The regulations in 7 CFR part 319 prohibit or restrict the importation into the United States of certain plants and plant products to prevent the introduction of plant pests. The regulations contained in “Subpart—Nursery Stock, Plants, Roots, Bulbs, Seeds, and Other Plant Products,” §§ 319.37 through 319.37-14 (referred to below as the regulations), restrict, among other things, the importation of living plants, plant parts, and seeds for propagation.

Paragraph § 319.37-8(a) of the regulations requires, with certain exceptions, that plants offered for importation into the United States be free of sand, soil, earth, and other growing media. This requirement is intended to help prevent the introduction of plant pests that might be present in the growing media; the exceptions to the requirement take into account factors that mitigate that plant pest risk. Those exceptions, which are found in paragraphs (b) through (e) of § 319.37-8, consider either the origin of the plants and growing media (paragraph (b)), the nature of the growing media (paragraphs (c) and (d)), or the use of a combination of growing conditions, approved media, inspections, and other requirements (paragraph (e)).

That combination approach found in § 319.37-8(e) provides conditions under which plants from 10 listed taxa may be imported into the United States established in an approved growing medium. In addition to other requirements, § 319.37-8(e):

• Specifies the types of growing media that may be used;

• Requires plants to be grown in accordance with written agreements between the Animal and Plant Health Inspection Service (APHIS) and the plant protection service of the country where the plants are grown and between the foreign plant protection service and the grower;

• Requires the plants to be rooted and grown in a greenhouse that meets certain requirements for pest exclusion and that is used only for plants being grown in compliance with § 319.37-8(e);

• Restricts the source of the seeds or parent plants used to produce the plants, and requires grow-out or treatment of parent plants imported into the exporting country from another country;

• Specifies the sources of water that may be used on the plants, the height of the benches on which the plants must be grown, and the conditions under which the plants must be stored and packaged; and

• Requires that the plants be inspected in the greenhouse and found free of evidence of plant pests no more than 30 days prior to the exportation of the plants.

A phytosanitary certificate issued by the plant protection service of the country in which the plants were grown that declares that the above conditions have been met must accompany the plants at the time of importation. These conditions have been used successfully to mitigate the risk of pest introduction associated with the importation into the United States of approved plants established in growing media.

In 1994, the Animal and Plant Quarantine Service of the People's Republic of China (CAPQ) requested that APHIS consider amending the regulations to allow Buxus (Buxaceaea) spp., Ehretia (Carmona) (Boraginaceae) spp., Podocarpus (Podocarpaceae) spp., Sageretia (theazans) (Rhamnaceae) spp., and Serissa (Rubiaceae) spp. to be imported into the United States under the conditions set forth in § 319-37-8(e). These species are commonly traded as artificially dwarfed plants (often referred to as “penjing” in China and “bonsai” in Japan) and are currently allowed to be imported into the United States only as bare-rooted plants.

The regulations in § 319.37-8(g) provide that we will evaluate a request such as that made by China to allow the importation of additional taxa of plants established in growing media using specific pest risk evaluation standards. We conduct that assessment to determine the plant pest risks associated with each requested plant article and to determine whether or not we will propose to allow the requested plant article established in growing media to be imported into the United States. The pest risk evaluation, the standards for which are set forth in § 319.37-8(g)(1) through (g)(4), involves collecting commodity information, cataloging quarantine pests, conducting individual pest risk assessments, and determining an overall estimation of risk based on a compilation of the component estimates.

After receiving China's request to allow the importation of Buxus spp., Ehretia (Carmona) spp., Podocarpus spp., Sageretia spp., and Serissa spp. artificially dwarfed (penjing) plants established in growing media, we conducted a pest risk assessment. The assessment is described in a qualitative, pathway-initiated pest risk assessment titled “Pest Risk Assessments Penjing Plants from China,” copies of which are available through the person listed under FOR FURTHER INFORMATION CONTACT. The pest risk assessment identified arthropod pests, mollusks, nematodes, and fungi as the plant pests most likely to travel with the plant and having the greatest potential for economic damage. Several of the pests were identified in the pest risk assessment for each genus. It is important to note, however, that our pest risk assessment did not include a risk management component, i.e., it did not take into account the mitigative effects of the requirements of § 319.37-8(e), which are designed to establish and maintain a pest-free production environment and ensure the use of pest-free seeds or parent plants.

We have determined that the existing regulations in § 319.37-8(e) that pertain to the importation of plants in growing media would not, by themselves, provide adequate protection against certain pests that may be present in shipments of artificially dwarfed plants from China that are established in growing media. In order to address the pest risks posed by these plants, we have identified additional risk management measures related to propagative cuttings, inspections, treatment, and greenhouse growing to protect against pest introduction. These measures would apply only to the five genera of artificially dwarfed (penjing) plants identified in this proposed rule and would supplement the general requirements that apply to all plants that are imported in growing media under § 319.37-8(e). Descriptions of each of these risk management measures follow. We propose to add these risk management measures to the regulations in § 319.37-8(e).

1. We propose to require that the propagative materials used to produce the artificially dwarfed (penjing) plants enter an approved greenhouse as either seeds, tissue cultures, unrooted cuttings, or rooted cuttings. If the rooted cuttings were grown in soil, the soil would be required to be sampled and found free from, or fumigated for, the nematodes Paratrophorus spp., Tylenchorhynchus crassicaudatus, and Tylenchorhynchus leviterinalis within the 12 months prior to the introduction of the plants into the greenhouse. Before rooted or unrooted cuttings are introduced into the greenhouse, they would be required to be inspected and found free of pests and then treated with a pesticide dip, approved by CAPQ, that would control mites, scale insects, whiteflies, thrips, and fungi. Rooted cuttings would also be required to be treated with a nematicide dip in addition to or in conjunction with the pesticide dip.

This requirement is necessary because the propagative materials used to produce artificially dwarfed plants are derived from mother plants that are not grown within the controlled environment of a greenhouse. Mother plants that are grown outdoors necessarily present a high risk of infestation with nematodes, mites, scale insects, whiteflies, thrips, and fungi that, left untreated, could be spread to plants intended for export. These measures help to ensure that seeds, tissue cultures, unrooted cuttings, or rooted cuttings enter the greenhouse free from such pests. If the rooted cuttings were grown in soil, the soil would have to be sampled and/or fumigated for the nematodes Paratrophorus spp., Tylenchorhynchus crassicaudatus, and Tylenchorhynchus leviterinalis because these nematodes were identified in the “Pest Risk Assessments Penjing Plants from China” as presenting, in the absence of mitigation measures, both a high likelihood of introduction and severe economic consequences in the event of an introduction. By sampling and/or fumigating soil for nematodes, and by applying pesticide dips to cuttings, and an additional nematicide dip to rooted cuttings, the risk that plants intended for export could be exposed to the pests identified above is decreased to a negligible level.

2. We propose to require the mother plants from which the artificially dwarfed (penjing) plants are produced to be visually inspected by an APHIS inspector or an inspector of CAPQ and found free of evidence of Paratrophorus spp., Tylenchorhynchus crassicaudatus, and Tylenchorhynchus leviterminalis nematodes and the following species-specific diseases and organisms:

• For Buxus spp.: Guignardia miribelii, Macrophoma ehretia, Meliola buxicola, and Puccinia buxi.

• For Ehretia spp.: Macrophoma ehretia, Phakopsora ehretiae, Pseudocercosporella ehretiae, Pseudocercospora ehretiae-thyrsiflora, Uncinula ehretiae, Uredo ehretiae, and Uredo garanbiensis.

• For Podocarpus spp.: Pestalosphaeria jinggangensis , Pestalotia diospyri , Phellinus noxius , and Sphaerella podocarpi .

• For Sageretia spp.: Aecidium sageretiae .

• For Serissa spp.: Melampsora serissicola .

The above species-specific diseases and organisms were identified in “Pest Risk Assessments Penjing Plants from China” as presenting, in the absence of mitigation measures, both a high likelihood of introduction and severe economic consequences in the event of an introduction. Inspectors can visually identify evidence of the presence of any of the above pests in Buxus spp., Ehretia spp., Podocarpus spp., Sageretia spp., and Serissa spp. This requirement will help to ensure that propagative materials used to produce artificially dwarfed plants enter the greenhouse free from the pests identified above.

3. We propose to require the artificially dwarfed (penjing) plants to have been grown in an approved greenhouse for at least 6 months immediately prior to export. In addition to other phytosanitary procedures required under § 319.37-8(e), the greenhouses would have to have mesh screens with openings no larger than 0.6 mm if the plants had been treated with broad spectrum pesticides at least once a month for the 3 months before shipping. Otherwise, the vents and openings of the greenhouse would have to be covered with mesh screens with openings no larger than 0.2 mm.

We are proposing this requirement because plants that have been grown in an approved greenhouse for 6 months are easier to observe for signs of pest infestations and generally pose less of a risk of pest infestation due to their controlled environment. Further, we have determined that treatment of the plants with broad spectrum pesticides would decrease the possibility that plants could be infested with pests such as thrips and whiteflies that could otherwise enter the greenhouse through 0.6 mm mesh screens. In order to preclude infestations of those pests without the use of broad spectrum pesticides, vents in the greenhouses would be required to be screened with 0.2 mm mesh.

Based on the pest risk assessment, we have determined that Buxus spp., Ehretia ( Carmona ) spp., Podocarpus spp., Sageretia spp., and Serissa spp. artificially dwarfed ( penjing ) plants established in growing media could be imported from the People's Republic of China under § 319.37-8(e) and the additional conditions described in this proposed rule without posing any greater plant pest risk than is posed by the importation of these species as bare-rooted plants under § 319.37-8(a). We have also determined that sufficient APHIS resources are available to implement or ensure implementation of the proposed mitigation measures described above, as required under § 319.37-8(g)(4)(ii) of the regulations. Therefore, we propose to amend the regulations to allow Buxus spp., Ehretia ( Carmona ) spp., Podocarpus spp., Sageretia spp., and Serissa spp. to be imported in approved growing media subject to those conditions.

In this document, we are also correcting the number of a footnote in § 319.37-8(e).

APHIS has begun the process of informal consultation with the U.S. Fish and Wildlife Service  1 to assess the potential effects of this proposed rule on endangered or threatened species. We believe that the phytosanitary measures that we have proposed would effectively mitigate the risk of introducing quarantine pests. Therefore, we currently have no reason to believe that there would be effects on any endangered or threatened species associated with this rulemaking. If, during our consultation with the U.S. Fish and Wildlife Service, we determine that this proposal would have effects on endangered or threatened species, we will take appropriate action. Executive Order 12866 and Regulatory Flexibility Act.

This proposed rule has been reviewed under Executive Order 12866. The rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

This proposal would allow five genera of artificially dwarfed (penjing) plants established in approved growing media to be imported into the United States from the People's Republic of China. The five genera are: Buxus , Ehretia (carmona), Podocarpus , Sageretia , and Serissa . Plants imported or offered for importation under this program would be required to be presented for inspection at ports of entry with special inspection and treatment facilities, and they would be allowed to enter the United States only under specific conditions designed to prevent the introduction of plant pests.

In China, trained miniature or artificially dwarfed artistic potted plants are called penjing (most Americans are more familiar with the related Japanese term, bonsai). Penjing plants may range from 4 to 60 inches in height. Various styles of potted penjing plants are developed and shaped using specific preferred varieties of trees and other plants most fitted to each particular distinctive style. In China, there are over 160 species of trees, as well as a number of other plants, considered suitable for penjing development. Among the most commonly used are apricot, box, camellia, carmonas, cypress, elm, flowering quince, Fujian tea bush, gingko, hedge, jasmine orange, juniper, maple, ornamental apple, pine, pomegranate, sageretia, serissa, stone yew, and yew podocarpus. Each school of styles uses various combinations of these trees to painstakingly develop the preferred miniature of the parent tree. The objective is to make the penjing plants look as natural, ancient, and picturesque as their large relatives. Growing penjing plants is highly labor intensive and requires much time. Some of these plants have been actively cultivated for hundreds of years by succeeding generations. Penjing plants may be cultivated either from natural trees by cutting, pruning, and shaping, or propagated artificially through seeding, cutting, grafting, and a process known as layering.

The art of miniature tree gardening is a relatively recent phenomenon in the United States. Because it is highly time consuming and very labor intensive, it is practiced by a relatively small number of households. Acquiring the already developed trees can be an expensive investment, with prices ranging between $40 and $10,000 per plant. Value increases with age, regardless of size. Information on the number of households that own penjing plants is not available. However, if the size of the industry is an indicator, then the number of households may be very small. Currently, there are about 400 companies in the United States engaged in the production and distribution of artificially dwarfed plants and related materials, with gross revenue of less than $10 million. Most of these establishments are family owned and operated. Some are plant and seed producers. Other companies are engaged in supplying tools and stands for artificially dwarfed plants. Still others specialize in the production of pots and containers. Certain companies also produce business newsletters and magazines or are otherwise engaged in consulting. Approximately 99 percent of these firms are considered to be small entities.

Artificially dwarfed plants imported into the United States come from the People's Republic of China, Japan, and the Republic of Korea. None of the artificially dwarfed plants are currently imported in growing media. Between 5 and 10 companies import about 20,000 bare-rooted artificially dwarfed plants (about 5,000 from China, 10,000 from Japan, and 5,000 from Korea) annually. To minimize the time between unpotting and repotting these plants so the bare-rooted plants are not damaged, they are shipped by air. Since the cost of air shipment of these plants is based not only on weight but also on space occupied, the cost per unit is quite high. The cost of transporting the plants in a growing media, by ship, would be lower than the current air freight cost.

We expect that adoption of this proposed rule would cause a slight decrease in the costs of business for importers of artificially dwarfed plants. The cost reduction would be mainly from reduced transportation expenses. The ability to import penjing plants in growing media would allow importers to use sea transport without risking the loss of valuable plants. The average savings per importer would depend on the number of penjing plants moved by air versus by sea. Those entities that opt to ship their products by sea could save as much as 50 percent per unit. If these savings were passed on to penjing buyers, consumers could benefit from lower prices. Since the price of other ornamental trees and plants is relatively much lower than penjing plants, their competitive advantage over penjing plants would continue to be great even with reduced prices for penjing plants. It is also unlikely that more people would be drawn to purchase these plants as a result of the proposed rule, as unique individual preferences are not changed by such minor cost reductions. Therefore, we expect that overall effects of this proposed rule upon price and competitiveness would be relatively insignificant.

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action would not have a significant economic impact on a substantial number of small entities. Executive Order 12988.

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. If this proposed rule is adopted: (1) All State and local laws and regulations that are inconsistent with this rule will be preempted; (2) no retroactive effect will be given to this rule; and (3) administrative proceedings will not be required before parties may file suit in court challenging this rule.

APHIS has begun the process of preparing an environmental assessment for this action. When the environmental assessment has been completed, we will publish a notice in the Federal Register that announces the availability of the environmental assessment and requests public comment on it. We will also make the environmental assessment available to the public for inspection on the APHIS web site at http://www.aphis.usda.gov/ppd/ead/ppqdocs.html.

The environmental assessment will be prepared in accordance with: (1) The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et seq. ), (2) regulations of the Council on Environmental Quality for implementing the procedural provisions of NEPA (40 CFR parts 1500-1508), (3) USDA regulations implementing NEPA (7 CFR part 1b), and (4) APHIS' NEPA Implementing Procedures (7 CFR part 372).

This proposed rule contains no new information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

Accordingly, we propose to amend 7 CFR part 319 as follows:

The regulations in 9 CFR part 75 (referred to below as the regulations) govern the interstate movement of horses, asses, ponies, mules, and zebras that test positive for communicable diseases. The purpose of the regulations is to prevent the interstate spread of communicable diseases in equines. Equine viral arteritis (EVA) is not currently addressed by the regulations.

EVA is an acute, contagious, viral disease characterized by fever, edema, conjunctivitis, nasal discharge, and abortion. Aerosol transmission is the principal means of the spread of infection among horses that are closely congregated in places such as racetracks, shows, and sales. However, the disease can also be spread venereally by infected stallions or infected semen. In fact, infected stallions play a significant role in maintaining EVA infection in horse populations.

When a mare, gelding, or sexually immature colt becomes infected with EVA, the disease will run its course and the animal will eliminate the virus. However, when a stallion becomes infected with EVA, the EVA virus localizes in the stallion's reproductive system, and the stallion becomes a reservoir of the disease. As a consequence, the EVA virus can be shed continuously in the stallion's semen. If a stallion is serologically positive, it has a 50 percent chance of shedding the virus in its semen. Virus isolation can be performed on the stallion's semen to determine whether the stallion is shedding the EVA virus. If the stallion is shedding the EVA virus in its semen, the stallion is considered a shedder. Stallions that are shedders can infect mares during breeding, and infected mares can spread the disease to their foals in utero or to other horses through aerosol transmission.

EVA can pose a number of problems for horse owners, horse breeders, and the equine performance industry. Horses that have EVA antibodies, which can be present due to vaccination against the disease or infection with the EVA virus, can be barred from entering foreign countries for racing or competition purposes. In addition, semen collected from stallions that are shedders is barred from importation into many countries. However, economically, the most damaging aspect of EVA is that the disease can cause abortion in pregnant mares. Abortion rates due to EVA can be as high as 70 percent.

At this time, the Animal and Plant Health Inspection Service (APHIS) does not have a program to control EVA because the disease is not perceived to be widespread in the United States, and confirmed outbreaks are sporadic. However, the equine industry within the United States has requested that APHIS initiate surveillance, control, and possibly eradication of EVA and has indicated a willingness to assist in the implementation of such programs. This document requests public comment on five possible programs to address EVA. Each program is discussed below, and each succeeding program is more restrictive.

The U.S. equine industry would develop, manage, and monitor this program. This program would include an educational program for equine producers and equine practitioners regarding the etiology, treatment, and prevention of EVA. In addition, this program would include a method, to be determined by the equine industry, to identify infected semen and stallions that are shedders. APHIS would not have regulatory involvement with this program.

The U.S. equine industry would develop, manage, and monitor this program with cooperation from APHIS and individual States. This program would include an educational program for equine producers and equine practitioners regarding the etiology, treatment, and prevention of EVA. In addition, APHIS would quarantine imported stallions at the time of arrival and test them to determine whether they are serologically positive for EVA. APHIS would also test imported equine semen for EVA at the time of arrival. APHIS would note the test results on the import permit accompanying the stallion or semen, release the stallion or semen, and notify animal health regulatory officials in the State of destination of any that were positive. APHIS would recommend that each State determine whether to conduct further testing of positive stallions upon entry into the State.

APHIS would also recommend that each State develop an EVA program that includes testing domestic stallions and semen for EVA and controlling the intrastate movement of EVA-positive stallions, stallions that are shedders, and infected semen. In addition, APHIS would recommend that States make all test results for domestic and imported stallions and semen a matter of public record.

The U.S. equine industry would develop, manage, and monitor this program with cooperation from APHIS and individual States. This program would include an educational program for equine producers and equine practitioners regarding the etiology, treatment, and prevention of EVA. In addition, APHIS would develop a program standards document entitled, “Uniform Methods and Rules—Equine Viral Arteritis” (UM&R). APHIS would draft this document with cooperation from the States, the equine industry, and other interested entities. The UM&R would be based on standards set by the Office International des Epizooties and guidelines of the American Horse Council. The UM&R would contain uniform standards that States could use for detecting, controlling, and preventing EVA, as well as recommended standards for the intrastate and interstate movement of stallions that are serologically positive for EVA, stallions that are shedders, and infected semen. The UM&R would be available for use as a guidance document only.

As in the Voluntary Control Program, APHIS would quarantine imported stallions at the time of arrival and test them to determine whether they are serologically positive for EVA. APHIS would also test imported equine semen for EVA at the time of arrival. APHIS would note the test results on the import permit accompanying the stallion or semen, release the stallion or semen, and notify animal health regulatory officials in the State of destination of any that were positive. APHIS would recommend that positive stallions be moved to an approved location in the State of destination for virus isolation testing by the State.

APHIS would also recommend that each State develop an EVA program that includes testing domestic stallions and semen for EVA. As part of this program, APHIS would recommend that each State determine the serology of a stallion upon entry into the State and record its test result on the stallion's health certificate. APHIS would recommend that the State conduct a virus isolation test on positive stallions. APHIS would also recommend that each State test equine semen for EVA upon entry into the State and record its test result on the semen's health certificate. APHIS would further recommend that infected semen and stallions that are positive or shedding the EVA virus be handled in accordance with the UM&R. In addition, APHIS would recommend that States make all test results for domestic and imported stallions and semen a matter of public record.

APHIS would develop this program with cooperation from individual States and the U.S. equine industry. This program would include an educational program for equine producers and equine practitioners regarding the etiology, treatment, and prevention of EVA. It would include use of the UM&R previously described and a new component a certification program that States could participate in.

As in the previous two programs described, APHIS would quarantine imported stallions at the time of arrival and test them to determine whether they are serologically positive for EVA. APHIS would also test imported equine semen for EVA at the time of arrival. APHIS would note the test results on the import permit accompanying the stallion or semen and release the stallion or semen. However, APHIS would release imported positive stallions and infected semen only to States participating in the certification program. In addition, APHIS would restrict the interstate movement of known domestic infected semen and stallions that are positive or shedders to those States participating in the certification program.

To be a participating State, a State would have to: (1) Conduct a virus isolation test on positive stallions upon movement into the State after release from APHIS import quarantine stations; (2) determine the serology of any domestic stallion upon its entry into the State, record the test result on the stallion's health certificate, and conduct a virus isolation test on stallions that test positive; (3) test domestic equine semen for EVA upon entry into the State and note the semen's status on its health certificate; (4) regulate the intrastate movement of infected semen and stallions that are positive or shedding the EVA virus in accordance with the UM&R. Also, APHIS would recommend that States make all test results for domestic and imported stallions and semen a matter of public record.

For a State that does not participate in the certification program, APHIS would recommend that the State develop an EVA program that includes testing domestic stallions and semen for EVA. As part of this program, APHIS would recommend that the State determine the serology of a stallion upon entry into the State, record the test result on the stallion's health certificate, and perform a virus isolation test on stallions that test positive. APHIS would also recommend that the State test equine semen for EVA upon entry into the State and record the test result on the semen's health certificate. In addition, APHIS would recommend that the State regulate the intrastate movement of infected semen and stallions that are positive or shedding the EVA virus in accordance with the UM&R. Also, APHIS would recommend that States make all test results for domestic and imported stallions and semen a matter of public record.

APHIS would develop this program with cooperation from individual States and the U.S. equine industry. This program would include an educational program for equine producers and equine practitioners regarding the etiology, treatment, and prevention of EVA. It would include the use of the UM&R previously described.

Again, APHIS would quarantine all imported stallions at the time of arrival and test them to determine whether they are serologically positive for EVA. APHIS would move any imported stallion that tested positive for EVA to an APHIS-approved location for virus isolation testing to determine whether it was a shedder. APHIS would also test imported equine semen for EVA at the time of arrival. APHIS would record the test results on the import permit accompanying the stallion or semen. If APHIS determined that a stallion was not a shedder or that the imported semen was negative, we would release the stallion or semen. Positive stallions would be allowed to proceed to their destination; however, we would prohibit shedders and infected semen from entering the United States.

Under this program, APHIS would also require stallions and semen to be tested for EVA prior to interstate movement. The test results would have to be recorded on the health certificate accompanying the stallion or semen interstate. Also, APHIS would require a permit for the interstate movement of stallions that are shedders and infected semen. APHIS would recommend that each State conduct a virus isolation test on a stallion's semen the first time it is used for breeding purposes in that State. APHIS would also recommend that infected semen and stallions that are positive or shedding the EVA virus be moved intrastate in accordance with the UM&R. In addition, APHIS would initiate an EVA-vaccination program for domestic mares.

We welcome comments on the options described above and encourage the submission of new options or any suggestions.

Comments Invited

Interested persons are invited to participate in the making of these proposed special conditions by submitting such written data, views, or arguments as they may desire. Communications should identify the regulatory docket or notice number and be submitted in duplicate to the address specified above. The Administrator will consider all communications received on or before the closing date for comments. The proposals described in this action may be changed in light of the comments received. All comments received will be available in the Rules Docket for examination by interested persons, both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerning this rulemaking will be filed in the docket. Persons wishing the FAA to acknowledge receipt of their comments submitted in response to this action must include with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to CE163.” The postcard will be date stamped and returned to the commenter.

On October 9, 1995, Sino Swearingen Aircraft Company, 1770 Sky Place Boulevard, San Antonio, Texas 78216, applied for normal category type certificate for their new Model SJ30-2. The Model SJ30-2 airplane is a six-to-eight place, all metal, low-wing, T-tail, twin turbofan engine powered airplane with fully enclosed retractable landing gear. The SJ30-2 will have a VMO/MMO of 320 knots/M=.83, and will have engines mounted aft on the fuselage.

The Model SJ30-2 airplane will contain one side-facing seat. Side facing seats are considered a novel design and were not considered when those airworthiness standards were promulgated. The FAA has determined that the existing regulations do not provide adequate or appropriate safety standards for occupants of side-facing single occupant seats. In order to provide a level of safety that is equivalent to that afforded to occupants of forward and aft facing seats, additional airworthiness standards, in the form of additional special conditions, are necessary.

Under the provisions of 14 CFR 21.17, Sino Swearingen Aircraft Company must show that the Model SJ30-2 meets the applicable provisions of 14 CFR part 23 as amended by Amendments 23-1 through 23-53, and selected portions of 14 CFR part 25 as provided for by 14 CFR part 21, §§ 21.16 and 21.17(a)(2); exemptions, if any; equivalent level of safety findings, if any; and the special conditions adopted by this rulemaking action.

If the Administrator finds that the applicable airworthiness regulations ( i.e., part 23) do not contain adequate or appropriate safety standards for the Sino Swearingen Model SJ30-2 because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

In addition to the applicable airworthiness regulations and special conditions, the Model SJ30-2 must comply with the part 23 fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36, and the FAA must issue a finding of regulatory adequacy pursuant to section 611 of Public Law 92-574, the “Noise Control Act of 1972.”

Special conditions, as appropriate, are issued in accordance with § 11.49 after public notice, as required by §§ 11.28 and 11.29(b), and become part of the type certification basis in accordance with § 21.17(a)(2).

The Model SJ30-2 will incorporate the following novel or unusual design features: A side-facing seat occupiable for taxi, takeoff and landing.

The intent of these special conditions is to establish a level of safety for the occupant of the side facing seat consistent with the level afforded occupants of the forward and aft facing seats. The primary objective is that all occupants should have protection from serious injuries, regardless of the orientation of the seat system. Occupants of side facing seats are exposed to different physical loads than forward facing occupants, such as lateral body contact with armrests and walls. Thus, a means to assess the potential for injuries due to occupant loads imparted by lateral impacts must be imposed.

Therefore, the following special conditions are considered to be applicable to the side facing seat on the SJ30-2.

In addition to the airworthiness standards in §§ 23.562 and 23.785, the following special conditions provide the additional injury criteria and installation/testing guidelines that represent the minimum acceptable airworthiness standards for side facing seats:

(a) Existing Criteria: All injury protection criteria of § 23.562(c)(1) through (c)(7) and § 23.785 apply to the occupant of a side facing seat. Head Injury Criteria (HIC) assessments are only required for head contact with either the seat or adjacent structures or both.

(b) Body-to-wall/furnishing contact: The seat must be installed aft of a structure such as an interior wall or furnishing that will support the pelvis, upper arm, chest, and head of an occupant seated next to the structure. Horizontal tests of the seat must include representative structures for the forward wall. The wall must include attachments that represent the geometry, strength, and stiffness of the airplane installation. If there are structures forward of the wall that will affect the deformation of the wall, these structures must be addressed in the test procedure. The contact surface of this structure must be covered with at least two inches of energy absorbing protective foam, such as ensolite.

(c) Thoracic Trauma: Testing with a Side Impact Dummy (SID), as defined by 49 CFR part 572, Subpart F, or its equivalent, must be conducted and Thoracic Trauma Index (TTI) injury criteria acquired with the SID must be less than 85, as defined in 49 CFR part 572, Subpart F. SID TTI data must be processed as defined in Federal Motor Vehicle Safety Standard (FMVSS) § 571.214, S 6.13.5. Rational analysis, comparing an installation with another installation where TTI data were acquired and found acceptable, may also be viable.

(d) Pelvis: Pelvic lateral acceleration must not exceed 130g. Pelvic acceleration data must be processed as defined in FMVSS § 571.214, S 6.13.5.

(a) One test with the SID Anthropomorphic Test Dummy (ATD), undeformed floor, no yaw, and with all lateral structural supports (armrests/walls).

Pass/fail injury assessments: TTI; and pelvic acceleration.

(b) One test with the Hybrid II ATD, or equivalent, deformed floor, with 10 degrees yaw, and with all lateral structural supports (armrests/walls). Pass/fail injury assessments: HIC; and upper torso restraint system retention and pelvic acceleration.

(c) Vertical test to be conducted with modified Hybrid II ATD's with existing pass/fail criteria.

The intent of the criteria established is to provide an equivalent level of safety to that afforded to forward and aft facing seats. The applicant concurs that the test guidelines and injury criteria defined achieve that goal with the following exceptions and clarifications.

1. In the assessment of the TTI and pelvic lateral accelerations for the test condition defined in Item 2(a), the applicant proposes to retain the option of using either the SID ATD as defined or, alternately, the EuroSID ATD as defined by the Official Journal of European Communities, L169 Volume 39, dated July 8, 1996, Directive 96/27/EC and amending Directive 70/156/EEC. The applicant considers both the SID and the EuroSID to be acceptable ATD's for the showing of compliance with the requirements of Item 2(a).

2. The designation of “seat/restraint systems * * * installed in the first row” given in § 23.562 is applied to the crew seats located on the flight deck. The designation of “all other seat/restraint systems” given in § 23.562 is applicable to all SJ30-2 seats other than those located on the flight deck. Therefore, the test conditions of Items 2(a) and 2(b) shall be in accordance with the 21G pulse defined in § 23.562(b)(2) with the exceptions noted, and the test conditions of Item 2(c) shall be in accordance with the 15G pulse defined in § 23.562(b)(1) with the exceptions noted.

As discussed above, these special conditions are applicable to the Model SJ30-2. Should Sino Swearingen Aircraft Company apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special conditions would apply to that model as well under the provisions of § 21.101(a)(1).

The special conditions proposed in the FAA position are acceptable. The conditions requested by the applicant are as follows:

1. The EuroSID-1 ATD as defined in the Applicant's Position is considered an acceptable equivalent for the purposes of the tests defined in these special conditions.

2. The applicants position which is consistent with Advisory Circular 23.562-1, page 4, shows a table in which “crew” seats are shown to meet the 19/26G pulses and passenger seats are shown to meet the 15/21 G pulses.

This action affects only certain novel or unusual design features on one model of airplane. It is not a rule of general applicability, and it affects only the applicant who applied to the FAA for approval of these features on the airplane.

The authority citation for these special conditions is as follows:

Accordingly, the Federal Aviation Administration (FAA) proposes the following special conditions as part of the type certification basis for the Sino Swearingen Aircraft Company Model SJ30-2 airplane applicable to side-facing seats occupiable during taxi, takeoff, and landing.

(a) Existing Criteria: All injury protection criteria of § 23.562(c)(1) through (c)(7) and § 23.785 apply to the occupant of a side facing seat. Head Injury Criteria (HIC) assessments are only required for head contact with either the seat or adjacent structures or both.

(b) Body-to-wall/furnishing contact: The seat must be installed aft of a structure such as an interior wall or furnishing that will support the pelvis, upper arm, chest, and head of an occupant seated next to the structure. Horizontal tests of the seat must include representative structures for the forward wall. The wall must include attachments that represent the geometry, strength, and stiffness of the airplane installation. If there are structures forward of the wall that will affect the deformation of the wall, these structures must be addressed in the test procedure. The contact surface of this structure must be covered with at least two inches of energy absorbing protective foam, such as ensolite.

(c) Thoracic Trauma: Testing with a Side Impact Dummy (SID), as defined by 49 CFR part 572, Subpart F, or its equivalent, must be conducted and Thoracic Trauma Index (TTI) injury criteria acquired with the SID must be less than 85, as defined in 49 CFR part 572, Subpart F. SID TTI data must be processed as defined in Federal Motor Vehicle Safety Standard (FMVSS) § 571.214, S 6.13.5. Rational analysis, comparing an installation with another installation where TTI data were acquired and found acceptable, may also be viable. The use of the EuroSID-1 as defined by the Official Journal of European Communities, L169 Volume 39, dated July 8, 1996, Directive 96/27/EC and amending Directive 70/156/EEC is considered acceptable for the collection of this data.

(d) Pelvis: Pelvic lateral acceleration must not exceed 130g. Pelvic acceleration data must be processed as defined in FMVSS § 571.214, S 6.13.5.

(a) One test with the SID Anthropomorphic Test Dummy (ATD) or the EuroSID-1, as defined above, undeformed floor, no yaw, and with all lateral structural supports (armrests/walls).

Pass/fail injury assessments: TTI; and pelvic acceleration.

(b) One test with the Hybrid II ATD, or equivalent, deformed floor, with 10 degrees yaw, and with all lateral structural supports (armrests/walls).

Pass/fail injury assessments: HIC; and upper torso restraint system retention and pelvic acceleration.

(c) Vertical test to be conducted with modified Hybrid II ATD's with existing pass/fail criteria.

(d) G-loads used in 2(a), 2(b) and 2(c) are those defined in 14 CFR part 23, § 23.562(b), for first row (crew) and other rows (passenger) seats.

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

Submit comments using the following format:

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

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

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

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

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this notice must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2000-NM-125-AD.” The postcard will be date stamped and returned to the commenter.

Any person may obtain a copy of this NPRM by submitting a request to the FAA, Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 2000-NM-125-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

On December 11, 1997, the FAA issued AD 97-26-06, amendment 39-10249 (62 FR 66512, December 19, 1997), applicable to all EMBRAER Model EMB-120 series airplanes, to require revising the Airplane Flight Manual (AFM) to include requirements for activation of the ice protection systems and to add information regarding operation in icing conditions; installing an ice detector system; and revising the AFM to include procedures for testing system integrity. That action was prompted by reports indicating that flightcrews experienced difficulties controlling the airplane during (or following) flight in normal icing conditions, when the ice protection system either was not activated when ice began to accumulate on the airplane, or the ice protection system was never activated. These difficulties may have occurred because the flightcrews did not recognize that a significant enough amount of ice had formed on the airplane to require activation of the deicing equipment. The requirements of that AD are intended to ensure that the flightcrew is able to recognize the formation of significant ice accretion and take appropriate action; such formation of ice could result in reduced controllability of the airplane in normal icing conditions.

Since the issuance of that AD, the Departmento de Aviacao Civil (DAC), which is the airworthiness authority for Brazil, has advised the FAA that certain procedures (required by AD 97-26-06) for installing the ice detector system improperly affect the logic of the deicing system warning messages. The manufacturer has issued revised procedures.

EMBRAER has issued Service Bulletin 120-30-0027, Change 02, dated December 3, 1997; Change 03, dated June 26, 1998; and Change 04, dated July 13, 1999. The service bulletin describes procedures for installing an ice detector system. The procedures described in Changes 02-04 differ in several ways from those described in the original version of the service bulletin (which was cited in AD 97-26-06 as the appropriate source of service information for the installation) and its first revision. Changes 02-04 provide:

• Additional actions for airplanes modified in accordance with the original or first revised service bulletin.

• Additional installation instructions for airplanes that were originally equipped with provisions only for the system installation.

• Information to correct the system accomplishment.

• Correction of certain editorial errors.

• Correction of certain effectivity listings.

• Correction of information in certain steps related to follow-up testing.

The DAC classified Change 02 and subsequent revisions of the service bulletin as mandatory and issued Brazilian airworthiness directive 97-06-03R1, dated December 15, 1997, in order to ensure the continued airworthiness of these airplanes in Brazil.

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

Since an unsafe condition has been identified that is likely to exist or develop on other airplanes of the same type design registered in the United States, the proposed AD would supersede AD 97-26-06 to continue to require revising the Airplane Flight Manual (AFM) to include requirements for activation of the ice protection systems and to add information regarding operation in icing conditions; installing an ice detector system; and revising the AFM to include procedures for testing system integrity. The proposed AD would require that the ice detector system be installed in accordance with revised procedures. The actions would be required to be accomplished in accordance with the AFM revisions, and in accordance with Change 02, 03, or 04 of the service bulletin, all described previously.

This proposed AD and the Brazilian airworthiness directive differ in the compliance times to install the ice detector system. The Brazilian airworthiness directive mandated the installation by June 1, 1998 (6 months after the effective date). However, the FAA has determined that an interval of six months would not address the identified unsafe condition in a timely manner. In developing an appropriate compliance time for this AD, the FAA considered not only the manufacturer's recommendation, but the degree of urgency associated with addressing the subject unsafe condition, the average utilization of the affected fleet, and the time necessary to install the ice detector system. In light of these factors, the FAA finds a 30-day compliance time for initiating the required actions to be warranted, in that it represents an appropriate interval of time allowable for affected airplanes to continue to operate without compromising safety.

There are approximately 250 airplanes of U.S. registry that would be affected by this proposed AD.

The AFM revisions currently required by AD 97-26-06 and retained in this proposed AD take approximately 1 work hour per airplane to accomplish, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of the AFM revision on U.S. operators is estimated to be $60 per airplane.

The complete installation currently required by AD 97-26-06 and retained in this proposed AD takes approximately 53 work hours per airplane to accomplish, at an average labor rate of $60 per work hour. Required parts would cost approximately $13,054 per airplane. Based on these figures, the cost impact of the installation on U.S. operators is estimated to be $16,234 per airplane.

The additional installations described in Parts III and IV of EMBRAER Service Bulletin 120-30-0027 (Change 02, 03, or 04) would each take approximately 5 work hours per airplane. The additional tests described in Part VI would take approximately 2 work hours per airplane to accomplish. The average labor rate is $60 per work hour. Information regarding the cost of parts required to accomplish the modifications described in Parts III and IV is unavailable at this time; there would be no cost for parts required to complete Part VI. Based on these figures, the cost impact of the additional modifications and tests proposed by this AD on U.S. operators required for those airplanes that have previously complied with the original issue or Change 01 of the service bulletin is estimated to be as high as $420 per airplane (excluding parts).

The cost impact figures discussed above are based on assumptions that no operator has yet accomplished any of the current or proposed requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted.

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

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

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

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

Submit comments using the following format:

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

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

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

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

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this notice must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 99-NM-381-AD.” The postcard will be date stamped and returned to the commenter.

Any person may obtain a copy of this NPRM by submitting a request to the FAA, Transport Airplane Directorate, ANM-114, Attention: Rules Docket No. 99-NM-381-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

On August 10, 1999, the FAA issued AD 99-17-11, amendment 39-11259 (64 FR 45868, August 23, 1999), applicable to certain Airbus Model A319, A320, and A321 series airplanes, to require repetitive inspections to detect wear of the inboard flap trunnions, and to detect wear or debonding of the protective half-shells; and corrective actions, if necessary. That action was prompted by issuance of mandatory continuing airworthiness information by a foreign civil airworthiness authority. The requirements of that AD are intended to detect and correct chafing and resultant wear damage on the inboard flap drive trunnions or on the protective half-shells, which could result in failure of the trunnion primary load path; this would adversely affect the fatigue life of the secondary load path and could lead to loss of the flap.

AD 99-17-11 provides for an optional modification, which, if accomplished, would constitute terminating action for the required inspections. Since the issuance of that AD, the FAA has determined that the modification should be made mandatory for airplanes subject to the identified unsafe condition. Such modification would terminate the extensive repetitive inspections and/or corrective actions of the protective half-shell (area 1) to detect wear or debonding, and of the trunnion (area 2) to detect wear.

Airbus has issued Service Bulletin A320-27-1117, Revision 02, dated January 18, 2000, which describes procedures for modification of the sliding panel mechanism of the flap drive trunnion. Revision 02 is essentially equivalent to previous revisions of the service bulletin (which were cited in AD 99-17-11 as appropriate sources of service information for accomplishment of the modification). However, certain work procedures have been clarified in Revision 02. Accomplishment of this modification would eliminate the need for repetitive inspections. The DGAC approved this service bulletin and issued French airworthiness directive 1996-271-092(B) R3, dated August 11, 1999, in order to assure the continued airworthiness of these airplanes in France.

Airbus also has issued Service Bulletin A320-27-1108, Revision 04, dated November 22, 1999, which describes procedures for repetitive detailed visual inspections of the protective half-shell (area 1) to detect wear or debonding, and detailed visual inspections of the trunnion (area 2) to detect wear. This revision is essentially equivalent to previous revisions, which were cited as the appropriate sources of service information for certain inspections required by AD 99-17-11. However, certain references have been revised and certain work procedures have been clarified in this revision.

Airbus also has issued Service Bulletin A320-27-1066, Revision 5, dated June 25, 1999, which describes procedures for repetitive detailed visual inspections of areas 1 and 2 of the inboard flap trunnion to detect wear on the trunnion; and repair or replacement of the trunnion, if necessary. Revision 5 is essentially equivalent to A320-27-1066, Revision 4, dated July 15, 1997 (for Model A320 series airplanes), which was cited as an appropriate source of service information for certain inspections required by AD 99-17-11.

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

Since an unsafe condition has been identified that is likely to exist or develop on other airplanes of the same type design registered in the United States, the proposed AD would supersede AD 99-17-11 to continue to require the actions specified in that AD, and to require accomplishment of the previously optional terminating action. The actions would be required to be accomplished in accordance with the service bulletins described previously.

The proposed AD also would revise paragraph (a)(3) of the existing AD to clarify which airplanes are affected by that paragraph. As stated in that paragraph, Airbus Model A320 series airplanes “on which Airbus Modification 22881 has been accomplished, and on which Airbus Modification 22841 or the modification specified in Airbus Service Bulletin A320-27-1050 has not been accomplished” should accomplish certain actions. Since Airbus Modification 22881 corresponds to Airbus Service Bulletin A320-27-1050, the statement is contradictory as written, and cannot be literally complied with by operators. Therefore, the FAA is revising paragraph (a)(3) to apply to Airbus Model A320 series airplanes “on which Airbus Modification 22881 (Airbus Service Bulletin A320-27-1050) has been accomplished, and on which Airbus Modification 22841 has not been accomplished.” Paragraph (a)(3) has also been revised to provide operators with additional time in which to accomplish the inspection required by that paragraph. In addition, NOTE 2 of this proposed AD explains the revision to paragraph (a)(3) of AD 99-17-11 to correct the description of airplanes affected by that paragraph.

The proposed AD would differ from the parallel French airworthiness directive in that it would mandate the accomplishment of the terminating action for the repetitive inspections. The French airworthiness directive provides for that action as optional. Mandating the terminating action is based on the FAA's determination that long-term continued operational safety will be better assured by modifications or design changes to remove the source of the problem, rather than by repetitive inspections. Long-term inspections may not be providing the degree of safety assurance necessary for the transport airplane fleet. This, coupled with a better understanding of the human factors associated with numerous continual inspections, has led the FAA to consider placing less emphasis on inspections and more emphasis on design improvements. The proposed modification requirement is consistent with these conditions.

There are approximately 132 airplanes of U.S. registry that would be affected by this proposed AD.

The actions that are currently required by AD 99-17-11, and retained in this AD, take approximately 1 work hour per airplane to accomplish, at an average labor rate of $60 per work hour. Based on these figures, the cost impact of the currently required actions on U.S. operators is estimated to be $7,920, or $60 per airplane, per inspection cycle.

The new actions that are proposed in this AD action would take approximately 14 work hours per airplane to accomplish, at an average labor rate of $60 per work hour. Required parts would be provided by the manufacturer at no cost to the operators. Based on these figures, the cost impact of the proposed requirements of this AD on U.S. operators is estimated to be $110,880, or $840 per airplane.

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

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

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

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

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

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

Commenters wishing the FAA to acknowledge receipt of their mailed comments submitted in response to this notice must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. 99-SW-65-AD.” The postcard will be date stamped and returned to the commenter.

Any person may obtain a copy of this Supplemental Notice of Proposed Rulemaking (SNPRM) by submitting a request to the FAA, Office of the Regional Counsel, Southwest Region, Attention: Rules Docket No. 99-SW-65-AD, 2601 Meacham Blvd., Room 663, Fort Worth, Texas 76137.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to add an AD for ECD Model BO-105CB-5 and BO-105CBS-5 helicopters was published as an NPRM in the Federal Register on March 13, 2000 (65 FR 13251). That NPRM proposed to supersede AD 99-24-05, Amendment 39-11429 (64 FR 62973, November 18, 1999), which requires, before further flight, creating a component log card and determining the calendar age and number of flights on each TT strap and inspecting and removing, as necessary, certain unairworthy TT straps. The NPRM, in addition to retaining the requirements of AD 99-24-05, would have required establishing a life limit, effective January 1, 2001, for the TT straps of 120 months or 25,000 flights, whichever occurs first.

Since the issuance of that NPRM, the FAA has reevaluated the proposed requirement and determined that establishing a life limit on the TT straps should be accomplished before January 1, 2001, as earlier indicated. The FAA has also determined that the graduated inspection criteria and the accompanying TT strap life limits specified in the current AD are no longer necessary after the currently specified life limit is established.

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

The FAA estimates that 200 helicopters of U.S. registry would be affected by this proposed AD, that it would take approximately 16 work hours per helicopter to accomplish the proposed actions, and that the average labor rate is $60 per work hour. Required parts would cost approximately $10,400 per helicopter. Based on these figures, the total cost impact of the proposed AD on U.S. operators is estimated to be $2,272,200.

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

For the reasons discussed above, I certify that this proposed regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A copy of the draft regulatory evaluation prepared for this action is contained in the Rules Docket. A copy of it may be obtained by contacting the Rules Docket at the FAA, Office of the Regional Counsel, Southwest Region, 2601 Meacham Blvd., Room 663, Fort Worth, Texas.

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

This proposal would require initial and repetitive visual inspections, and replacement if necessary, of certain compressor bleed valve assembly components on PT6A-25C and -114A turboprop engines, in accordance with P&WC Service Bulletin (SB) No. 1574 Revision 2, dated October 14, 1999. This proposal would also require eventual replacement of compressor bleed valve assemblies with redesigned valve assemblies, on PT6A-114A turboprop engines, in accordance with P&WC SB No. 1588, dated February 18, 2000.

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

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

Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this notice must submit a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket Number 2000-NE-26-AD.” The postcard will be date stamped and returned to the commenter.

Any person may obtain a copy of this NPRM by submitting a request to the FAA, New England Region, Office of the Regional Counsel, Attention: Rules Docket No. 2000-NE-26-AD, 12 New England Executive Park, Burlington, MA 01803-5299.

Transport Canada (TC), which is the airworthiness authority for Canada, recently notified the FAA that an unsafe condition may exist on P&WC PT6A-25C and -114A series turboprop engines, which are installed on but not limited to Pilatus PC-7 and Cessna 208 Caravan airplanes. TC advises that engines, which have incorporated P&WC SB No. 1510, may experience cotter pin and diaphragm wear and fatigue inside the compressor bleed valve assembly. Separation of sections of the cotter pin and particles from diaphragm wear may cause blockage of one or both valve orifices, resulting in a power loss, inability of the engine to accelerate and/or in-flight shut down. P&WC has issued SB No. 1574, Revision 2, dated October 14, 1999, which specifies initial visual inspection of compressor bleed valve assembly cover, guide pin shaft, cotter pin, and diaphragm for wear, and, replacement of these parts if necessary. TC classified this SB as mandatory by issuing AD No. CF-99-23, dated September 14, 1999 in order to assure the continued airworthiness of these airplanes in Canada. P&WC has also issued SB No. 1588, dated February 18, 2000, for PT6A-114A turboprop engines that specify compressor bleed valve assembly replacement with a redesigned valve assembly.

These engine models are manufactured in Canada and are type certificated for operation in the United States under the provisions of § 21.29 of Title 14 of the Code of Federal Regulations (14 CFR 21.29) and the applicable bilateral airworthiness agreement. Pursuant to this bilateral airworthiness agreement, Transport Canada has kept the FAA informed of the situation described above. The FAA has examined the findings of Transport Canada, reviewed all available information, and determined that AD action is necessary for products of this type design that are certificated for operation in the United States.

Since an unsafe condition has been identified that is likely to exist or develop on other engines of the same type design registered in the United States, the proposed AD would require initial visual inspection of certain compressor bleed valve assembly components within 150 flight hours after the effective date of this AD, repetitive visual inspections within 600 flight hours after the last inspection, and if necessary, the replacement of certain components. The proposed AD would also require replacement of compressor bleed valve assemblies on PT6A-114A engines which have had Pratt & Whitney Canada SB No. 1510 incorporated, with a redesigned valve assembly at the next shop visit but no later than five years after the effective date of this AD. The actions would be required to be accomplished in accordance with the SB's described previously.

There are about 504 engines of the affected design in the worldwide fleet. The FAA estimates that 353 engines installed on aircraft of U.S. registry would be affected by this proposed AD, that it would take about 2 work hours per engine to accomplish the initial inspections, and 1 hour to accomplish the replacement of the valve, and that the average labor rate is $60 per work hour. Required parts would cost about $7,458.00 per engine. Based on these figures, the total cost impact of the proposed AD on U.S. operators is estimated to be $2,696,214.00.

This proposal does not have federalism implications, as defined in Executive Order 13132, because it 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. Accordingly, the FAA has not consulted with state authorities prior to publication of this proposal.

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

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

These regulations are proposed under the authority of section 26a of the Tennessee Valley Authority Act of 1933 (16 U.S.C. 831y-1), and TVA's property rights under certain deeds and flowage easement instruments.

Section 26a of the TVA Act provides that no dam, appurtenant works, or other obstruction affecting navigation, flood control or public lands or reservations shall be constructed, and thereafter operated or maintained across, along, or in the Tennessee River system or any of its tributaries until the plans for such construction, operation, or maintenance shall have been submitted to and approved by the TVA Board of Directors, or its delegate. Commencement of construction, operation, or maintenance of such structures without such approval is prohibited.

On October 22, 1971, TVA promulgated regulations setting forth the approval process and establishing a number of policies regarding the exercise of TVA's section 26a authority. The regulations have since been amended from time to time. This proposed rulemaking would further amend the existing regulations by adding new sections regarding underground and aboveground storage tanks, marina sewage pump-out stations and holding tanks, wastewater outfalls and septic systems, and development within flood control storage zones of TVA reservoirs. A new section providing for the handling of requests for waivers or variances would be added, and the sections governing the application process and the handling of appeals would be revised for clarity.

TVA also proposes to add new subparts C and D regarding residential-related use of TVA-controlled residential access shoreline and TVA flowage easement shoreline. The rules contained in these subparts would implement the “Shoreline Management Initiative” policy adopted by TVA's Board of Directors on April 21, 1999. Through these rules, TVA would promote the conservation of shoreline resources to provide public use opportunities and protect environmentally sensitive resources, while also accommodating access to the shore by adjacent residents.

Today's proposal would make minor revisions to the existing process for obtaining approvals required under section 26a of the TVA Act. This subpart would apply to all cases involving an obstruction subject to section 26a approval or otherwise requiring TVA approval under these rules (including, among other things, TVA-owned residential access shoreland uses described in proposed subpart C and certain uses of TVA flowage easement property under proposed subpart D).

1. Scope and intent. This section (§ 1304.1) sets forth the authorities for and the purposes of TVA's regulation of structures in the Tennessee River system and activities on land in which TVA has a property interest. Part 1304 is generally applicable to all obstructions in the river system and to activities conducted on reservoir-related property in TVA's custody or subjects to TVA flowage easements.

2. Application. If the rule is amended as proposed, section 26a facilities would, for purpose of the application process and certain other purposes, be divided into “minor” and “major” facilities. Applicants for minor facilities would have to include less information with their applications. Nonexclusive examples of minor and major facilities are provided in the proposed rule. TVA believes that in most cases it will be readily apparent whether a facility should be classified as minor or major. Generally, it is TVA's intention that most residential related facilities for individual use would be minor facilities. For application purposes, a request for a variance to the size limitations for a residential-related facility would be regarded as an application for a “major” facility. Commercial or community facilities likely would be much larger than individual facilities and usually would be classified as major. TVA would encourage applicants to inquire in advance for guidelines in cases where it may not be clear whether a proposed facility would be minor or major.

3. Delegation of Authority and Application Review and Approval Process. The rule would be revised to reflect the current organizational structure of TVA. The information required to be included with applications for each type of facility would be specified. The procedures for TVA's consideration of applications, including the procedures applicable to hearings and appeals, would be clarified.

The regulation governing nonnavigable houseboats would be revised to better distinguish between navigable and nonnavigable houseboats and to more clearly specify where nonnavigable houseboats may be moored. A provisions governing sanitation would be added. As in the current rule, no new nonnavigable houseboats would be allowed.

Today's proposal contains a new subpart (subpart C) regarding residential-related use of TVA-controlled residential access shoreline.

1. Applicability. This subpart addresses access across, and construction of facilities and vegetation management on, three categories of TVA-owned shoreland property by adjacent upland residential landowners (for ease of reference, property owned by the United States and under the custody and control of TVA is referred to in this preamble and throughout the proposed rule as “TVA-owned”):

• TVA-owned shorelands over which the adjacent upland residential landowners hold deeded rights of ingress and egress for access to the water (except where a particular activity is excluded by the deed language) and/or the right to apply to construct water-use facilities.

• TVA-owned shorelands designated in current, approved TVA Reservoir Land Management Plans as open for consideration of residential shoreline development.

• On reservoirs not having a current, approved TVA Reservoir Land Management Plan at the time of application, TVA-owned shorelands designated in TVA's property forecast system as “reservoir operations property,” identified in a subdivision plat recorded prior to September 24, 1992, and containing at least one water-use facility developed prior to September 24, 1992.

Subpart C would apply only to TVA-owned property adjacent to reservoirs. It would not apply to land adjacent to a free-flowing river—whether or not TVA-owned. Obstructions on land adjacent to a free-flowing river would be regulated under amended subparts A, B, and E; if TVA owns the property, construction of facilities and vegetation management on, and access across such land would be controlled by TVA on a case-by-case basis. Subparts C and D would not apply to commercial marinas or other commercial facilities. Such facilities would be regulated in accordance with subparts A, B, and E, and, where TVA has a property interest, in accordance with the full exercise of TVA's rights under such interest.

No residential-related obstructions, shoreline structures, access corridors, or vegetation management activities would be allowed on any TVA-owned reservoir land not included in one of the three categories specified in the proposed rule.

2. Vegetation Management. It is expected that requests for permission to manage vegetation on TVA-owned lands would, for the most part, be made in conjunction with a request to construct a dock or other obstruction under section 26a. However, adjacent upland residential landowners may wish to engage in vegetation management activities on TVA-owned lands without constructing any facility regulated under section 26a. In such circumstances, the proposed rules would still require the adjacent landowner to apply for and obtain a permit before engaging in any vegetation management on TVA-owned lands.

3. Docks, Piers, and Other Water-Use Facilities. Under the proposed rule, adjacent property owners would be responsible for submitting drawings of proposed facilities for TVA review and approval to ensure that the applicable standards would be met and that the facility would otherwise be consistent with TVA's management of the Tennessee River system. To provide design suggestions for private water-use facilities, TVA makes available sample drawings for docks, piers, and boatslips. Adjacent property owners may use these drawings or create their own drawings reflecting their design preferences in a way that meets TVA's size and construction requirements.

Standards for the size and type of docks permitted by TVA help to avoid the construction of structures that obstruct or otherwise have an adverse impact on boating access into coves or along the shore. They also help to limit obstructions to visibility. The proposed dock standards are designed in a way that numerous different shapes, sizes, and combinations of facilities could be built. The standards are designed to define the maximum size of docks and other water-use facilities that are approvable by TVA. Unless there are environmental resources that must be avoided, navigation restrictions, or physical site constraints such as a narrow cove, decisions about the size and type of docking facilities to be built would be made by the applicant, provided the maximum standards are not exceeded. When site constraints preclude the building of maximum-size facilities, TVA would determine if a smaller facility could be approved and, if so, what size facility would be allowed.

4. Group and Community Water-Use Facilities. TVA recognizes that subdivision developers or chartered homeowner's associations may wish to develop group or community water-use facilities on a community lot or other site. In such cases, some deviation from the requirements applicable to individual adjacent upland landowners may be appropriate. Generally, where individual upland landowners have deeded ingress and egress rights, they may apply to construct individual water-use facilities and undertake vegetation management activities even though a community facility has been approved.

5. Channel Excavation on TVA-Owned Residential Access Shoreland. The standards for channel excavation are designed to minimize impacts upon water quality and aquatic communities and avoid obstructions that would adversely affect navigation or flood control.

6. Shoreline Stabilization. TVA generally will allow homeowners to choose between riprap, biostabilization, gabions, retaining walls, or a combination of the four approaches for erosion control. Retaining walls are not a favored method of treating shoreline erosion. They typically require extensive site disturbance during construction, which can destroy fish spawning and feeding areas. Their vertical surface does not provide desirable aquatic habitat conditions, and they often fail because of improper design, causing further site disturbance. As requested by the homeowner, TVA may assess shoreline erosion conditions and advise whether biostabilization, riprap, gabions, retaining walls, or some combination of these treatment methods would be most appropriate.

This subpart governs use of privately-owned shorelands where TVA has acquired flowage easements and thus has the right to flood the land as part of its reservoir operations. TVA's authority with respect to such lands stems from its authority under section 26a of the TVA Act and the rights accorded to TVA under the flowage easement documentation. Under the proposed rule, TVA generally would apply to flowage easement lands the same standards regarding docks, piers, and other water-use facilities, shoreline stabilization, fish attractors, and channel excavation (to the extent it creates an obstruction regulated under section 26a) as would be applicable to residential-related use of TVA-controlled residential access shoreline. Decisions about vegetation management and any other activities not subject to regulation under section 26a or prevented or regulated by the terms of the flowage easement would be made by the landowner. Subpart D specifically identifies the sections of subpart C that are applicable to flowage easement shoreland.

This subpart contains rules of general applicability and other miscellaneous provisions. To the extent anything contained in this subpart may be inconsistent with the standards set forth in subparts C and D, those subparts shall take precedence on the lands to which they apply.

1. Definitions. A number of new definitions would be added to improve clarity.

2. Flotation Devices and Materials. The proposed rule (§ 1304.401) would impose minimum specifications for flotation devices associated with docks, boat mooring buoys, and other water-use structures and facilities.

3. Discharges From Houseboats, Watercraft, and Floating Structures. This section (§ 1304.402) would continue the existing prohibition against the mooring over TVA land of any watercraft or floating structure equipped with a marine sanitation device unless such device is in compliance with all applicable requirements.

4. Wastewater Outfalls and Septic Systems. New § 1304.403 would require facilities required to have a wastewater permit to obtain such permit before a section 26a permit would be issued. Septic tank systems where any portion of the system is located on TVA flowage easement property would be subject to permitting requirements and certain specified standards. No portion of any septic tank system would be allowed on TVA-owned shoreland property.

5. Marina Sewage Pump-out Stations and Holding Tanks. The proposed rule would establish minimum design and operating requirements for new marina sewage pump-out stations and holding tanks (§ 1304.404). Other Federal, State, or local laws or rules may require installation of such facilities or otherwise regulate them in some circumstances.

6. Fuel Storage Tanks and Handling Facilities. The proposed regulations (§ 1304.406) would establish minimum requirements for the installation of underground and aboveground storage tanks in connection with commercial facilities subject to TVA approval. TVA is considering new requirements for fuel handling piping systems associated with storage tanks and for fuel containment provisions at fuel pumps located on commercial docks, piers, and marinas. Generally, except in unusual circumstances where there is no other practicable solution, TVA does not approve storage tanks on TVA lands. Tanks must be located on land owned by the applicant. Also, TVA would not approve fuel handling facilities of any kind on private non-commercial docks, piers, and boathouses.

7. Development Within Flood Control Storage Zones of TVA Reservoirs. A new section (§ 1304.408) imposing certain requirements when a project would result in a loss of flood control storage would be added.

8. Request for Waiver or Variance. A new section (§ 1304.409) would establish a mechanism for requesting a waiver of or variance from a provision of the rules. Good cause would be required for approval of such requests, and approval or disapproval would be at the sole discretion of the Vice President, Resource Stewardship, TVA.

The proposed rule contains no Federal mandates for State, local, and tribal Governments or the private sector. Rather, it simply codifies policies and requirements regarding the use of TVA land and the size, type, and use of obstructions to be allowed in the Tennessee River. In addition, any expenditures by State, local and tribal governments or the private sector in connection with the rule would be substantially less than $100 million in any one year.

This proposed action will not have a significant economic impact on a substantial number of small entities. There will be no significant economic impact from the amendments since the proposed rule would not significantly add to the costs of one who chooses to use TVA land or construct an obstruction in the Tennessee River system. Existing obstructions that are or could be permitted under current regulations would not have to be modified to conform to new standards.

Any economic impact that would occur as a result of the proposed rule would not affect a substantial number of small entities because TVA only processes about 300 applications annually for nonresidential facilities.

TVA prepared a detailed draft environmental impact statement (EIS) assessing residential shoreline development impacts in the Tennessee Valley. Copies of the Executive Summary and/or draft EIS were distributed to numerous State agencies and public libraries in the Tennessee Valley and to approximately 8,000 interested individuals. Sixteen public meetings were held, and numerous oral and written comments were received and considered. A final EIS adopting the residential access policies that would be implemented by these rules has been released, and a record of decision has been issued. This proposed rulemaking reflects the involvement of the interested public during the environmental review process. An Environmental Assessment is being prepared for those aspects of the proposed rule not addressed in the residential shoreline development EIS.

The information collection requirements in this proposed rule have been submitted for approval of the Office of Management and Budget (OMB) under the Paperwork Reduction Act, 44 U.S.C. § 3501 et seq. An Information Collection Request (ICR) document has been prepared by TVA, and a copy may be obtained from Wilma H. McCauley, Agency Clearance Officer, Tennessee Valley Authority, 1101 Market Street (WR 4Q), Chattanooga, Tennessee 37402-2801 or by calling (423) 751-2523.

The only information collection activity contained in the proposed rule is a requirement that persons seeking approval to construct an obstruction along or in the Tennessee River system or authorization to use certain property under TVA's control submit an application to TVA. The application consists of an application form plus, in the case of an obstruction, detailed plans, maps, and other information necessary for TVA to evaluate the request for approval. The estimated time to complete the application form and prepare the supplemental material is 1.5 hours. The time may vary depending upon the nature and complexity of the proposed action.

Comments are requested on TVA's need for this information, the accuracy of the provided burden estimates, and any suggestions for minimizing respondent burden. Send comments on the ICR to the Agency Clearance Officer, Tennessee Valley Authority, 1101 Market Street (WR 4Q), Chattanooga, Tennessee 37402-2801; and to the Officer of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503, marked “Attention: Desk Officer for Tennessee Valley Authority.” Include the ICR number in any correspondence. Comments should be received by OMB no later than thirty (30) days after the date of public of this proposed rule. The final rule will respond to any OMB or public comments on the information collection requirements contained in this proposal.

For the reasons set forth in the preamble, title 18, chapter XIII of the Code of Federal Regulations is amended by revising part 1304 to read as follows:

In the Federal Register of July 3, 2000 (65 FR 41029), FDA (we) published a document announcing a public meeting to discuss the use of the term “fresh” on foods processed with alternative nonthermal technologies. In that document, we solicited public input on whether use of the term “fresh” is truthful and nonmisleading in the labeling of foods processed with these technologies and on what criteria we should use when considering use of the term with future technologies. We stated that we would make available at our Dockets Management Branch and on our website the transcript of the public meeting. Also in that document, we stated that interested parties may submit comments to the docket until August 21, 2000.

Following the public meeting, FDA received a comment from a trade association requesting more time for interested parties to comment. The trade association stated that the testimony presented at the public meeting made it evident that the issues surrounding the use of the term “fresh” on foods processed with new technologies are quite complicated. The trade association maintained that additional time is needed for careful consideration of the scientific and technical topics on which FDA is seeking comments. FDA believes that reopening the comment period until Novembr 20, 2000, is appropriate. Reopening the comment period will allow the public adequate time to read the transcript of the public meeting and to carefully consider the topics we are seeking input on before preparing their comments.

Interested persons may, on or before November 20, 2000, submit written comments to the Dockets Management Branch (address above). You may also send comments to the Dockets Management Branch at the following e-mail address: FDADockets@oc.fda.gov or via the FDA Internet at http://www.accessdata.fda.gov/scripts/oc/dockets/comments/commentdocket.cfm. Please address your comments to the docket number given at the beginning of this document. You must submit two copies of comments, identified with the docket number found in brackets in the heading of this document, except that you may submit one copy if you are an individual. You may review received comments in the Dockets Management Branch between 9 a.m. and 4 p.m. Monday through Friday.

On March 26, 1998 (63 FR 14613), the IRS issued proposed regulations (REG-104537-97) which contained two sets of provisions, one relating to the treatment under subpart F of a controlled foreign corporation's (CFC's) distributive share of partnership income (including a clarification of the manufacturing exception under the foreign base company sales income rules) and the other relating to hybrid branch transactions. The provisions relating to hybrid branch transactions were also issued as temporary regulations (TD 8767). Congress and taxpayers raised concerns about the proposed and temporary regulations relating to hybrid branch transactions. To respond to these concerns, on July 6, 1998, Treasury and the IRS issued Notice 98-35 (1998-27 I.R.B. 35), which announced that they would withdraw the proposed regulations and remove the temporary regulations. Notice 98-35 also announced that Treasury and the IRS would issue two new separate sets of proposed regulations. One proposed regulation would contain hybrid branch rules. The other proposed regulation would contain rules pertaining to the treatment under subpart F of a CFC's distributive share of partnership income. On July 13, 1999, in furtherance of Notice 98-35, Treasury and the IRS published REG-113909-98 (64 FR 37727), which withdrew the proposed regulations and issued new proposed regulations containing the hybrid branch provisions with new dates of applicability to give Congress and the Treasury more time to evaluate the issues raised by these provisions. On the same date, TD 8827 (64 FR 37677) removed the temporary regulations relating to hybrid branch transactions. Treasury and the IRS are now proposing the regulations relating to the subpart F treatment of a CFC's distributive share of partnership income.

This document substantially restates the former proposed regulations relating to the treatment of a CFC's distributive share of partnership income under subpart F. These new proposed regulations, however, do not contain the provisions of the former proposed regulations that clarified the manufacturing exception under subpart F. Regulations clarifying the manufacturing exception will be proposed at a later date.

These proposed regulations clarify the appropriate treatment under subpart F of certain partnership items that had been the subject of Brown Group, Inc. v. Commissioner, 77 F.3d 217 (8th Cir. 1996), vacating and remanding 104 T.C. 105 (1995). In Brown Group, a Cayman Islands partnership with a Cayman Islands CFC partner earned commission income from purchasing footwear in Brazil on behalf of the CFC's U.S. parent. This commission income would have been subpart F income, specifically foreign base company sales income under section 954(d), to the CFC if it had earned this commission income directly and under the same circumstances in which the partnership earned this income. The Tax Court applied an aggregate theory of partnerships and held that the CFC's distributive share of this commission income was foreign base company sales income. The Eighth Circuit, vacating and remanding the Tax Court's decision, applied an entity theory of partnerships and held that the CFC's distributive share of this commission income was not foreign base company sales income.

In response to the Eighth Circuit's opinion, the IRS announced that it intended to issue regulations under subpart F to clarify its position that whether a CFC partner's distributive share of partnership income is subpart F income generally is determined at the CFC partner level. See Notice 96-39 (1996-2 C.B. 209).

The proposed regulations would provide guidance for the treatment under subpart F of a CFC partner's distributive share of subpart F income. The regulations would provide general rules to determine whether a CFC partner's distributive share of partnership income falls within, not only foreign base company sales income, the category of income at issue in Brown Group, but any category of subpart F income. These regulations also would provide guidance about the treatment of a CFC partner's distributive share of foreign personal holding company income, foreign base company sales income, foreign base company services income, and earnings invested in United States property under certain specific provisions of subpart F.

The proposed regulations are based on the authority of subchapter K and subpart F and the policies underlying those provisions. The legislative history of subchapter K provides that a partnership distributive share should be characterized by using the approach that best serves the Internal Revenue Code or regulations section at issue.

To allow a CFC to avoid subpart F treatment for items of income through the simple expedient of receiving them as distributive shares of partnership income, rather than directly, is contrary to the intent of subpart F. Subpart F was intended to limit deferral of U.S. income tax on passive income received by CFCs, as well as on certain other kinds of easily transferable income.

Under these proposed regulations, gross income would be characterized at the partnership level, as, for example, sales income. If any part of the partnership's gross income would be subpart F income if received directly by partners that are CFCs, it must be separately taken into account by each partner, under section 702. Thus, to the extent the separately stated income is subpart F income at the CFC partner level, it will be taken into account in determining the CFC's total subpart F income for the taxable year and U.S. shareholders of the CFC will currently include their pro rata share of this income in gross income to the extent provided under the rules of subpart F.

The regulations under section 702 would be clarified to expressly provide that an item must be separately taken into account when, if separately taken into account by any partner, the item would result in an income tax liability for that partner, or any other person, different from that which would result if the partner did not take the item into account separately. This clarification incorporates into the regulations Rev. Rul. 86-138 (1986-2 C.B. 84), which holds that a subsidiary partnership in a multi-tiered arrangement must separately state items which, if separately taken into account by any partner of any partnership in the multi-tiered arrangement, would affect the income tax liability of that partner.

The regulations under section 952 also would be clarified to expressly include within the definition of subpart F income a CFC's distributive share of any item of gross income of a partnership to the extent the income would have been subpart F income if received by the CFC partner directly. Comments are requested as to whether this rule should apply for ownership interests that fall below certain thresholds.

The proposed regulations would provide further that, generally, in determining whether a distributive share of partnership income is subpart F income, whether an entity is a related person and whether an activity takes place in or outside the CFC's country of incorporation is determined with respect to the CFC partner and not the partnership. Applying these rules to the Brown Group facts, the income would be characterized at the partnership level as commission income from the purchase of shoes in Brazil on behalf of the U.S. parent for sale in the U.S. Each partner would be required to separately take into account its distributive share of this commission income. It would then be determined at the CFC partner level that the shoes were manufactured and sold for use outside of the CFC's country of incorporation (Cayman Islands), and that the U.S. parent was a related person with respect to the CFC. Thus, the CFC's distributive share of commission income would be foreign base company sales income.

The proposed regulations also would address whether a CFC's distributive share of partnership income can qualify for the exceptions from foreign personal holding company income treatment that are based on the activities performed by the CFC in connection with the property through which it earns the income. The proposed regulations would provide that an exception requiring activity would generally apply if the exception would have applied to the income if the CFC itself had directly earned the income taking into account only the property and activities of the partnership. This requirement is not met if the partnership can qualify for the exception only by taking into account the separate activities of its partners. Thus, for example, if the partnership earns rental income from leasing real property that it owns and with respect to which it performs active and substantial management functions, the CFC partner's distributive share of the rental income can be excluded from subpart F income under the active rents exception of section 954(c)(2)(A) if the rental income is earned from a person that is not a related person with respect to the CFC partner. However, if the partnership owns the real property but the CFC contracts to perform the management functions, the rental income is not excludible under this exception.

These proposed regulations would clarify how the manufacturing exception of § 1.954-3(a)(4) applies in the context of the distributive share rules. The proposed regulations would provide that the manufacturing activities of a partnership may be taken into account under the distributive share rules when the partnership sells the property that it manufactures. As previously noted, the general rules would provide that income that could be foreign base company sales income at the CFC partner level is separately stated and that determinations as to relatedness and the relevant country are made at the partner level. Consistent with the general rules outlined above, these regulations would allow a CFC's distributive share of sales income to be excluded, under the manufacturing exception of § 1.954-3(a)(4), when the partnership manufactures the property that it sells (without regard to the activities of the CFC partner or any other person).

The general rule, described above, would determine whether a CFC partner's distributive share of partnership income is foreign base company services income when the income is earned from performing services for or on behalf of a person that is a related person with respect to the CFC partner. These proposed regulations also would describe how the substantial assistance rule of § 1.954-4(b)(1)(iv) applies when the CFC earns services income through a partnership. When the partnership is performing services for a person unrelated to the CFC partner but the CFC partner, or a related person, provides substantial assistance to the partnership contributing to the performance of those services, the CFC partner and the partnership would be regarded as separate entities and the substantial assistance provided to the partnership by the CFC partner, or a related person, would cause the CFC's partner's distributive share of the services income to be treated as foreign base company services income. Treasury and the IRS are considering applying similar principles to branches of CFCs. Comments are requested on this issue.

Finally, consistent with Rev. Rul. 90-112 (1990-2 C.B. 186), the regulations would provide that, for purposes of section 956, a CFC partner's investment in U.S. property includes the U.S. property held by a partnership to the extent of the CFC's interest in the partnership. Comments are requested as to whether, for purposes of section 956, a CFC partner's interest in a partnership should be based on the CFC's capital interest in the partnership, the CFC's interest in partnership profits, or another standard, such as the facts and circumstances relating to the CFC's interest in the partnership.

Treasury is currently conducting a study to review the provisions of subpart F. The study may examine the foreign base company rules, contract manufacturing, and the use of hybrid partnerships under subpart F. Although comments will be sought separately on the study, comments received on these regulations will be reviewed in connection with the study.

These regulations are proposed to apply for taxable years of a controlled foreign corporation beginning on or after the date the final regulations are published in the Federal Register . For prior periods, the IRS will rely on principles and authorities under subpart F and subchapter K to apply an aggregate approach, (including § 1.701-2(e) and (f) of the regulations for periods for which it is applicable).

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedures Act (5 U.S.C. chapter 5) does not apply to these regulations, and, because the regulation does not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (preferably a signed original and eight (8) copies) that are timely submitted to the IRS. All comments will be available for public inspection and copying. The IRS and Treasury specifically request comments on the clarity of these proposed regulations and how they may be made easier to understand.

A public hearing has been scheduled for December 5, 2000, at 10 a.m., in room 4718, Internal Revenue Building, 1111 Constitution Avenue NW., Washington DC. Due to building security procedures, visitors must enter at the 10th Street entrance, located between Constitution and Pennsylvania Avenues, NW. In addition, all visitors must present photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 15 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section of this preamble.

The rules of 26 CFR 601.601(a)(3) apply to the hearing.

Persons that wish to present oral comments at the hearing must submit written comments and an outline of topics to be discussed and time to be devoted to each topic (signed original and eight (8) copies) by November 14, 2000.

A period of 10 minutes will be allotted to each person for making comments.

An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing.

The principal author of these regulations is Valerie Mark of the Office of the Associate Chief Counsel (International), IRS. However, other personnel from the IRS and Treasury Department participated in their development.

Accordingly, 26 CFR part 1 is proposed to be amended as follows:

The Bureau of Prisons is proposing to amend its regulations on drug abuse treatment programs (28 CFR 550) pertaining to the requirements for the drug abuse education course and participation in the institution residential drug abuse treatment program.

Inmates with drug abuse problems who fail to enter drug treatment are at significantly higher risk of poor institutional adjustment, recidivism, and transition problems once released into the community. Though many inmates take advantage of the Bureau's drug treatment services each year, some inmates who need drug treatment avoid program participation while incarcerated.

The current regulations for the drug abuse education course are contained in § 550.54 and were most recently published in the Federal Register on May 25, 1995 (60 FR 27694). These regulations distinguish between “mandatory” and “voluntary” participation in the drug abuse education course. Participation is mandatory if there is evidence in the inmate's Presentence Investigation that alcohol or other drug use contributed to the commission of the instant offense, alcohol or other drug use was a reason for violation either of supervised release, including parole, or BOP community status (CCC placement) for which the inmate is now incarcerated, or the inmate was recommended for drug programming during incarceration by the sentencing judge. Inmates not qualifying under the mandatory provisions are eligible to volunteer for the drug education program with the approval of the drug abuse treatment coordinator when participation space is available.

The Bureau is revising the regulation to remove the terms “mandatory,” “voluntary,” and “sanctions”. Participation in the drug abuse education program is not intended to be mandatory in the sense that a refusal to participate would result in a disciplinary action. The intent is that if the inmate chooses to refuse to participate, certain consequences may follow which affect the inmate's eligibility for other program assignments (for example, work performance pay levels or community program eligibility). The Bureau is also adding as an additional eligibility criterion evidence of a history of alcohol or other drug use. This history of alcohol or other drug use need not be limited to circumstances surrounding the instant offense.

The current provisions for the institution residential drug abuse treatment program are contained in § 550.56 and were most recently published in the Federal Register on May 25, 1995 (60 FR 27694). The institution residential drug abuse treatment program allows participation by inmates to be voluntary. Currently, inmates may receive incentives for their satisfactory involvement in the residential program. For example, inmates may be eligible for financial achievement awards, recommendation for the maximum 180-day community corrections center placement, and early release consideration (provided they meet the strict criteria for early release) upon full program completion.

In an effort to encourage more inmates to participate in the residential drug abuse treatment program, the Bureau is proposing to establish enhanced incentives at selected institutions. The three additional incentives being proposed in this document are tangible achievement awards as permitted by the Warden and allowed by the regulations governing personal property (for example, textbooks, journals, drug abuse program t-shirts), pencils, photographs of treatment ceremonies, and consideration for a nearer release transfer for medium and low security inmates. Nearer release transfers ordinarily are made to place the inmate in an institution nearer the inmate's release destination or to facilitate the release process. While the Bureau attempts to place inmates in institutions which are reasonably close to anticipated release destinations, other factors pertaining to inmate population management may mean that an inmate is not always optimally placed. In those instances where an inmate's placement has been affected by other factors, earning consideration for a nearer release transfer may be an additional mitigating factor in a subsequent decision to transfer the inmate to an institution nearer to the inmate's anticipated release destination.

The Bureau is also proposing to encourage participation by reluctant inmates with an identified treatment need through the use of specified consequences for non-participants. An inmate who has an identified treatment need but who refuses to participate in a residential treatment program at an institution which offers enhanced incentives will be subject to the following consequences: (1) If the inmate is eligible for parole, staff will notify the U.S. Parole Commission of the inmate's treatment need and the subsequent failure to participate in the residential drug abuse treatment program; (2) the inmate is not eligible for furlough (other than possibly an emergency furlough); (3) the inmate is not eligible for more than 90 days placement in community-based programs (for example, placement in a community corrections center); (4) the inmate is not eligible for performance pay above maintenance pay level, or for bonus or vacation pay; and (5) the inmate is not eligible for a Federal Prison Industries work assignment (unless the Warden makes exception on the basis of work program labor needs). For the sake of consistency, the consequences pertaining to work assignment pay are also being revised in the provisions which pertain to the drug abuse education course (new § 550.54(e)).

The use of enhanced incentives at selected institutions together with the consequences of non-participation is intended to permit the Bureau to evaluate the effectiveness of a more aggressive approach in drug abuse treatment program placement. The Bureau assumes that these revisions will result in increased participation by inmates, particularly with respect to those inmates who do not meet the strict criteria for early release consideration but who do qualify for nearer release transfer. While the Bureau may further adjust the number of selected institutions to be used in this evaluation, any system-wide application of the additional incentives/consequences would be implemented through a separate rulemaking proceeding.

The Bureau's regulations for both the drug abuse education course and the institution residential treatment program contain provisions precluding participation by inmates with learning disabilities or mental impairments (§§ 550.54(c) and 550.56(a)(2)). In actuality, the Bureau has been able to make reasonable accommodations to allow such inmates to participate in the programs. The Bureau believes that these provisions are not necessary and accordingly has removed them in this proposed revision.

The Bureau's regulations on inmate work and performance pay (28 CFR 545, subpart C) are being amended to conform with these requirements. The Bureau's regulations on furloughs (28 CFR 570, subpart C) do not need to be amended because the Warden may deem the inmate's refusal to participate a failure to demonstrate sufficient responsibility to provide reasonable assurance that furlough requirements will be met (see § 570.34(d)).

This rule falls within a category of actions that the Office of Management and Budget (OMB) has determined not to constitute “significant regulatory actions” under section 3(f) of Executive Order 12866 and, accordingly, it was not reviewed by OMB.

This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or on distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 12612, it is determined that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

The Director of the Bureau of Prisons, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation and by approving it certifies that this regulation will not have a significant economic impact upon a substantial number of small entities for the following reasons: This rule pertains to the correctional management of offenders committed to the custody of the Attorney General or the Director of the Bureau of Prisons, and its economic impact is limited to the Bureau's appropriated funds.

This rule will not result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This rule is not a major rule as defined by § 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

We want to make Bureau documents easier to read and understand. If you can suggest how to improve the clarity of these regulations, call or write Sarah Qureshi at the address listed above.

Accordingly, pursuant to the rulemaking authority vested in the Attorney General in 5 U.S.C. 552(a) and delegated to the Director, Bureau of Prisons in 28 CFR 0.96(p), we propose to amend parts 545 and 550 in subchapter C of 28 CFR, chapter V as follows.

The notice of proposed rulemaking (NPRM) on a Vessel Traffic Service (VTS) on the Lower Mississippi River, published on April 26, 2000 (65 FR 24616), encouraged interested persons to participate in this rulemaking by submitting written data, views, or arguments by July 25, 2000. In response to several requests for additional time, the Coast Guard extended the comment period on the NPRM until December 1, 2000 (65 FR 50479). The NPRM and comments already received may be viewed at http://dms.dot.gov. The Coast Guard also received several requests for a public meeting at which interested parties could present their comments. This meeting is in response to those requests.

For information on facilities or services for individuals with disabilities or to request special assistance at the public meeting, contact Lieutenant Junior Grade Ken Mills at the phone number under FOR FURTHER INFORMATION CONTACT.

The Coast Guard will hold a public meeting regarding this proposed rulemaking on Tuesday, October 24, 2000, from 9 a.m. to 5 p.m. The meeting will be held at the address under ADDRESSES.

Under the Clean Air Act as amended in 1990, 42 U.S.C. 7401 et seq. , states required to implement vehicle inspection and maintenance (I/M) programs were further required to incorporate a check of the onboard diagnostic (OBD) computer as part of those programs. On November 5, 1992, the U.S. Environmental Protection Agency (EPA) published in the Federal Register (40 CFR part 51, subpart S) a rule related to state air quality implementation plans for I/M programs (hereafter referred to as the I/M rule; see 57 FR 52950). At the time the 1992 rule was published, certification regulations for OBD had not been finalized, and so EPA reserved space in the I/M rule to address OBD-I/M requirements at some later date. Since 1992, EPA has twice amended the I/M rule to address various aspects of the OBD-I/M check—first, on August 6, 1996, and again on May 4, 1998. EPA is proposing today to further amend the I/M rule and OBD testing requirements to provide states with the greater flexibility they need to better meet local needs, to update requirements based upon technological advances, and to optimize program efficiency and cost effectiveness.

With today's document EPA proposes to: (1) Extend the current deadline for mandatory implementation of the OBD-I/M inspection from January 1, 2001 to January 1, 2002; (2) clarify that I/M programs may use periodic checks of the OBD system on model year (MY) 1996 and newer OBD-equipped vehicles in lieu of (as opposed to in addition to) existing exhaust and evaporative system purge and fill-neck pressure tests on those same vehicles; (3) establish the modeling methodology to be used by states in their State Implementation Plans (SIPs) to account for the replacement of traditional I/M tests by OBD-I/M testing and repair, prior to release of MOBILE6 and subsequent iterations of EPA's mobile source emission factor model; (4) revise and simplify the current list of Diagnostic Trouble Codes (DTCs) that constitute the OBD-I/M failure criteria to include any DTC that leads to the dashboard Malfunction Indicator Light (MIL) being commanded on; (5) provide for exemptions from specific readiness code rejection criteria on OBD-equipped vehicles based upon vehicle model year; and (6) correct a typographical error in the basic I/M performance standard's OBD coverage (which currently applies OBD-I/M testing to both light-duty vehicles and light-duty trucks) to limit such testing coverage to light-duty vehicles only, for the purpose of establishing the minimum, basic I/M performance standard.

The goal of these proposed amendments is to update and streamline requirements and to remove regulatory obstacles that would impede the effective implementation of the OBD-I/M testing required of all I/M programs under the Clean Air Act as amended in 1990. By extending the deadline by which states must begin implementation of OBD-I/M inspections, EPA hopes to provide states the time necessary to better educate the public and the testing and repair industries regarding this important emission control technology, and to reduce the potential for start-up difficulties that have undercut previous I/M efforts in many areas. EPA also hopes to help states maximize the efficiency and cost effectiveness of their I/M programs by allowing them to eliminate functionally redundant testing requirements. That said, it should be pointed out that it is not the goal of this proposal to provide comprehensive guidance on how to successfully implement OBD-I/M testing in an I/M program. Separate guidance addressing the non-regulatory aspects of OBD-I/M implementation will be issued by EPA in conjunction with today's proposal and made available to the public via EPA's web site and by request to the person listed in the FOR FURTHER INFORMATION CONTACT section of this document.

Today's proposed amendments are based upon EPA's findings gathered during three separate OBD-I/M pilot studies, which focused on the following aspects of OBD-I/M testing: (1) OBD's effectiveness as compared to existing exhaust emission testing; (2) OBD's effectiveness as compared to existing evaporative system testing; and (3) the unique implementation issues associated with incorporating checks of the OBD system into a traditional I/M setting. Elements of today's proposal are also based upon EPA's discussions with states regarding their preparedness for OBD-I/M testing as well as on recommendations made by the OBD Workgroup of the Mobile Source Technical Review Subcommittee established under the Federal Advisory Committee Act (FACA). The results of those pilot studies and the FACA workgroup recommendations can be found in the docket for this proposal. Copies of those materials may be obtained from the docket directly, or by contacting the person identified in the FOR FURTHER INFORMATION CONTACT section of this document.

Authority for the rule changes proposed in this document is granted to EPA by sections 182, 202, 207, and 301 of the Clean Air Act as amended (42 U.S.C. 7401, et seq. ).

The Clean Air Act as amended in 1990 (CAA or Act) requires EPA to set guidelines for states to follow in designing and running both basic and enhanced I/M programs. The Act also established certain minimum design specifications for these programs, including, among other things, a requirement that both basic and enhanced I/M programs conduct periodic inspections of the onboard diagnostic (OBD) system of vehicles so equipped. When EPA published the original I/M rule in 1992, emission-based federal certification standards for OBD were still being developed. To address the Act's OBD-I/M requirement, EPA reserved sections in the 1992 I/M rule to be amended at some future date.

Although the federal requirement for OBD as an element of vehicle design began with model year (MY) 1994, manufacturers were allowed to request waivers on vehicles for MY 1994-95, so that the current generation of OBD (also known as OBDII) was not required on all light-duty cars and trucks sold in this country until MY 1996. On August 6, 1996, EPA published amendments to the I/M rule establishing OBD-I/M performance standard and SIP requirements. The 1996 amendments also specified data collection, analysis, and summary reporting requirements for the OBD-I/M testing element; established OBD test equipment requirements and the OBD test result reporting format; and identified those conditions that would result in either an OBD-I/M failure or rejection. Lastly, the August 6, 1996 amendments revised 40 CFR part 85, subpart W to establish OBD-I/M as an official performance warranty short test under section 207(b) of the Act.

At the time the original OBD-I/M requirements were established, it was not practical to evaluate the real-world, in-use performance of OBD because the vehicles in question were still too new and the number of those vehicles in need of repair were too few to make pilot testing worthwhile. 1 Therefore, in 1998, EPA further amended its OBD-I/M requirements to delay the date by which I/M programs must begin OBD testing to no later than January 1, 2001

One of the primary reasons for delaying the deadline for beginning OBD-I/M testing was to give EPA time to evaluate the OBD check as an I/M program element and to give states time to prepare for implementation. In conducting its evaluation of OBD, however, EPA found that identifying and recruiting OBD-equipped vehicles in need of repair proved more difficult and time-consuming than originally anticipated. As a result, EPA has only recently completed its preliminary assessment of OBD effectiveness and implementation issues. During the course of these evaluations, however, it became clear that certain regulatory changes were needed to ensure the smooth implementation of OBD-I/M testing by the states. EPA is therefore proposing to further extend the deadline for OBD-I/M start-up from January 1, 2001 to January 1, 2002, to give states the time necessary to address the issues raised by today's proposed amendments. This element of today's proposal is discussed in more detail below, under section A, “Amendments to Extend the Implementation Deadline.”

EPA's assessment of OBD is based upon data gathered during three separate OBD-I/M pilot studies. The focus, general design, and results of those studies are discussed briefly below. The complete results of the pilot studies—including EPA's analysis of its findings—can be found in the Technical Support Document (TSD) for this proposal, copies of which are available in the docket or by contacting the person listed in the FOR FURTHER INFORMATION CONTACT section of this document.

The first pilot study focused on assessing the effectiveness of the OBD check as an I/M test relative to the IM240, which is generally recognized as the most rigorous and accurate tailpipe inspection currently available for use by I/M programs. That said, the “gold standard” for all I/M tests remains the Federal certification test for new vehicles established under section 206(a)(1) of the Act (also known as the Federal Test Procedure or FTP). Section 207(b) of the Act requires that all I/M tests demonstrate a reasonable correlation to the FTP. Therefore, in conducting its pilot testing, EPA compared both the OBD-I/M and IM240 test results to the FTP results on a per-vehicle basis. Between October 1997 and September 1999, 201 vehicles failing either the IM240, the OBD-I/M check, or both were recruited for this study; each received properly preconditioned, lab-grade IM240, OBD-I/M, and FTP tests, both before and after repairs. What EPA found was that not only did the OBD-I/M check catch most of the same high emitters identified by the IM240 (while avoiding the vehicles falsely failed by that particular test), it also identified vehicles in need of maintenance and/or repair prior to their becoming high emitters, thus acting not only as a pollution reduction strategy, but also as a pollution prevention measure. The results of this pilot are discussed in more detail below, under section B, “Amendments to Reduce Testing Burden.”

The second pilot study focused on assessing the effectiveness of OBD-I/M testing at identifying evaporative system failures, such as leaks and purge system malfunction, and determining the emission-reduction potential of correcting those failures, once identified. Like the OBD tailpipe pilot discussed above, the OBD-I/M evaporative system monitoring results were compared to the FTP results for the same vehicles. Testing for this pilot ran from March 1999 to May 2000, and included a total of 30 vehicles. Unlike the OBD tailpipe study discussed above, the OBD evaporative pilot involved the use of induced evaporative system failures, as opposed to the recruitment of actual, in-use failures. Induced failures were used due to the difficulty EPA had in finding MY 1996+ OBD-equipped vehicles with naturally occurring evaporative system problems, which, in turn, was due to the relative newness of the vehicles in question, and the observation that the vast majority of naturally occurring problems were attributable to loose gas caps. Use of induced evaporative system failures thus allowed EPA to more thoroughly investigate the effectiveness of OBD systems in detecting a variety of potential in-use failures. Unlike tailpipe problems which are largely a function of mileage accumulation and general wear-and-tear, evaporative system problems tend to be a function of vehicle age, as the rubber components of the system lose elasticity and become brittle and more leak-prone. What EPA found was that in the vast majority of cases, the induced failure was accurately identified by the OBD system, that substantial emission reductions were achieved as a result of repairing the failures, and that the OBD computer responded to repairs by correctly verifying that the failure conditions had been removed ( i.e. , when the vehicle was operated to reset the evaporative system readiness flags, no DTCs or illuminated MILs were observed).

In addition to these findings, an earlier EPA-sponsored FTP testing program showed high evaporative emissions from leaking gas caps. Furthermore, in comparing the test results for gas cap tests versus OBD-based evaporative system tests from the Wisconsin I/M program's data, EPA found that the gas cap test failed considerably more vehicles than were identified by the OBD evaporative system monitors alone. This result is not too surprising, given the more stringent test criteria for the gas cap test. Based on these findings, EPA believes that continuing to conduct the gas cap check on OBD-equipped vehicles (and replacing those gas caps that fail the check) is a good supplement to OBD-I/M testing. EPA therefore recommends that the gas cap check be conducted in concert with OBD testing. However, the gas cap check is the only test that EPA recommends be continued in conjunction with OBD-I/M testing, and for which additional credit will be available in MOBILE6. The results of the OBD evaporative pilot are discussed in more detail below, under section B, “Amendments to Reduce Testing Burden.”

The last of the three OBD-I/M pilot studies was aimed at identifying the real-world implementation issues associated with OBD-I/M testing and was conducted using data gathered from the Wisconsin enhanced I/M test lanes, where OBD checks were being implemented voluntarily by the state. One portion of the study was conducted under contract to EPA by Sierra Research. This portion of the study looked at data related to program implementation from May 1998 and July 1998 and included paired IM240 and OBD testing on over 2,500 MY 1996+ OBD-equipped vehicles. Separate from the Sierra Research analysis, EPA looked at data from Wisconsin's I/M program  2 for the last eight months of 1999, which included IM240, gas cap, and OBD-I/M test results on approximately 94,000 MY 1996+ vehicles. In reviewing these two sets of real-world I/M data, EPA identified two OBD-related implementation issues: (1) unset OBD readiness flags, and 2) atypical OBD data link connector (DLC) locations.

Regarding the first—unset readiness flags—EPA found that when it excluded vehicles for which corrective measures are being taken by the manufacturers, roughly 3% of MY 1996 vehicles have unset readiness flags for the catalyst and/or evaporative system monitors, and that this number dropped to below 1% for MY 1998 vehicles. This issue is discussed in more detail below, under section E, “OBD-I/M Rejection Criteria Amendments.”

Regarding the second problem area—atypical DLC locations—EPA has developed a database of DLC locations based upon its Wisconsin data and manufacturer-supplied information. Electronic copies of this database are available by contacting Arvon Mitcham at (734)214-4522. EPA has found that the development of this database and increased inspector experience has eliminated DLC location as a problem area in the Wisconsin program.

Coincident with the pilot testing described above and the development of today's proposal, EPA staff participated in an OBD Workgroup which was formed by the Mobile Source Technical Review Subcommittee, itself established under the Federal Advisory Committee Act (FACA). The OBD Workgroup included members representing a broad range of OBD and I/M stakeholders (for a list of workgroup members, see the docket). EPA shared the results of its pilot studies with the OBD Workgroup while those studies were still in process and used the workgroup's suggestions and recommendations as a resource to guide the studies' progress. During the course of these discussions, FACA workgroup members made recommendations concerning regulatory revisions needed to facilitate the smooth implementation of OBD-I/M testing. Those recommendations have been considered and addressed in today's proposal. Copies of the FACA workgroup recommendations are available from the docket or by contacting the person listed in the FOR FURTHER INFORMATION CONTACT section of this document.

Today's proposals and EPA's rationale for each are discussed under separate headings below.

The 1992 I/M rule was first amended in August 1996 to establish the original OBD-I/M requirements. These requirements assumed dual testing of OBD-equipped vehicles with both traditional I/M tests and the OBD-I/M check, and included an implementation deadline of January 1, 1998 for all I/M areas, with the exception of those areas qualifying for the Ozone Transport Region (OTR) low enhanced performance standard, which were allowed to start OBD testing one year later, by January 1, 1999. Although testing of the OBD system was required to start in 1998 or 1999, depending upon the area, states were not required to fail vehicles on the basis of OBD-I/M testing until January 1, 2000. The first cycle of OBD-I/M testing was intended to be advisory and was to be conducted mainly as a means of gathering data on the effectiveness of OBD checks relative to other, more traditional I/M tests. At the time the original OBD-I/M requirements were promulgated in 1996, OBD-equipped vehicles were still brand new and EPA had no basis for affording SIP credit for what was essentially an untested test type. EPA's original intention was to analyze data gathered by the states during the first, advisory phase of OBD-I/M testing, and to use this analysis as the basis for establishing SIP credit during the second, and mandatory phase of OBD-I/M.

Subsequent to the original 1996 requirements, EPA concluded that it was not appropriate to require states to perform what amounted to mandatory pilot testing on behalf of the Agency. Therefore, on May 4, 1998, EPA revised its original OBD-I/M requirements to delay the date by which I/M programs were to begin OBD-I/M testing to no later than January 1, 2001. The goal of this delay was to give EPA time to evaluate the OBD check as an I/M program element based on its own pilot testing, to develop an appropriate level of SIP credit for OBD-I/M testing, to determine whether dual testing was necessary or desirable, and to give states time to better prepare for the eventual implementation of OBD-I/M testing.

In conducting its evaluation of OBD-I/M testing, EPA found that identifying and recruiting OBD-equipped vehicles in need of repair proved more difficult and time-consuming than originally anticipated. As a result, EPA has only recently completed its preliminary assessment of OBD effectiveness. Nevertheless, based upon this assessment, it is clear that rule changes are needed to ensure the smooth implementation of OBD-I/M testing by the states. EPA is therefore proposing to further extend the deadline for OBD-I/M start-up from January 1, 2001 to January 1, 2002, to give states the time necessary to address the issues raised by today's proposed amendments. EPA believes that such a delay is appropriate, given the changes needed, and the lateness of these proposed changes relative to the current 2001 deadline.

EPA would also like to solicit comment on whether a slightly longer delay is necessary, given the states' possible need to revise rules, software, test procedures, SIPs, et cetera to address today's proposed amendments. EPA asks that states also consider the role that public outreach and technician training will play in their preparation for OBD-I/M testing in conjunction with their response to this request for comments.

The OBD-I/M test effectiveness pilot studies for tailpipe and evaporative emission testing had two primary goals: (1) To determine whether or not OBD technology was actually meeting its design expectations in the real world, in terms of identifying high emitting vehicles and vehicles in need of repair and/or maintenance and (2) to determine whether OBD-I/M checks can replace traditional I/M tests like the IM240 and the purge and pressure tests without a significant loss in emission reductions. With regard to the first goal, EPA found that OBD identified nearly all of the vehicles later confirmed as high emitters on the FTP. Furthermore, EPA found that OBD frequently identified vehicles in need of repair and/or maintenance prior to their actually becoming high emitters, thus preventing high emissions as opposed to simply reducing them after the fact. Therefore, EPA concluded that OBD technology is successfully meeting its design expectations in the real world.

With regard to the second goal, the OBD tailpipe and OBD evaporative system effectiveness pilots reached slightly different conclusions regarding whether or not OBD-I/M checks can completely replace existing I/M tests. Therefore, we will look at the two pilots separately, starting with the OBD tailpipe effectiveness study.

During the OBD tailpipe effectiveness pilot, EPA found that while the pass/fail test results for the IM240 and OBD-I/M check frequently agreed, a significant portion of the vehicles tested failed the IM240 while passing the OBD-I/M check and vice versa. In cases where the OBD-I/M and IM240 test results disagreed, EPA had to determine which test was correct. In investigating these results, EPA focused on the vehicles which passed the OBD-I/M check while failing the IM240 in the lane. What EPA found when it retested these vehicles on the IM240 under quality-controlled, lab-grade conditions was that in most cases the lane IM240 failures were, in fact, false failures. 3 This suggests that in the I/M lane environment, the OBD-I/M check at least has the advantage of not falsely failing the same vehicles as the IM240—a consumer protection benefit, if not necessarily an environmental one. 4

In other cases, the OBD-I/M check resulted in failing vehicles that both passed the IM240 and FTP. Though for a traditional tailpipe test these would constitute false failures, OBD is not a traditional tailpipe test. Traditional tailpipe tests sample exhaust emissions as they leave the tailpipe, whereas OBD monitors the status of individual emission control components. Unlike a traditional tailpipe test, OBD-I/M can identify vehicle emission control problems before the emissions themselves are out of control. OBD does this by identifying not only emission control components that are broken, but also those that are in need of maintenance prior to failure. Where traditional I/M tests can only measure the problem once the emission control system has failed, OBD (if heeded) can actually prevent the failure from happening in the first place (and thereby prevent a relatively inexpensive problem from leading to a significantly more costly repair bill).

Although EPA did find some vehicles during its pilot testing for which the malfunction that triggered the original DTC could not be reproduced, we do not believe Malfunction-Not-Reproduced (MNR) vehicles will constitute a significant problem in operating I/M programs. EPA believes that most of the MNR vehicles identified during the course of the pilot testing were the result of the recruitment procedures used in the pilot, and not an inherent problem with OBD-I/M itself. Under the pilot, vehicles were recruited as soon as the MIL was illuminated—not an optimum strategy for OBD, which is designed to detect intermittent problems like misfire, but one which was necessitated by the scarcity of vehicles with any MIL illumination at all. Under EPA's OBD requirements, a MIL lit for a random misfire (or other intermittent system fault) may be extinguished after three subsequent driving cycles of similar operation in which the system fault does not reoccur; after forty warm-up cycles without further fault detection, the DTC that caused the original MIL illumination may be erased. Under the pilot study, however, such vehicles were recruited before the OBD system had a chance to clear itself, and therefore fell into the MNR category. In its discussions with the repair industry concerning OBD-identified intermittent problems such as misfire and fuel trim problems, EPA has found that vehicles it identified as MNR during its pilot testing are frequently receiving relevant, preventative maintenance in the real world to ensure that the original malfunction does not reoccur and that the MIL, once cleared, stays off. This issue is discussed in more detail in the draft Technical Support Document (TSD) included in the docket for this proposal.

Based upon the above criteria, EPA concluded that OBD-I/M checks are superior to the IM240 because they: (1) Identify the same true failures as IM240; (2) do not identify the same false failures as IM240; and (3) identify vehicles in need of repair and/or maintenance prior to actual failure of the emission control system, thus preventing excess emissions in the first place. In turn, EPA concluded that there is little environmental value added in requiring states to perform both the IM240 and the OBD-I/M check on MY 1996+ vehicles. Furthermore, since the IM240 is considered the most accurate traditional tailpipe test available for I/M testing, these conclusions should also apply to other tailpipe tests, such as the idle test and the Acceleration Simulation Mode (ASM) test

With regard to the OBD evaporative testing pilot, EPA focused on determining whether OBD-I/M checks accurately identified induced evaporative system failures and responded correctly when these failures were repaired. Another goal of the pilot was to quantify the emission reductions that resulted from correcting these evaporative system failures. The effectiveness of the OBD-I/M check was evaluated relative to the evaporative portion of the FTP. The induced failures included missing gas caps, disconnected purge lines, 0.040 inch leaks in the gas cap, vent line, and purge line, and 0.020 inch leaks in the gas cap. What EPA found was that the majority of OBD-equipped vehicles responded to the induced failures by lighting a MIL which then remained extinguished after repair. A relatively small percentage of vehicles (12% or 3 out of 25) did not illuminate the MIL after the failure was induced and only one vehicle in the study continued to register high evaporative emissions during SHED  5 testing after repairs that turned off the MIL. EPA considers these results impressive, compared to the existing purge and fill-neck pressure tests, which both suffer from a relatively high untestability rate due to accessability and material composition problems for various makes and models (roughly 30% for pre-OBD-equipped vehicles and over 85% for OBD-equipped vehicles). When it comes to the OBD-I/M check, however, OBD-equipped vehicles are 100% testable, by design (provided the Data Link Connector has not been tampered—a condition which itself constitutes grounds for failure). EPA therefore proposes to allow states currently doing the purge and fill-neck pressure tests to drop those tests on MY 1996 and newer OBD-equipped vehicles in favor of OBD-I/M checks on those same vehicles. EPA also recommends that programs add or continue existing gas cap tests in conjunction with OBD-I/M evaporative system testing, based upon the finding that a separate gas cap check can find leaking gas caps not designed to be found by OBD, and the known potential for such leaks to produce high evaporative emissions, as noted earlier.

As currently written, the I/M rule requires states to add OBD testing to their I/M programs beginning no later than January 1, 2001. Although the rule does not explicitly state that I/M programs must conduct both their pre-existing I/M test(s) and the OBD check on OBD-equipped vehicles, the current rule's data analysis and reporting requirements include, among other things, the reporting of the number and percentage of vehicles by model year passing the OBD test while failing the I/M emission test(s), and vice versa. The existence of these requirements implies that both tests must be done under the I/M rule as currently written. Furthermore, the fact that EPA has not provided SIP credit modeling guidance with regard to OBD-I/M testing creates a disincentive to states that might otherwise prefer to drop the traditional I/M test(s) in favor of OBD-I/M testing on MY 1996+ OBD-equipped vehicles.

Today EPA is proposing to correct this presumption by making an affirmative determination that states are not required to conduct both the traditional I/M tests and the OBD check on MY 1996+ OBD-equipped vehicles. Given the fact that the Clean Air Act provides the states and EPA little discretion regarding the inclusion of OBD testing in I/M programs, the only flexibility EPA can offer states to prevent functionally redundant testing is to allow them to drop the traditional I/M tests on MY 1996+ OBD-equipped vehicles in favor of an OBD-I/M check. EPA does not have the authority to allow states to take the opposite course ( i.e., we cannot approve I/M programs that ignore the Act's OBD testing requirement in favor of the traditional I/M tests on MY 1996+ OBD-equipped vehicles). Nevertheless—and provided it does not interfere with a state's ability to meet the relevant performance standard—states may still exempt the newest vehicles from all testing for a set period of time. For example, a state may be able to delay implementation of the OBD-I/M check past January 1, 2002— if it can still meet the relevant performance standard after exempting MY 1996+ vehicles from all testing. The ability to exempt that many model years will vary on a state-by-state basis and is driven by the relative distribution of old versus new vehicles in the local fleet, as well as by which performance standard applies.

EPA believes that allowing states to exempt vehicles from the program and to otherwise deviate from specific elements of the relevant performance standard (provided the program achieves the same or better emission reductions as achieved by the performance standard) is consistent with the Clean Air Act, which draws a distinction between what is required of EPA in establishing the enhanced I/M performance standard, and what is minimally required of actual state programs. For example, the CAA requires that EPA's enhanced I/M performance standard include light-duty vehicles and light-duty trucks, but does not impose a similar, explicit requirement on actual, operating state programs. The CAA also requires that the enhanced I/M performance standard include antitampering inspections, but does not require the same of actual, operating state programs. Conversely, the CAA requires OBD-I/M testing in all I/M programs—whether basic or enhanced—but does not explicitly require EPA to include OBD-I/M testing in its performance standard.

It may be argued that since “[c]omputerized emission analyzers” and OBD inspections are listed as two separate elements required in enhanced I/M programs, that neither EPA nor the states have the discretion to exempt subject vehicles from one or the other test. EPA disagrees with this argument. Maintaining that states cannot drop tailpipe emission testing from OBD-equipped vehicles based upon this separate-element argument leads to the illogical corollary that states also cannot exempt non-OBD-equipped vehicles from the OBD inspection. Rather, EPA believes that as long as a state includes emission testing on some segment of its subject vehicles, OBD-I/M testing on the OBD-equipped portion of the fleet, and meets or exceeds the emission reductions achieved by the relevant performance standard, then it shall be considered in compliance with the CAA requirements regarding minimum test type coverage. EPA believes the Act requires at a minimum that computerized emission analyzers be used where emission tests are conducted, and that OBD equipment be tested where cars are so equipped.

EPA proposes to insert clarifying text making the affirmative determination that states may drop traditional I/M tests on MY 1996+ OBD-equipped vehicles in favor of OBD-I/M checks in those sections of the I/M rule currently addressing OBD-I/M testing requirements, such as the performance standards, test procedure requirements, and data reporting requirements.

The Clean Air Act distinguishes between the minimum program elements that were to be used by EPA in developing its I/M performance standards, and those program elements which had to be adopted by the state programs themselves to qualify as approvable I/M programs. For example, in developing its enhanced I/M performance standard, EPA was required to include both an antitampering inspection and an emission test on all MY 1968+ vehicles, including light-duty cars and light-duty trucks, using a centralized network and annual testing. States, on the other hand, have the option of designing biennial and/or decentralized I/M programs, are not required to include antitampering inspections, and can exempt as many vehicles as they want—provided they can still meet or exceed the applicable performance standard in terms of emission reductions. States also have flexibility with regard to the type of test performed and which model years are covered. In fact, to improve the cost effectiveness of their programs, states routinely exempt the newest vehicles in their fleets for two or more years, due to the very low statistical likelihood that such vehicles will fail.

As suggested above, states already have the flexibility to exempt MY 1996 and newer vehicles from traditional I/M tests, provided they can make a demonstration that they still meet the applicable performance standard, despite these exemptions. In practice, however, there has been little incentive for states to exempt these vehicles because doing so would result in a loss of the emission reductions they could model as part of their I/M SIPs, thus jeopardizing their ability to demonstrate that they meet the applicable performance standard. This shortfall would only grow for later evaluation years as a larger proportion of the fleet fell into the category of MY 1996 and newer vehicles. Performing the required OBD-I/M check on these vehicles would do nothing to offset the SIP credit shortfall because the MOBILE5 emission factor model used for projecting SIP credits does not currently include credits for OBM-I/M testing, and EPA has not provided guidance on how to address OBM-I/M testing in SIPs prior to release of MOBILE6. Therefore, even though EPA's pilot studies suggest that OBM-I/M testing does produce real-world emission reductions, without EPA's proposed action today, states could be compelled to continue functionally redundant testing, just so they can claim the credits needed to satisfy a paperwork modeling requirement.

The reason that the MOBILE5 model does not include OBM-I/M credits is because when the model was developed in the early 1990s, neither OBD certification nor OBM-I/M testing requirements had been established. As a result, there was no real-world data upon which to determine how much credit OBM-I/M testing should get, and whether this credit should replace or be added to the credit already assessed for the traditional I/M tests. Although the next iteration of the MOBILE model—MOBILE6—will include separate and explicit OBM-I/M credit, that version is still in development and is not currently available for states to use in preparing their SIPs. In the interim between MOBILE5 and MOBILE6, EPA proposes that states account for the replacement of traditional I/M tests with OBM-I/M testing by assuming that OBM-I/M testing does not get less credit than the test(s) that it is replacing. This assessment of “no credit loss” is based upon the pilot testing discussed earlier and addressed in detail in the TSD. In short, EPA has concluded that the OBM-I/M check is at least as effective as all other available I/M tests, with the exception of the gas cap pressure test—which is the only test EPA recommends states continue in conjunction with OBM-I/M testing for OBD-equipped vehicles. MOBILE6, when it is released, will reflect this guidance ( i.e. , a modeling run that includes both traditional I/M testing and OBM-I/M testing on OBD-equipped vehicles will generate no more credit than if only OBM-I/M were assumed for those vehicles—with the exception of the gas-cap pressure test, for which additional credit will be available). Therefore, under the rule EPA is proposing today, states that opt to drop their traditional I/M tests for OBD-equipped vehicles in favor of OBM-I/M checks will not have to remodel their I/M credits prior to mandatory use of MOBILE6 for the next iteration of the states' other SIP modeling requirements that include I/M.

EPA proposes to revise the OBD sections of the I/M performance standards to indicate that for modeling purposes, the OBM-I/M testing segment of the performance standard overlaps but does not add to the credit already assessed for testing MY 1996+ vehicles. Furthermore, prior to release of MOBILE6, the credit from OBM-I/M testing will replace (as opposed to being added to) the credit already assessed for the testing of MY 1996+ vehicles in the states' I/M SIPs. Therefore traditional ­I/M tests can be dropped on MY 1996+ vehicles in favor of OBM-I/M testing on those same vehicles without affecting an area's ability to meet the applicable performance standard.

Prior to release of MOBILE6, EPA is not proposing to proactively “give” states SIP credit for OBM-I/M testing; rather, we are proposing to “not deduct” credit from those areas that drop their existing, non-gas-cap-based I/M inspections on OBD-equipped vehicles in favor of OBM-I/M testing on that same subset of subject vehicles. EPA understands how this may seem like a distinction without a difference, the practical impact of which is that areas performing an idle test as their tailpipe test will only get idle-level credit for OBM-I/M, while those areas doing IM240 will get IM240-level credit for OBM-I/M. The fact is that both areas will get the exact same level of credit for OBM-I/M—once MOBILE6 is released. Prior to that release, the only credit-assessment tool EPA has to offer states is MOBILE5—a model which simply was not designed to account for ­OBM-I/M. MOBILE5 and MOBILE6 are sufficiently different from one another that any surrogate method EPA would propose to “trick” MOBILE5 into modeling OBM-I/M credits is bound to produce erroneous results—results which, more likely than not, would produce temporary, “paper” credits that would disappear once areas were called upon to remodel their I/M programs using MOBILE6. EPA believes that maintaining the status quo with regard to I/M SIP credits while allowing states to drop their non-gas-cap-based, traditional I/M tests on OBD-equipped vehicles in favor of OBM-I/M for those same vehicles is the most responsible and conservative approach we can take during this interim period between models, given the known differences between the two models. Nevertheless, EPA welcomes comment on alternative approaches for assessing OBM-I/M credit during this interim period between mobile source emission factor models. Currently, MOBILE6 is scheduled for release by the end of calendar year 2000, and OBM-I/M will be included as a separate, modelable and fully-credited program element as part of that model.

On August 6, 1996, EPA identified the list of Diagnostic Trouble Codes (DTCs) that constitute the OBD-I/M failure criteria at 40 CFR 85.2207(d). These criteria were then echoed in 40 CFR 85.2223(b) which identifies the required DTCs that are to be listed as part of the OBD-I/M test report. Currently, the DTC-based failure criteria for OBD-I/M is limited to a subset of power train (or P-code) DTCs. If a vehicle is identified through an I/M program as having a Malfunction Indicator Light (MIL) commanded on for one or more of these P-codes, then Federal regulations require that the vehicle fail the inspection.

As part of the OBD-I/M implementation pilot study, EPA discovered that using only a subset of DTCs (as opposed to all DTCs that lead to the MIL being commanded on) undermines the potential of OBD to reduce and prevent excess emissions. The problem is that once the MIL is lit for a relatively minor problem the system is effectively eclipsed, should a more significant problem develop between I/M inspections. However, one of the significant advantages of OBD systems relative to traditional I/M is its ability to inform motorists of a problem in between inspections. Ideally, once the MIL has been commanded on, the motorist is aware that there is a problem with the vehicle that needs correction and will respond by getting the vehicle repaired well before such repairs are required by the I/M program. Repairing the vehicle in a timely manner can also help prevent minor problems from becoming major ones, thus saving the owner money in the long run. Under such a scenario, the I/M program is the backstop of last resort that enforces compliance with the OBD system. If the I/M program allows vehicles to complete the testing process without extinguishing the MIL, the OBD system will be effectively invalidated until the next inspection, and the public's responsiveness to OBD MILs will be eroded.

Given the above considerations, EPA is today proposing to simplify the DTC-based OBD-I/M failure criteria to include any DTC that results in the MIL being commanded on. Additionally, in the event that the OBD scan reveals DTCs that have been set but for which the MIL has not been commanded on, EPA recommends that the motorist be advised that a problem may be pending but we do not propose to require that the vehicle be failed at this time (unless other, non-DTC-based failure criteria have been met, such as a failed bulb check).

Given the above discussion concerning the MIL eclipsing effect and out-of-cycle OBD response, it is important to also note what EPA is not proposing with this document. Although voluntary compliance with OBD on the part of individual motorists prior to mandatory I/M testing represents the ideal, given OBD's potential, EPA realizes that the backstop of mandatory I/M is still needed to ensure compliance of these vehicles. Therefore, EPA is not proposing that OBD-equipped vehicles be exempt from participating in the periodic inspection process. The mandatory, periodic nature of I/M and the I/M infrastructure remain unchanged by today's proposal. Whether or not they are OBD-equipped, subject vehicles must still be presented for periodic inspection and must demonstrate compliance with all applicable I/M program requirements at an I/M test facility prior to registration in registration-based programs. OBD-equipped vehicles will just be subject to a different kind of periodic inspection once they show up at the lane ( i.e. , the OBD scan) while non-OBD-equipped vehicles will continue to receive the more traditional tailpipe and/or evaporative system tests.

While simplifying the failure criteria to all DTCs leading to MIL illumination will greatly simplify the state's administration of the OBD-I/M inspection, a logical biproduct of that simplification is that more motorists will be failed for OBD-I/M checks under the revised criteria than under the current regulations. Looking at six months' worth of OBD-I/M data from the Wisconsin I/M program, EPA found that less than 0.5% of the OBD-equipped vehicles tested had MILs lit for DTCs falling outside the current failure criteria. Furthermore, EPA believes that the net impact of today's proposal will be a significant lessening of the test burden on motorists, since they will be subjected to fewer tests overall under the proposal than would be the case otherwise ( i.e. , a single, sixty second OBD-I/M test versus tailpipe, evaporative system, and OBD-I/M tests, which can take five minutes or longer to perform). Allowing states to drop traditional I/M tests in favor of OBD-I/M—EPA believes—will reduce the overall failure rate for OBD-equipped vehicles, relative to current requirements.

Currently, both the Clean Air Act and the I/M rule provide a minimum expenditure value for state programs which allow the waiver of vehicles failing the I/M inspection from further repair obligation for one test cycle once a certain, minimum amount has been spent on relevant repairs. For basic I/M programs, these minimum expenditures are $75 for pre-1981 model year vehicles, and $200 for MY 1981 and newer vehicles; for enhanced I/M programs, the Act specifies a minimum expenditure for all vehicles of $450 adjusted to reflect the difference in the Consumer Price Index (CPI) between the previous year and 1989. Neither the rule nor the Act addresses the OBD-I/M check when it comes to qualifying for waivers. However, EPA is formally recommending that states not allow waivers for MY 1996 and newer OBD-equipped vehicles prior to extinguishing the MIL and correcting the cause of any DTCs for which the MIL was illuminated. EPA also recommends that states consider providing repair subsidies or some other form of financial assistance to address hardship cases that would otherwise be addressed through the waiver process.

EPA makes this recommendation because of the fundamental difference between how OBD-equipped vehicles and non-OBD-equipped vehicles are diagnosed and repaired. EPA believes that the minimum expenditure waiver makes sense for traditional tailpipe and/or evaporative emission test-based repairs because such tests provide little concrete information concerning the specific cause of failure. Therefore, the waiver helps protect consumers from trial-and-error repairs that amount to little more than throwing parts at an insufficiently isolated problem. OBD, on the other hand, is specifically designed to help limit the opportunity for trial-and-error repairs by linking DTCs to specific components and subsystems. OBD does not just tell the repair technician that there is a problem, but also what kind of problem and approximately where in the overall system it is occurring. Furthermore, if an OBD-equipped vehicle is waived from further repair without extinguishing the MIL, the practical effect would be to render the OBD system invalid until the next test cycle due to the MIL eclipsing effect discussed earlier. EPA believes that allowing waivers under these circumstances sends the wrong message concerning the importance of responding to the MIL and defeats the whole purpose for which OBD was designed. We therefore recommend that states bar MY 1996 and newer OBD-equipped vehicles from participating in their waiver programs if such vehicles have a MIL commanded on at the time they apply for a waiver. EPA welcomes public comments and suggestions on alternative methods for addressing the OBD-I/M waiver issues discussed here.

Current Federal regulations for OBD-I/M testing require that I/M programs reject from further testing any MY 1996+ OBD-equipped vehicles that are found to have unset readiness flags. It is important to note that “rejection” is distinct from “failure.” In the context of OBD-I/M, rejection is triggered by a vehicle's readiness status while failure is related to the presence of DTCs that command the MIL to be lit. If DTCs are present and the MIL is commanded on, the vehicle is failed, the initial test process is considered complete and an official test report is generated. If, on the other hand, unset readiness flags are present, the vehicle is rejected and the test process is aborted.

The reason vehicles with unset readiness flags are rejected but not failed is because an unset readiness flag is not necessarily an indication of an emission problem. Rather, it is an indication that certain monitor(s) that are intended to determine whether or not there may be an emission problem have not been run to evaluate the system. In the case of rejection, the issue of whether or not the vehicle requires repairs is deferred until the readiness flag(s) have been set and the monitor(s) run.

The current I/M requirements are inadequate with regard to OBD readiness because there are many reasons why a readiness flag may not be set when an OBD-equipped vehicle arrives at the I/M test site—some of them wholly legitimate and beyond the control of the motorist. For one thing, not all OBD system monitors are run continuously. Some monitors are run every time a vehicle is driven, while others may only run after a certain combination of operating conditions has been met. Within Federal guidelines, manufacturers still have a fair degree of discretion in establishing the monitor-triggering protocols used and these tend to vary from manufacturer to manufacturer, as well as from model to model. As a result, it is possible that a vehicle may not have been operated under the conditions necessary to trigger one or more monitors before showing up for an OBD-I/M check. It is also possible that the monitors did run, but were then reset when the battery was disconnected during routine maintenance on the vehicle, or in an attempt to fraudulently extinguish the MIL and clear DTCs prior to OBD-I/M testing. Although disconnecting the battery will temporarily clear any DTCs that are present, these will eventually be triggered again, as the monitors in question are rerun. In fact, readiness codes were developed specifically to prevent vehicle owners from evading the test by disconnecting their batteries just prior to testing. In most cases the readiness flag can be set by running the vehicle under load for some period of time prior to resubmitting it for testing.

As part of its analysis of Wisconsin's OBD-I/M data, EPA found that a small percentage of the earliest OBD-equipped vehicles showed up at the I/M test lanes with unset readiness flags that could not be readily resolved by additional, normal vehicle operation. The percentage of vehicles experiencing this particular problem is small, and shrinking for newer model years. Excluding vehicles for which corrective measures are being taken by the manufacturers in the form of service campaigns and OBD computer reprogramming, EPA found that roughly 3% of MY 1996 vehicles had this readiness problem at the time of their initial OBD-I/M check and that this number dropped to below 1% for MY 1998 vehicles receiving their first OBD-I/M check. The majority of these unset readiness flags were for the catalyst and/or evaporative system, which are known to be difficult to set. Based upon these findings, EPA concluded that requiring rejection of vehicles for any unset readiness flag is unnecessarily restrictive, and that flexibility in this area is therefore warranted. Furthermore, EPA believes that the practical impact of allowing this flexibility is negligible, especially because an unset readiness flag is not the same thing as an emission problem and because of the likelihood that vehicles with unset readiness flags during one test cycle will be “ready” in time for subsequent test cycles. Lastly, the number of vehicles involved is dwarfed by other perennial I/M issues such as the non-compliance, drop-out and waiver rates, which are known to have a direct impact on the emission reduction effectiveness of a program.

Although EPA believes it is important in most cases to verify an OBD-equipped vehicle's readiness status, we do not believe that the motorist should be penalized for something beyond his/her control. Therefore, EPA is today proposing to allow states to complete the testing process on MY 1996-2000 vehicles with two or fewer unset readiness flags; for MY 2001 and newer vehicles, the testing process could still be complete provided there is no more than one unset readiness flag. This does not mean that these vehicles are exempt from the OBD-I/M check. The complete MIL check and scan must be run in all cases, and the vehicle still must be failed if the MIL is commanded on. The vehicle should continue to be rejected if it is MY 1996-2000 and has three or more unset readiness flags or is MY 2001 or newer and has two or more unset readiness flags. This proposal is based upon EPA's findings regarding readiness status from Wisconsin's OBD-I/M data discussed above and also reflects a FACA workgroup recommendation. It is intended to reduce the potential for customer inconvenience during this start-up phase of the transition to OBD-I/M testing. We believe that the environmental impact of this exemption will be negligible, given the small number of vehicles involved, the likelihood that at least some of these readiness flags will have been set in time for subsequent OBD-I/M checks, and the fact that an unset readiness flag is not itself an indication of an emission problem. Furthermore, both EPA and the California Air Resources Board (CARB) are currently working with vehicle manufacturers to address this issue and further reduce the number of vehicles affected. Nevertheless, EPA solicits public comment on alternative approaches to addressing the readiness issue discussed here. In particular, EPA would like comment on whether vehicles with unset readiness flags should receive a traditional tailpipe and/or evaporative system test and whether different tests should be required in lieu of OBD-I/M testing depending upon which readiness flag has not been set.

The current I/M rule includes identical language regarding the inclusion of OBD-I/M testing in both the enhanced and basic I/M performance standards, with each standard assuming that, at a minimum, OBD-I/M testing is being performed on all OBD-equipped light-duty vehicles and light-duty trucks. While the Clean Air Act requires enhanced I/M performance standards to cover both light-duty vehicles and light-duty trucks, it does not require that level of coverage for the basic I/M performance standard. Currently, all other elements of the basic I/M performance standard (such as tailpipe testing coverage) apply only to light-duty vehicles, but not light-duty trucks. The inclusion of OBD-I/M testing on light-duty trucks in the basic I/M performance standard is the result of a typographical error. We are therefore proposing to correct this typographical error by deleting reference to light-duty trucks in § 51.352(c) of the I/M rule, which establishes the basic I/M performance standard coverage requirements for OBD-I/M testing.

Today's proposal clarifies existing flexibility currently available to states with regard to exempting specific model years from specific program requirements. It also provides an incentive for states to optimize the efficiency and cost effectiveness of their existing programs through the elimination of functionally redundant testing methods by allowing such tests to be dropped without any reduction in I/M SIP credit. Based upon the pilot data discussed in the TSD to this proposal, EPA has concluded that there is little inherent environmental benefit from requiring traditional I/M testing in addition to OBD-I/M checks on MY 1996+ OBD-equipped vehicles, with the exception of the gas cap pressure test. As a result, EPA believes that there is effectively no negative environmental impact from providing an incentive for eliminating these functionally redundant tests. EPA concludes that any marginal environmental benefit that might result from dual testing of OBD-equipped vehicles is far outweighed by the cost and inconvenience of dual testing, as well as by the potential environmental loss associated with “fixing” falsely failed vehicles.

States with approved I/M SIPs will not have to remodel their I/M programs if they choose to exempt MY 1996+ OBD-equipped vehicles from traditional I/M tests in favor of OBD-I/M checks on those vehicles, provided no other programmatic changes are made. If, however, a state chooses to modify its program another way, then a revised I/M SIP and new modeling may be necessary. 6 Nevertheless, it is important to note that today's proposed amendments are aimed at lessening the overall burden on states while also improving program efficiency and cost effectiveness; the proposal does not increase the existing burden on states, provided states do not make other changes to their programs.

Today's proposed revisions provide states with an incentive to increase the cost effectiveness and efficiency of their existing I/M programs. The proposal, when finalized, will lessen rather than increase the potential economic burden on states. Furthermore, states are under no obligation, legal or otherwise, to modify existing plans meeting the previously applicable requirements as a result of today's proposal.

EPA desires full public participation in arriving at final decisions in this rulemaking action. EPA solicits comments on all aspects of this proposal from all parties. Wherever applicable, full supporting data and detailed analysis should also be submitted to allow EPA to make maximum use of the comments. All comments should be directed to the Air Docket, Docket No. A-2000-16.

It has been determined that these proposed amendments to the I/M rule do not constitute a significant regulatory action under the terms of Executive Order 12866 and this action is therefore not subject to OMB review. Any impacts associated with these revisions do not constitute additional burdens when compared to the existing I/M requirements published in the Federal Register on November 5, 1992 (57 FR 52950) as amended. Nor do the proposed amendments create an annual effect on the economy of $100 million or more or otherwise adversely affect the economy or the environment. The proposal is not inconsistent with nor does it interfere with actions by other agencies. It does not alter budgetary impacts of entitlements or other programs, and it does not raise any new or unusual legal or policy issues.

There are no additional information requirements in this proposed rule which require the approval of the Office of Management and Budget under the Paperwork Reduction Act 44 U.S.C. 3501 et seq.

Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b), the Administrator certifies that this proposal will not have a significant economic impact on a substantial number of small entities and, therefore, is not subject to the requirement of a Regulatory Impact Analysis. A small entity may include a small government entity or jurisdiction. This certification is based on the fact that the I/M areas impacted by the proposed rulemaking do not meet the definition of a small government jurisdiction, that is, “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than 50,000.” The basic and enhanced I/M requirements only apply to urbanized areas with population in excess of either 100,000 or 200,000 depending on location. Furthermore, the impact created by the proposed action does not increase the preexisting burden of the existing rules which this proposal seeks to amend.

Under section 202 of the Unfunded Mandates Reform Act of 1995 (“Unfunded Mandates Act”), signed into law on March 22, 1995, EPA must prepare a budgetary impact statement to accompany any proposed or final rule where the estimated costs to State, local, or tribal governments, or to the private sector, will be $100 million or more. Under section 205, EPA must select the most cost-effective and least burdensome alternative that achieves the objective of the rule and is consistent with statutory requirements. Section 203 requires EPA to establish a plan for informing and advising any small governments that may be significantly impacted by the rule. To the extent that the rules being proposed by this action would impose any mandate at all as defined in section 101 of the Unfunded Mandates Act upon the state, local, or tribal governments, or the private sector, as explained above, this proposed rule is not estimated to impose costs in excess of $100 million. Therefore, EPA has not prepared a statement with respect to budgetary impacts. As noted above, this rule offers opportunities to states that would enable them to lower economic burdens from those resulting from the currently existing I/M rule.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

Under section 6 of Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law, unless the Agency consults with State and local officials early in the process of developing the proposed regulation.

This proposed rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. On the contrary, the intent of today's proposed rule is to provide states greater flexibility with regard to pre-existing regulatory and statutory requirements for vehicle inspection and maintenance (I/M) programs. Thus, the requirements of section 6 of the Executive Order do not apply to this proposal.

Under Executive Order 13084, EPA may not issue a regulation that is not required by statute, that significantly or uniquely affects the communities of Indian tribal governments, and that imposes substantial direct compliance costs on those communities, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by the tribal governments, or EPA consults with those governments. If EPA complies by consulting, Executive Order 13084 requires EPA to provide to the Office of Management and Budget, in a separately identified section of the preamble to the rule, a description of the extent of EPA's prior consultation with representatives of affected tribal governments, a summary of the nature of their concerns, and a statement supporting the need to issue the regulation. In addition, Executive Order 13084 requires EPA to develop an effective process permitting elected officials and other representatives of Indian tribal governments “to provide meaningful and timely input in the development of regulatory policies on matters that significantly or uniquely affect their communities.” Today's proposal does not significantly or uniquely affect the communities of Indian tribal governments. Today's proposal does not create a mandate on tribal governments or create any additional burden or requirements for tribal government. The proposal does not impose any enforceable duties on these entities. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to this proposal.

Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any rule that: (1) Is determined to be economically significant as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Order has the potential to influence the regulation. This proposal is not subject to Executive Order 13045 because it is not economically significant under Executive Order 12866 and because it is based on technology performance and not on health or safety risks.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA) directs all Federal agencies to use voluntary consensus standards instead of government-unique standards in their regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g., material specifications, test methods, sampling and analytical procedures, business practices, etc.) that are developed or adopted by one or more voluntary consensus standards bodies. Examples of organizations generally regarded as voluntary consensus standards bodies include the American Society for Testing and Materials (ASTM), the National Fire Protection Association (NFPA), and the Society of Automotive Engineers (SAE). The NTTAA requires Federal agencies like EPA to provide Congress, through OMB, with explanations when an agency decides not to use available and applicable voluntary consensus standards.

These proposed amendments do not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.

For the reasons set out in the preamble, part 51 and 85 of chapter I, title 40 of the Code of Federal Regulations are proposed to be amended to read as follows:

For additional information, see the direct final rule which is published in the rule's section of this Federal Register .

For additional information see the direct final rule which is published in the Final Rules section of this Federal Register .

This is a synopsis of the Commission's Notice of Proposed Rule Making, MM Docket No. 00-166, adopted August 30, 2000, and released September 8, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC's Reference Information Center (Room CY-A257), 445 Twelfth Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Service, Inc., 1231 20th Street, NW., Washington, DC 20036, (202) 857-3800.

Provisions of the Regulatory Flexibility Act of 1980 do not apply to this proceeding.

Members of the public should note that from the time a Notice of Proposed Rule Making is issued until the matter is no longer subject to Commission consideration or court review, all ex parte contacts are prohibited in Commission proceedings, such as this one, which involve channel allotments. See 47 CFR 1.1204(b) for rules governing permissible ex parte contacts.

For information regarding proper filing procedures for comments, See 47 CFR 1.415 and 1.420.

This is a summary of the Commission's Report and Order, MM Docket No. 00-27, adopted August 30, 2000, and released September 8, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the Commission's Reference Center, 445 12th Street, SW., Washington, DC.

The complete text of this decision may also be purchased from the Commission's copy contractors, International Transcription Services, Inc., 1231 20th Street, NW., Washington, DC. 20036, (202) 857-3800, facsimile (202) 857-3805.

This is a synopsis of the Commission's Report and Order, MM Docket No. 00-94, adopted August 30, 2000, and released September 8, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Center (Room 239), 445 12th Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Services, Inc., (202) 857-3800, 1231 20th Street, NW, Washington, DC 20036.

This is a synopsis of the Commission's Notice of Proposed Rule Making, MM Docket No. 00-165, adopted August 30, 2000, and released September 8, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Services, Inc., (202) 857-3800, 1231 20th Street, NW, Washington, DC 20036.

Provisions of the Regulatory Flexibility Act of 1980 do not apply to this proceeding.

Members of the public should note that from the time a Notice of Proposed Rule Making is issued until the matter is no longer subject to Commission consideration or court review, all ex parte contacts are prohibited in Commission proceedings, such as this one, which involve channel allotments. See 47 CFR 1.1204(b) for rules governing permissible ex parte contacts.

For information regarding proper filing procedures for comments, see 47 CFR 1.415 and 1.420.

This rule proposes to amend the policy at DFARS 213.301 to permit contracting officers supporting a contingency operation, as defined in 10 U.S.C. 101(a)(13), or a humanitarian or peacekeeping operation, as defined in 10 U.S.C. 2302(8), to use the Governmentwide commercial purchase card on a stand-alone basis for purchases valued at or below the simplified acquisition threshold. In accordance with FAR 2.101, the simplified acquisition threshold for contingency, humanitarian, or peacekeeping operations is $200,000.

Use of the purchase card at the $200,000 threshold would be subject to the existing conditions at DFARS 213.301 and the following additional conditions: (1) The supplies or services must be immediately available; and (2) Only one delivery and one payment will be made. These additional conditions are similar to those placed on contingency contracting officers using the Standard Form 44, Purchase Order-Invoice-Voucher, in accordance with FAR 13.306 and DFARS 213.306.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

The proposed rule is not expected to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule applies only to purchases that are made outside the United States for use outside the United States in support of contingency, humanitarian, or peacekeeping operations. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2000-D019.

The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

Therefore, DoD proposes to amend 48 CFR Part 213 as follows:

1. The authority citation for 48 CFR Part 213 continues to read as follows:

The Defense Priorities and Allocations System is a Department of Commerce program which supports certain authorized national defense programs by requiring that contractors give priority treatment to contracts which have priority ratings. NFS Subpart 1811.6 currently requires that most NASA contractual actions receive a priority rating under the Defense Priorities and Allocations System (DPAS) regulation (15 CFR 700). The present NFS requirement is being changed to provide that NASA acquisition actions will be rated only if they are in one of the categories in DPAS Schedule L.

NASA certifies that this proposed rule will not have a significant economic impact on a substantial number of small business entities within the meaning of the Regulatory Flexibility Act (5 USC 601, et seq. ), because it does not impose any new requirements on offerors or contractors.

The Paperwork Reduction Act does not apply because the changes to the NFS do not impose any recordkeeping or information collection requirements, or collection of information from offerors, contractors, or members of the public that require the approval of the Office of Management and Budget under 44 USC 3501, et seq.

Accordingly, 48 CFR Part 1811 is proposed to be amended as follows:

1. The authority citation for 48 CFR part 1811 continues to read as follows:

NMFS manages the domestic groundfish fisheries in the exclusive economic zone off Alaska pursuant to the Alaska groundfish FMPs. The North Pacific Fishery Management Council (Council) prepared the FMPs, and NMFS approved them, in accordance with the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). Regulations governing the Alaska groundfish fisheries appear at 50 CFR parts 600 and 679. Fishing for Pacific halibut in waters in and off Alaska is governed by the Convention between the United States and Canada for the Preservation of the Halibut Fishery of the North Pacific Ocean and Bering Sea and by regulations adopted by the International Pacific Halibut Commission (IPHC) and approved by the Secretary of State of the United States pursuant to section 4 of the Northern Pacific Halibut Act (16 U.S.C. 773-773k). Regulations of the IPHC are published as annual management measures in the Federal Register each year pursuant to regulations at 50 CFR 300.62.

The Prohibited Species Donation (PSD) program regulations at § 679.26 include provisions for the voluntary donation of halibut taken as bycatch in the groundfish trawl fisheries that are delivered dead by trawl catcher vessels to shoreside processors for distribution by tax-exempt organizations for consumption by economically disadvantaged individuals.

The groundfish trawl vessels are not allocated any directed fishery quota for halibut and must discard all halibut. Many trawl vessels discard halibut at sea; some portion of which is alive. However, many trawl vessels, for practical reasons, cannot sort their catch at sea and catch remains unsorted until it is offloaded at a shoreside processor. Because of this process of shoreside sorting, halibut are ‘landed’ dead. This action would not affect the halibut resource because the groundfish fisheries are restricted by halibut bycatch mortality limits that require closure of specified fisheries when a limit has been reached. In 1998 and 1999, 21,196 lb (9,635 kg) and 6,190 lb (2,814 kg) of eviscerated halibut were donated through the PSD program, respectively. NMFS estimates that the halibut donation program provided 65,000 meals to economically disadvantaged individuals in the western Washington Puget Sound area in 1998. No violations of the halibut donation regulations have been reported or observed.

The halibut PSD program will expire on December 31, 2000. The Council and the IPHC supported the sunset provision to allow management agencies to assess the effectiveness of the halibut donation program, relative to the program's objectives, before the Council took action to extend the program beyond the year 2000.

At its June 2000 meeting, the Council requested NMFS to initiate rulemaking to permanently extend the halibut donation program. The Council also endorsed a recommendation by IPHC staff to review the program every 3 years and assess whether regulatory changes should be pursued to respond to any management or enforcement concerns that may arise in the future. This proposed rule would extend permanently the existing halibut provisions of the PSD program. This action would make no other changes to the existing PSD program. NMFS, the Council, and the IPHC would conduct periodic reviews of the program and the regulations could be revised in the future, if necessary, to respond to new concerns.

At this time, NMFS has not determined that this proposed regulatory amendment is consistent with the national standards of the Magnuson-Stevens Act and other applicable laws. NMFS, in making that determination, will take into account the views and comments received during the comment period.

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

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

Pursuant to section 7 of the Endangered Species Act (ESA), NMFS has completed a consultation on the effects of the groundfish fishery on listed species. Reasonable and prudent alternatives have been implemented to mitigate the adverse impacts of the pollock fisheries on the western population of Steller sea lions and its critical habitat (65 FR 3892, January 25, 2000, and extended at 65 FR 36795, June 12, 2000). NMFS also completed consultations on the effects of the 2000 Bering Sea and Aleutian Islands (BSAI) groundfish fisheries on listed species, and on critical habitat. These consultations were completed December 23, 1999, and concluded that the proposed fisheries were not likely to cause jeopardy or adverse modification to designated critical habitat. However, in an order dated January 25, 2000, the District Court for the Western District of Washington concluded that NMFS must consult pursuant to section 7 of the ESA on the fishery management plans for the groundfish fisheries of the BSAI and GOA. Greenpeace v. NMFS , Civ. No. 98-49ZZ (W.D. Wash.). Prior to the issuance of the Court’s order, NMFS had begun consultation to evaluate the cumulative effects of the BSAI and Gulf of Alaska (GOA) groundfish fisheries over a multi-year period on candidate and listed species and critical habitat. NMFS is currently reviewing this ongoing consultation for compliance with the Court’s order and will continue consultation. NMFS has determined that this proposed rule, if implemented, would not result in an irreversible or irretrievable commitment of resources that would have the effect of foreclosing the formulation or implementation of any reasonable or prudent alternative measures that may be necessary.

The area in which this proposed action is planned has been identified as essential fish habitat (EFH) for species managed by the Council. No adverse impacts to EFH are anticipated from this action and, therefore, no consultation is required.

Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act (PRA), unless that collection of information displays a currently valid OMB control number.

This proposed rule contains collection-of-information requirements subject to the PRA. The collection of this information has been approved by the Office of Management and Budget under OMB control number 0648-0316. Public reporting burden (per individual) for these collections of information, including both salmon and halibut donations, is estimated to average as follows: 40 hours every 3 years per application and 40 hours per year for completing a list of vessels and processors for a NMFS authorized distributor; 9 hours per year (0.1 hrs for 90 processing days) for vessel and processor labeling and product tracking documentation; and 15 minutes per year for vessels/processor documentation. The estimated response times listed include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.