2)(ii). Therefore, the certification emission
levels of the equipment will be considered by the Agency when it
establishes final post-rebuild levels as required pursuant to
85.1403(c)(1)(iii). DDC's upgrade kit is certified to emission levels
of 0.30 g/bhp-hr for 1979 through 1987 model year 6V92TA MUI engines,
and 0.23 g/bhp-hr for 1988 and 1989 model year 6V92TA MUI engines. If
either or both of those certification levels are established as post-
rebuild values, then operators complying with compliance program 2
would use such levels, as appropriate, in calculations for determining
fleet target emissions for 1998 and thereafter.
Copies of the DDC notification, DDC's letter to the Agency dated
December 15, 1995, the summary of the APTA survey, and public comments
are available for review in the public docket located at the address
indicated above.
Dated: July 3, 1996.
Mary D. Nichols,
Assistant Administrator for Air and Radiation.
[FR Doc. 96-18179 Filed 7-18-96; 8:45 am]
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