User fees to reimburse the Animal and Plant Health Inspection Service (APHIS) for the costs of providing veterinary diagnostic services and import- and export-related services for live animals and birds and animal products are contained in 9 CFR part 130. Section 130.8 lists miscellaneous flat rate user fees.

In this document, we are proposing to amend existing user fees for processing applications for permits to import or transport certain animal products, organisms, vectors, and germ plasm. We are also proposing to establish user fees to cover the cost of processing applications for permits to import live animals. These proposed changes are explained in detail below.

Currently, under the regulations in § 130.8, APHIS charges flat rate fees for processing Veterinary Services Form 16-3, “Application for Permit to Import or Transport Controlled Material or Organisms or Vectors.” This form is used to apply for a permit to import materials derived from animals or materials that have been exposed to animal-source materials. Materials that require a permit include animal tissues, blood, cells, or cell lines of livestock or poultry origin, RNA/DNA extracts, hormones, enzymes, monoclonal antibodies, certain polyclonal antibodies, antisera, bulk shipments of test kit reagents, and microorganisms including bacteria, viruses, protozoa, and fungi. Exceptions to this requirement are tissues, serum, and blood from primates. Various other animal materials from countries where certain livestock diseases exist require a permit to be imported into the United States. Such materials include dairy products (except butter and cheese), meat products ( e.g. , meat pies, prepared foods), and various animal products, including, but not limited to, hides, bones, and carcasses, parts, or products of certain animals that are destined for use as trophies.

Also under § 130.8, APHIS charges a flat fee for processing applications to import germ plasm. APHIS services related to inspecting imported germ plasm and empty germ plasm containers are charged at the hourly rate user fees listed in § 130.30.

The table below lists existing and proposed user fees for the services listed.

On August 28, 2000, we published in the Federal Register a final rule (65 FR 51997-52010, Docket No. 97-058-2) that amended the user fees for the services listed above. When we calculated the fees established by that final rule, we assumed that the fees in place prior to the rule had been calculated to cover all the costs of providing the respective services. Therefore, in calculating the current fees, we simply added cost components for employee pay increases and additional costs for inflation (based on the consumer price index) to the previous fees.

Since the time when we calculated the current fees, we have conducted an in-depth review of the basic costs of providing the services listed above. In that review, we found that the existing fees and fees previously collected for the services listed (1) underestimated the amount of direct labor performed by administrative and professional staff who are involved in the permit application process, and (2) do not cover overhead costs. We are, therefore, proposing to amend the fees accordingly as shown above. The proposed fees will allow us to recover all the costs associated with providing the services listed, including direct labor and overhead costs.

We began our calculation of the proposed fees by estimating future annual volumes of each type of application based on the average of the actual volumes of each type of application processed in FY's 1998 and 1999. Those volumes are shown in the table below.

We then estimated that the total annual cost of processing the projected volume of applications would be $282,000. Our estimate includes cost components for the salaries of employees involved in processing applications, along with costs of billings and collections, rent, equipment (such as computer technologies), agency overhead, and departmental charges.

We then estimated, based on our experience processing applications, that processing amended and renewed applications respectively take approximately 50 percent and 65 percent of the time required to process a new application. We used the following equation to determine the proposed fee for a new application. In the equation, “x” represents the fee for new applications.

The fee for processing a permit application to import fetal bovine serum when inspection of a facility is required pays the cost of providing two distinct APHIS services. One covers the cost of processing an application to import fetal bovine serum (representing $94.00 of the fee), and the other covers the cost of inspecting the facility where the fetal bovine serum will be housed (representing the remaining $228.00 of the fee). We determined these costs based on the estimated time it takes to process the applications and inspect the facilities. The portion of the fee covering the costs of processing an application is the same as that proposed for processing an application to import other animal products and live animals. The portion of the fee covering the cost of inspecting the facility where fetal bovine serum will be housed is based on the existing hourly rate user fee of $76.00 per hour that is contained in § 130.30 of the regulations. We set this portion of the fee at $228.00 (3 × $76.00) because inspections of this type of facility have averaged 3 hours in recent years.

Currently, APHIS uses appropriated funds to cover the costs of processing applications and amended applications to import live animals. In this document, we are proposing to establish a flat-rate user fee to recover these costs. APHIS currently charges flat-rate user fees to persons applying for permits to import animal products, organisms, and vectors, as well as animal semen, embryos, and ova. By establishing flat rate user fees for processing applications and amended applications for permits to import live animals, we would make our user fee regulations more consistent and shift the cost of paying for these services away from taxpayers toward the actual users of these services.

Our proposed flat-rate user fees for processing these applications are as follows:

The above fees are the same as those we are proposing to charge for processing applications for permits to import animal products, organisms, vectors, and germ plasm. We believe that these fees will adequately cover the cost of providing these services.

We began our calculation of the proposed fees by estimating future annual volumes of each type of application based on the approximate volumes of each type of application processed in FY 1999. In FY 1999, APHIS processed approximately 7,500 new applications and 1,500 amended applications to import live animals.

We then estimated that the total annual cost of processing new and amended applications to import live animals, based on the expected volume of applications to be processed, would be $775,970. Our estimate includes cost components for the salaries of employees involved in processing applications, along with costs of billings and collections, rent, equipment (such as computer technologies), agency overhead, and departmental charges.

We then estimated, based on our experience processing applications, that it takes approximately half as much time to process an amended application as it takes to process a new application. Given these estimates, we used the following equation to determine the proposed fee for a new application. In the equation, “x” represents the fee for a new application.

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-319-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-319-AD, 1601 Lind Avenue, SW., Renton, Washington 98055-4056.

The Departmento de Aviacao Civil (DAC), which is the airworthiness authority for Brazil, notified the FAA that an unsafe condition may exist on certain EMBRAER Model EMB-135 and EMB-145 series airplanes. The DAC advises that it received a report of one occurrence in which the flight crew noticed uncommanded brake application on an EMB-145 series airplane. Analysis of the brake control unit (BCU) that was removed after this occurrence revealed a condition that caused uncommanded application of 50 percent braking in one pair of wheels. This condition, if not corrected, could result in the airplane skidding off the runway.

EMBRAER has issued Service Bulletin 145-32-0060, Change No. 01, dated June 6, 2000, which describes procedures for replacement of certain BCU's with new units. The procedures involve converting BCU's having a particular part number to a new part number, replacing certain units with new units, and performing a functional check of the main brake system. Accomplishment of the actions specified in the service bulletin is intended to adequately address the identified unsafe condition. The DAC classified this service bulletin as mandatory and issued Brazilian airworthiness directive 2000-07-01, dated August 20, 2000, in order to assure the continued airworthiness of these airplanes in Brazil.

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

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

Operators should note that the applicability of the Brazilian airworthiness directive includes all Model EMB-135 and EMB-145 series airplanes. However, the applicability of this proposed AD points to the effectivity of the referenced service bulletin, which specifies affected airplane serial numbers and provides information on in-production airplanes.

The FAA estimates that 165 Model EMB-135 and EMB-145 series airplanes of U.S. registry would be affected by this proposed AD. It would take approximately 5 work hours per airplane (2.5 work hours per BCU) to accomplish the proposed actions, at an average labor rate of $60 per work hour. Required parts would be provided by a vendor at no charge to the operator. Based on these figures, the cost impact of the proposed AD on U.S. operators is estimated to be $49,500, or $300 per airplane.

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

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

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

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

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy related aspects of the proposal. Communications should identify the airspace docket number and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit, with those comments, a self-addressed stamped postcard on which the following statement is made: “Comments to Airspace Docket No. 00-ANM-16.” The postcard will be date/time stamped and returned to the commenter. All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in the light of comments received. All comments submitted will be available for examination at the address listed above both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

Any person may obtain a copy of this NPRM by submitting a request to the Federal Aviation Administration, Airspace Branch, ANM-520, 1601 Lind Avenue SW, Renton, Washington 98055-4056. Communications must identify the docket number of this NPRM. Persons interested in being placed on a mailing list for future NPRM's should also request a copy of Advisory Circular No. 11-2A, which describes the application procedure.

The FAA is considering an amendment to Title 14 Code of Federal Regulations, part 71 (14 CFR part 71) by modifying Class E airspace at Tillamook, OR. A new RNAV SIAP to RWY 13 at Tillamook Airport has made this proposal necessary. Additional controlled airspace from 700 feet, and 1,200 feet, above the surface is required to contain aircraft executing the RNAV RWY 13 SIAP with a TAA design to Tillamook Airport. The FAA establishes Class E airspace where necessary to contain aircraft transitioning between the terminal and en route environments. The intended effect of this proposal is designed to provide for the safe and efficient use of the navigable airspace. This proposal would promote safe flight operations under IFR at the Tillamook Airport and between the terminal and en route transition stages.

The area would be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. Class E airspace areas extending upward from 700 feet or more above the surface of the Earth, are published in Paragraph 6005, of FAA Order 7400.9H dated September 1, 2000, and effective September 16, 2000, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document would be published subsequently in the Order.

The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore, (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and procedures (44 FR 11013; February 26, 1979(; and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

The Fair Housing Act (42 U.S.C. 3600-3620) (referred to as “the Act” in this rule) prohibits discrimination on the basis of sex. Sexual harassment related to housing has been uniformly recognized by courts as a form of discrimination based on sex and a violation of the Fair Housing Act. Sexual harassment may violate sections 804(a), 804(b), 804(c), 805, 806 or 818 under the Act. As the Department's current Fair Housing regulations do not address the standards to be applied in cases of sexual harassment, courts have looked to Title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000 et. seq.) (Title VII), and associated case law and regulations for guidance in Fair Housing Act cases. ( See Grieger v. Sheets, 1989 WL 38707 (N.D. Ill); see also Henson v. City of Dundee, 682 F.2d 897 (11th Cir. 1982); Shellhammer v. Lewallen, 770 F.2d 167 (6th Cir. 1985); Honce v. Vigil, 1 F.3d 1085 (10th Cir. 1993); Beliveau v. Caras, 873 F. Supp. 1393 (D. Cal. 1995); Krueger v. Cuomo, 115 F.3d 487 (7th Cir. 1997).) One court has expressed concern about the Department's lack of published standards concerning sexual harassment as a violation of the Act. (See DiCenso v. Cisneros, 96 F.3d 1004, 1007 (7th Cir. 1996)).

The Department is promulgating this proposed rule to provide guidance on key aspects of evaluating sexual harassment claims. In formulating the Department's position on sexual harassment, the Department carefully reviewed case law applying the Fair Housing Act, case law governing Title VII, and the Equal Employment Opportunity Commission's (EEOC) guidelines and policy statements.

Victims of sexual harassment at home lose their traditional place of refuge. “When the harassment occurs in a woman's home, it is a complete invasion in her life. Ideally, the home is the haven from the troubles of the day, when home is not a safe place, a woman may feel distressed and often immobile.” (Regina Cahan, Home is No Haven: An Analysis of Sexual Harassment in Housing 1987 Wis. L. Rev. 1061, 1072 (1987).) At least two courts have recognized that sexual harassment in the home may have more severe effects than harassment in the workplace. ( See Beliveau v. Caras, 873 F. Supp. 1393, 1397 (C.D. Cal. 1995); Williams v. Poretsky Management, 955 F. Supp. 490, 497 (S.D. Md. 1996).)

Sexual harassment violates the prohibitions against discrimination on the basis of sex found in sections 804(a), 804(b), 804(c), 805, or 806 of the Act. Sexual harassment can also violate section 818 of the Act, which prohibits threatening, intimidating or coercive verbal or physical conduct that occurs because of an individual's membership in a protected class. Threatening, intimidating or coercive verbal or physical conduct, which occurs between neighbors or tenants, may constitute sexual harassment and, if so, the offending neighbor or tenant will be liable under section 818 of the Act.

There are two types of actionable sexual harassment claims: “quid pro quo” claims and “hostile environment” claims. There will be cases where the conduct in question may support both quid pro quo and hostile environment claims of sexual harassment.

A “quid pro quo” claim exists when submission to unwelcome sexual advances and requests for sexual favors is made a term or condition of housing related to the sale or rental of dwellings, the provision of services in connection therewith, or the availability of residential real estate-related transactions. Such a claim may be established if submission to or rejection of such conduct is used as the basis for decisions affecting the provision of housing or residential real estate-related transactions and related benefits or services. Generally, an individual asserting a quid pro quo claim of sexual harassment must establish the existence of an unwelcome demand for sexual favors based on the individual's sex and that the harassment adversely affected one or more terms, conditions, or privileges of housing or a residential real estate-related transaction or associated benefits or services.

A person creates a hostile environment when that person's unwelcome conduct is sufficiently severe or pervasive that it results in the creation of an environment that a reasonable person in the aggrieved person's position would find intimidating, hostile, offensive, or otherwise significantly less desirable. Generally, an individual asserting a hostile environment sexual harassment claim generally must establish that he or she was subjected to unwelcome verbal or physical conduct; the conduct was severe or pervasive; the conduct was based upon the individual's sex; and the conduct made the environment burdensome and significantly less desirable than if the conduct had not occurred.

Reasonable person standard. Whether conduct creates a hostile environment will be evaluated from the perspective of a reasonable person in the aggrieved person's position. The perspective of a reasonable person in the aggrieved person's position is that of an ordinary person in like circumstances. The Department believes that the purpose and intent of the Act is best served by adhering to the reasonable person standard and adopts this standard for cases under the Act. This standard recognizes that men, as well as women, may be victims of sexual harassment. ( Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75 (1998).) This standard also recognizes that either opposite-sex or same-sex discrimination violates the Fair Housing Act if the challenged conduct occurred because of the victim's sex. ( Id. )

The reasonable person standard is the perspective from which the victim's reaction to the harasser's conduct should be analyzed to determine whether an actionable sexual harassment claim exists. Use of the reasonable person standard to determine liability should not be confused with the standard used to determine appropriate damages to aggrieved persons in housing discrimination cases. It is a well-established principle in fair housing law that perpetrators of housing discrimination must take their victims as they find them; that is, damages are measured based on the injuries actually suffered by the victim, not on the injuries that would have been suffered by a reasonable person. (Alan W. Heifetz and Thomas C. Heinz, Separating the Objective, the Subjective and the Speculative: Assessing Compensatory Damages in Fair Housing Adjudications, 26 Marshall Law Review 3, 21 (1992).)

Whether any conduct in question constitutes sexual harassment in violation of the Act will depend on the totality of the circumstances involved in each particular situation on a case by case basis. ( Harris v. Forklift Systems, Inc., 510 U.S. 17, 22 (1993).) Critical factors to examine include, but are not limited to, the context, nature, severity, scope, frequency, duration, and location of the incidents, as well as the identity, number, relative ages and relationships of the persons involved.

This proposed regulation does not impose a quantitative requirement on the incidents of harassment that will constitute sexual harassment under the Act. ( Harris, 510 U.S. at 22 “[t]his is not * * * a mathematically precise test.”) A quantitative requirement unfairly penalizes the person who takes affirmative steps to avoid further harassment by avoiding the harasser. ( Gnerre v. Massachusetts Commission Against Discrimination, 524 N.E. 2d 84, 89 (Mass. 1988).) A single incident of conduct may constitute unlawful sexual harassment.

As evidenced by case law, unwelcome verbal conduct without physical conduct may independently support a sexual harassment claim. (See e.g., Grieger, 1989 WL 38707 (N.D. Ill.).) Verbal conduct includes, but is not limited to, the use of sexual epithets. Since verbal harassment may by itself support a sexual harassment claim under the Act, it follows that proof of physical harm is not necessary to establish a sexual harassment claim.

An intentional touching of any part of the body may constitute unwelcome conduct. To establish that conduct is sexual harassment, it is not necessary that intentional physical conduct involve an intimate body part. Evidence of unwelcome conduct need not be sexual in nature to support a claim for sexual harassment. ( Id .*3 (citing cases from the Eighth, Tenth, and District of Columbia Circuits).)

(1) A person is responsible for his or her acts.

(2) A person shall be vicariously liable for sexual harassment by his or her agents. An alleged perpetrator's responsibilities, duties and functions should be carefully examined to establish whether the perpetrator was acting in an agency capacity before determining whether a principal is liable. This principle is fully consistent with the Department's position on a principal's liability for the acts of agents. (See 24 CFR 103.20 (1999), and preamble to final rule implementing the Fair Housing Act Amendments of 1988, 54 FR 3232, 3260-3261, January 23, 1989.)

The duty of a property owner not to discriminate in the leasing or sale of property is non-delegable. ( Alexander v. Riga, 208 F.3d 419, 432-434 (3rd Cir. 2000); Walker v. Crigler, 976 F.2d 900, 904 (4th Cir. 1992); Marr v. Rife, 503 F.2d 735, 741 (6th Cir. 1974); City of Chicago v. Matchmaker Real Estate Sales Center, Inc., 982 F.2d 1086, 1096 (7th Cir. 1996); Coates v. Bechtel, 811 F.2d 1045, 1051 (7th Cir. 1987); Phiffer v. Proud Parrot Motor Hotel, Inc., 648 F.2d 548 (9th Cir. 1980)). The Department invites comment on whether an affirmative defense, similar to the one that was created for employers by the Supreme Court in Title VII cases ( Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), and Faragher v. City of Boca Raton, 524 U.S. 775 (1998)) would be appropriate in the Fair Housing context. The Department also solicits comments on methods by which it can incorporate in the regulation provisions regarding training and other methods to educate individuals as to the prohibitions against sexual harassment under the Fair Housing Act.

(3) A person shall be responsible for acts of sexual harassment by third parties, where he or she, or his or her agent, knew or should have known of the conduct and failed to take immediate and appropriate corrective action, and had a duty to do so. ( Reeves v. Carrolsburg Condominium Unit Owners Association, 1997 U.S. Dist. LEXIS 21762 *23; Cf. Bradley v. Carydale Enterprises, 707 F. Supp. 217 (E.D. VA 1989).) The duty to take corrective action may be established by leases, contracts, condominium by-laws and local ordinances. ( Reeves, 1997 U.S. Dist., LEXIS 21762, *23.) Examples of third parties include tenants and independent contractors.

The Department solicits comments on other mechanisms that may create a duty to take corrective action and factors the Department should consider when determining whether such a duty exists.

When a housing-related opportunity or benefit is granted because of an individual's submission to sexual advances or requests for sexual favors, a person may be held liable for sexual harassment by other individuals who were qualified for and had a reasonable expectation of receiving an opportunity or benefit, but were denied. (Cf., Broderick v. Ruder, 685 F. Supp., 1269 (D.D.C. 1988).) For example, the manager of a housing complex with a long waiting list offers to move applicants to the top of the waiting list in exchange for sexual favors. Other applicants, even if they were not propositioned, but lost housing opportunities because of the manager's preferential treatment of others in exchange for sexual favors are aggrieved persons under the Fair Housing Act.

Evidence relating to the relative mildness or severity of an aggrieved person's psychological harm is not relevant to whether a respondent has violated the Fair Housing Act's prohibition against sexual harassment. (Harris, 510 U.S. 17 (1993)) Evidence of psychological harm may be considered in determining the proper amount of any money damages to which an aggrieved person may be entitled in compensation for emotional distress suffered.

The Office of Management and Budget (OMB) reviewed this rule under Executive Order 12866, Regulatory Planning and Review, and determined that this rule is a “significant regulatory action” as defined in section 3(f) of the Order (although not economically significant, as provided in section 3(f)(1) of the Order). Any changes made in this proposed rule subsequent to its submission to OMB are identified in the docket file, which is available for public inspection between 7:30 a.m. and 5:30 p.m. in the Office of the Rules Docket Clerk, Office of General Counsel, Room 1026, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC.

The Secretary, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this proposed rule before publication and by approving it certifies that this rule would not have a significant economic impact on a substantial number of small entities. This proposed rule would address sexual harassment in a housing or residential real estate-related transaction environment as a form of discrimination based on sex and a violation of the Fair Housing Act.

In accordance with 24 CFR 50.19(c)(3) of HUD's regulations, this proposed rule would set forth fair housing standards, and therefore is categorically excluded from the requirements of the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4347).

This rule does not have Federalism implications and does not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of Executive Order 13132.

Title II of the Unfunded Mandates Reform Act 1995 (Pub. L. 104-4; approved March 22, 1995) (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments, and on the private sector. This rule would not impose any Federal mandates on any State, local, or tribal government, or on the private sector, within the meaning of the UMRA.

The Catalog of Federal Domestic Assistance number is 14.400.

Accordingly, 24 CFR part 100 is proposed to be amended as follows:

The Bureau of Alcohol, Tobacco and Firearms (ATF) is responsible for implementing Title XI, Regulation of Explosives (18 U.S.C. Chapter 40), of the Organized Crime Control Act of 1970. One of the stated purposes of the Act is to reduce the hazards to persons and property arising from the misuse of explosive materials. Under section 847 of title 18, United States Code, the Secretary of the Treasury “may prescribe such rules and regulations as he deems reasonably necessary to carry out the provisions of this chapter.” Regulations that implement the provisions of chapter 40 are contained in title 27, Code of Federal Regulations (CFR), part 55.

Section 55.109 requires licensed manufacturers of explosive materials to legibly identify by marking all explosive materials manufactured for sale or distribution. The term “explosive materials,” as defined in section 55.11, means explosives, blasting agents, water gels and detonators. The term includes, but is not limited to, all items in the “List of Explosive Materials” provided for in section 55.23. Section 55.202 provides that there are three classes of explosive materials: (1) high explosives (e.g., dynamite, flash powders, and bulk salutes), (2) low explosives (e.g., black powder, safety fuses, igniters, igniter cords, fuse lighters, and display fireworks (except bulk salutes)), and (3) blasting agents (e.g., ammonium nitrate-fuel oil and certain water-gels).

The marks required by section 55.109 include the identity of the manufacturer and the location, date, and shift of manufacture. This section also provides that licensed manufacturers must place the required marks on each cartridge, bag, or other immediate container of explosive materials for sale or distribution, as well as on the outside container, if any, used for their packaging.

Exceptions to the marking requirements are provided in section 55.109(b). Licensed manufacturers of blasting caps are only required to place the required identification marks on the containers used for the packaging of blasting caps. In addition, the Director may authorize other means of identifying explosive materials upon receipt of a letter application from the licensed manufacturer showing that other identification is reasonable and will not hinder the effective administration of part 55. Finally, section 55.109(b) provides that the Director may authorize the use of other means of identification on fireworks instead of the required markings specified above.

The Institute of Makers of Explosives (IME) filed a petition with ATF, dated March 7, 2000, requesting an amendment of the regulations to require licensed importers to place the same identification marks on imported explosive materials that are currently required for explosive materials manufactured in the United States. As stated in the petition, the IME is the safety association of the commercial explosives industry. Its mission is to promote safety and the protection of employees, users, the public and the environment, and to encourage the adoption of uniform rules and regulations in the manufacture, transportation, storage, handling, use, and disposal of explosive materials used in blasting and other essential operations.

According to the petitioner, the commerce of explosives is a global enterprise and it expects the quantity of imports to increase over time. For example, the petitioner states that between 1994 and 1997, imports of cast boosters (high explosives) increased 14-fold to account for approximately 17 percent of all high explosives used annually in the U.S. The IME further states that while unmarked high explosives may have entered the United States over the years, it was not until last year that the association became aware of significant quantities of unmarked high explosives being imported into the country. The IME contends that by the end of 1999 about two million unmarked units had been distributed in the United States. The petitioner further states that many more thousands of tons of these high explosives are expected to be imported into the U.S. in the near future. Without a change in the regulations, the IME is concerned that these explosives will be entered into commerce in the U.S. without marks of identification, posing significant safety and security risks to the public. Although the IME has informed ATF that many of its member companies importing explosives into the U.S. mark their imported explosive materials in an effort to ensure traceability and accountability of the materials, it believes that all imported explosive materials should be appropriately identified. Therefore, it petitioned that the Federal explosives regulations be amended.

By letter dated August 2, 2000, the IME amended its petition to narrow the scope to importers of high explosives and blasting agents. The IME stated that it did not understand that the scope of its initial petition would apply to importers of products other than high explosives and blasting agents, i.e., low explosives. The IME noted that it has a specific standard that high explosives and blasting agents be marked with a date/plant/shift code.

In an effort to protect the public from the misuse of explosive materials, ATF generally requires that explosives manufacturers mark all explosive materials manufactured with specific information, including the name of manufacturer, and the location, date, and shift of manufacture. Generally, licensees and permittees must record the manufacturer's marks of identification on all explosives they receive. These requirements help ensure that explosive materials can be effectively traced for criminal enforcement purposes, i.e., the explosives can be tracked through the records kept by licensees and permittees. This process often provides valuable information in explosion and bombing investigations and is useful for inspection purposes in verifying inventory and proper conduct of business practices. However, the regulations do not require that imported explosive materials be marked. Therefore, we are requesting information and comments from interested persons on the desirability and feasibility of marking imported explosive materials.

Although ATF is soliciting comments on the following specific questions, we are also requesting any relevant information on the subject. 1. Should explosive materials imported into the United States contain identification markings?

2. Should all imported explosive materials be marked, or should certain classes of explosive materials, such as low explosives, be exempt? If you believe certain classes of explosives should be exempt from marking, please provide the reason(s) why such an exemption is consistent with public safety.

3. What identification marks, if any, are currently being placed on imported explosive materials?

4. What information should appear on imported explosive materials? ATF believes that the name and address of the importer, the name of the country in which the explosive materials were manufactured, and the date that the explosive materials were manufactured would be sufficient.

5. Assuming that any required identification marks must be placed on each cartridge, bag, or other immediate container of explosive materials that are imported, as well as on any outside container used for their packaging, is it feasible for a U.S. importer to place the required marks on foreign explosive materials?

6. How many importers would be affected by a requirement to place identification markings on foreign explosive materials?

7. Of those importers that would be affected by such a requirement, how many would be considered a “small business concern” as provided in the Small Business Act (15 U.S.C. 631, et seq. )?

8. What would be the cost burden imposed on importers for purchasing or leasing equipment for marking foreign explosive materials, including installation and operation?

9. What would the cost be for importers to contract with a foreign manufacturer to place the required marks on explosive materials on behalf of the importer?

It has been determined that this advance notice is not a significant regulatory action as defined by Executive Order 12866. Accordingly, this advance notice is not subject to the analysis required by this Executive Order.

We are requesting comments on the petition from all interested persons. We are specifically requesting comments on the clarity of this advance notice and how it may be made easier to understand.

Comments received on or before the closing date will be carefully considered. Comments received after that date will be given the same consideration if it is practical to do so, but assurance of consideration cannot be given except as to comments received on or before the closing date.

ATF will not recognize any material in comments as confidential. Comments may be disclosed to the public. Any material that the commenter considers to be confidential or inappropriate for disclosure to the public should not be included in the comment. The name of the person submitting a comment is not exempt from disclosure.

You may submit written comments by facsimile transmission to (202) 927-8602. Facsimile comments must:

• Be legible;

• Reference this notice number;

• Be 8 1/2 ″ × 11″ in size;

• Contain a legible written signature; and

• Be not more than three pages long.

We will not acknowledge receipt of facsimile transmissions. We will treat facsimile transmissions as originals.

Copies of the petition, this advance notice, and the comments received will be available for public inspection during normal business hours at: ATF Public Reading Room, Room 6480, 650 Massachusetts Avenue NW., Washington, DC.

The author of this document is James P. Ficaretta, Regulations Division, Bureau of Alcohol, Tobacco and Firearms.

The Bureau of Prisons (Bureau) proposes to revise its regulations on the suicide prevention program (28 CFR part 552, subpart E). Current regulations on this subject were published in the Federal Register on April 24, 1990 (55 FR 17355).

We are revising the regulations generally for clarity and to remove procedures relating to agency management. The revised regulations more clearly describe for the inmate how we identify and protect inmates at risk for suicide.

We are making this change to conform to the plain language initiative. Procedures relating to agency management are exempt from the rulemaking provisions of the Administrative Procedure Act (5 U.S.C. 553). Removing these procedures from the regulations allows us to speak more directly to inmates.

Revised § 552.40 more precisely states the purpose of our suicide prevention program and summarizes how we place inmates in and remove them from the program. Former §§ 552.41 through 552.43 are combined in a new § 552.41 which details the specific procedures we use to identify, refer, assess, and treat potentially suicidal inmates.

We combined provisions for the conditions of a suicide watch in former §§ 552.44, 552.46, and 552.48 in the new § 552.42. The revised regulations are more objective based. For example, the revised regulations require that rooms designated for housing an inmate on suicide watch must allow staff to maintain adequate control of the inmate without compromising the ability to observe and protect the inmate.

Previously, the regulations relied upon a more prescriptive approach of describing the location of the room (“. . . a non-administrative detention/segregation cell ordinarily in the health services area”). This prescriptive approach does not take into account recent developments in correctional facility design and construction, and has become unnecessarily restrictive.

Former §§ 552.45 and 552.49 addressed agency management procedures, and former § 552.47 affirms that a previously imposed sanction remains in effect for an inmate when that inmate is removed from a suicide watch. Because our regulations on inmate discipline sufficiently support that statement, we removed these three sections.

This regulation generally affects inmates in Bureau institutions.

If you want to comment on this proposed rulemaking, you can submit data, views, or arguments in writing to the Rules Unit, Office of General Counsel, Bureau of Prisons, 320 First Street, NW., HOLC Room 754, Washington, DC 20534.

We will consider comments we receive during the comment period before we take final action. We will try to consider comments we receive after the comment period ends if we can.

All comments received remain on file for public inspection at the above address. We may change the proposed rule in light of the comments received. We do not expect to hold oral hearings on this rulemaking.

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, under Executive Order 13132, we determine that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

The Director of the Bureau of Prisons, under the Regulatory Flexibility Act (5 U.S.C. 605(b)), reviewed this regulation and by approving it certifies that it 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 section 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 telephone number or address listed above.

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

Section 18 of the Occupational Safety and Health Act of 1970 (the “Act”) 29 U.S.C. 667 provides that a State which desires to assume responsibility for the development and enforcement of standards relating to any occupational safety and health issue with respect to which a Federal standard has been promulgated may submit a State plan to the Assistant Secretary of Labor for Occupational Safety and Health (“Assistant Secretary”) documenting in detail the proposed program. Regulations promulgated pursuant to the Act at 29 CFR part 1956 provide that a State may submit a State plan for the development and enforcement of occupational safety and health standards applicable only to employees of the State and its political subdivisions (“public employees”). Under these regulations the Assistant Secretary will approve a State plan for public employees if the plan provides for the development and enforcement of standards relating to hazards in employment covered by the plan which are or will be at least as effective in providing safe and healthful employment and places of employment for public employees as standards promulgated and enforced under section 6 of the Federal Act, giving due consideration to differences between public and private sector employment. In making this determination the Assistant Secretary will consider, among other things, the criteria and indices of effectiveness set forth in 29 CFR part 1956, Subpart B.

In 1973, the New Jersey Department of Labor and Industry obtained OSHA approval of a State plan for the enforcement of occupational safety and health standards covering private sector workplaces as well as a program for public employees in New Jersey. That plan was approved by the Assistant Secretary on January 22, 1973 (37 FR 2426); 29 CFR 1952.140 et seq. ). That plan was subsequently withdrawn by the State of New Jersey effective June 30, 1975, after the State was unable to gain enactment of the necessary State OSHA legislation (40 FR 27655).

In 1984, the New Jersey State Legislature passed the New Jersey Public Employees Occupational Safety and Health (PEOSH) Act, which was signed into law by the Governor, and which provided the basis for establishing a comprehensive occupational safety and health program applicable to the public employees in the State.

The State formally submitted for Federal approval a plan applicable only to public employees in February 1988. OSHA's review findings were detailed in an October 1988 letter to then New Jersey Labor Commissioner Charles Serraino. OSHA determined that the New Jersey statute, as structured, and the proposed State plan presented several obstacles to meeting Federal State plan approval criteria.

A revised plan was submitted by the State on February 19, 1992. On March 27, 1992, in a letter to former New Jersey State Labor Commissioner Raymond L. Bramucci, OSHA informed the State of its latest findings, identifying areas of the proposed plan which needed to be addressed or needed clarification. Amended enabling legislation was signed into law by Governor Christine Todd Whitman on July 25, 1995, to conform the proposed State plan to OSHA requirements. On October 11, 1995, former New Jersey State Labor Commissioner Peter J. Calderone submitted a newly revised PEOSH State plan which OSHA determined was conceptually approvable as a developmental State plan, but which could not be approved until Congress appropriated additional Federal matching grant funds for a new State plan under section 23(g) of the OSHAct. On August 1, 2000, current New Jersey Commissioner of Labor, Mark B. Boyd, and Commissioner of Health and Senior Services, Christine Grant, submitted a further revised plan document, with final amendments submitted on September 1, 2000.

The Act provides for funding “up to 50%” of the State plan costs, but longstanding language in OSHA's appropriation legislation further provides that OSHA must fund “* * * no less than 50% of the costs required to be incurred” by an approved State plan. The Department of Labor's Fiscal Year 2000 budget request included additional section 23(g) grant funds to allow approval of the New Jersey State plan. However, the requested funds were not included in OSHA's final FY 2000 Congressional appropriation. The Department of Labor's Fiscal Year 2001 budget, which is pending final Congressional and Executive action, again requests funding to allow approval of the New Jersey State plan.

After an opportunity for public comment, and contingent upon the availability of additional section 23(g) grant funds, the Assistant Secretary of Labor will approve the New Jersey State plan if it is determined that the plan meets the criteria set forth in the Occupational Safety and Health Act of 1970 and applicable regulations at 29 CFR part 1956, Subpart B. The approval of a State plan for public employees in New Jersey is not a significant regulatory action as defined in Executive Order 12866.

The plan designates the New Jersey Department of Labor as the State agency responsible for administering the plan throughout the State. The plan includes legislation, the Public Employees Occupational Safety and Health Act (the “State Act,” N.J.S.A. 34:6A-25 et seq. ), passed by the New Jersey legislature in 1995. Under that legislation, the New Jersey Commissioner of Labor has full authority to adopt standards and enforce and administer all laws and rules protecting the safety and health of employees of the State and its political subdivisions. The State Commissioner of Labor and the State Commissioner of Health and Senior Services are both responsible for conducting inspections within their jurisdictional areas. (Although health inspections will be conducted by the New Jersey State Department of Health and Senior Services, all enforcement actions will be initiated by the State Department of Labor.) New Jersey has adopted State standards identical to Federal occupational safety and health standards promulgated as of December 7, 1998, with differences only in its hazard communication and fire protection standards. The State plan includes a commitment to bring those standards into conformance with OSHA requirements and to update all standards within one year after plan approval. The State plan also provides that future OSHA standards and revisions will be adopted by the State in accordance with 29 CFR 1953.21. The plan also includes provisions for the granting to public employers of permanent and temporary variances from State standards in terms substantially similar to the variance provisions contained in the Federal Act. The State provisions require employee notification of variance applications as well as employee rights to participate in hearings held on variance applications. Variances may not be granted unless it is established that adequate protection is afforded employees under the terms of the variance. Section 6A-35 of the State Act (N.J.S.A. 34) provides for inspections of covered workplaces including inspections in response to employee complaints. If a determination is made that an employee complaint does not warrant an inspection, the complainant will be notified, in writing, of such determination and afforded an opportunity to seek informal review of the determination. Additionally, section 6A-35 of the State Act provides the opportunity for employer and employee representatives to accompany an inspector during an inspection for the purpose of aiding in the inspection.

The plan provides for notification to employees of their protections and obligations under the plan by such means as a State poster, and required posting of notices of violation. Section 6A-45 of the State Act provides for protection of employees against discharge or discrimination resulting from exercise of their rights under the State Act in terms essentially identical to section 11(c) of the Federal Act. In lieu of first-instance monetary penalties, the plan provides a scheme of enforcement for compelling compliance under which public employers are issued notices of violations and orders to comply, for any violation of standards and orders. Such notices must allow a reasonable abatement period. Public employers, employees and other affected parties may seek informal review of the notice of violation with the New Jersey Department of Labor, including the reasonableness of the abatement period, and/or may seek formal administrative review with the New Jersey Department of Labor's Occupational Safety and Health Review Commission. Judicial review of the decision of the Review Commission may be sought at the Appellate Division of the Superior Court. The PEOSH Act further mandates a system of monetary penalties as its primary enforcement mechanism for failures to comply with an Order of the Commissioner of Labor and willful violations pursuant to section 6A-41d. The prescribed penalty amounts are up to $7,000 per day for failure to abate violations and up to $70,000 for willful violations. Such penalties are also subject to administrative review and subsequent judicial appeal.

The plan also includes provisions for right of entry for inspection, prohibition of advance notice of inspection and employers' obligations to maintain records and provide reports as required. The plan further provides assurances of a fully trained, adequate staff, including 20 safety and 7 health compliance officers for enforcement inspections, and 4 safety and 3 health consultants to perform consultation services in the public sector, and 2 safety and 3 health training and education staff. 29 CFR 1956.10(g) requires that State plans for public employees provide a sufficient number of adequately trained and qualified personnel necessary for the enforcement of standards. The compliance staffing requirements (or benchmarks) for State plans covering both the private and public sectors are established based on the “fully effective” test established in AFL-CIO v. Marshall, 570 F.2d 1030 (D.C. Cir., 1978). This staffing test, and the complicated formula used to derive benchmarks for complete private/public sector plans, is not intended, nor is it appropriate, for application to the staffing needs of public employee only plans. However, the State has given satisfactory assurance in its plan that it will meet the staffing requirements of 29 CFR 1956.10. The State has also given satisfactory assurances of adequate State matching funds to support the plan and is requesting initial Federal funding of $1,771,000.

Although the State Act sets forth the general authority and scope for implementing the New Jersey Public Employees Occupational Safety and Health (PEOSH) Plan, the plan is developmental under the terms of 29 CFR 1956.2(b), in that specific rules and regulations must still be adopted to carry out the plan and make it fully operative. The plan sets forth a timetable for the accomplishment of these and other developmental goals. This timetable addresses such general areas as the development or revision of regulations governing enforcement, consultation, and variances. Other developmental aspects include hiring and training of staff, obtaining laboratory services, development of a Field Operations Manual and other implementing policies and procedures, and adoption of various forms, procedures, and instructions.

A copy of the plan may be inspected and copied during normal business hours at the following locations:

Public comment on the New Jersey Public Employees Occupational Safety and Health (PEOSH) Plan is hereby requested. Interested persons are invited to submit written data, views, and comments with respect to this proposed initial State plan approval. These comments must be received on or before December 13, 2000 and submitted in duplicate to the Docket Officer, Docket No. T-034, U.S. Department of Labor, Room N-2625, 200 Constitution Avenue NW., Washington, DC 20210. Written submissions must clearly identify the issues which are addressed and the positions taken with respect to each issue. Comments limited to 10 pages or fewer may also be transmitted by FAX to: (202) 693-1648, provided that the original and one copy of the comment are sent to the Docket Office immediately thereafter. Electronic comments may be submitted on the Internet at: http://ecomments.osha.gov/ . The State of New Jersey will be afforded the opportunity to respond to each submission. The New Jersey Department of Labor must also publish appropriate notice within the State of New Jersey within 5 days of publication of this notice, announcing OSHA's proposal to approve a New Jersey State Plan for Public Employees Only, contingent on the availability of appropriated funds, and giving notice of the opportunity for public comment.

Pursuant to 29 CFR 1902.39(f), interested persons may request an informal hearing concerning the proposed initial State plan approval. Such requests also must be received on or before December 13, 2000 and should be submitted in duplicate to the Docket Officer, Docket T-034, at the address noted above. Such requests must present particularized written objections to the proposed initial State plan approval. The Assistant Secretary will decide within 30 days of the last day for filing written views or comments and requests for a hearing whether the objections raised are substantial and, if so, will publish notice of the time and place of the scheduled hearing.

The Assistant Secretary will, within a reasonable time after the close of the comment period or after the certification of the record if a hearing is held, publish his decision in the Federal Register . All written and oral submissions, as well as other information gathered by OSHA, will be considered in any action taken. The record of this proceeding, including written comments and requests for hearing and all materials submitted in response to this notice and at any subsequent hearing, will be available for inspection and copying in the Docket Office, Room N-2625, at the previously mentioned address, between the hours of 8:15 a.m and 4:45 p.m.

OSHA certifies pursuant to the Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq. ) that the proposed initial approval of the New Jersey State Plan will not have a significant economic impact on a substantial number of small entities. By its own terms, the plan will have no effect on private sector employment, but is limited to the State and its political subdivisions. Moreover, the New Jersey legislation has been in effect since 1984, when the State first established a safety and health program for State and local government employees. Since that time, the New Jersey program has been in operation with State funding and most public sector employers in the State, including small units of local government, have been subject to its terms. Compliance with State OSHA standards is required by State law; Federal approval of a State plan imposes regulatory requirements only on the agency responsible for administering the State plan. Accordingly, no new obligations would be placed on public sector employers as a result of Federal approval of the plan.

Executive Order 13132, “Federalism,” emphasizes consultation between Federal agencies and the States and establishes specific review procedures the Federal government must follow as it carries out policies which affect state or local governments. OSHA has consulted extensively with New Jersey throughout the development, submission and consideration of its proposed State plan. Although OSHA has determined that the requirements and consultation procedures provided in Executive Order 13132 are not applicable to initial approval decisions under the Act, which have no effect outside the particular State receiving the approval, OSHA has reviewed the New Jersey initial approval decision proposed today, and believes it is consistent with the principles and criteria set forth in the Executive Order.

This document was prepared under the direction of Charles N. Jeffress, Assistant Secretary of Labor for Occupational Safety and Health. It is issued under section 18 of the OSH Act (29 U.S.C. 667), 29 CFR part 1902, and Secretary of Labor's Order No. 3-2000 (65 FR 50017).

For additional information see the direct final rule published in the rules section of this Federal Register . Copies of the documents relevant to this action are available for public inspection during normal business hours at the above address. (Please telephone John Mooney at (312) 886-6043 before visiting the Region 5 Office.)

This is a synopsis of the Commission's Notice of Proposed Rulemaking, CC Docket No. 00-199, FCC 00-364, adopted October 12, 2000 and released October 18, 2000. The full text of this Commission NPRM is available for inspection and copying during normal business hours in the FCC Reference Center (CY-A257), 445 12th Street, SW, Washington, DC. The complete text of this NRPM may also be purchased from the Commission's copy contractor, International Transcription Service, Inc., 1231 20th Street, NW., Washington, DC 20036.

This NPRM contains proposed information collections subject to the Paperwork Reduction Act of 1995 (PRA). It has been submitted to the Office of Management and Budget (OMB) for review under the PRA. OMB, the general public, and other Federal agencies are invited to comment on the proposed information collections contained in this proceeding.

This NPRM contains a proposed information collection. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the information collections contained in this NPRM, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. Public and agency comments are due at the same time as other comments on this NPRM; OMB notification of action is due January 12, 2001.

Comments should address: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology.

OMB Control Number: None.

Title: 2000 Biennial Regulatory Review—Comprehensive Review of the Accounting Requirements and ARMIS Reporting Requirements for Incumbent Local Exchange Carriers: Phase 2 and Phase 3, CC Docket No. 00-199.

Form No.: FCC Reports 43-01, 43-02, 43-03, 43-04, 43-05, 43-07, 43-08, 495A and 495B.

Type of Review: New collection.

Respondents: Business or other for-profit.

Total Annual Burden: 1,113,198 hours.

Cost to Respondents: $65,000-$1,200,000.

Needs and Uses: In CC Docket No. 00-199, the Commission seeks comment on streamlining its part 32 chart of accounts, modifying its affiliate transactions rules, and revising its expense limits rules. In addition, the NPRM seeks comment on streamlining the accounting and reporting requirements specifically for mid-sized carriers by eliminating mandatory CAM filing and CAM audits for these carriers. The NPRM seeks comment on the modification of all ARMIS reports, except FCC Report 43-06. The information is needed so that the Commission can fulfill its statutory responsibilities and obligations.

In this item, we commence Phase 2, to seek comment on further accounting and reporting reform measures that may be implemented in the near term; and Phase 3, to consider the appropriate indicia for more significant deregulation in this area.

Commencement of Phase 2, that is also part of our biennial regulatory review process, is particularly appropriate at this time given the recent changes in the telecommunications industry and recent changes in regulatory requirements for the largest incumbent LECs.

In 1999, we initiated this comprehensive review proceeding to examine further reform measures and announced a two-phased approach that would address immediate and long-term reform. We adopted a number of immediate reform measures in our Phase 1 Report and Order, 65 FR 16328 (March 28, 2000). We realize now that further immediate reform measures may be warranted at this time, as we consider long-range reform. Thus, in Phase 2, we seek comment on immediate accounting and reporting reform measures that are appropriate now, and in Phase 3, we seek comment on appropriate indicia for more significant deregulation in this area. Our actions to implement immediate reforms will not slow down our long-range plans for accounting and reporting deregulation. We envision that Phase 2 and Phase 3 will proceed concurrently. Accordingly, we seek comment on both immediate and long-term reform measures.

During this comprehensive review, we have worked closely with the National Association of Regulatory Utility Commissioners (NARUC), state commissions, and the industry. We are also working with the states to eliminate overlap of federal and state reporting requirements, as well as eliminating unnecessary reporting requirements. Under section 220(i) of the Communications Act, the Commission must notify the state commissions before modifying the chart of accounts and must allow the states a reasonable opportunity to present their views. Even without this statutory requirement, we recognize the state commissions' significant expertise with accounting and cost allocation issues and would invite their recommendations.

In the following sections, we set forth proposals for the second phase of our comprehensive review and seek comment on streamlining accounting rules and ARMIS reporting requirements for Class A carriers. We also set forth a separate proposal for streamlining our accounting and reporting requirements specifically for mid-size carriers. In addition to commenting on these proposals, commenters are encouraged to propose any additional recommendations for action. In the third phase of our comprehensive review, we seek comment on specific issues and long-term proposals as we continue to move to a more deregulatory environment.

In this NPRM, we seek comment on further revising our part 32 chart of accounts, our affiliate transactions rules, and our expense limits rules.

In this NPRM, we seek comment on modifications to the Uniform System of Accounts to reduce burdens on Class A carriers. We propose retaining the current Class B account structure for the incumbent LECs currently reporting at the Class B level. We seek comment on specific proposals from both the industry and the states to streamline and modify the USOA. Specifically, USTA has requested that we uniformly adopt Class B accounting for all carriers. USTA contends that Class A accounting is not needed for jurisdictional separations, price caps, or universal service mechanisms. The states, in contrast, have asked us to add additional accounts to track information for various purposes. USTA also proposes that we eliminate several subaccounts and Jurisdictional Difference Accounts that Class B carriers currently must report. USTA contends that carriers should not be required to maintain subaccounts or subsidiary records that are not necessary to meet business requirements. In addition, USTA contends that the Jurisdictional Difference Accounts are not needed because they are not used for federal regulatory oversight and the information in these accounts is also provided to the states. We seek comment on these proposals.

In considering USTA's request to use Class B accounts for all carriers, we have found many instances where Class B accounting would appear to meet the Commission's data needs. We agree with USTA that fewer prescribed accounts such as we now require for Class B carriers would reduce the carriers' regulatory reporting burdens. Therefore, we propose to eliminate approximately one-fourth of the current Class A accounts. Based on our examination of the various accounts, we believe there is no continuing need for carriers to record their costs in these accounts. We seek comment on whether eliminating these accounts would undermine our ability to meet our statutory mission.

We also seek comment on the remaining three-fourths of Class A accounting. In particular, we seek comment on the impact of eliminating the Class A account structure for network plant and related asset and expense accounts, and how that would affect our ongoing mission. We seek comment on whether using Class B accounting for all carriers would provide sufficient information for our purposes. Commenters should address the impact this rule modification would have on universal service mechanisms and anything else they deem relevant. For example, we note that there may be a continuing need for network plant and related accounts at the Class A level in order to maintain and use the universal service model we utilize in administering the universal service high cost fund for non-rural carriers. For instance, Class A accounting requires that switching equipment be accounted for by technology ( i.e. , analog electronic switching, digital electronic switching, and electro-mechanical switching) whereas Class B combines all switching technologies in one account. The universal service high cost model currently determines the cost of providing digital switching equipment using Class A central office equipment accounts. We seek comment on how we could avoid serious distortions in the digital switching cost estimates if all types of switching equipment were combined as they are in Class B accounts.

In addition, Class A accounting data may be used by the states on a comparative basis in state UNE pricing proceedings. We seek comment on the prevalence and frequency of such state use. Commenters should also address whether states could find or develop alternative sources of data for this purpose. Part 32 organizes telecommunications costs in a manner that allows a logical mapping of these costs to telecommunications rate structures. Switching costs, for example, currently are tracked separately from transport costs under our part 32 rules. This cost distinction permits the carriers' use of separate rate structures for switching and transport UNEs, thus facilitating the states' efforts to compare costs and rates for each UNE. Part 32 creates uniformity among telecommunication carriers, allowing state regulators to compare and benchmark the UNE costs and rates of carriers operating in various states. Such uniformity also benefits carriers operating in more than one jurisdiction. Part 32 provides the level of cost detail that is used in forward-looking cost studies. For example, estimates of operating costs for digital switches can be derived from Class A accounts in part 32, thus enabling the states to evaluate forward-looking switching costs without the distortion that could result if all types and vintages of switches were combined into one account. Consequently, state and federal regulators may use uniform and detailed accounting data when setting rates, even when those rates are based on forward-looking costs. Commenters should discuss whether reporting at the Class B level would provide sufficient detail to identify costs for various rate elements and services such as collocation, UNEs, interconnection, and long term number portability.

In contrast to USTA's proposal, in our teleconferences and public workshops, state staff advocated adoption of new accounts to meet their data needs to implement the 1996 Act and to keep pace with changes in technology and the regulatory environment. They reason that new accounting information is needed to follow the rate of deployment and cost of new technologies, to evaluate prices for UNEs and resold services, to determine separated jurisdictional costs, to provide more details for state access revenues, and to provide insight into issues related to reciprocal compensation, state universal service support, and collocation. We seek comment on whether and, if so, specifically how we should amend part 32 to add these new accounts. Commenters should discuss whether specific accounts are needed and provide detailed analysis as to what regulatory purpose the new information would serve. Commenters should also address and quantify, to the extent possible, the regulatory burdens associated with establishing and maintaining these new accounts. We also seek comment on whether these new accounts should be required for both Class A and Class B carriers.

In the USTA petition and during our workshops, the carriers raised several other areas that would provide additional regulatory relief by generally loosening restrictions in our current rules. We seek comment on these areas, which are discussed in the following paragraphs. In addition, we seek comment on any other areas that may provide similar relief.

Section 32.1220(h) of the Commission's rules, provides that inventories of material and supplies shall be taken during each calendar year and the adjustments to this account shall be charged or credited to Account 6512, Provisioning expense. Section 32.2311(f) of the Commission's rules requires an annual inventory of all station apparatus in stock included in this account. In its petition for rulemaking, USTA proposes that GAAP requirements should be the basis for performing these inventories instead of the detailed inventory requirements in the rules and that companies should be able to perform inventories based on risk assessment and on existing controls. We seek comment on whether we should adopt USTA's proposal to eliminate these inventory requirements.

In its petition for rulemaking, USTA contends that the cost of construction should be calculated using GAAP and that management judgment and materiality should form the basis of the criteria for determining the status of construction. USTA argues that arbitrary thresholds, such as the two month/$100,000 thresholds, are not appropriate for price cap LECs. We seek comment on whether we should eliminate the threshold requirements in § 32.2003(b), modify the thresholds, or keep the thresholds. Commenters are invited to propose alternative ways of satisfying the underlying goals of these requirements.

In June 1993, the Financial Accounting Standards Board (FASB) adopted Statement of Financial Accounting Standards No. 116 (SFAS-116), “Accounting for Contributions Received and Contributions Made.” SFAS-116 requires companies to record in the current period a liability and related expense for unconditional pledges to make contributions in future years. Prior to adoption of SFAS-116, companies would record such pledges annually as they were made. The Common Carrier Bureau (Bureau) notified carriers, after BellSouth Telecommunications, Inc., filed a notice of intent to adopt SFAS-116, that carriers should not adopt SFAS-116 for federal accounting purposes. The Bureau was concerned that adoption of SFAS-116 for federal accounting purposes would allow carriers to increase reported costs and prices based on pledges rather than actual contributions.

We conclude that we should revisit this issue. Adopting SFAS-116 may make sense for financial accounting purposes because this accounting treatment better informs investors about the impact of a company's commitments on the financial condition of the company. We are concerned, however, that adoption of SFAS-116 could necessitate an exogenous price cap adjustment permitting carriers to recover the entire amount of pledged contributions as an exogenous cost in the year the accounting change is adopted. We seek comment on whether we should allow carriers to adopt SFAS-116 for federal accounting purposes.

USTA has presented several additional proposals to further streamline our accounting and reporting requirements. USTA proposes that we eliminate the § 32.5280(c) subsidiary record requirement. This rule section requires carriers to maintain separate subsidiary categories for nonregulated revenue recorded in Account 5280, Nonregulated operating revenue. USTA contends that this subsidiary record requirement is unnecessary.

In addition, USTA requests that we simplify deferred tax accounting by allowing carriers to book the Account 1437, Deferred tax regulatory asset, net of Account 4361, Deferred tax regulatory liability. USTA requests that carriers be permitted to eliminate the requirement to calculate the gross up for the tax on tax effect. USTA contends that this would bring the regulatory books closer to the financial books. USTA proposes that we eliminate detailed requirements for property record additions, retirements, and recordkeeping. USTA contends that detailed property records do not impact the establishment of access rates and only serve to require LECs to maintain an extraordinary array of records. USTA also proposes that we eliminate the § 32.16 requirement for notification and approval to implement new accounting standards prescribed by the Financial Accounting Standards Board (FASB). USTA claims that the FASB provides a process through which proposed changes in GAAP are exposed for debate, discussion, and evaluation. Finally, USTA proposes that the Commission clarify that section 252(e) agreements are treated the same as tariffed services in part 64 cost allocation rules. We seek comment on these proposals.

In the Accounting Safeguards Order, 62 FR 022918 (January 21, 1997) the Commission concluded that its revised affiliate transactions rules would promote competition by preventing LECs from using their market power in local exchange services to obtain an anti-competitive advantage in other markets. The Commission amended the affiliate transactions rules for assets and services provided by a carrier to its affiliate and services received by a carrier from its affiliate. Under these rules, such transactions are to be valued at publicly available rates, if possible. The publicly available rates, in order of precedence, are: (1) An existing tariff rate; (2) (for services only) a publicly-filed agreement or statements of generally available agreements; or (3) a qualified prevailing price valuation. To qualify for prevailing price treatment, at least 50 percent of sales of the subject asset or service must be to third parties. USTA proposes that the Commission revise § 32.27(d) to decrease the threshold from 50 percent to 25 percent for use of prevailing price in valuing affiliate transactions. USTA contends that this proposed change in threshold would be consistent with a more competitive environment. We seek comment on USTA's proposal.

Under our rules, if a transaction cannot be valued at publicly available rates, it must be valued based on a comparison of cost and fair market value. If a comparison is used, the carrier must make a good faith determination of fair market value. If the regulated company receives the asset or service from the nonregulated affiliate, the carrier must record the transaction at the lower of cost or market value. On the other hand, if the carrier sells the asset or service to its nonregulated affiliate, it must record the transaction on its books at the higher of cost or market. There is an exception to the estimated fair market value rule for services received by a carrier from its affiliate that exists solely to provide services to members of the carrier's corporate family. These services are recorded at fully distributed cost. USTA proposes that we expand this exception to the estimated fair market value rule to include all centralized services, regardless of whether the services are from a separate affiliate. USTA argues that this rule change would permit carriers to recognize the benefit of shared administrative services. We seek comment on this proposal.

Commenters should discuss any other proposals to modify our affiliate transactions rules. We also seek comment on three modifications that would reduce the accounting burdens associated with our affiliate transactions rules. Two of these modifications would reduce the requirements related to the lower of cost or market value analysis for affiliate transactions, and the third would exempt transactions between a carrier's nonregulated activity and a nonregulated affiliate.

In the Phase 1 Report and Order, we eliminated the requirement that carriers make a good faith determination of fair market value for services where the total annual value of that service is less than $500,000. We noted that below that threshold the administrative cost and effort of making such a determination would outweigh the regulatory benefits of a good faith determination of fair market value. In such cases, the service should be recorded at fully distributed cost, and carriers should continue to report such transactions in their CAMs and ARMIS reports.

We seek comment on whether such an exemption for assets would be appropriate and whether the potentially burdensome cost analyses outweighs the benefits to ratepayers. We propose to extend the exemption to assets and no longer require carriers to perform the net book cost/fair market value comparison for asset transfers totaling less than $500,000 per year. We seek comment on our proposal. Commenters should discuss specifically the burdens, financial or otherwise, of performing the comparison for assets and the potential harm, if any, to ratepayers.

As discussed, for certain transactions carriers must compare the cost of the service or asset to market value. If the carrier is the recipient of the asset or service, it must be recorded on the carrier's books at the lower of cost or market. If the carrier is the provider, it must be recorded at the higher of cost or market. We seek comment on whether ratepayers would be harmed if carriers had flexibility to use the higher or lower of cost or market valuation as either a floor or ceiling. If ratepayers would be harmed if carriers had this flexibility, we seek comment on alternative methods for addressing such harm. We propose to give carriers flexibility in valuing these transactions by allowing the higher or lower of cost or market valuation to operate as either a floor or ceiling, depending on the direction of the transaction. If, for example, the transaction were from the carrier to the nonregulated affiliate, the higher of cost or market valuation would function as the floor amount, i.e., the carrier could value the asset or service at that amount or higher. If the transaction were from the nonregulated affiliate to the carrier, the lower of cost or market valuation would function as the ceiling, i.e., the carrier could value the asset or service at that amount or lower. Therefore, if a carrier purchased an asset from one of its nonregulated affiliates with a net book cost of $750,000 and a fair market value of $1,000,000 (and no tariff rate or prevailing price), our current rules would require the carrier to book the asset at $750,000, which is the lower of cost or market. Our proposed rule, on the other hand, would allow the carrier to record the asset at a maximum of $750,000. We seek comment on our proposal. Commenters should address any potentially anti-competitive effects if we implement ceilings and floors for transactional valuations, as well as any benefits that would result from this approach.

Our affiliate transactions rules apply to all transactions between carriers and their nonregulated affiliates that affect the carrier's regulated books of account. This means that many transactions involving nonregulated assets and services are subject to our affiliate transactions rules. For example, when a carrier sells an asset used exclusively in its nonregulated operations to its nonregulated affiliate, the asset must be valued according to our affiliate transactions rules. The asset is subject to two separate levels of accounting safeguards against subsidization: first, when the carrier ensures, pursuant to part 64, that the asset is recorded as a nonregulated cost, and second, when the asset is valued according to our affiliate transactions rules.

It is now the time to revisit this issue in light of the changes in the CAM audits process. In the Phase 1 Report and Order, we permitted the large incumbent LECs to obtain an attest examination every two years, covering the prior two-year period, in lieu of an annual financial audit. Such attests should be performed by independent auditing firms in accordance with the standards of the American Institutes of Certified Public Accountants and as further directed by the Chief, Common Carrier Bureau. As part of this attest examination, we required the independent auditor to provide the Commission with the CAM audit program at least 30 days prior to the commencement of the audit. We stated that in the event additional steps are necessary, we will communicate this to the independent auditor within 30 days and attempt to minimize the burden of any necessary changes. This review will permit the Commission's auditors to review the audit program and, if necessary, work with the independent auditors to eliminate potential problems in advance.

We propose that our affiliate transactions rules should not apply to nonregulated activities transferred from the carrier's nonregulated operations to its nonregulated affiliate. We seek comment on whether the independent CAM attestation process or alternative measures can be relied upon to ensure that there is no ratepayer harm. We also seek comment on whether it matters how the carrier values its transaction to its nonregulated affiliate because our part 64 rules ensure that the asset is recorded as nonregulated. We seek comment on our proposal. Commenters should discuss whether removing these transactions from our affiliate transactions rules could result in potential ratepayer harm.

Section 32.4999(l) provides that revenues from minor nontariffed activities that are an outgrowth of the carrier's regulated activities may be recorded as regulated revenues under certain conditions. This provision obviates the need to make the detailed cost allocations that would otherwise be required to remove the costs of the nonregulated activity from regulated costs. Essentially, the revenues from the activity are used to reduce the carrier's revenue requirement rather than removing the costs to reduce the carrier's revenue requirement.

These activities, referred to as “incidental activities,” must satisfy four criteria:

(1) Be an outgrowth of regulated operations;

(2) have been treated traditionally as regulated;

(3) be a non-line-of business activity; and

(4) result in revenues that, in the aggregate, represent less than one percent of total revenues for three consecutive years. Carriers must list their incidental activities in their CAM, but may not add new incidental activities because of the second criterion. Carriers filed their first CAMs over ten years ago. During this decade, the list of incidental activities has been static. We seek comment on whether eliminating the “treated traditionally” requirement would harm ratepayers.

We note that the three remaining criteria provide safeguards that the incidental-activities exception will not be abused. We seek comment on whether we should modify the three remaining criteria. Commenters advocating modifications to these three criteria should address how such changes would provide adequate safeguards against abuse. We propose to relax the “treated traditionally” requirement to allow carriers the flexibility to add new incidental activities. Under this proposal, the three other criteria would remain unaffected. We seek comment on whether relaxing this criterion is appropriate. Commenters should describe any additional activities that would qualify as incidental under our proposed rule. In addition, commenters should address whether, under our proposal, carriers could classify a new nonregulated activity as incidental and subsequently reclassify it as nonregulated thereby forcing ratepayers to bear the risk of nascent nonregulated ventures.

The purpose of the expense limit is to reduce the cost of maintaining property records for the acquisition, depreciation, and retirement of a multitude of low-cost, high-volume assets. Increases in the expense limit are made periodically to recognize the effects of inflation, technological changes, and changes in the telecommunications regulatory environment. The expense limit in part 32 has been increased several times. In addition, Responsible Accounting Officer Letter No. 6, increased from $200 to $500 the limit for expensing the tools and test equipment included in the central office plant accounts.

We seek comment on whether the expense limit rules should be modified again. Specifically, we seek comment on whether we should raise the expense limit from $500 to $2,000 for both Account 2124, General support computers, and the tools and test equipment included in the central office plant accounts. Alternatively, we could extend the expense limit to include all the plant asset accounts, not just selected general support assets. We note that the expense limit would have to be the same for all carriers to allow the Commission to compare costs across companies when determining appropriate levels of Universal Service support. Commenters should discuss positive or negative impacts on maintaining continuing property records related to central office plant accounts if the expense limit were raised. Commenters should also address how we should treat the embedded investment in these accounts if the expense limit were raised.

Section 64.903 of the Commission's rules requires incumbent LECs with annual operating revenues from regulated telecommunications operations equal to or above a designated indexed revenue threshold, currently $114 million, to file CAMs annually setting forth the cost allocation procedures that they use to allocate costs between regulated and nonregulated services. The companies with operating companies that exceed the indexed threshold are SBC Communications, Qwest, Verizon, and BellSouth Corporation (all filing based on Class A accounts) and Alltel, Cincinnati Bell, Citizens Telecom, Frontier, Sprint, and C-TEC (mid-size carriers, filing based on Class B accounts). USTA proposes that the Commission allow all carriers the option to allocate part 64 costs at a Class B level. USTA contends that direct assignment of costs would not change if carriers moved from Class A to Class B accounting. We seek comment on this proposal and any alternative modifications to these requirements. Commenters should discuss any concerns that may affect the states due to cost allocations at the Class B level and address the potential for cost allocation distortions. Commenters should also discuss the benefits of such an approach.

Section 32.11 of the Commission's rules divides companies into two categories for accounting purposes: Class A and Class B. Carriers with annual revenues from regulated telecommunications operations that are equal to or above the indexed revenue threshold, currently $114 million, are classified as Class A; those with annual revenues from regulated telecommunications operations that are below the threshold are classified as Class B. Currently, we apply these requirements to incumbent LECs only. We seek comment on whether § 32.11 should be amended so that its requirements explicitly pertain only to incumbent LECs, as defined in section 251(h) of the Communications Act, and any other companies that the Commission designates by order.

Section 64.901(b)(4) of the Commission's rules requires that carriers allocate the costs of central office equipment and outside plant investment between regulated and nonregulated activities based on a forecast of the relative regulated and nonregulated usage during a three calendar year period beginning with the current calendar year. The purpose of this rule is to avoid cost allocation distortions that could adversely affect regulated ratepayers. USTA has asserted that this rule is burdensome and unnecessary. We seek comment on USTA's proposal, whether elimination of the rule would adversely affect ratepayers, and whether there are other alternative forecasting methodologies.

In this NPRM we are proposing revisions to the following ARMIS Reports: 43-01 (Annual Summary Report); 43-02 (USOA Report); 43-03 (Joint Cost Report); 43-04 (Separations and Access Report); 43-07 (Infrastructure Report); and 43-08 (Operating Data Report). As set forth, our proposed recommendations seek to eliminate or substantially simplify the reporting requirements for both large incumbent LECs and mid-sized incumbent LECs. We seek comment on our proposed recommendations. We are also looking for ways to provide easier input and access to the ARMIS reports and invite comment on how we can best achieve a more user-friendly ARMIS system. In addition, we set forth a separate proposal addressing reporting requirements for mid-sized carriers. We seek comment on the separate proposal for mid-sized carriers and ask commenters to address whether the proposed abbreviated filing requirement is sufficient and whether different reporting requirements for large incumbent LECs and mid-sized incumbent LECs, as proposed, is justified. To the extent ARMIS reports are used by states and other parties, we seek comment on whether those parties can obtain enough information for their purposes from alternative sources. In particular, commenters should address whether state-imposed or other non-federal reporting can be used to generate sufficient data for these parties' purposes.

We have attached the proposal presented by the large incumbent LECs as Appendix 1 to this document and seek comment on the industry's proposal as it relates to the ARMIS 43-01, 43-02, 43-03, 43-04, 43-07, and 43-08 Reports. USTA contends that this proposal would be less burdensome and addresses some of the concerns expressed by the Commission and the state staffs in the public meetings. We specifically seek comment from the states on how that industry's proposal, if implemented, would affect their ongoing activities.

We propose to eliminate the requirement to file ARMIS 43-01, Table I for all carriers filing at the Class A level. We propose to generate this table from information provided in other financial ARMIS reports and to post the report electronically with the carrier's annual ARMIS filing. Under this proposal, carriers would be relieved from reporting information that can otherwise be derived from other financial ARMIS reports. At the same time, useful summary information would be made available to policy makers and interested parties. We seek comment on this proposal. We are also considering eliminating Table II, from the ARMIS 43-01 requirements. We propose to eliminate the reporting of all Common Line Demand Minutes of Use ( i.e., premium and non-premium). We seek comment on retaining the sections for Switched Traffic Sensitive Demand Minutes of Use and Common Line Demand Billable Access Lines. This information about traffic on the carrier's network may be needed for decisions concerning jurisdictional separations, subscriber line charges, the deployment and cost of Lifeline service, and other universal service issues. The information we propose to retain would be added to the ARMIS 43-04 in conjunction with row 9010 (Total Billable Access Lines). We seek comment on this proposal and on any alternative proposals for achieving these purposes.

In this NPRM, we seek comment on eliminating the filing of ARMIS 43-02, Table I-1 (Income Statement Accounts) for all carriers filing at the Class A level. Table I-1 collects data on the carrier's revenues, expenses, and net income for the reporting period. We propose to eliminate the requirement for carriers to file Table I-1 and to generate this table from information provided in the other financial ARMIS reports. As with our proposal for eliminating Table-I from the 43-01 Report, this proposal would provide relief to carriers from reporting information that can otherwise be derived from other ARMIS reports.

We propose to reduce the number of columns currently reported on the 43-03 Report by eliminating the distinction between “SNFA and Intra-co. Adjustments” and “Other Adjustments.” We propose to combine these columns into one column entitled “Adjustments.” We seek comment on this proposal.

In order to implement our proposal to eliminate the requirement to file ARMIS 43-01, Table I and ARMIS 43-02, Table I-1, for the largest incumbent LECs, we note that collection of some additional data will be needed in the ARMIS 43-03 Reports. Therefore, we are proposing to include in ARMIS 43-03, the collection of data for Account 1402 (Investment in Non-Affiliate Companies); Account 1437 (Deferred Tax Regulatory Asset); Account 4341 (Net deferred tax liability adjustment); Account 4361 (Deferred tax regulatory liability); and the account series (7410 through 7450) for Account 7400 (Non-operating Taxes). In addition, we propose the addition of 4 rows for collecting information on the number of employees (rows 830, 840, 850, and 860). We note that these data are currently required in ARMIS 43-02, Table I-1, but not in any other ARMIS report. We seek comment on this proposal and whether any additional data would be needed to meet our ongoing needs.

The ARMIS 43-04 Separations and Access Report contains data regarding the separation of carriers' regulated revenues and costs between the state and interstate jurisdictions and allocation of interstate amounts among the access charge categories. We note that the Federal-State Joint Board has currently recommended an interim five-year freeze on separations activities as it continues to further consider more comprehensive separations reform. Until such time as the Commission takes action on the Joint Board's recommendation, we will not propose changes that would affect separations data.

We propose some revisions to the 43-04 Report, however, that we do not believe will affect the separations data. We propose to reduce the number of columns by eliminating the column for “BFP” ( i.e., the base factor portion) and collecting this data in the existing column entitled “Total Common Line.” We seek comment on this proposal. As noted, our proposal to eliminate Table-II, from the ARMIS 43-01 requirements entails that we retain data collection of Switched Traffic Sensitive Demand Minutes of Use and Common Line Demand Billable Access Lines. In the event we decide, after reviewing the comments, to retain this data, we propose to add this information to the ARMIS 43-04 Report in conjunction with row 9010 (Total Billable Access Lines). We seek comment on this proposal. We also propose that the carriers be required to identify the cost and revenue associated with their excluded services separately from the remainder of their access element data. We seek comment on these proposals. Commenters also may propose alternative approaches that do not require carriers to identify the cost and revenue associated with their excluded services separately from the remainder of the access element data.

Finally, we note that part 32 requires metallic and non-metallic subsidiary record categories for each of the cable investment and expense accounts. These subsidiary record categories are not reported to the Commission, but the data contained therein are used to calculate universal service support for non-rural carriers, and also are useful in other forward-looking cost studies. We propose to add rows to ARMIS 43-02 and 43-04 Reports to allow for the reporting of metallic and non-metallic cable investment and expense information. We seek comment on this proposal.

The ARMIS 43-07 Infrastructure Report and 43-08 Operating Data Report collects data about the physical and operating characteristics of the local exchange carriers' telephone network. Together, these reports provide information about the make-up and operating capability of nearly 95 percent of the country's public local exchange telephone network. This information has been useful to policymakers at federal, state, and local levels, and provides critical data not available through other public sources. We seek comment on the continued need to collect this data at the federal level, or whether state-level collection or other sources would be sufficient. As reported in ARMIS, approximately 480 million telephone calls were carried over the public network in 1991. By 1999, calls over the public telephone network reached almost 660 million, an increase of almost 40 percent in traffic. This growth shows the increasing use of, and reliance on, the public network for communications throughout the country. We seek comment on whether such reliance should be considered when deciding whether to retain these reporting requirements.

Our monitoring through ARMIS has provided us with information to assess the condition of the country's network infrastructure and has permitted us to make informed decisions to protect against degradations and outmoded network capabilities. While the ARMIS 43-07 and 43-08 Reports were designed to achieve this purpose, our review reveals that many of the reporting requirements may have outlived their usefulness. We believe that significant revisions to these reports are in order. We seek comment on the elimination of obsolete data and also the collection of data related to new technologies.

We note that the Commission currently has underway an effort to collect data concerning broadband deployment. The information collected through the Local Competition and Broadband Data Gathering Program, however, is not a substitute for the information collected in the ARMIS 43-07 and 43-08 Reports and was designed to be complementary to other Commission data gathering efforts, including ARMIS. The Local Competition and Broadband Data Gathering Program will provide the Commission with information on local competition and the deployment of advanced services in the United States; in contrast, the information collected in ARMIS provides the Commission with basic information about the infrastructure, capacity, and operating characteristics of the nation's network. We seek comment on whether this distinction is meaningful and on the extent to which ARMIS data is needed in light of our newer broadband data gathering efforts.

We seek comment on whether gathering information about the deployment of newer technologies would assist us in carrying out our mission of ensuring a competitive environment, while ensuring universal service. We seek comment on whether we should collect data on newer technologies to assist us in achieving our stated objectives of ensuring that incumbent LECs maintain and upgrade their network infrastructure for all consumers. We recognize that additional collections must be carefully designed to balance our need for information with the need to reduce burdens imposed on carriers. We seek comment on how burdensome the requirements we consider would be if imposed. Commenters should discuss whether the additional information concerning these newer technologies are appropriate indicators of the carriers' efforts to upgrade and invest in technologies that provide improved service to their customers and promote efficiencies and cost savings.

Finally, we seek comment on ways to improve reporting requirements for infrastructure and operating data in ARMIS. We seek comment on whether the ARMIS 43-07 and 43-08 Reports could be made more efficient in terms of use and reporting by combining some or all requirements. We note, however, that although there is a close relationship between these reports, there are some notable differences. Generally, the 43-07 Report collects information on measure of capacity while the 43-08 Report collects information on what is in-service. Further, the 43-07 Report is only filed by mandatory price cap incumbent LECs and is reported at the study area (jurisdiction) and holding company levels. The 43-08 Report is filed by all carriers at or above the revenue reporting threshold and is reported at the operating company level. We ask commenters to make specific recommendations as to the nature of any proposed changes in format and collection of data. We seek comment on whether and how ARMIS should be modified to enable us to perform trend analysis, provide rate and tariff analysis, make relevant comparisons among companies, and monitor the effects of company mergers and acquisitions, and whether the purposes of such analyses could be achieved through alternative means.

In ARMIS 43-07 Infrastructure Report we propose to eliminate the collection of outdated information and propose to collect information on newer technologies. Our intent is to collect basic relevant facts about the deployment of new technologies, not to expand significantly our monitoring program. In Table I (Switching Equipment), we propose to eliminate all reporting requirements for electromechanical switches (rows 130-141). We further propose to eliminate reporting requirements for analog stored-program-control and digital stored-program-control switches except for the total number of switches and lines served (retain rows 150, 160, 170 and 180; eliminate rows 151-155, 161, 171-175, and 181). We also propose to eliminate all reporting requirements related to equal access and touch tone capabilities (rows 190-221). We seek comment on these proposals. We also propose to eliminate reporting of information related to SS7 and ISDN capabilities except to retain information concerning total switches, lines, local switches, and tandems equipped with SS7 and ISDN capabilities (eliminate rows 231, 233, 235, 237, 241, 247, 251, 257, 271, 281, 291, and 301). We seek comment on this proposal.

To the extent commenters conclude that our broadband data gathering program is inadequate for this purpose, we seek comment on whether our monitoring program should include information on new technologies that indicate the degree that carriers are upgrading the network. We seek comment on including information for switches capable of transmitting the ATM protocol in Table I, and on the characteristics of ATM that carriers should provide in this report. Switched multi-megabit data service (“SMDS”), internet routers, and frame relay service are high-speed data telecommunications services built upon packet-switching technology. These services are widely offered to business customers for high-volume usage. We seek comment on whether carriers should report data on SMDS, internet routers, and frame relay services in Table I and on which characteristics of switches used to provide SMDS, internet routers, and frame relay services carriers should report.

Table II (Transmission Facilities) collects information about components of the network that are used to carry voice, video, and data traffic. Data reported in Table II provide information about transmission facilities for the total operating area of the carrier, and does not distinguish between urban and rural areas. The deployment of new technologies and new services in rural areas has been a matter of particular concern for the Commission. Transmission facilities, are perhaps, the most critical component in the provisioning of new services to rural areas. However, because the reporting carriers do not distinguish between rural and urban transmission facilities, the Commission cannot compare rural and urban infrastructure development based on the current reported information. Therefore, we seek comment on modifying Table II to require carriers to report data by Metropolitan Statistical Areas (MSA) and non-MSA. We seek comment on whether this distinction will assist the Commission and other interested parties in measuring the deployment of advanced telecommunications infrastructure in rural areas. We also seek comment on whether this or alternative proposals would be best considered in the context of the broadband data gathering proceeding.

In the first section of Table II, “Sheath Kilometers,” carriers report data on transmission facilities within their operating areas. Carriers use either analog or digital technology on copper wire, coaxial cable, fiber, radio, and other media. We seek comment on changing the title “Sheath Kilometers” to “Loop Sheath Kilometers” and to narrow the collection of data to only local loop facilities connecting customers to their serving offices.

In the second section of Table II, “Interoffice Working Facilities,” total circuit links are reported for baseband, analog carrier, and digital carrier. We seek comment on whether we should eliminate the reporting requirements that further distinguish baseband, analog, and digital (rows 331, 332, 333, 350, 351, 352, 360, 361, 362, 363). We believe we can simplify the reporting requirements and obtain relevant information by requiring only the total circuit links for copper, radio, and fiber. We also note that optical carrier facilities, such as synchronous optical networks (SONET) are currently being deployed by the incumbent LECs. This technology will increasingly play a role in improving the transmission capacity of the network. We seek comment on whether we should include categories for optical carrier facilities and non-optical carrier facilities. Commenters should address definitional and other characteristics that would be useful if collection of data on this technology is implemented. We also seek comment on whether this or alternative proposals would be best considered in the context of the broadband data gathering proceeding.

In the third section of Table II, “Loop Plant-Central Office Terminations,” carriers report total working channels and total equipped channels. Under each category, there is a requirement for reporting six subcategories (copper, baseband, analog carrier, digital carrier, fiber digital carrier, and other). We seek comment on whether we should eliminate the reporting of six subcategories of equipped channels, and retain only the total of equipped channels. We seek comment on whether data about new technologies used in the local loop that provide high-capacity transmission facilities closer to subscribers would assist the Commission and the states in monitoring the deployment of new services and how that technology affects the development of competition. Commenters should discuss which categories of data would provide an accurate picture of deployment without placing an undue administrative burden on the reporting incumbent LECs. We also seek comment on whether this or alternative proposals would be best considered in the context of the broadband data gathering proceeding.

In the fourth section of Table II, “Other Transmission Facility Data,” we propose to eliminate reporting of information that is no longer useful (fiber strands terminated at the customer premises at the DS-0 rate; and fiber strands terminated at the customer premises at the DS-2 rate). We seek comment on including information on hybrid fiber-copper loop interface locations, number of customers served from these interface locations, xDSL customer terminations associated with hybrid fiber-copper loops, and xDSL customer terminations associated with non-hybrid loops. Such data could provide a meaningful indication of carrier's efforts to upgrade the network. Commenters should discuss any other specifics that may provide a better indicator of this aspect of the network. We also seek comment on whether this or alternative proposals would be best considered in the context of the broadband data gathering proceeding.

In Table III (LEC Set-up Time Reporting), information is provided about incumbent LEC call set-up time for calls delivered by the incumbent LEC to interexchange carriers. Incumbent LEC call set-up time measures the time from when the customer completes dialing until the call reaches an interexchange carrier. We note that the need for this data was largely driven by problems arising from the change from a multi-frequency to the SS7 protocol. Our review of the data shows that most of these problems have been solved. Thus, we propose to eliminate this table. We seek comment on this proposal.

In Table IV (Additions and Book Costs), carriers report data concerning total access lines in service, access line gain, and total gross capital expenditures. This information provides data as it relates to carriers' actions to maintain and upgrade the network. We seek comment on whether there is continued need to collect this information by the federal government, as opposed to states or other entities. We seek comment on whether the information collected in this table is available from other data reported in ARMIS, and if so, whether there is a need for duplication. Specifically, we ask commenters to comment on whether the information on number of access lines is the same information reported in the 43-08 Report and whether the data on gross capital expenditures is the same information reported in the 43-02 Report, Table B-1.

The ARMIS 43-08 tables, which collect data on an operating company level by state, provide us with the ability to assess trends in investment in physical plant and to benchmark among carriers. We seek comment on the continued importance of such assessments and on whether there are alternative methods for achieving the goals underlying these assessments. We believe there are a number of areas in the ARMIS 43-08 Report where unnecessary data can be eliminated and where necessary data can be collected more efficiently. We seek comment on whether we can eliminate the reporting requirements in Table 1.A (Outside Plant Statistics—Cable and Wire Facilities), that distinguish among aerial, underground, buried, submarine, deep sea, and intrabuilding cable plant (columns d-o). We note that some carriers have suggested that we use information on relative sheath miles in aerial, underground, and buried cable as a basis for determining the relative amount of these types of facilities used in the forward looking model for calculating universal service support for non-rural carriers. In Table 1.B (Outside Plant Statistics—Other), we propose to eliminate the reporting of information on satellite channels and video circuits for carriers' radio relay and microwave systems (columns be, bj, bm). We believe that data collected in these areas may no longer provide important information relevant to our policy analysis. We seek comment on these proposals. We ask commenters proposing to retain this information to discuss at what point would collection of data no longer be necessary. For instance, radio relay systems, except in 11 states, are 100 percent digital. We seek comment on whether some threshold level of deployment would provide a basis for eliminating the need for information, and if so, what an appropriate threshold level would be.

In Table II (Switched Access Lines in Service by Technology), we propose to eliminate the distinction between analog and digital lines, and require carriers to report the total of main access lines, PBX and Centrex units, and Centrex extensions (retain columns cc, cd, and ce on a total basis; and eliminate columns cf, cg, and ch). Our experience reveals that, while the data derived from these columns provide us with important information, the information may be more useful and collected more efficiently if provided on a total basis. We seek comment on these proposals and on the continued importance of collecting switched access line data generally.

In Table III (Access Lines in Service by Customer), we propose to narrow the information collection to total number of Business Access Lines (Single-Line and Multi-Line) and Residential Access Lines (Lifeline/Non-Lifeline and Primary/Non-Primary). We believe that the level of detail required in this table may not be necessary and that collection on a total basis may be sufficient for us to meet our responsibilities. We propose to collect data on private lines providing intrastate service. We note that this information is used to calculate forward-looking costs for universal service purposes. We seek comment on whether this information is available from any other public source. We also seek comment on whether Special Access Lines (Analog and Digital) (columns dk and dl) provide accurate information about the carriers' provision of special access lines. Specifically, we seek comment on whether there is a need for clarification of this reporting requirement. For instance, would redefining this collection as Customer Private Line Terminations (Broadband and Narrowband) or some other designation result in more accurate reporting by carriers? We note that there has been much controversy over the use of the term “Special Access Lines,” resulting in inconsistent reporting by carriers. We seek comment on the use of this term and whether a more meaningful definition or term would be appropriate. We also ask commenters to discuss whether the use of terms in other ARMIS reports should be revised or clarified in order to be consistent with any change made in this report.

In this NPRM, we propose more significant reductions for mid-sized carriers than we have proposed for large incumbent LECs. In our public meeting with the mid-sized carriers, they suggested that we treat mid-sized Class A carriers as Class B carriers. This would eliminate all CAM requirements and ARMIS filings for such carriers. We seek comment on this proposal. As an alternative, we propose to eliminate mandatory annual CAM filings and biennial CAM audits for these carriers. Instead, the mid-sized carriers would file only an annual certification with the Commission. We also propose raising the indexed revenue threshold from $114 million to $200 million. The net effect for mid-sized carriers would be that several carriers will be classified as Class B carriers, and therefore not subject to any reporting requirements, and the balance of the mid-sized carriers will be subject only to very minimal reporting requirements. We also propose eliminating all financial reporting for mid-sized carriers except the 43-01 (Summary Report). We seek comment on adoption of these proposals for mid-sized carriers.

We seek comment on ways to further reduce regulatory burdens on mid-sized incumbent LECs. We propose to eliminate the requirement that mid-sized incumbent LECs file their CAMs on an annual basis. We seek comment on whether these carriers should be required to maintain cost allocation manuals in the format set forth in § 64.903 of our rules, even if they do not file those CAMs with the Commission. Commenters should quantify the costs of maintaining a CAM in accordance with the requirements of § 64.903, and suggest any modifications to that rule they deem appropriate. As an alternative, the mid-sized carriers could file a certification with the Commission stating that they are complying with § 64.901 of the Commission's rules. Under this proposal, the certification would be signed, under oath, by an officer of the incumbent LEC, and filed with the Commission on an annual basis. In addition, we propose to eliminate the requirement for an attestation engagement every two years. The Common Carrier Bureau would have the authority to request further information or order an audit of the carrier's books to ensure they are in compliance with our cost allocation requirements. We seek comment on these proposals.

We further seek comment on whether our definition of mid-sized incumbent LECs should be re-examined. We note that a few carriers have recently crossed the indexed revenue threshold, although they are significantly smaller than the majority of mid-sized LECs. We propose to increase the indexed revenue threshold from $114 million to $200 million. Under this proposal, carriers with operating revenues below $200 million would not be required to maintain a CAM or file a certification. We seek comment on our proposal. Carriers should discuss whether, alternatively, the threshold should be based on holding company revenues instead of operating company revenues, with a corresponding change in threshold.

We propose to eliminate the ARMIS 43-02, 43-03, and 43-04 reporting requirements for mid-sized carriers. We recognize that mid-sized carriers often have limited resources and have financial transactions that are generally smaller and fewer in number than the larger incumbent LECs. The cost of regulatory compliance may disproportionately impact the mid-sized carriers filing the more detailed ARMIS 43-02, 43-03, and 43-03 reports.

We seek comment on retaining the reporting requirement that mid-sized carriers report ARMIS 43-01 (Summary Report), which presents information in a highly aggregated form. We ask commenters to specifically address the costs and benefits of requiring certain mid-size carriers to file the ARMIS 43-01 Summary Report, particularly in light of the previous proposal to eliminate ARMIS 43-02, 43-03, and 43-04. To the extent we find obvious errors or inconsistencies, we have the ability to request further information from the carrier that will clarify and address such issues. We also seek comment on the costs and benefits of retaining the requirement that carriers at or above the threshold continue to file operating data in the ARMIS 43-08 Report.

We further propose to reduce the requirements in ARMIS 43-01 by eliminating the distinction between “SNFA and Intra-co. Adjustments” and “Other Adjustments.” We propose to combine these columns into one column entitled “Adjustments.” We propose to reduce the number of columns by eliminating the column for “BFP” and collecting this data in the existing column entitled “Total Common Line.” Finally, we propose to either add a new column for “excluded services” or add excluded services cost and revenue data to the billing and collection data in a renamed column. This would enable us to reconcile their rate of return filings with their accounting data. We seek comment on these proposals, and on whether it would be appropriate to extend all or part of this relief to larger carriers.

The 1996 Act directed the Commission to “provide for a pro- competitive, de-regulatory, national policy framework.” As regulatory, technological, and market conditions continue to change, the Commission must consider more drastic changes to existing accounting and reporting requirements. We thus seek to undertake a broader examination of part 32 and ARMIS requirements with the goal of determining what additional changes can be made as competition develops, and assessing ultimately what, if any, specific accounting and reporting requirements are necessary when local exchange markets become sufficiently competitive.

Our accounting and reporting safeguards were largely implemented to support Commission policies intended to prevent dominant carriers from taking unfair advantage of their monopolistic control over loop facilities and access to the local exchange network. As the local exchange industry becomes more competitive, we expect that our needs for accounting and reporting information will diminish. At the same time, we must be careful not to eliminate requirements that are necessary to promote universal service, foster efficient competition, and protect consumers before significant market changes occur.

In this section, we seek comment on what roadmap we should follow for accounting and reporting deregulation. Specifically, we seek comment on whether there are certain triggers that will allow the Commission to significantly modify or relieve certain accounting and reporting requirements that currently apply to incumbent LECs. Is there a point at which the Commission should completely eliminate its accounting and reporting requirements? Is that point when all local exchange carriers become non-dominant? Alternatively, should individual carriers be relieved of accounting and reporting requirements as they individually become non-dominant? How would this Commission make such a finding of non-dominance? How should the Commission proceed if an incumbent remains dominant for certain services, but not others? How should deregulation occur if some carriers are deemed non-dominant, but other carriers, such as rural carriers, remain dominant? Is there a basis for eliminating or modifying our accounting and reporting requirements on an industry wide basis, even if some carriers retain market power?

We also ask commenters to address the effect of BOCs receiving section 271 authorizations to provide in-region interLATA services. We seek comment on whether certain accounting requirements should sunset when the section 272 separate affiliate requirements sunset for a given carrier in a particular state, and if so, which specific requirements should be eliminated. Would it be administratively practical for accounting and reporting requirements to be reduced or eliminated on a state-by-state basis?

We seek comment on whether achieving pricing flexibility should be a trigger for relaxing accounting and reporting requirements and if it would be administratively practical because pricing flexibility is granted on a market by market basis. If so, which specific requirements should be modified or eliminated?

We note that other carriers, such as competitive LECs (CLECs), interexchange carriers, cable companies providing telephony, and wireless carriers, are not subject to our accounting and reporting requirements. We seek comment on whether this asymmetric regulation makes sense as we move to a more competitive environment. What is the policy rationale for subjecting one type of carrier to accounting and reporting requirements when other carriers are not subject to such requirements? Do the current accounting and reporting requirements imposed on incumbent LECs impede their ability to compete with other market participants? Commenters should quantify any monetary or other impact of our current requirements.

We note that a number of incumbents, both large and small, have begun to compete as CLECs outside of their traditional service areas. Moreover, a number of incumbents are offering bundled packages of offerings—such as voice, Internet access, wireless, and long distance—in competition with other carriers. How should our accounting and reporting requirements evolve as carriers no longer remain in their historical line of business?

The requirements under consideration in this proceeding fall into two general areas. First, our accounting rules largely prescribe how incumbent LECs record and allocate costs. Second, our ARMIS reporting rules require that certain carriers report to the Commission on an annual basis various information, both financial and nonfinancial. We seek comment on whether it makes sense to relieve carriers from reporting requirements, while maintaining our existing accounting requirements. Compliance with certain requirements may be critical to protecting ratepayers from subsidizing nonregulated services, but the Commission may not need information on an annual basis on how specific carriers are complying with such requirements. How would the Commission's mission be affected if it were to gather information on a less frequent, or more ad hoc, basis?

Our accounting and reporting requirements already recognize that the burdens of compliance may outweigh the benefits for small and mid-size incumbent LECs. The vast majority of incumbents with fewer than two percent of the nation's access lines are not required to file in ARMIS today, even though they have historically been dominant in their relevant markets. In the 1996 Act, Congress explicitly recognized that smaller and rural carriers might face unique circumstances warranting lesser regulatory requirements. Regardless of what actions we take with respect to the larger carriers, should deregulation proceed in a different fashion, for companies with fewer than two percent of access lines? Commenters should address with specificity what deregulatory measures are appropriate for smaller carriers and what safeguards are necessary to ensure that consumers' interests are protected.

We note that our accounting and reporting rules were designed to provide uniform accounting data to be used to support tariffed prices, to provide information concerning the financial condition of incumbent local exchange carriers, and to serve as an efficient system for both management and federal and state regulators. As carriers were allowed to provide nonregulated services without the need for structural separations, the accounting and reporting rules served the additional public policy goal of ensuring that the ratepayers of regulated services did not bear the costs and risks of nonregulated activities. As our universal service system developed, the accounting and reporting rules also served the policy of ensuring proper cost data on which to base a system of sufficient universal service support. Comments addressing triggers for accounting and reporting deregulation should also discuss these policy underpinnings, how these policies have changed over time, and how these policies can be maintained when more drastic deregulation of accounting and reporting occur.

Section 220 of the Communications Act states that the Commission shall prescribe a uniform system of accounts for use by telephone companies. Sections 260 and 271 through 276 of the Communications Act require a certain amount of accounting safeguards in place to either ensure that transactions between Bell operating companies (BOCs) and their affiliates or nonregulated activities are accomplished without cost misallocations and that these transactions are performed on an arm's length basis. Section 254(k) specifically states that the Commission, with respect to interstate services, and the states, with respect to intrastate services, shall establish any necessary cost allocation rules, accounting safeguards, and guidelines to ensure that services included in the definition of universal service bear no more than a reasonable allocation of joint and common costs of facilities used to provide these services. These legislative accounting safeguards were mandated to ensure that the pro-competitive goals of the Communications Act could be realized. Moreover, section 1 of the Communications Act established as one purpose to ensure “a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities and reasonable charges.” We seek comment on how we can best achieve these mandates keeping in mind the ultimate goal of a deregulatory national telecommunications policy framework.

We ask commenters to discuss whether and how the Commission and the states can carry out their respective statutory mandates without uniform and accurate accounting and reporting information. Specifically, commenters should address how jurisdictional separations could be implemented without part 32 accounting data. Commenters should also discuss how any system of universal service support could be implemented without the Commission receiving uniform accounting data. Commenters should address how this Commission could assess the state of the network without ARMIS information. Finally, we ask commenters to discuss how the Commission and states could address cost issues in various proceedings such as long-term number portability, interconnection, pole attachments, and collocation without uniform and accurate accounting data.

This is a permit but disclose rulemaking proceeding. Ex parte presentations are permitted, except during the Sunshine Agenda period, provided that they are disclosed as provided in the Commission's rules. See generally 47 CFR 1.1202, 1.1203, and 1.1206.

As required by the Regulatory Flexibility Act (RFA), the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities by the policies and rules proposed in this Notice of Proposed Rulemaking. Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the Notice of Proposed Rulemaking provided in section V.D. The Consumer Information Bureau, Reference Information Center, will send a copy of the Notice of Proposed Rulemaking, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the Notice of Proposed Rulemaking and IRFA (or summaries thereof) will be published in the Federal Register .

The Commission has initiated this proceeding to determine whether it should streamline or modify the current accounting and reporting requirements. This Notice of Proposed Rulemaking consists of Phase 2 and Phase 3 of the Commission's comprehensive review of the accounting and reporting requirements. This Notice of Proposed Rulemaking seeks to reduce accounting and reporting requirements, while furthering the Commission's goals of promoting universal service, fostering efficient competition, and protecting consumers.

The legal basis for the action as proposed for this rulemaking is contained in sections 4(i), 4(j), 11, 201(b), 303(r), and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 161, 201(b), 303(r), and 403.

The RFA directs agencies to provide a description of, and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines “small entity” as having the same meaning as the term “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act, unless the Commission has developed one or more definitions that are appropriate to its activities. Under the Small Business Act, a “small business concern” is one that: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) meets any additional criteria established by the SBA.

We have included small incumbent local exchange carriers (LECs) in this present RFA analysis. As noted, a “small business” under the RFA is one that, inter alia , meets the pertinent small business size standard ( e.g. , a telephone communications business having 1,500 or fewer employees), and “is not dominant in its field of operation.” The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent LECs are not dominant in their field of operation because any such dominance is not “national” in scope. We have therefore included small incumbent LECs in this RFA analysis, although we emphasize that this RFA action has no effect on the Commission's analyses and determinations in other, non-RFA contexts.

The SBA has developed a definition of small entities for telephone communications companies other than radiotelephone companies. The SBA has defined a small business for Standard Industrial Classification (SIC) categories 4812 (Radiotelephone Communications) and 4813 (Telephone Communications, Except Radiotelephone) to be small entities when they have no more than 1,500 employees. The Census Bureau reports that, there were 2,321 such telephone companies in operation for at least one year at the end of 1992. All but 26 of the 2,321 non-radiotelephone companies listed by the Census Bureau were reported to have fewer than 1,000 employees. Thus, even if all 26 of those companies had more than 1,500 employees, there would still be 2,295 non-radiotelephone companies that might qualify as small entities or small incumbent LECs. It seems certain that some of these carriers are not independently owned and operated, but we are unable at this time to estimate with greater precision the number of wireline carriers that would qualify as small business concerns under SBA's definition. Consequently, we estimate that fewer than 2,295 small telephone communications companies other than radiotelephone companies are small entities or small incumbent LECs that may be affected by the proposed rules, if adopted.

More specifically, the proposed changes to the accounting and reporting requirements in sections III.A.1, III.A.6, and III.B would only affect Class A companies, i.e. , companies with annual revenues from regulated telecommunications operations that are equal to or above the indexed revenue threshold, currently $144 million. Presently, these companies are SBC Communications, Quest, Verizon, BellSouth Corporation, Cincinnati Bell, C-TEC, Sprint, Alltel Corporation, Frontier Corporation, and Citizens Telecom. These companies would not be considered “small entities” under the SBA definition. Therefore, it is extremely unlikely that any of the 2,295 small entity telephone companies would be affected by the proposals in section III.A.1, III.A.6, and III.B.

The proposals discussed in section III.A.2, 3, 4, 5, 7, and 8 could affect all local exchange carriers. Some of these companies may be considered “small entities” under the SBA definition. Therefore, it is possible that some of the 2,295 small entity telephone companies may be affected by the proposals in section III.A.2, 3, 4, 5, 7, and 8.

The proposals discussed in section III.C would affect only mid-sized carriers, i.e. , Class A carriers with aggregate revenues below $7 billion but equal to or above the indexed revenue threshold (currently $144 million). These companies would not be considered “small entities” under the SBA definition. Therefore, it is extremely unlikely that any of the 2,295 small entity telephone companies would be affected by the proposals in section III.C.

The proposals discussed in section IV could affect all local exchange carriers. Some of these companies may be considered “small entities” under the SBA definition. Therefore, it is possible that some of the 2,295 small entity telephone companies may be affected by the proposals in section IV.

This Notice of Proposed Rulemaking seeks to further reduce accounting and reporting requirements for Class A companies. In this Notice of Proposed Rulemaking, the Commission seeks comment on eliminating one-fourth of the Class A accounts from the Part 32 chart of accounts, reducing ARMIS reporting requirements, and streamlining other accounting rules. These proposals, if adopted, would result in fewer accounting requirements and reduced ARMIS reporting requirements for Class A companies. In some instances, the Commission seeks comment on whether additional accounts should be added to the Part 32 Chart of Accounts, to reflect changes in technology and new requirements under the Telecommunications Act of 1996. None of these proposals apply to small entities because they are not subject to these reporting requirements. As mentioned in section C, Class A companies are not small businesses, so these reporting and record-keeping requirements will not affect small entities.

In addition, in section III.A.2, 3, 4, 5, 7, and 8, the Notice of Proposed Rulemaking seeks comment on: streamlining inventory requirements in §§ 32.1220(h) and 32.2311(f); changing the threshold requirements in § 32.2003(b); adopting SFAS-116 for federal accounting purposes; and modifying the affiliate transactions rules, the definition of “incidental activities,” our expense limit rules, and cost allocation manual requirements. These proposals, if adopted, could affect both Class A and Class B companies, including small entities. If adopted, these proposals could significantly reduce the federal regulatory accounting requirements and costs associated with these requirements for the affected companies, including the small entities.

In section III.C, the Notice of Proposed Rulemaking also seeks comment on simplifying reporting requirements and eliminating cost allocation manual filing requirements for mid-sized carriers, including any small entities. This proposal, if adopted, would greatly reduce the reporting requirements and costs associated with these requirements for these companies, including any small entities.

In section IV, the Notice of Proposed Rulemaking seeks comment on triggers for more significant deregulation of accounting and reporting requirements for all carriers in a competitive marketplace, including small entities. Once the marketplace is competitive, regulatory accounting and reporting requirements and costs associated with these requirements for all carriers, including small entities may be greatly diminished, if not eliminated.

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

The rule changes proposed in this Notice of Proposed Rulemaking are reductions in our accounting requirements and ARMIS reporting requirements for Class A companies ( i.e., carriers with annual revenues from regulated telecommunications operations that are equal to or above the indexed revenue threshold, currently $144 million). These rule changes, as discussed in sections III.A.1, III.A.6, III.B, and III.C, only affect Class A companies and would not have a significant economic impact on small entities because the Class A companies, as identified in section C, are not small entities. The remaining rule changes proposed in the Notice of Proposed Rulemaking may affect all LECs. Our proposals, if adopted, would streamline the accounting and reporting rules and would significantly lessen regulatory requirements for all carriers, including small entities. This should produce a significant economic benefit to small entities. Alternatives considered for small entities subject to our accounting and reporting requirements, were to maintain our current rules or to consider changes proposed in this Notice of Proposed Rulemaking on a case-by-case basis in ongoing proceedings where related accounting changes may properly be considered within the scope of such proceedings. We believe that streamlining our current rules, however, would reduce regulatory burdens on carriers, including small entities. In section IV of the Notice of Proposed Rulemaking, we discuss eliminating accounting rules and reporting requirements as the local exchange market becomes competitive. This would result in a further reduction in the regulatory burden on small entities.

None.

As part of our continuing effort to reduce paperwork burdens, we invite the general public to take this opportunity to comment on information collections contained in this NPRM, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. Public and agency comments are due at the same time as other comments on this NPRM. Comments should address: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology.

Pursuant to §§ 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments on Phase 2 on or before December 21, 2000, and reply comments on or before January 30, 2001. For Phase 3, interested parties may file comments on or before January 30, 2001, and reply comments on or before February 28, 2001. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS) or by filing paper copies.

Comments filed through the ECFS can be sent as an electronic file via the Internet to http://www.fcc.gov/e-file/ecfs.html. Generally, only one copy of an electronic submission must be filed. If multiple docket or rulemaking numbers appear in the caption of this proceeding, however, commenters must transmit one electronic copy of the comments to each docket or rulemaking number referenced in the caption. In completing the transmittal screen, commenters should include their full name, Postal Service mailing address, and the applicable docket or rulemaking number. Parties may also submit an electronic comment by Internet e-mail. To get filing instructions for e-mail comments, commenters should send an e-mail to ecfs@fcc.gov, and should include the following words in the body of the message, “get form your e-mail address.” A sample form and directions will be sent in reply.

Parties who choose to file by paper must file an original and four copies of each filing. If more than one docket or rulemaking number appear in the caption of this proceeding, commenters must submit two additional copies for each additional docket or rulemaking number. All filings must be sent to the Commission's Secretary, Magalie Roman Salas, Office of the Secretary, Federal Communications Commission, 445 12th Street, S.W., Washington, D.C. 20554.

Parties who choose to file by paper should also submit their comments on diskette. These diskettes should be submitted to: Ernestine Creech, Accounting Safeguards Division, 445 12th Street, S.W., Washington, D.C. 20554. Such a submission should be on a 3.5-inch diskette formatted in an IBM compatible format using Word or compatible software. The diskette should be accompanied by a cover letter and should be submitted in “read only” mode. The diskette should be clearly labeled with the commenter's name, proceeding (including the docket number, in this case CC Docket No. 00-199, type of pleading (comment or reply comment), date of submission, and the name of the electronic file on the diskette. The label should also include the following phrase “Disk Copy—Not an Original.” Each diskette should contain only one party's pleadings, preferably in a single electronic file. In addition, commenters must send diskette copies to the Commission's copy contractor, International Transcription Service, Inc., 1231 20th Street, N.W., Washington, D.C. 20036.

Written comments by the public on the proposed and/or modified information collections are due on or before December 13, 2000. Written comments must be submitted by the Office of Management and Budget (OMB) on the proposed and/or modified information collections on or before January 12, 2001. In addition to filing comments with the Secretary, a copy of any comments on the information collections contained herein should be submitted to Judy Boley, Federal Communications Commission, Room 1-C804, 445 12th Street, S.W., Washington, DC 20554, or via the Internet to jboley@fcc.gov and to Edward Springer, OMB Desk Officer, 10236 NEOB, 725—17th Street, N.W., Washington, D.C. 20503.

Pursuant to the authority contained in sections 4(i), 4(j), 11, 201(b), 303(r), and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 161, 201(b), 303(r), and 403, this NPRM is adopted .

The Commission's Consumer Information Bureau, Reference Information Center, shall send a copy of this NPRM, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

This is a synopsis of the Commission's Report and Order, MM Docket No. 00-149, adopted October 11, 2000, and released October 20, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Information Center (Room CY-A257), 445 12th Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractors, International Transcription Service, 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. 00-208, adopted October 18, 2000, and released October 27, 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.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

This is a synopsis of the Commission's Notice of Proposed Rule Making, MM Docket No. 00-209, adopted October 18, 2000, and released October 27, 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.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

This is a synopsis of the Commission's Notice of Proposed Rule Making, MM Docket No. 00-210, adopted October 18, 2000, and released October 27, 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 l980 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.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

This is a synopsis of the Commission's Notice of Proposed Rule Making, MM Docket No. 00-211, adopted October 18, 2000, and released October 27, 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.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

This is a synopsis of the Commission's Notice of Proposed Rule Making, Docket Nos. 00-215, 00-216, adopted October 18, 2000, and released October 27, 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.

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 contact.

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

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

This is a synopsis of the Commission's Notice of Proposed Rule Making, MM Docket No. 00-213; adopted October 18, 2000 and released October 27, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Information Center (Room CY-A257), 445 12th Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Service, 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.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

This is a synopsis of the Commission's Notice of Proposed Rule Making, MM Docket No. 00-214; adopted October 18, 2000 and released October 27, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Information Center (Room CY-A257), 445 12th Street, SW, Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Service, 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.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

This is a synopsis of the Commission's Notice of Proposed Rule Making, MM Docket No. 00-212; adopted October 18, 2000 and released October 27, 2000. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Information Center (Room CY-A257), 445 12th Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Service, 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.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

On April 12, 1995, we published an Advance Notice of Proposed Rulemaking (ANPRM) (60 FR 18566) announcing our plans to consider upgrading Standard No. 301, Fuel system integrity. 1 Specifically, we announced our plans to consider research and rulemaking activities related to amending Standard No. 301 to:

• define performance criteria for fuel system components directed at reducing the occurrence and spread of vehicle fires;

• modify the existing Standard No. 301 crash test procedures and performance criteria to better simulate the events that lead to serious injury and fatalities in fires; and,

• define the role of environmental and aging factors such as corrosion and vibration as they affect fuel system integrity, and, if appropriate, specify performance criteria related to this area.

Due to the varying complexity of the above three activities, we also announced that we were considering pursuing a three-phase approach to upgrading the standard:

• Phase 1 would focus on requirements for component performance.

• Phase 2 would address system performance.

• Phase 3 would address issues related to environmental and aging effects.

After evaluating the research related to the frontal and rear impact requirements and the comments submitted in response to the ANPRM, we have decided not to pursue rulemaking related to Phases 1 and 3 at this time. Further analysis by NHTSA of the results of research related to fuel system components conducted by the agency and General Motors (GM) is needed before we can determine whether rulemaking is appropriate and, if so, what form it should take. 2 In addition, we believe that further studies are needed to define the problems associated with environmental and aging effects and determine whether rulemaking would be appropriate to address them. 3

After evaluating the research related to Phase 2 and the comments submitted in response to the ANPRM, we have tentatively concluded that a more stringent rear impact test procedure would save lives and reduce injuries. We are, therefore, proposing to strengthen the current crash requirements applicable to vehicles with a gross vehicle weight rating (GVWR) of 4,536 kg (10,000 pounds) or less. Specifically, we are proposing to replace Standard No. 301's current rear impact test procedure with one that involves striking the rear of the test vehicle at 80 km/h (50 mph) with a 1,368 kg (3,015 lb) moving deformable barrier at a 70 percent overlap with the test vehicle. We are also proposing to replace Standard No. 301's lateral impact test procedure with the current side impact test procedure of Standard No. 214, Side impact protection. We tentatively conclude that these changes would help to preserve fuel system integrity in a crash, thereby helping to prevent fire-related fatalities and injuries. In addition, we tentatively conclude that the specification of a single lateral impact test procedure instead of two different test procedures would reduce manufacturer certification and agency enforcement costs.

Standard No. 301 sets performance requirements for the fuel systems of light vehicles, i.e. , vehicles with a gross vehicle weight rating (GVWR) of 4,536 kg (10,000 pounds) or less. The standard, which was issued in the 1970s, limits the amount of fuel spillage from fuel systems of vehicles during and after being subjected to a frontal, rear, or lateral impact test.

In the frontal impact test, a vehicle is driven forward into a fixed barrier at 48 km/h (30 mph), while in the side impact test, a 1,814 kg (4,000 lb) barrier moving at 32 km/h (20 mph) is guided into the side of a stationary vehicle, and in the rear impact test, a 1,814 kg (4,000 lb) barrier moving at 48 km/h (30 mph) is guided into the rear of a stationary vehicle. The standard limits fuel spillage from crash-tested vehicles to 28 grams (1 ounce) by weight during the time period beginning with the start of the impact and ending with the cessation of vehicle motion and to a total of 142 grams (5 ounces) by weight during the 5-minute period beginning with the cessation of motion. During the 25-minute period beginning with the end of the 5-minute period, fuel spillage during any 1-minute interval is limited to 28 grams (1 ounce) by weight.

Similar fuel spillage limits apply to vehicles tested in accordance with the standard's static rollover test procedure. The rollover test is conducted after frontal, rear and lateral impact tests.

Preserving fuel system integrity in a crash to prevent occupant exposure to fire is critical. Although vehicle fires are relatively rare events (occurring in only one percent of vehicles in towaway crashes), they tend to be severe in terms of casualties. According to an analysis of the agency's Fatality Analysis Reporting System (FARS) in 1998, four percent (1,411) of light vehicle occupant fatalities occurred in crashes involving fire. 4 Overall, the fire itself was deemed to be the most harmful event in the vehicle for about 20 percent (282) of these fatalities.

An analysis of 1991-1998 National Automotive Sampling System (NASS) data shows that about 12,941 occupants per year were exposed to fire in passenger cars and light vehicles (vans, pickup trucks, and multipurpose vehicles with GVWR of 4,536 kg (10,000 lb) or less) that were towed away from the fire. Of those occupants, about 1,062 (8 percent) received moderate or severe burns (AIS 2 and greater). Three-quarters of those with moderate and more severe burns had second or third degree burns over more than ninety percent of the body; maximum-severity (AIS 6) burns are nearly always fatal. These statistics underscore the importance of preserving fuel system integrity in a crash in order to prevent vehicle fires.

In the 1995 ANPRM, we announced our plans to consider upgrading Standard No. 301. We explained that we were considering using a three-phase approach to upgrade the requirements of Standard No. 301. Phase 1 would focus on requirements for component performance, Phase 2 would address system performance, and Phase 3 would address issues related to environmental and aging effects. We sought comment on this approach as well as several other issues.

We explained that our focus in Phase 1 was on developing component performance criteria aimed at shutting down the fuel supply and potential fire ignition sources in a crash to help reduce the occurrence and effects of a fire should a breach in the fuel system occur. Quickly shutting off the fuel flow during or immediately after a crash would eliminate a major fire and fuel source and should, therefore, both reduce fires and limit the spread of fire, if one were to start. Phase 1 would also focus on minimizing the possibility of an electrical spark of sufficient intensity to act as an ignition source. Finally, it would explore other means for reducing fires (e.g., engine fire extinguishers). While these criteria would primarily address fires that originate in the engine compartment due to frontal impacts, they would also help to shut off the fuel flow for all crash modes, including a rollover crash.

In the ANPRM, we sought comment about component test requirements for fuel tanks, fuel pumps, the vehicle's electrical system, and engine fire extinguishers. We requested information on the performance, cost, and practicability aspects of various systems for shutting off the fuel flow and the electric power. We also requested comments on ways to develop practicable test procedures and to define specific criteria with sufficient objectivity that test variability would be minimal.

We also explained that we believed that the technology already existed for detecting and identifying conditions when the fuel flow should be shut off. Most new vehicles sold in the United States were already equipped with devices that shut off the fuel pump in any collision that causes the engine to stop. 5 Other vehicles were equipped with inertia switches that shut off the fuel flow and/or the electric current. 6 We also discussed how fuel system components had to operate in a real-world environment surrounded by extreme conditions imposed by modern engine technology. We explained that the materials and parts used to assemble fuel system components were already subject to manufacturers' specifications, which were often derived from or directly related to other engineering standards such as those of the American Society for Testing and Materials (ASTM). Some of the test requirements are generic to many of the ASTM standards, for example: vibration, shock, endurance testing, temperature cycling, temperature extremes, and compatibility with other materials.

Finally, we also sought comment regarding the extent and scope of component test requirements that could be developed for inclusion in Standard No. 301. We identified the following fuel system and vehicle components as potential candidates for this approach: fuel tank, including filler pipe; fuel pump(s); vehicle's electrical system; and engine fire retardant/extinguisher. We did not include fuel lines in the list because the potential to shut down the entire fuel delivery system when the fuel pump shuts down already exists.

While Phase 1 focused on shutting down fuel supply and potential ignition sources in a crash to help prevent or mitigate vehicle fires if a breach in the fuel system occurs, Phase 2 focused on preventing fuel system failures in the first instance. We explained that Phase 2 would focus on the process of upgrading crash test performance in frontal, side, and rear impacts. Phase 2's purpose was to identify tests that represent the crash conditions associated with fires that cause fatal and severe injury.

We explained that available information indicated that the present tests in Standard No. 301 may not be representative of the crash conditions associated with fatal and severe injury-causing fires. We also explained that further tests were needed to define specific upgrades to these crash conditions. We noted that offset/oblique tests in the frontal mode, use of the Standard No. 214 barrier in the rear test mode, and a pole impact or use of the Standard No. 214 barrier for the side impact test all appeared promising for possible inclusion in Standard No. 301.

We explained that a key objective for such tests may be to limit the engagement of the struck vehicle to a narrower area than is engaged using current barriers. We explained that we needed to define the specific crash conditions that cause fuel system loss of integrity and understand which crashes would be survivable if fire were avoided. We explained that we were considering performing crash data analyses and crash testing to further explore these issues. We requested comments on the performance aspects and practicability of this approach.

We explained that the third phase would explore the issue of environmental and aging effects on vehicle condition and the possible relationship to fire occurrence. Our preliminary analyses of FARS and State crash files indicated that the likelihood of fire increases with the age of the vehicle. The analysis also attempted to determine the possible differences, if any, in the occurrence of fire in fatal crashes in states that typically experience more inclement weather ( i.e., snow and ice) and as a result, use more salt and other corrosive substances on public roadways, when compared to other states.

Passenger cars registered in the “salt belt” states and involved in fatal crashes were found to have an approximately 25 percent greater rate of fire occurrence in fatal crashes, compared with passenger cars in fatal crashes in the “sun belt” states. When the fire itself was deemed to be the most harmful event in the vehicle, however, the “salt belt” states had a lower rate compared to the “sun belt” states. Consequently, it was not clear whether the possible relationship between vehicle aging, weather and use of salt and similar substances and fire occurrence was due to environmental characteristics, to changes in vehicle design, to differences in operator characteristics, or a combination of these factors. We explained that if the disparity could be attributed to environmental factors, it might be possible to add environmental tests, such as a corrosion test, to Standard No. 301.

NHTSA received 40 comments on the April 1995 ANPRM. Of the comments, twenty were one-page form letters that supported the proposal and were signed by individuals affiliated with various businesses and organizations. The remaining 20 comments were submitted by: eight manufacturers (1 component manufacturer and 7 vehicle manufacturers), 6 associations, and 6 other organizations (2 separate comments from a consulting firm, 1 state agency, 1 consumer advocacy organization, 1 research institute, and 1 individual). The comments are summarized below.

The First Inertia Switch Company (First Inertia) stated that it first introduced a crash activated fuel pump shut-off switch for the 1981 vehicle models in the U.S. First Inertia argued that an inertia switch is the most direct and effective means of shutting off the fuel pump in a crash. It estimated that during the 1995 model year, 9.5 million inertia switches would be installed in vehicles manufactured in the U.S., Canada, Europe, and Japan. First Inertia believes that its inertia switches can easily be designed for shutting off the electric power in a crash and performing other functions (e.g., unlocking vehicle doors).

While GM expressed interest in the potential benefits that could be derived from possible fuel system component upgrades, it suggested that we conduct careful studies to ensure that we selected proposed countermeasures that would not be “counterproductive.” Specifically, GM pointed out that the agency's crash data analysis of vehicle fires showed no statistically significant difference in the rate of crash related fuel leakage and/or fire between the GM vehicles that used an engine rotation sensing device for shutting off the fuel flow and the peer Ford vehicles that, in addition to the engine rotation sensing device, used inertia switches as a redundant fuel pump shut-off device.

GM opposed using a battery shut-off device to interrupt the vehicle's electric power. GM argued that the potential negative side effects ( e.g. , potentially getting stranded on the road if the engine shuts off while driving) of a crash-activated electrical system shut-off preclude the incorporation of such a device. GM suggested conducting additional research on the nature and relative frequency of real-world crash fire ignition sources.

GM stated that it considered the concept of using fire extinguishers and fire retardant blankets for extinguishing engine compartment fires intriguing and supported doing a thorough evaluation to determine their feasibility. GM also stated that it planned to research means to reduce or delay engine fire propagation into the occupant compartment to help provide occupants with additional time to exit a vehicle and avoid burn injuries.

Volkswagen of America, Inc. (VW) was concerned with potential reliability problems associated with inertia-activated fuel cut-off switches. VW explained that it was using an engine rotation sensing device for cutting-off fuel flow in its vehicles. VW also stated that additional fuel tank filler valve systems were unnecessary. In addition, VW recommended that we refer to ECE Regulation No. 34 for possible component test requirements, but did not specify particular tests.

Mitsubishi Motors America, Inc. argued that the proposed Phase 1 approach could put undue emphasis on the performance of particular isolated components in resisting post-impact fires. Mitsubishi argued that such an approach could have unanticipated negative consequences on maximizing over-all fire resistance in real-world crashes.

Ford Motor Company (Ford) stated that fuel system integrity in a crash is a vehicle/system phenomenon in which the vehicle and its components work as a unit. Ford disagreed with the proposed Phase 1 approach of incorporating separate component tests into Standard No. 301. Ford stated that it uses redundant fuel shut-off devices (an engine speed sensing device and an inertia sensing device) to stop the flow of electric current to the fuel pump in certain conditions.

Chrysler Corporation (Chrysler) argued that fuel system integrity should be evaluated as a system and expressed its opposition to any initiative to introduce component design or performance requirements into Standard No. 301. Chrysler explained that it used a fuel shut-off device that senses engine rotation for stopping the fuel flow and stated that additional protection had not been shown to be any more effective in reducing fuel related fires. Chrysler stated that it was premature to consider using an electrical power shut-off device for reducing fuel induced fires. Chrysler argued that more research is needed to verify that the proposed mitigation approach will not harm other systems that are critical to occupant protection, during and after the crash event. Chrysler opposed the concept of using fire extinguishers and fire retardant systems for engine compartment fires and stated that the ignition of a vehicle fire does not necessarily occur at a predictable point in time during a vehicle crash. In addition, Chrysler stated that, in some fires, a “second ignition” is encountered that would not be mitigated by these proposed systems.

Volvo Cars of North America, Inc. (Volvo) stated that shutting off fuel flow quickly during and after a crash could help to reduce the risk of engine fires and the spread of fires once one had started. Volvo stated that since a number of methods could be employed to stop the flow of fuel, there should be no requirement mandating certain equipment. Volvo stated that we should give manufacturers the freedom to design their own systems by specifying performance criteria for them to meet. Volvo suggested that we incorporate the plastic fuel tank test requirements of ECE Reg. No. 34 into Standard No. 301.

Stilson Consulting submitted two sets of comments in favor of the proposed approach. Stilson suggested in its first set of comments (Stilson-1) that the upgrading effort concentrate on preventing fuel siphoning from fuel line and fuel tank failure due to undercarriage impact and requiring a fuel pump shut-off switch for all crash directions. Stilson-1 provided a draft amendment to Standard No. 301 for consideration. Stilson's second set of comments (Stilson-2) contained recommendations for examining vehicle components and testing fuel lines, fuel filler necks and caps, and inertia switches.

The Insurance Institute for Highway Safety (IIHS), Advocates for Highway and Auto Safety (Advocates), National Truck Equipment Association (NTEA), National Association of State Fire Marshals (NASFM), and North Carolina Department of Crime Control and Public Safety (North Carolina) supported the proposed approach. IIHS stated that we should move rapidly to incorporate component testing. IIHS argued that since the fuel flow shut-off technology is readily available, the agency should require manufacturers to demonstrate that their vehicles will automatically interrupt the fuel flow in a crash. IIHS also stated that the technology to interrupt the flow of electrical current was readily available and supported including in the Standard test requirements that assure that electrical sparks do not ignite spilled fuel in crashes. IIHS reiterated its suggestion that we specify additional requirements for nonmetallic fuel tanks.

Chrysler, GM, Mitsubishi, Ford, and Volvo expressed general support for upgrading Standard No. 301's test procedures. GM, Ford, and Chrysler stated, however, that more research was needed before the test procedures for frontal and rear impacts were upgraded. The American Automobile Manufacturing Association (AAMA) also stated that additional research and analysis was needed for some of the proposed upgrades. Mitsubishi argued that we should look at the entire spectrum of real-world impact speeds and modes and consider whether the proposed upgrades would yield negative side-effects on other aspects of overall crashworthiness. Volvo stated that Standard No. 301 should adopt the proposed ECE R94 tests using an offset crash condition with a fixed deformable impact barrier. IIHS and Advocates suggested using a deformable barrier for frontal and rear impact offset tests. VW opposed including any additional crash tests in the standard.

For side impact, GM, VW, Ford, Chrysler, AAMA, Advocates, and IIHS all supported replacing the current Standard No. 301 side impact test with the current Standard No. 214 dynamic test. GM, VW, Ford, Chrysler, and AAMA stated that the moving deformable barrier (MDB) used in Standard No. 214 is more realistic than the one currently used in Standard No. 301's lateral moving barrier crash test. They also argued that no new test development was needed because Standard No. 214's test was more stringent and more representative of real-world crash conditions than Standard No. 301's side impact test. Chrysler, GM and AAMA stated that no other side impact tests were justified for the upgrade and opposed including a side impact pole test in Standard No. 301. AAMA, GM and Chrysler all noted that a December 1994 NHTSA report indicates

They argued that Standard No. 214's test procedure would do this.

For rear impacts, GM supported efforts to develop a repeatable and objective rear impact test, using a realistic moving deformable barrier to replace the existing Standard No. 301 rear moving barrier test. However, GM cautioned that, because of the uniaxial nature and construction of the Standard No. 214 barrier, the representativeness of this barrier face in a primarily off-axis crush mode ( e.g. , in an angled rear impact) had to be evaluated.

Three of the commenters, Stilson, IIHS, and Advocates, supported the system level approach to upgrade Standard No. 301. Stilson-1 argued that since automobile manufacturers were already conducting 80 km/h (50 mph) offset vehicle-to-vehicle impact tests for examining fuel systems, incorporating higher test speeds into Standard No. 301 would not pose an unreasonable burden on the automotive manufacturers. Stilson-2 reiterated the comments in Stilson-1 and stated that the minimum test requirements should be: 56 km/h (35 mph) frontal barrier (NCAP type) and 88 km/h (55 mph) vehicle-to-vehicle 50 percent offset impact tests, 48 km/h (30 mph) rear fixed barrier impact tests, and 88 km/h (55 mph) vehicle-to-vehicle side impact tests.

Advocates stated that all barrier tests at any crash angle should be conducted at least 56 km/h (35 mph). Advocates supported using a more aggressive test barrier design to simulate narrow objects. Advocates expressed support for replacing the current Standard No. 301 side impact test with the current Standard No. 214 dynamic test as a near term upgrade. Advocates also recommended using heavier barrier weights for testing LTVs than those used for cars. Advocates also stated that we should require fuel tanks on light passenger vehicles to be placed forward of the rear axle.

Ford, Mitsubishi and GM all said that additional research and analysis was needed to determine if an association between fire and environmental and/or aging factors exists. Chrysler argued that it was premature to suggest that environmental and aging factors degrade fuel system components and lead to an increase in vehicle fires. Chrysler, Ford and GM stated that manufacturers were already upgrading fuel and evaporative emission components to comply with the regulations of the Environmental Protection Agency (EPA) and the California Air Resources Board. These regulations require the vehicle's fuel system to comply with specified emission performance requirements for a specified period of time (ten years or 100,000 miles for cars and 11 years or 100,000 miles for trucks). The regulations also require manufacturers to install an on-board diagnostic system that detects evaporative emissions. Mitsubishi also stated that the agency needed to do more work to define possible performance tests and said that such tests would have to address issues such as how to “age” vehicles or vehicle parts. Advocates argued that we should adopt performance tests that ensure that fuel systems are designed and manufactured to maintain their integrity over the life of the vehicle.

We examined the effectiveness of fuel pump shut-off devices in reducing post-crash vehicle fires, using the data in NHTSA's 1992 to 1996 NASS file. We compared post-crash fire occurrence in light vehicles with and without inertia activated fuel pump shut-off devices. According to estimates based on the NASS data, 1,552 Ford vehicles that had inertia switches were involved in post-crash fires. In addition, 2,020 GM and 1,008 Chrysler vehicles that did not have inertia switches were involved in post-crash fires. These crash fires accounted for 0.32 percent of all Ford towaway crashes during that period, as compared to 0.34 percent for GM, and 0.41 percent for Chrysler. The fires were classified as minor or major fires with the following results: Ford (0.23 percent minor, 0.09 percent major), GM (0.06 percent minor, 0.28 percent major), and Chrysler (0.35 percent minor, 0.06 percent major), respectively. It appears that Ford and Chrysler vehicles had more minor fires than the GM vehicles.

Based on the foregoing, we have decided not to pursue rulemaking with respect to fuel system component performance at this time. Our own review of NASS data did not reveal a significant difference in the rate or severity of post crash fire occurrence in vehicles with and vehicles without inertia activated fuel pump shut-off devices. GM crash test data support this conclusion. GM monitored the fuel pump circuitry in all of the crash tests that it conducted for its above-mentioned research. All of the crashes caused electrical circuitry shorting that disabled the fuel pump before the inertia switch could be activated.

In response to the comments and to follow-up on earlier activities, we decided to investigate the feasibility and practicability of upgrading Standard No. 301's current rear and side impact requirements. We reviewed real world crash data to determine what types of rear impact crashes result in “moderate,” “severe,” and “very severe” fires. 7 Next, we analyzed the data to determine whether it was the fire or the impact of the crash that caused the fatalities and injuries in the fire-related crashes. We then examined the data to determine the types of rear crashes that were causing fire-related fatalities and injuries and developed a new crash test procedure to simulate the most frequent crash scenario that leads to fire and fire-related fatalities and injuries in rear impact crashes. We then performed seventeen crash tests using the new crash test procedure. The following two sections summarize the results of the studies and crash tests.

In the April 1995 ANPRM, we discussed the results of a detailed NHTSA-sponsored research study of a sample of crash cases involving fire from NASS and FARS conducted by GESAC, Inc. 8 The GESAC study selected 150 NASS cases for detailed analysis. They were selected from recent years and involved fire that caused any occupant injury of AIS 2 or greater. One of the objectives of the analysis was to suggest a laboratory simulation for crashes that cause vehicle fires. The suggested crash simulations include impact mode, speed, barrier, location, and orientation.

For vehicles receiving rear damage, the report indicates that a moving deformable barrier with a partial overlap (a partial width of the vehicle involved in the crash) would simulate the most common type of fire-producing crash. The GESAC study also presented information on impact speed for crash simulations. For rear impacts, the delta-v ranged from 11 km/h to 73 km/h (7 to 45 mph) with a 42 km/h (26 mph) median delta-v. Overlap, which is defined as the percentage of the rear width engaged in a crash, ranged from 30 percent to 95 percent with an average level of 71 percent. The rear impact estimates were based on 11 cases in the 1979 to 1986 NASS data. Due to data limitations, we were unable to derive a more detailed and statistically significant delta-v versus occupant burn injury (e.g., 8 km/h (5 mph) delta-v intervals vs. different AIS levels of occupant injury). Therefore, we concluded that further study was needed.

A detailed case study of 214 fire-related fatal crashes was conducted to determine whether the death was caused by the fire or blunt trauma and to determine the specific crash conditions which caused the fire. 9 Fatality Analysis Reporting System (FARS) data for 1990, 1991, 1992, and 1993 were queried to obtain a listing of cases in which fire occurred. Cases were selected from seven states (Illinois, Florida, Colorado, Arizona, Ohio, Delaware, and West Virginia) because the crash records of these states include case history information. The crash records may have included all or part of the following: (1) Photographs which documented the crash site and the vehicle damage, (2) “police accident reports” (PARs) that described the crash based on the opinion and findings of the investigating officer, (3) witness statements, sometimes indicating the intensity, location, and timing of the fire, and (4) medical records that stated whether an autopsy was performed and the findings of the autopsy describing the cause of death, typically differentiating between conflagration and blunt trauma. Based on these data, NHTSA determined the cause of death. Generally, we gave priority to death certificates issued by a medical examiner. We also used witness statements in a few cases to determine the immediate post crash state of the burn victim. This study did not use the FARS' variable for most harmful event.

The 214 fire-related fatal crashes involved 251 vehicles and 293 total fatalities. The distribution of these 214 crashes was 58 percent (124) frontal impacts, 15 percent (33) side impacts, 10 percent (22) rollover crashes, 10 percent (22) rear impacts, and 6 percent (13) coded as other impact types. At the crash level, NHTSA's analysis found 21 percent of the crashes (45) resulted in one or more fatalities due to burn-related trauma. Of these 45 crashes, 16 were rear impacts.

At the occupant level, NHTSA's analysis found 22 percent of the 293 occupant fatalities (65) were due to burn-related trauma while the remaining 78 percent (228) were due to impact-related trauma. The subset consisting of the 65 burn-related trauma occupant fatalities was categorized by crash type. The resulting distribution shows that 46 percent (30) of the fatalities occurred from rear impacts, 23 percent (15) from front impacts, 15 percent (10) from side impacts, 11 percent (7) from rollover crashes, and 5 percent (3) were coded as other impact types.

Although the majority of crashes in which fire occurs are frontal crashes (58 percent), an analysis of fatalities due to burn-related trauma shows that rear impacts account for the majority (46 percent). Therefore, a fatal rear impact involving fire is more likely to result in a burn-related fatality than fire-related crashes in other modes.

Based on the methodology used in this analysis, we estimate that 309 burn-related trauma fatalities occurred in 1995 in the United States. Further, based on the distribution of burn-related trauma fatalities, about 143 (46 percent) of these would have occurred in rear impact crashes.

A thorough review of the crash conditions in the rear impact cases revealed a consistent crash and fire scenario. According to the study, “[i]n all 16 rear impact cases the vehicle [was] struck in the rear causing loss of fuel from the tank area which ignites during impact and results in a rapidly spreading fire and resulting fatalities.” The study concluded that striking a stationary vehicle at 50-55 mph with a moving deformable barrier (MDB) at a 70 percent overlap (width of vehicle engagement) would provide a reasonable crash simulation of real world rear impact fatal burn cases.

As discussed earlier in this notice, the April 1995 ANPRM described the results of a research study GESAC, Inc. conducted for NHTSA on 150 selected NASS cases for detailed analysis. One of the objectives of the analysis was to suggest a laboratory simulation for each crash that led to vehicle fire. For rear impacts, the GESAC study suggested using a moving deformable barrier with a partial overlap to simulate the most frequent crash scenario. The overlap ranged from 30 percent to 95 percent with an average level of 71 percent. The GESAC study accumulated a delta-v range from 11 to 72 km/h (7 to 45 mph) with a recommended 42 km/h (26 mph) delta-v, if the crash could be simulated by an equal mass vehicle-to-vehicle collision (i.e., where the weights of the two vehicles are equivalent).

According to 1991 to 1997 NASS-CDS estimates of occupant injuries vs. delta-v, there were no occupant burn injuries when the delta-v was lower than 32 km/h (20 mph) in light passenger vehicles involved with fire and in nonrollover rear-impact towaway crashes. The NASS-CDS estimates also show that the majority of fatal and nonfatal occupant burn injuries were crashes with a 34 to 48 km/h (21 to 30 mph) delta-v range. For those occupants that suffered both burn and impact injuries, NASS-CDS does not specify whether the most severe occupant injury (MAIS) listed in NASS-CDS is due to burn or impact.

Crash data analyses revealed a consistent crash scenario that causes fire and fire-related fatalities and injuries that can be simulated with the following test procedure: a moving deformable barrier (MDB) of 1,368 kg (3,015 pounds) impacting the rear of the test vehicle at 80 km/h (50 mph) with a 70 percent overlap of the vehicle. The 1,368 kg (3,015 lb) moving deformable barrier is the same barrier used for Standard No. 214, except that the barrier's face is situated two inches lower than the face of the Standard No. 214 barrier to simulate pre-crash braking in rear impact crashes.

The lowering of the face of the barrier by 2 inches is consistent with the results of panic braking tests that were performed by the agency as part of its underride research. It is also supported by annualized estimates from NASS-CDS 1995 to 1999 data regarding the frequency of braking by the drivers of striking vehicles in rear impact crashes involving two light vehicles. Based on those data, we estimate that 72% of drivers of striking vehicles involved in those crashes applied the brakes. Based on the same data, we estimate that 36% of drivers applied the brakes in frontal and 54% in side impact crashes, respectively.

According to the October 30, 1990 final rule that adopted the Standard No. 214 barrier, the barrier is intended to simulate a 2,700 pound vehicle containing 300 pounds of passengers or cargo, which we estimated would be the average weight of the striking vehicle in crashes. 10 Using the Standard No. 214 barrier as the rear impact striking device on a range of small, mid-size, and large vehicles  11 at 80 km/h (50 mph) produces a delta-v range of about 32 to 48 km/h (20 to 30 mph). That is the range in which the majority of fatal and nonfatal occupant burn injuries are occurring, according to NASS-CDS estimates. 12

We conducted several series of vehicle crash tests to determine the feasibility and practicability of the offset rear impact test procedure for the types of vehicles to which it would apply. 13 All of the tests used a 1,368 kg (3,015 pounds) MDB with the barrier lowered by 50 mm (2 inches) to simulate pre-crash breaking. The MDB impacted the test vehicle at 80 km/h (50 mph) (parallel to the longitudinal centerline of the tested vehicle) with a 70 percent overlap on the side of the vehicle where the fuel filler neck is located. This test condition approximates the findings of both the GESAC study and the FARS case study with respect to delta-v and vehicle-to-barrier overlap. Once the tests were performed, we looked to see whether the vehicles met the fuel leakage requirements of Standard No. 301. A discussion of the test results follows. 14

Between February and April 1996 at the Transportation Research Center of Ohio (TRC), we conducted six rear impact tests on 1996 model vehicles using the offset rear impact test procedure. The vehicles tested included a Suzuki Sidekick, Dodge Neon, Geo Prizm, Ford Mustang, Plymouth Voyager, and Chevrolet Blazer. The Suzuki Sidekick, Dodge Neon, and Geo Prizm all leaked fuel in excess of Standard No. 301's requirements. 15 The Ford Mustang, 16 Plymouth Voyager, and Chevrolet Blazer all passed the fuel leakage requirements. 17

In light of the failure of the smaller vehicles to pass the test, we decided to perform additional crash tests on small compact and light-passenger vehicles to assess the practicability and repeatability of the offset rear impact test procedure with respect to small vehicles.

GM, in cooperation with the agency, conducted five rear impact crash tests between December 1997 and January 1998. The five GM tests were funded by the GM C/K pickup truck settlement research fund. All of the five tested vehicles, a Honda Civic, Chevrolet Cavalier, Nissan Sentra, VW Jetta, and Ford Escort, were 1998 models. The vehicles' test weights ranged from 1,344 to 1,468 kg (2,962 to 3,236 pounds). The Honda Civic and the Nissan Sentra passed Standard No. 301's fuel leakage requirements. The Chevrolet Cavalier, Ford Escort, and VW Jetta all leaked fuel in excess of Standard No. 301's requirements.

We also conducted two additional tests on two mini-cars, a 1998 Chevrolet Metro and a 1999 Mazda Miata, through Veridian (formerly Calspan Corp.). The Metro weighed 996.5 kg (2,196 pounds) and the Miata weighed 1,225.5 kg (2,701 pounds). Both of the vehicles passed the fuel leakage requirements, demonstrating the feasibility of the smallest cars passing the proposed rear impact test procedure.

To assess the repeatability of the offset rear impact test procedure, we conducted additional tests of previously tested vehicles. We decided to retest the Honda Civic, which had passed the test, and the Chevrolet Cavalier, which had failed the test. Between September and October 1998, the agency conducted these two tests through TRC. The Honda Civic passed the TRC test and repeated the results of the GM test. The Chevrolet Cavalier, which failed the GM test, also passed the TRC test and, therefore, did not repeat the results of the GM test.

An examination of the TRC test results revealed that the damage patterns of the TRC tests were nearly identical to the damage pattern of the GM tests, but that the extent of the damage was less. The impact velocity of the TRC test was 1 km/h lower than the GM test. This difference, however, would not account for the difference in crush. Further examination revealed a defective honeycomb barrier assembly. The barrier's honeycomb bumper assembly delaminated during the TRC crash test, which led to more honeycomb crush and less vehicle crush.  18 Because of the consistent crush pattern to both of the vehicles and the MDBs in the two tests of the Cavalier, we decided not to retest the Chevrolet Cavalier at TRC if we obtained a repeatable outcome in the Veridian testing.

In November 1998, we conducted two additional tests of the Honda Civic and Chevrolet Cavalier through Veridian. The Honda Civic passed and the Chevrolet Cavalier failed the Veridian test. Both the Cavalier and the Civic repeated the results of the GM tests.

Since 1994, a small number of vehicles have exceeded the limits on fuel leakage in Standard No. 301 in Standard No. 301 lateral and Standard No. 214 compliance tests (one out of more than 100 vehicles in Standard No. 214 compliance tests and one out of 43 in Standard No. 301 compliance tests). In addition, in 1997, the agency's New Car Assessment Program (NCAP) began conducting NCAP side impact tests at a higher impact speed. To date, two out of 76 of the NCAP tested vehicles leaked fuel in excess of Standard No. 301's fuel leakage requirements.

We compared the crash test results of a Standard No. 301 lateral impact compliance test and a Standard No. 214 compliance test for the same vehicle model. According to our analysis, the Standard No. 214 crash test exposes the subject vehicle to higher crush energy and higher crash forces, and to greater changes in velocity than the existing Standard No. 301 test. The data show that the fuel system components are exposed to more stringent forces in the Standard No. 214 test than in the present Standard No. 301 lateral test.

At this time, we have decided not to pursue rulemaking related to environmental and aging effects. While we agree with Advocates that preserving fuel system integrity over the life of a vehicle is important, we also agree with the comments of Mitsubishi, GM and Ford that further studies are needed to define the problems associated with environmental and aging effects and determine whether rulemaking would be appropriate to address them.

GM has conducted research on environmental factors and aging effects on fuel system integrity as part of the GM Settlement Agreement and has prepared a report on its findings. A review of this findings, based on a limited number of vehicles from the “salt belt” regions, indicates some significant degradation of metal components including fuel tanks. Additionally, a significant degradation of rubber components from the “sun belt” regions was observed. There was little degradation of plastic fuel tanks or lines in either region. Upon further study, we may revisit this issue in the future.

As stated in the 1995 ANPRM, the number of cases in the data base is insufficient to produce statistically significant results using vehicle age as a variable. Further studies are needed to relate degradation of components to fire-related occupant injuries. The agency seeks comments on the magnitude of the problem and the need for future rulemaking action. The agency also seeks comments on what procedure and requirements are appropriate to be used in testing for problems associated with older vehicles.

The following discussion summarizes the results of our comparison of Standard No. 301's requirements with the following foreign fuel system integrity standards:

(1) The Canadian CMVSS No. 301, Fuel System Integrity (Gasoline, Diesel);   19

(2) The Economic Commission for Europe (ECE) Regulation No. 34, Uniform Provisions Concerning the Approval of Vehicles with Regard to the Prevention of Fire Risks (01 Series, Amendment 1, January 29, 1979) (Thirteen European countries have agreed to adopt ECE Reg. No. 34, including Germany, France, Italy, Netherlands, Sweden, Belgium, Czechoslovakia, United Kingdom, Luxembourg, Norway, Finland, Denmark, and Romania); and

(3) The Japanese Standard, Technical Standard for Fuel Leakage in Collision, etc. (Amended on August 1, 1989).

In terms of the vehicles covered: Standard No. 301 applies to all vehicles 4,536 kg (10,000 pounds) or less GVWR and school buses over 4,536 kg (10,000 pounds) GVWR. ECE Reg. No. 34 only applies to passenger cars, and the Japanese standard applies to passenger cars and multipurpose passenger vehicles 2,540 kg (5,600 pounds) or less.

In terms of required impact tests: As described above, Standard No. 301 requires frontal, rear and side impact tests at 48, 48 and 32 km/h (30, 30, and 20 mph), respectively, plus a static rollover test, for vehicles 4,536 kg (10,000 pounds) or less GVWR. Standard No. 301 also requires a 48 km/h (30 mph) impact test for school buses over 10,000 pounds (4,536 kg) GVWR.

The ECE Reg. No. 34 requires a 48 to 53 km/h (30 to 33 mph) frontal fixed barrier impact test and a 35 to 38 km/h (22 to 24 mph) rear moving flat rigid barrier impact test. The ECE test device weighs 1,100±20 kg (2,425±44 pounds). A pendulum can be used as the impactor. ECE Reg. No. 34 does not require a rollover test. The standard requires a hydraulic internal-pressure test for all fuel tanks and special tests (impact resistance, mechanical strength, and fire resistance) for plastic fuel tanks.

The Japanese standard requires a 50±2 km/h (31±1 mph) frontal fixed barrier impact test and a 35 to 38 km/h (22 to 24 mph) rear moving flat barrier impact test. The flat rigid barrier weighs 1,100±20 kg (2,425±44 pounds). A pendulum can be used as the impactor.

In terms of test performance requirements: all three standards limit fuel spillage. As in Standard No. 301, the ECE Reg. No. 34 and the Japanese standard, in general, also limit fuel spillage to about 28 grams/min (1 ounce/min). The Japanese standard lists the ECE Reg. No. 34 and Standard No. 301 as equivalent standards.

In summary, Standard No. 301 applies to more vehicle classes and to higher vehicle weights than the ECE Reg. No. 34 or the Japanese standard. Standard No. 301 requires testing in all crash modes (frontal, side, rear, and rollover). ECE Reg. No. 34 and the Japanese standard require only frontal and rear impact tests. Standard No. 301 uses a much heavier moving barrier for impact tests than the ECE and Japanese standards (1,814 kg vs. 1,100 kg). However, Standard No. 301 does not specify a hydraulic pressure test for fuel tanks, a battery retention requirement, or additional tests for plastic fuel tanks; ECE Reg. No. 34 does. In addition, the ECE Reg. No. 34 requires that “no fire maintained by the fuel shall occur” and does not allow failure of the battery securing device due to the impact. ECE Reg. No. 34 also requires filling the impacted vehicle's fuel tank “either with fuel or with a non-inflammable liquid.” We understand that, in practice, when the ECE Reg. No. 34 tests are conducted, the fuel tank is filled with non-inflammable liquid. Therefore, compliance with the no-fire requirement is based on a judgment about whether a fire would occur given the amount of observed fuel leakage.

Based on our analysis of real-world fire-related fatal crash data and the results of various vehicle offset crash tests, we are proposing to replace Standard No. 301's current rear impact test procedure with one that specifies striking the rear of the test vehicle at 80 km/h (50 mph) ± 1 km/h with a 1,368 kg (3,015 lb) MDB at a 70 percent overlap with the test vehicle. The MDB face would be located 50 mm (2 inches) lower than the face of the Standard No. 214 barrier to simulate pre-crash braking. We have tentatively concluded that this more stringent test procedure would reduce fire-related deaths and injuries from rear impact crashes.

The greatest number of fatalities due to fire occur in rear impacts. The proposed test procedure simulates a type of rear vehicle-to-vehicle collision that can result in post-crash fire in an otherwise survivable crash: a high speed offset rear strike to the vehicle that results in fuel leakage from a breach in the fuel system; the fuel can ignite during or following impact and lead to a rapidly spreading fire which results in fatalities and injuries. NASS estimates show that the majority of fatal and nonfatal occupant burn injuries in rear impact crashes were in the 34 to 48 km/h (21 to 30 mph) delta-v range. The proposed test procedure simulates the vehicle-to-vehicle crashes that result in delta-v's of 32 to 48 km/h (20 to 30 mph).

We have tentatively concluded that replacing the current Standard No. 301 rear impact test procedure with the proposed upgraded test procedure is practicable. Crash test results indicate that large, medium and small vehicles could be designed to meet the standard under the proposed upgraded rear impact procedure. In those tests, some small as well as large existing light-duty vehicles already meet the proposed upgrade. Several larger light-duty vehicles, including passenger cars, multipurpose passenger vehicles, and light trucks, all passed the proposed upgrade. In addition, several small vehicles, the Mazda Miata, Chevrolet Metro, Nissan Sentra, and Honda Civic, passed the proposed upgrade. While we are aware that some existing smaller vehicles leaked fuel when tested under the proposed upgraded test procedure ( e.g., the 1996 Suzuki Sidekick, Dodge Neon, Geo Prizm, and the 1998 Chevrolet Cavalier, VW Jetta, and Ford Escort), we believe that relatively minor, inexpensive design changes would correct the vast majority of the failures. 20 For example, the fuel lines in the Dodge Neon could be rerouted and the area on top of the tank around the fuel sender unit plastic sealing plate could be reinforced on the VW Jetta.

We are not proposing to require manufacturers to place each vehicle's fuel tank forward of the rear axle as suggested by Advocates. We believe such a requirement is unnecessary and would be design restrictive. We note that the fuel tank of the 1996 Ford Mustang, which passed the proposed rear impact test requirement, is located behind the rear axle. We believe that this test demonstrates that structural and component design is a more critical factor than fuel tank location in maintaining fuel system integrity.

We are also not proposing to use a heavier barrier for light trucks and sport utility vehicles, as suggested by Advocates. As noted above, in a 80 km/h (50 mph) rear impact offset crash test, a 1,368 kg (3,015 lb) MDB effectively reproduces the damage profile seen in real world crashes that can lead to fires. If a heavier barrier were used, the proposed rear impact crash test would no longer reproduce that profile. 21

As to the comments concerning other aspects of crashworthiness, NHTSA plans to upgrade Standard No. 202, “Head restraints,” and is considering the possibility of upgrading Standard No. 207, “Seating systems.”

Commenters on the ANPRM supported replacing Standard No. 301's current lateral crash test with Standard No. 214's side impact crash test, stating that the latter test would impose requirements that are more stringent for evaluating fuel system integrity than the current lateral crash test requirements in Standard No. 301. Manufacturers, safety advocates, and others agreed that this replacement would be beneficial from both a safety and cost perspective. In addition, in November 1992, Volkswagen of America, Inc. (VW) petitioned the agency to replace Standard No. 301's lateral crash test with Standard No. 214's dynamic test. We granted that petition very shortly after it was received.

We are proposing to replace Standard No. 301's current lateral crash test with the side impact crash test of Standard No. 214. Test analyses show that that Standard No. 214 crash test exposes the subject vehicle to higher crush energy and crash forces, and to greater changes in velocity than the existing Standard No. 301 lateral test. The data show that the fuel system components are often exposed to greater forces in the Standard No. 214 test.

Replacing the current Standard No. 301 lateral test with the Standard No. 214 test would both increase safety and reduce certification testing costs for manufacturers. These costs would be reduced because manufacturers would only have to conduct one type of side impact test instead of two.

In proposing to adopt the Standard No. 214 test, we are also proposing a slight change to that test, both as it appears in Standard No. 214, and as it would appear in Standard No. 301. Instead of specifying that the test would be conducted “at” 54 km/h (33.5 mph), we are proposing to specify that the test would be conducted at 53 km/h + 1.0 km/h. This is very close to the speed (52.9+0.8 km/h) at which our Office of Vehicle Safety Compliance has been conducting Standard No. 214 tests. In addition to proposing this change to Standard No. 214, we are also deleting several paragraphs of outdated requirements relating solely to vehicles manufactured in the mid-1990s.

As discussed previously, NASS data from 1991 to 1998 indicate that potential escape from the fire was made more difficult for most occupants (87 percent for all impacts) with moderate or more serious burns because they (1) were sitting next to a door that was jammed shut by crash forces, (2) did not have a door at their position, or (3) had a part of their body physically restrained by deformed vehicle structure. Real-world crash reports indicate that there were instances in which fire suddenly started several minutes after the vehicle was impacted. Thus, it is critical that occupants are able to quickly and easily exit the vehicle after a crash that could lead to a fire.

We examined the results of the vehicle crash tests we conducted using the offset rear impact test procedure to determine whether the front and rear doors were operable. The driver and passenger side doors in the Ford Mustang, Plymouth Voyager, Chevrolet Blazer, Geo Prizm, Chevrolet Metro and the Veridian-tested Honda Civic were all easy to open after the test. The driver side door in the Veridian-tested Chevrolet Cavalier was operable while the passenger side door was not. In the TRC-tested Honda Civic, the driver side door was easy to open; the passenger side door required tools. Tools were needed to open both the driver and passenger side door in the TRC-tested Chevrolet Cavalier. The driver and passenger side doors in the Mazda Miata were reported closed/inoperable. Information was not available on the GM tests of the Honda Civic, Chevrolet Cavalier, Nissan Sentra, VW Jetta, and the Ford Escort. Several of the vehicles had at least one door that was “easy” to open or “operable.” Several, however, had doors that were inoperable or required tools to open.

In light of these data, we are considering adding a door opening test requirement to Standard No. 206. The purpose of this requirement would be to reduce the risk of injury in the event that a crash results in a fire. The requirement would accomplish this by increasing the chance that vehicle occupants can exit or be extricated from the vehicle after a crash. We request comment on whether such a requirement is necessary and, if so, what type of requirements would be appropriate, objective, and repeatable. Do any manufacturers currently perform post-crash door opening/egress capability tests? If so, how much force is applied to the door? How is the force applied? The ECE's frontal offset crash test requirement (ECE Regulation No. 94, S5.2.5.1, Amendment 2, September 18, 1998) requires that at least one door per row be openable after that frontal crash. Should we include a similar requirement in Standard No. 206 for the Standard No. 301 rear impact crash test? Should we go further and require openability after each type of crash specified in Standard No. 301?

The agency proposes a lead time of approximately three years for the rear impact test requirements. This proposal is based on the following analysis:

• All vehicles must be tested with the new requirements, which specifies a higher speed than the one currently used by most manufacturers in their testing. Thus, essentially all make/models that a manufacturer intends to sell after the effective date of these requirements would have to be tested to determine compliance. NHTSA estimates such testing will take at least five months.

• For all vehicles that did not currently comply (6 of 13 vehicles tested failed at least one test), a remedy must be determined, a prototype solution fabricated and incorporated in the vehicle, and the vehicle retested. With potential iterations, this process could take ten months. The design changes we believe are necessary for the vehicles we have tested have been moderate, not requiring retooling.

• Finally, the changes must be implemented on the production line. This is about a 12 month process.

These three factors indicate that a lead time of about 27 months is reasonably necessary. However, if retooling is necessary for some vehicles (we tested 13 make/models), at least an additional 6 months must be added to the process, making the total 33 months. Thus, as noted above, we propose a lead time of approximately three years for the rear impact test requirements. These estimates are based on a study conducted for NHTSA by Ludtke & Associates and documented in a report titled “FMVSS 301 Fuel System Integrity Rear Impact Test Upgrade: Cost, Weight and Lead Time Analysis,” dated September 21, 1999. This report is available in the docket for this rulemaking.

As to the new side impact test requirements, few, if any, design changes would be necessary. However, manufacturers would need to certify compliance using the new procedure. Therefore, we propose to put the side impact test requirements into effect on the first September 1st that occurs at least 12 months after the issuance of the final rule.

Between the issuance of the final rule and the effective date of the upgraded Standard, the manufacturers would be allowed the option of certifying to the Standard No. 301 rear and/or side impact requirements based either on the current test procedure or the new procedure. However, consistent with our other recent amendments adding options to our safety standards, a manufacturer would have to select irrevocably a particular option when it certifies the vehicle.

In addition to the matters discussed above, we seek responses to the following questions:

a. Are there any real-world data, other than the data that the agency has already analyzed for this proposed upgrade, that may better describe the relationship between the risk of occupant injury due to fire and crash severity?

b. Vehicle manufacturers.

i. How many of your vehicle models would need some redesign to comply with the proposed offset rear impact test procedure? Describe the type and extent of design changes. What costs would be associated with those redesigns? Would you have any significant problems completing necessary redesigns within the three-year lead time? If so, please identify those problems and indicate how much lead time would you need.

ii. How many of your vehicle models would need some redesign to comply with the proposed side impact test procedure? Describe the type and extent of design changes. What costs would be associated with those redesigns? Please indicate how much lead time you would need and why.

c. What impact would the proposed changes have on vehicle safety?

d. Are the proposals sufficient and appropriate for the different sizes and types of vehicles?

e. In the various crash tests that were performed during the research for this rulemaking, the values of head and neck injury criteria measured by the responses of the two front Hybrid III anthropomorphic test devices were much higher than acceptable thresholds. Direct contact of the head of the dummy with the interior of the vehicle compartment, which occurred when the front seat rotated backward excessively due to the rear impact, contributed to these high values. These high values raise concerns about head and neck protection of the occupants. The rear impact testing also raised concerns are also raised about the seat back strength as most seat backs collapsed in those tests. What do the high HIC values and neck loadings registered by the test dummies in those tests indicate about the real world potential for trauma injury to vehicle occupants in rear impacts? Could future vehicles be designed to provide both the improved fuel system integrity necessary to meet the more stringent requirements proposed in this NPRM and, at the same time, provide improved occupant protection in such impacts?

f. How do seat back failures influence the injury potential in rear impacts? Please provide data and other information that would aid the agency in determining the need for improving seat back strength and the appropriate requirements for doing so.

g. Should we require vehicles to retain fuel system integrity in tests with 5th percentile female dummies, as well as with 50th percentile male dummies, as is currently required?

h. We are proposing to eliminate the second sentence in S7.1.6(b) from Standard No. 301. That sentence reads: “If the weight on any axle, when the vehicle is loaded to unloaded vehicle weight plus dummy weight, exceeds the axle's proportional share of the test weight, the remaining weight shall be placed so that the weight on that axle remains the same.” Given the specifications in S7.1.6(a) concerning the placement of rated cargo and luggage capacity weight in the luggage area and the placement of dummies, is the second sentence in S7.1.6(b) needed for conducting Standard No. 301 compliance tests?

i. For the rear offset moving deformable barrier test conditions, we are proposing that the barrier be the same as the one shown in Figure 2 of Standard No. 214, 49 CFR 571.214 and specified in 49 CFR part 587, with one exception. The exception is that the face of the barrier would be positioned in the rear impact test so that it is 50 mm (2 inches) lower than the barrier face height specified in the current Standard No. 214, Figure 2. Positioning the barrier face in that manner might make it necessary for us to change slightly the center of gravity and moment of inertia specifications in paragraphs 587.6(d) and (e) of Part 587 of Title 49 CFR for the purposes of testing under Standard No. 301. The agency is in the process of determining the necessary changes to the specifications and plans to docket its findings during the comment period on this notice. Comments are requested on any necessary changes.

j. With respect to side impact crashes that result in fires, this proposal to upgrade Standard No. 301 addresses vehicle-to-vehicle crashes. As noted above, there are approximately two to eight times as many side collision fires (depending on vehicle type) when the object struck is another vehicle compared to a narrow object such as a pole. However, as also noted above, the side collision fire rate for cars, light trucks, and vans is highest when a narrow object is struck. Would it therefore be reasonable to consider a pole side impact test as part of a subsequent upgrading of the Standard?

k. Should the agency amend FMVSS No. 301 to prohibit fuel leakage in any crash test under FMVSS No. 208?

NHTSA has considered the impact of this final rule under E.O. 12866 and the Department of Transportation's regulatory policies and procedures. This rule was not reviewed under E.O. 12866, “Regulatory Planning and Review” and is not considered significant under the Department of Transportation's regulatory policies and procedures.

The agency has prepared a Preliminary Regulatory Evaluation (PRE) describing the economic and other effects of this proposal. The average cost for vehicles that would need to be modified to meet the proposed rear seat requirements is $5 per vehicle. Based on our estimate that 46 percent of the fleet does not currently meet the proposal and on an estimated 15.2 million total sales, we estimate that the total cost for the fleet would be $35 million annually.

The target population of crashes includes multi-vehicle crashes in which a passenger vehicle is struck in the rear by another passenger vehicle and the fire starts in the struck vehicle. There are an estimated 57 fatalities and 119 non-fatal injuries annually in the target population. The non-fatal burn injuries in that population of crashes were mostly minor and were typically not the most severe injury to the occupant. Our estimate of benefits ranges from 8 to 21 lives saved annually, once all vehicles on the road meet the proposed rear impact test.

While we believe the FMVSS 214 side impact test is somewhat stricter than the existing side impact test in FMVSS 301, we could not quantify any benefits in side impacts. There are less than 100 fatalities annually in multi-vehicle side impacts resulting in fire. More important, only one out of more than 100 vehicles tested failed the proposed fuel leakage requirements using the FMVSS 214 proposed test. Based on those test results, it appears that few vehicles would have to be modified to meet the proposed side impact test.

NHTSA has also considered the effects of this proposed rule under the Regulatory Flexibility Act. I hereby certify that it would not have a significant economic impact on a substantial number of small entities. Further, the amendments primarily affect passenger car and light truck manufacturers which are not small entities under 5 U.S.C. 605(b). The Small Business Administration's regulations at 13 CFR part 121 define a small business, in part, as a business entity “which operates primarily within the United States.” (13 CFR 121.105(a)). The agency estimates that there are at most five small final stage manufacturers of passenger cars in the U.S. and no small manufacturers of light trucks, producing a combined total of at most 500 cars each year. It is unknown how many of their vehicle models currently meet the proposed requirements. Comments are requested on the impact of this proposal on small vehicle manufacturers.

There are a large number of second-stage manufacturers that could be affected by this proposal. Second-stage manufacturers buy a chassis from a first-stage manufacturer and finish it to the consumer's specifications. The manufacturers that put a work-related body on a pickup truck chassis (like a small tow truck) often perform manufacturing operations affecting the fuel system, both in the structure around the fuel tank and where the fuel filler neck attaches to the body. Other second-stage manufacturers use a van chassis or an incomplete vehicle for ambulances, small mobile homes, small school buses, etc. Typically, the first-stage manufacturer provides the second-stage manufacturer with a body builder's guide which tells the second-stage manufacturer what it can do and still either pass along the original equipment manufacturer's certification for compliance with Standard No. 301 (for chassis cabs) or otherwise be confident that the vehicle will comply (for other types of incomplete vehicles). To the extent that a second-stage manufacturer deviates from the guide, it would have to certify compliance on their own. The agency tentatively concludes that few final stage manufacturers would do so and that therefore this would not result in a significant economic impact on these companies. Comments are requested on this tentative conclusion.

NHTSA has analyzed this rulemaking action for the purposes of the National Environmental Policy Act. The agency has concluded that implementation of this action would not have any significant impact on the quality of the human environment.

The agency has analyzed this rulemaking in accordance with the principles and criteria contained in Executive Order 13132 and has determined that it does not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism summary impact statement. The proposal would not have any substantial effects on the States, or on the current Federal-State relationship, or on the current distribution of power and responsibilities among the various local officials.

The Unfunded Mandates Reform Act of 1995 requires agencies to prepare a written assessment of the costs, benefits and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted for inflation with base year of 1995). As indicated above, NHTSA anticipates that this proposed rule would not result in an annual expenditure of $100 million.

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

Under the National Technology Transfer and Advancement Act of 1995 (NTTAA) (Public Law 104-113), “all Federal agencies and departments shall use technical standards that are developed or adopted by voluntary consensus standards bodies, using such technical standards as a means to carry out policy objectives or activities determined by the agencies and departments.” We surveyed several voluntary standards organizations to see whether there were any voluntary standards that were applicable to this rulemaking. Standard No. 301's current rear and lateral moving barrier crash test requirements are the same as the Society of Automotive Engineer's (SAE) Standard for rear and side barrier collision tests, SAE, J972. Today's notice proposes to amend Standard No. 301's current rear and lateral moving barrier crash test requirements. The American National Standards Institute (ANSI) and the International Standards Organization (ISO) do not have any automobile fire protection standards relevant to this rulemaking. We seek comment on whether there are any other voluntary standards that may be applicable to this rulemaking.

This rule does not contain any collection of information requirements requiring review under the Paperwork Reduction Act of 1995 (Public Law 104-13).

Executive Order 12866 and the President's memorandum of June 1, 1998, require each agency to write all rules in plain language. Application of the principles of plain language includes consideration of the following questions:

—Have we organized the material to suit the public's needs?

—Are the requirements in the rule clearly stated?

—Does the rule contain technical language or jargon that is not clear?

—Would a different format (grouping and order of sections, use of headings, paragraphing) make the rule easier to understand?

—Would more (but shorter) sections be better?

—Could we improve clarity by adding tables, lists, or diagrams?

—What else could we do to make the rule easier to understand?

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

In developing this NPRM, we tried to address the concerns of all our stakeholders. Your comments will help us improve this rule. We invite you to provide different views on options we propose, new approaches we have not considered, new data, how this proposed rule may affect you, or other relevant information. We welcome your views on all aspects of this proposed rule, but request comments on specific issues throughout this document. We grouped these specific requests near the end of the sections in which we discuss the relevant issues. Your comments will be most effective if you follow the suggestions below:

Explain your views and reasoning as clearly as possible.

• Provide solid technical and cost data to support your views.

• If you estimate potential costs, explain how you arrived at the estimate.

• Tell us which parts of the NPRM you support, as well as those with which you disagree.

• Provide specific examples to illustrate your concerns.

• Offer specific alternatives.

• Refer your comments to specific sections of the NPRM, such as the units or page numbers of the preamble, or the regulatory sections.

• Be sure to include the name, date, and docket number with your comments.

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

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

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

In addition, for those comments of 4 or more pages in length, we request that you send one copy on computer disc to: Dr. George Mouchahoir, Chief, Special Vehicles & Systems Division, NPS-12, National Highway Traffic Safety Administration, 400 Seventh Street, SW, Washington, DC 20590. We emphasize that this is not a requirement. However, we ask that you do this to aid us in expediting our review of all comments. The copy on computer disc may be in any format, although we would prefer that it be in WordPerfect 8.

Comments may also be submitted to the docket electronically by logging onto the Dockets Management System website at http://dms.dot.gov. Click on “Help & Information” or “Help/Info” to obtain instructions for filing the document electronically.

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

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

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

You may view the materials in the docket for this rulemaking on the Internet. This materials include the written comments submitted by other interested persons and the preliminary regulatory evaluation prepared by this agency. You may read them at the address given above under ADDRESSES . The hours of the Docket are indicated above in the same location.

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

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

(2) On that page, click on “search.”

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Motor vehicle safety, Reporting and record keeping requirements, Tires.

In consideration of the foregoing, the agency is proposing to amend 49 CFR part 571 as follows:

On October 18, 2000, Captains Lee and Fisher submitted an application to conduct exempted experimental fishing activities involving commercial gear trials with two modified nordmore-style grates assembled on standard Yankee trawls (modified trawls). This short-term investigation will provide information on the modified trawl gear performance and ability to selectively target winter flounder ( Pleuronectes americanus ) and reduce the rate of bycatch of Atlantic cod ( Gadus morhua ) in the overall catch. The experiment proposes to conduct preliminary gear trials in the shallow waters of Ipswich Bay through video observation of the trawl and modified grate configuration while under tow. The next stage of the gear trials involves a series of 15-minute tows with the grate angled at eight different positions to test for bycatch separation through the escape chute mechanism positioned at the top of the grate. The angle that produces the greatest separation of cod from flounder will be selected for the commercial scale trials in deeper waters. The final phase is designed to produce statistically valid data on the rate of reduction of cod bycatch as a result of the gear modifications. Four 1-hour parallel tows will be made on each of 4 consecutive days in the following sequence: Day 1, control net (standard trawl nets with 6.5-inch (16.5 cm) square codend) towed against a second control net; Day 2, control and experimental net towed in parallel; Day 3, switch the control and experimental nets between the two vessels; and Day 4, both vessels tow experimental nets in parallel. This tow sequence will be duplicated in two different bottom habitats; one primarily sand and the other mud. Therefore, a total of 32 tows with both the experimental and the control nets will be performed in each of two test sites. The entire experiment will require the use of 22 days to complete all phases of gear testing, from the preliminary tests in shallow water to the commercial scale testing in two deeper water sites.

Two nordmore-style grates have been constructed for use in these gear trials. One is made of plastic and the other of steel. Both grates are approximately 40-inches (101.6 cm) in width by 48-inches (121.9 cm) in length. The openings of the grate will lie horizontally and will decrease in aperture from 10-inches (25.4 cm) at the lowest bar spacing, becoming progressively smaller in 2-inch (5.1 cm) increments, until the fifth bar from the bottom, where they remain at the 2-inch bar spacing for the remainder of the upper portion of the grate. The modified nordmore-style grates will be fitted into a standard inshore Yankee trawl with a sweep measuring 80 ft (24.38 m) at the top and 60 ft (18.28 m) at the bottom. Any variability in vessel towing power and efficiency will be alleviated through the parallel gear testing sequence designed to quantify this variability.

All catch brought on board the vessels will be sorted and measured and returned to the sea immediately. It is estimated that the average maximum catch rate would be 6,720 to 8,400 lb (3,048 to 3,810 kg), based on a total towing time of 84 hours and a maximum average catch rate of 80 to 100 lb (36.3 to 45.4 kg) per 4-hour tow. Projections for average catch rates in the experimental net under experimental towing conditions are 5,040 lb (2,286 kg) based 84-hours total tow time, assuming that approximately 80 percent of the cod escape and that the catch composition on the bottom is 50 percent flounder and 50 percent cod and the total catch retained is 60 lb (27.2 kg)--50 lb flounder, 10 lb cod. The current net design has about a 20 percent bycatch of all other incidental species, including crabs, lobsters, whiting, and hake.

All data will be recorded by a biologist who will perform statistical analyses on significance demonstrating the ability of the experimental net configuration to separate cod bycatch from the targeted catch, flounder. A report and a short video to show the grate under construction and functioning in the water will be supplied to the Northeast Consortium. It is projected that this study may lead to other studies to further refine and develop a modified trawl net that will selectively fish for flatfish, while avoiding roundfish species (i.e., cod and monkfish) in soft mud and sandy bottom habitats.

EFPs would be issued to two participating vessels in accordance with the conditions stated therein, and will exempt vessels from the gear restrictions and DAS requirements of the Fishery Management Plan for the Northeast Multispecies Fishery.

On August 29, 2000, NMFS published notification of an application for an EFP to address safety issues associated with haddock trip limits (65 FR 52404). The EFP would have allowed commercial vessels to enter Gloucester Harbor with overages of haddock when unsafe conditions caused by wind or sea state prevent the vessels from remaining at sea. A more detailed description of the proposed EFP pilot program was contained in that notice and is not repeated here.

The Joint Enforcement Oversight and Advisory Panel (Enforcement Committee), consisting of members of the NMFS Office of Enforcement, the U.S. Coast Guard, and the Commonwealth of Massachusetts, met on September 21, 2000, to discuss the EFP pilot program application. The Enforcement Committee passed a motion that was carried forward to the New England Fishery Management Council (Council) that the pilot program not be approved in its current form due to the difficulty in adequately enforcing the EFP conditions. The Council agreed that the pilot program should not be pursued in its current form and advised NMFS not to approve the pilot program. Therefore, because of the enforcement concerns, and the recommendation of the Council, the Regional Administrator has denied the EFP application.

Additionally, because projections of the total allowable catch (TAC) target for haddock indicate that the haddock target TAC will not be harvested by the end of the current fishing year (April 30, 2001), the Regional Administrator has recently suspended the daily trip limits for haddock through February 28, 2001 (65 FR 63549, October 24, 2000), while maintaining the per trip maximum possession limit, as authorized under 50 CFR 648.86(a)(iii)(B). Eliminating the daily trip limit for haddock during the period when weather-related sea conditions have historically been the worst also eliminates the need for vessels fishing for haddock to wait out hazardous weather conditions at sea and relieves the need for the proposed EFP.